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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-31 · 277 added, 644 removed, 256 unchanged (78% of the section changed)

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See “Special Note Regarding Forward-Looking Statements” in this Annual Report.

RISKS RELATED TO OUR STRATEGIC REPRIORITIZATION

*Our strategic reprioritization may not be successful, may not yield the desired results and we may be unsuccessful in identifying and implementing any strategic transaction.

RISKS RELATED TO OUR REPRIORITIZATION, FINANCIAL POSITION AND CAPITAL REQUIREMENTS

*Our strategic reprioritization to progress our Obesity and Metabolic Program may not be successful, may not yield the desired results and we may be unsuccessful in identifying and implementing any alternate strategic transaction.

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

In connection with the reprioritization, we have reduced our workforce by approximately 95% to date and we continue working to reduce costs in order to extend our cash runway.

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

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

In addition, while we are evaluating several potential in-licensing opportunities in obesity, oncology and virology, there is no assurance that any of these potential opportunities will come to fruition.

We believe there is value in our hunTR® TCR discovery platform.

However, the platform is experimental.

There can be no assurances that we can succeed in improving the platform’s appeal and increasing its value.

We may be unable to successfully monetize the platform or any TCRs we discovered, either through partnerships or out-licensing.

We expect to devote substantial time and resources to exploring strategic alternatives that our Board of Directors believes will maximize stockholder value.

Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all.

We have not set a timetable for completion of this strategic review process, and our Board of Directors has not approved a definitive course of action.

Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value or that we will make any additional cash distributions to our stockholders.

The process of continuing to evaluate these strategic options may be very costly, time-consuming and complex and we have incurred, and may in the future incur, significant costs related to this continued evaluation, such as legal and accounting fees and expenses and other related charges.

We may also incur additional unanticipated expenses in connection with this process.

A considerable portion of these costs will be incurred regardless of whether any such course of action is implemented or transaction is completed.

Any such expenses will decrease the remaining cash available for use in our business.

In addition, potential counterparties in a strategic transaction involving the Company may place minimal or no value on our assets or our public listing.

Further, should we resume the development of our product candidates, the development and any potential commercialization of our product candidates will require substantial additional cash to fund the costs associated with conducting the necessary preclinical and clinical testing and obtaining regulatory approval.

Consequently, any potential counterparty in a strategic transaction involving the Company may choose not to spend additional resources and continue development of our product candidates and may attribute little or no value, in such a transaction, to those product candidates.

In connection with the reprioritization, we reduced our workforce by approximately 95% and continue to reduce costs to extend our cash runway.

We had previously engaged Cantor Fitzgerald & Co.

to act as strategic advisor for this process;

the engagement was terminated effective January 8, 2026.

Efforts to consummate a sale or out-license transaction of this legacy intellectual property portfolio have been unsuccessful to date.

We are not actively pursuing broad strategic alternatives such as acquisitions, mergers, or sales of the Company.

Our primary focus is advancing our internally developed small-molecule Obesity and Metabolic Disorders Program.

We devote substantial time and resources to the advancement of our Obesity and Metabolic Disorders Program.

There can be no assurance that this program will succeed, that we will be able to advance it through IND-enabling studies, or that we will secure the additional capital required to do so.

The process of advancing our Obesity and Metabolic Disorders Program is costly and resource-intensive.

We have incurred, and will continue to incur, significant costs related to preclinical studies, formulation development, manufacturing, and regulatory activities.

Any strategic transaction or financing would likely depend primarily on the perceived value and progress of our Obesity and Metabolic Disorders Program.

In addition, any strategic business combination or other transactions that we may consummate in the future could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affect our business and decreases the remaining cash available for use in our business or the execution of our strategic plan.

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Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our stockholders.

We also believe that the potential value of our obesity program for patients and our stockholders is high but that expectation may not be recognized by potential strategic alternative partners or by the market.

We may be forced to execute a transaction that undervalues or eliminates the obesity program entirely despite our best efforts to continue work on the assets if that transaction is in the best interest of the stockholders.

If we are not successful in setting forth a new strategic path for the Company, or if our plans are not executed in a timely fashion, this may cause reputational harm with our stockholders and the value of our securities may be adversely impacted.

We believe that the potential value of our Obesity and Metabolic Disorders Program for patients and our stockholders is high, but that expectation may not be recognized by potential partners, investors, or the market.

We may be forced to accept terms in any future financing or transaction that undervalue or limit the Obesity and Metabolic Disorders Program if such transaction is determined to be in the best interest of the stockholders.

If we are not successful in advancing our Obesity and Metabolic Disorders Program, or if our plans are not executed in a timely fashion, this may cause reputational harm with our stockholders and the value of our securities may be adversely impacted.

In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of the Company could cause our stock price to fluctuate significantly.

Even if we successfully consummate a transaction from our strategic assessment, we may fail to realize all of the anticipated benefits of the transaction, those benefits may take longer to realize than expected, or we may encounter integration difficulties.

Our ability to realize the anticipated benefits of any potential business combination or any other result from our strategic assessment is highly uncertain.

Any anticipated benefits will depend on a number of factors, including our ability to integrate with any future business partner, the success of any future business we may engage in following the transaction and our ability to obtain value for our product candidates or technologies, if divested.

The process may be disruptive to our business and the expected benefits may not be achieved within the anticipated timeframe, or at all.

The failure to meet the challenges involved and to realize the anticipated benefits of any potential transaction could adversely affect our business and financial condition.

Furthermore, our stockholders may experience substantial dilution as a result of the transaction without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent we are able to realize only part of the expected strategic and financial benefits currently anticipated from a transaction.

*We may require substantial additional financial resources to continue as a going concern, including through the strategic review process, and if we raise additional funds, this may materially and negatively affect the value of your investment in our common stock.

*We will require substantial additional financial resources to continue as a going concern and to advance our Obesity and Metabolic Program, and if we raise additional funds, this may materially and negatively affect the value of your investment in our common stock.

We have not generated significant revenue and have incurred significant net losses in each year since our inception.

For the year ended December 31, 2025, we had a net loss of $4.2 million, and, as of December 31, 2025, our accumulated deficit since inception in 2003 was $924.6 million.

Although we are in the process of implementing a restructuring plan, or the Plan, whereby we are winding down our TCR-T Library Phase 1/2 Trial, other development programs and implemented a reduction in force, in order to reduce operating expenditures and net losses, as discussed above, there can be no assurances we will be successful at all, or in the amount we anticipate.

During that process, we also internally developed an obesity program whereby we are now performing pre-clinical studies on our obesity assets.

Following the closure and wind down of our TCR-T Library Phase 1/2 Trial and a reduction in force to reduce operating expenditures and net losses, we also internally developed an Obesity and Metabolic Disorders Program whereby we are now performing preclinical studies.

As of December 31, 2025, we have approximately $1.4 million of cash and cash equivalents.

Following implementation of the Plan, we anticipate our cash resources will be sufficient to fund our operations into the second quarter of 2026.

We have not set a timetable for completion of the strategic review process and the timing of consummating a strategic transaction, if any, is not entirely within our control.

We have terminated our engagement with Cantor Fitzgerald & Co.

as strategic advisor effective January 8, 2026.

Efforts to consummate a sale or out-license transaction of this legacy intellectual

property portfolio have been unsuccessful to date.

We are not actively pursuing broad strategic alternatives.

Our primary focus is advancing our Obesity and Metabolic Disorders Program.

We have no committed sources of additional capital at this time.

Accordingly, we could exhaust our current cash resources prior to the identification or consummation of a suitable strategic alternative, requiring the Company to raise additional capital.

We anticipate that our exploration of strategic alternatives and advancing our obesity program will make it more difficult to raise additional capital.

Accordingly, we could exhaust our current cash resources before we are able to meaningfully advance our Obesity and Metabolic Disorders Program, requiring the Company to raise additional capital on uncertain terms or at all.

We anticipate that advancing our Obesity and Metabolic Disorders Program will make it more difficult to raise additional capital on favorable terms.

To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, creating liens, making capital expenditures or declaring dividends, which may further constrain our ability to execute on strategic alternatives.

We follow 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 our ability to continue as a going concern for one year after the date our financial statements are issued.

Based on the current cash forecast, management has determined that our present capital resources will not be sufficient to fund our planned operations for at least one year from the issuance date of the financial statements, which raises substantial doubt as to our ability to continue as a going concern.

The forecast of cash resources is forward-looking information that involves risks and uncertainties, and our actual cash requirements may vary materially from our current expectations for a number of other factors that may include, but are not limited to, the progress of our strategic review and the pursuit of and progress on one or more options identified in such review.

Global political and economic events, including the war in Ukraine and increased inflation, have already resulted in a significant disruption of global financial markets.

Global political and economic events, including the wars in Ukraine and Iran, may increase inflation and result in a significant disruption of global financial markets.

If the disruption persists and deepens, we could experience an inability to access additional capital or make the terms of any available financing less attractive, which could in the future negatively affect our operations.

If we are successful in completing a strategic transaction, we may be exposed to other operational and financial risks.

Although there can be no assurance that a strategic transaction will result from the process we have undertaken to identify and evaluate strategic alternatives, the negotiation and consummation of any such transaction will require significant time on the part of our management, and the diversion of management’s attention may disrupt our business.

The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including:

• increased near-term and long-term expenditures;

• unknown liabilities;

• higher than expected acquisition or integration costs;

• incurrence of substantial debt or dilutive issuances of equity securities to fund future operations;

• write-downs of assets or incurrence of non-recurring, impairment or other charges;

• increased amortization expenses;

• difficulty and cost in combining the operations and personnel of any counterparty business with our operations and personnel;

• impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership;

• inability to retain our employee of our company or any acquired business;

• possibility of future litigation.

Any of the foregoing risks could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

If a strategic transaction is not consummated, our Board of Directors may decide to pursue a dissolution and liquidation.

In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that a strategic transaction will be completed.

If a strategic transaction is not completed, our Board of Directors may decide to pursue a dissolution and liquidation.

In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations and exploration of strategic alternatives.

We have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.

We expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our Obesity and Metabolic Disorders Program through the preclinical stage of development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company.

We do not expect to generate any revenue from the sale of products for a number of years, if at all, and any such revenue will not be realized unless and until we obtain marketing approval for and successfully launch and commercialize a product candidate.

If we obtain marketing approval for any current or future product candidates that we develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing.

Some of these expenses may be incurred in advance of marketing approval and could be substantial.

Our operating expenses and net losses may fluctuate significantly from quarter to quarter and year to year, and we expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

• continue to advance our current research programs and conduct additional research programs;

• advance our current product candidates and any future product candidates we may develop into preclinical and clinical development;

• seek marketing approvals for product candidates that successfully complete clinical trials, if any;

• obtain, expand, maintain, defend and enforce our intellectual property;

• continue to discover, validate and develop additional product candidates;

• continue to manufacture increasing quantities of our current or future product candidates for use in preclinical studies, clinical trials and for any potential commercialization;

• acquire or in-license other product candidates, technologies or intellectual property;

• hire additional personnel to support current or future programs;

• establish a commercial and distribution infrastructure to commercialize products for which we may obtain marketing approval, if any;

• incur additional costs associated with current and future research, development and commercialization efforts and operations as a public company.

Even if we successfully complete clinical trials and obtain regulatory approval for one or more of our product candidates, our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful commercialization of those product candidates.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve profitability.

In addition, even if we are able to generate revenue from product sales, we may not become profitable.

Raising additional capital in the future may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to product candidates or our technology.

In addition, the issuance of shares of common stock upon the exercise of our outstanding prefunded warrants or common stock warrants will result in immediate and substantial dilution to our existing stockholders.

Unless and until we can generate a substantial amount of product revenue, we expect to seek additional capital through a combination of public or private equity offerings, debt, collaborations, licensing arrangements or other sources.

Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline, and our stockholders may not agree with our plans for additional capital or the terms of such capital.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

Similarly, if we issue additional shares of our common stock in one or more public or private offerings in the future, our existing stockholders will suffer further dilution.

In addition, the incurrence of any indebtedness would result in additional payment obligations and is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, would be repaid before holders of our equity securities received any distribution of our corporate assets.

Further, in raising funds through our collaborations and licensing arrangements with third parties, we have had to, and may in the future need to, relinquish valuable rights, partially or fully, to our technologies, future revenue streams, research programs or product candidates and grant licenses on terms unfavorable to us.

In addition, securing additional capital would require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

If we are unable to successfully advance our obesity and metabolic disorders program or raise sufficient additional capital, our Board of Directors may ultimately decide to pursue a dissolution and liquidation.

There can be no assurance that we will successfully advance our Obesity and Metabolic Disorders Program or raise sufficient additional capital.

If we are unable to do so, our Board of Directors may decide to pursue a dissolution and liquidation.

In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, with the passage of time, the amount of cash available for distribution will be reduced as we continue to fund our operations and advance our Obesity and Metabolic Disorders Program.

In addition, if our Board of Directors were to approve and recommend, and our stockholders were to approve, a dissolution and liquidation, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders.

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Accordingly, holders of our common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up.

Our ability to consummate a strategic transaction depends on our ability to retain our remaining employee and consultants.

Our ability to consummate a strategic transaction depends upon our ability to retain our remaining employee and consultants, the loss of whose services may adversely impact our ability to consummate such transaction.

In connection with the evaluation of strategic alternatives and in order to extend our resources, on August 14, 2023, we implemented the Plan that included reducing our workforce.

The reduction in force has impacted approximately 95% of our workforce to date, including key members of our management team.

Our cash conservation activities may yield unintended consequences, such as attrition beyond our planned reduction in workforce and reduced employee morale, which may cause our remaining employee and consultants to seek alternative opportunities.

If we are unable to successfully retain our remaining personnel, we are at risk of a disruption to our exploration and consummation of a strategic alternative as well as business operations.

Our corporate restructuring and the associated headcount reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could significantly disrupt our business.

On August 14, 2023, in connection with the evaluation of strategic alternatives and in order to extend our resources, our Board of Directors approved the Plan that included reducing our workforce, which has impacted approximately 95% of our workforce to date.

In addition, the Plan included a discontinuation of our clinical development programs and further prioritization of our resources as we assess strategic alternatives.

We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs.

If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected.

Furthermore, the Plan may be disruptive to our operations.

For example, our headcount reductions could yield unanticipated consequences, such as increased difficulties in implementing our business strategy, including retention of our remaining employee and consultants.

Any employee litigation related to the headcount reduction could be costly and prevent management from fully concentrating on the business.

Any future growth would impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees.

Due to our limited resources, we may not be able to effectively manage our operations or recruit and retain qualified personnel, which may result in weaknesses in our infrastructure and operations, risks that we may not be able to comply with legal and regulatory requirements, and loss of our employee and reduced productivity among the remaining employee and certain consultants of the Company.

For example, the workforce reduction may negatively impact our clinical, regulatory, technical operations, and commercial functions,

should we choose to continue to pursue them, which would have a negative impact on our ability to successfully develop, and ultimately, commercialize our product candidates.

Our future financial performance and our ability to develop our product candidates or additional assets will depend, in part, on our ability to effectively manage any future growth or restructuring, as the case may be.

We may become involved in litigation, including securities class action litigation, that could divert management’s attention and harm the Company’s business, and insurance coverage may not be sufficient to cover all costs and damages.

In the past, litigation, including securities class action litigation, has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials.

These events may also result in investigations by the SEC or other governmental agencies.

We may be exposed to such litigation even if no wrongdoing occurred.

Litigation is usually expensive and diverts management’s attention and resources, which could adversely affect our business and cash resources and our ability to consummate a potential strategic transaction or the ultimate value our stockholders receive in any such transaction.

RISKS RELATED TO OUR BUSINESS

*Although the monitoring period for our 2024 Delisting Determination from Nasdaq has closed, we remain at risk for delisting due to our volatile stock price and could then be subject to a new delisting notice from Nasdaq which could prevent us from maintaining an active, liquid and orderly trading market for our common stock and may materially and adversely impact our ability to consummate certain strategic transactions.

Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from the Nasdaq Capital Market or if we are unable to transfer our listing to another stock market.

On January 4, 2023, we were notified by The Nasdaq Stock Market LLC, or Nasdaq, that we were in breach of Listing Rule 5450(a)(1), or the Minimum Bid Price Rule, for continued listing on the Nasdaq Global Select Market because the minimum bid price of our listed securities for 30 consecutive business days had been less than $1 per share.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), or the Compliance Period Rule, we were provided a period of 180 calendar days, or until July 3, 2023, or the Compliance Date, to regain compliance with the Bid Price Requirement.

On June 22, 2023, we applied to transfer our listing from the Nasdaq Global Select Market to the Nasdaq Capital Market, or the Transfer.

On July 5, 2023, Nasdaq notified us that the Transfer was approved, and that, in connection with the Transfer, we were eligible for an additional 180 calendar day period, or until January 2, 2024, or the Extended Compliance Date, to regain compliance with the Minimum Bid Price Rule.

On November 8, 2023, we received the Delisting Determination notifying us that, because the closing bid price for our common stock was below $0.10 per share for 10 consecutive trading days during the Extended Compliance Period, the Staff planned to suspend trading of our common stock as of November 17, 2023, and file a Form 25-NSE with the SEC to remove our common stock from listing and registration under the Securities Exchange Act of 1934, as amended, unless we timely request an appeal of the Delisting Determination to the Panel.

After complying with Nasdaq's procedural requests and attending the required hearing, on February 16, 2024, we were notified by Nasdaq that we had regained compliance with the Minimum Bid Price Rule.

We were then subject to a Mandatory Panel Monitor until February 16, 2025.

We maintained compliance with the Minimum Bid Price Rule during the monitoring period, which ended February 16, 2025.

If our common stock is delisted by Nasdaq, it could lead to a number of negative implications, including an adverse effect on the price of our common stock, deterring broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, increased volatility in our common stock, reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.

Delisting could also cause a loss of confidence of our customers, collaborators, vendors, suppliers and employee, which could harm our business and future prospects.

* We are currently deficient under Nasdaq’s stockholders’ equity continued listing requirement and remain at risk of delisting, which could materially harm our liquidity, stock price, and ability to consummate strategic transactions.

On April 7, 2025, we received a notice from Nasdaq that our stockholders’ equity, as reported in our Annual Report on Form 10-K for the year ended December 31, 2024 ($2,063,000), did not satisfy Nasdaq Listing Rule 5550(b)(1), which requires minimum stockholders’ equity of $2,500,000 for continued listing on the Nasdaq Capital Market.

On August 19, 2025, Nasdaq notified the Company that it had regained compliance with the continued listing requirements of the Nasdaq Capital Market.

Based on the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $3.66 million, the Listing Qualifications staff determined that the Company now complies with the Nasdaq Listing Rules and confirmed that the matter is closed.

Our stockholders’ equity as of December 31, 2025 was $2.2 million, which remains below the $2,500,000 threshold.

We are likely to receive a notice from Nasdaq and may have 45 calendar days from the date of the notice to submit a compliance plan, and if accepted, we may be granted up to 180 calendar days from the date of the notice to evidence compliance.

There can be no assurance that our compliance plan will be accepted or that we will regain compliance within any granted period.

Given our current trading price of approximately $3.15 per share, the immediate risk of a Minimum Bid Price deficiency is lower at this time;

however, our stock price remains volatile and a future decline could still trigger a separate delisting notice.

Previously, we addressed and resolved a Minimum Bid Price deficiency under Nasdaq Listing Rule 5450(a)(1).

We regained compliance on February 16, 2024, and successfully completed the mandatory one-year Panel Monitor period on February 16, 2025.

Given our current trading price, the immediate risk of a new Minimum Bid Price deficiency is lower at this time;

however, our stock price remains volatile and a future decline below $1.00 could still trigger a separate delisting notice.

In the past, we effected a reverse stock split to address a bid price deficiency, and shareholders may not approve another reverse stock split if required in the future.

Even if approved and effected, there can be no assurance that a reverse stock split would increase or sustain the trading price above $1.00 or maintain compliance.

If our common stock is delisted by Nasdaq (whether due to stockholders’ equity, minimum bid price, or any other rule), it could lead to a number of negative implications, including an adverse effect on the price of our common stock, deterring broker-dealers from making a market in or

otherwise seeking or generating interest in our common stock, increased volatility in our common stock, reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.

Delisting could also cause a loss of confidence of our collaborators, vendors, suppliers and employees, which could harm our business and future prospects.

If our common stock is delisted by Nasdaq, the price of our common stock may decline, and although our common stock may be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common stock or obtain accurate quotations as to the market value of our common stock.

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The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

Furthermore, if our common stock is delisted, we would expect it to have an adverse impact on our ability to consummate certain strategic alternatives.

Furthermore, if our common stock is delisted, we would expect it to have an adverse impact on our ability to raise capital or advance our obesity program.

Further, if our common stock is delisted, we would incur additional costs under state blue sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.

*We do not have approval by our shareholders for a third reverse stock split of our common stock to enable the Board of Directors to respond to a Panel if we fail to comply with the Minimum Bid Price Rule in the future.

While our stockholders approved a reverse stock split of the issued and outstanding shares of our common stock, our treasury stock, and a proportionate reduction in the shares of our authorized common stock, if needed in the discretion of our Board of Directors to regain compliance with the Minimum Bid Price Rule, at a ratio between the range of 1-for-5 and 1-for-15, inclusive, at any time on or before June 6, 2025, we executed this approved stock split to achieve compliance to the above-described delisting notice in July 2024.

Therefore, if we receive another delisting notice before our 2025 annual stockholders meeting, we would have to convene a special shareholder meeting to obtain approval for another reverse stock split, should the Board decide to execute a reverse stock split in response to the delisting notice.

There is no guarantee that the shareholders would approve another reserve stock split.

*Shareholders may not approve another reverse stock split.

Even if we are able to convene a shareholders meeting within the time required by a future delisting notice, if received, there is no guarantee that the shareholders would approve a reverse stock split.

Failure to acquire shareholder approval of a reverse stock split would negatively affect our ability to regain compliance with the Minimum Bid Price Rule, which would result in our common stock being delisted from the Exchange.

Even if we do get approval and effectuate a second reverse stock split, the trading price of our common stock may not meet the Minimum Bid Price Rule

If we do effect a reverse stock split in response to a future delisting notice, if received, there can be no assurance that the market price per new share of our common stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of old shares of our common stock outstanding before the reverse stock split.

Other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our common stock and there can be no assurance that a reverse stock split, if completed, will result in the intended benefits, that the market price of our common stock will increase in proportion to the reduction in the number of shares of our common stock outstanding before the reverse stock split or that the market price of our common stock will not decrease in the future.

If the market price of our common stock does not increase the price per share of our common stock above Nasdaq’s minimum bid price threshold of $1.00 per share or if the market price of our common stock does not remain above Nasdaq’s minimum bid price threshold of $1.00 per share, our common stock may still be delisted from Nasdaq.

There is also no guarantee that Nasdaq would agree that implementing a reverse stock split warrants would reverse the Staff's delisting determination, regardless of the price at which our common stock would trade following the split.

*In light of our recent reverse stock splits, or if we implement another reverse stock split, liquidity of our common stock may be materially and adversely affected.

In light of our recent reverse stock splits, or if we have to effect another reverse stock split to avoid a delisting, the liquidity of the shares of our common stock may be materially and adversely affected by any such reverse stock split given the reduced number of shares of common stock that will be outstanding following the reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split.

Following any reverse stock split, the resulting market price of our common stock may not attract new investors and may not satisfy the investing requirements of those investors.

Although we believe a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a share price that will attract new investors, including institutional investors.

In addition, there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors.

As a result, the trading liquidity of our common stock may not necessarily improve.

*Since we effectuated a reverse stock split within the past year, should the trading price of our common stock fall again below the Minimum Bid Price requirement, we may be issued a delisting decision.

Under the recently amended Nasdaq reverse stock split rules, companies are limited by the number of times it can conduct a reverse stock split to regain compliance with the minimum bid price requirement.

If a company’s primary equity security fails to meet the minimum bid price requirement and the company has conducted a reverse stock split in the last year, it will not be eligible for any compliance period to address the price deficiency.

If a company has effectuated a reverse stock split within the past year, and its security falls out of compliance with the minimum bid price requirement, it will be issued a delisting decision rather than receive a compliance period.

We last effectuated a 10:1 reverse stock split in July 2024, and therefore may be subject to immediate delisting without being granted a compliance period should the trading price of our common stock fall below the minimum bid price requirement.

There can be no assurance that the market price of our common stock will remain above the minimum bid price requirements even if we conduct another reverse stock split, and there can be no assurance of a positive outcome from an appeal of any delisting determination.

*We have identified a material weakness and may identify more in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or could have a material adverse effect on our business and trading price of our securities.

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Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow our management to report on the effectiveness of our internal control over financial reporting.

Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2025, our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting related to the lack of sufficient personnel to allow for the required segregation of duties.

We may also be required to have our independent registered public accounting firm issue an opinion on the effectiveness of our internal control over financial reporting on an annual basis.

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A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

Because we currently have only one full-time employee—our Chief Executive Officer—who performs or oversees multiple functions, and we rely on outside consultants (including for accounting and financial reporting functions).

Although the material weaknesses identified in the past have been remediated, we cannot assure you that any measures we have taken or may take in the future will be sufficient to avoid potential future material weaknesses.

If we are unable to successfully remediate any future material weakness and maintain effective internal controls, we may not have adequate, accurate or timely financial information, and we may be unable to meet our reporting obligations as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results in future periods, or report them within the timeframes required by the requirements of the SEC, Nasdaq or the Sarbanes-Oxley Act.

If we are unable to successfully remediate any future material weakness and maintain effective internal controls, we may not have adequate, accurate or timely financial information, and we may be unable to meet our reporting obligations as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results in future periods, or report them within the timeframe required by the requirements of the SEC, Nasdaq or the Sarbanes-Oxley Act.

Failure to comply with the Sarbanes-Oxley Act, when and as applicable, could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities.

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Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business, financial condition, results of operations, cash flows and prospects could be materially harmed and investors could lose confidence in our reported financial information.

The development and commercialization of non-viral adoptive TCR-T cell therapies could be considered a new approach to cancer treatment, the successful development of which is subject to significant challenges.

We have employed technologies such as the technology licensed from MD Anderson pursuant to the MD Anderson License, described above, from Precigen, pursuant to the A&R License Agreement, and from the NCI, pursuant to the Patent License described above, to pursue the development and commercialization of non-viral cellular therapies based on T-cells and TCRs, targeting solid tumor malignancy.

Because this is a new approach to cancer immunotherapy and cancer treatment generally, developing and commercializing product candidates is subject to a number of challenges, including:

• obtaining regulatory approval from the FDA and other regulatory authorities that have very limited experience with the commercial development of genetically modified T-cell therapies for cancer;

• designing and conducting our clinical trials using this new approach or selecting the appropriate TCRs in a way that may lead to optimal results;

• identifying and manufacturing appropriate TCRs from either the patient or third parties that can be administered to the patient;

• developing and deploying consistent and reliable processes for engineering a patient’s and/or donor’s T-cells ex vivo and infusing the T cells back into the patient;

• conditioning patients with chemotherapy in conjunction with delivery of the potential products, which may increase the risk of adverse side effects of the chemotherapy itself or of the potential products;

• educating medical personnel regarding the potential side effect profile of each of the potential products, such as the potential adverse side effects related to cytokine release;

• addressing any competing technological and market developments;

• developing processes for the safe administration of these potential products, including long-term follow-up for all patients who receive the potential products;

• sourcing additional clinical and, if approved, commercial supplies for the materials used to manufacture and process the potential products;

• developing a manufacturing process with a cost of goods that allows for an attractive return on investment;

• establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance;

• developing therapies for types of cancers beyond those addressed by the current potential products;

• maintaining and defending the intellectual property rights relating to any products we develop;

• not infringing the intellectual property rights, in particular, the patent rights, of third parties, including competitors, such as those developing T-cell therapies;

• unless we revoke the notice to terminate the Patent License or subsequently acquire substantially similar rights, our inability to use the technology currently licensed to us pursuant to the Patent License.

Should we resume our TCR-T clinical programs, we cannot assure you that we will be able to successfully address these challenges, which could prevent us from achieving our research, development and commercialization goals.

In addition, these challenges may diminish the value of our assets in the execution of any strategic alternative.

*For our obesity program or, should we resume development of our TCR-T product candidates, we will need to recruit, hire and retain qualified personnel.

Following our strategic reprioritization in August 2023, we have reduced our workforce by approximately 95% to date.

The reductions in force included employees responsible for key aspects of our clinical and other development programs.

For our obesity program, or should we, in the future, resume development of our TCR-T product candidates, we may not be able to attract or retain qualified management and commercial, scientific, manufacturing and clinical personnel due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses.

If we are not able to attract and retain necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

*The termination of our licenses and research and development agreement with the National Cancer Institute and Precigen could significantly limit our ability to resume our clinical trial or begin new ones focused on TCR-T.

We have terminated our TCR licenses with the National Cancer Institute and Precigen.

This will affect our ability to quickly resume TCR-T-based clinical trials as we will need to renegotiate these licenses or obtain approval from FDA to use TCRs that we have validated internally.

We may not obtain such approval or be able to validate TCRs internally quickly or at all, significantly hindering our ability to resume our clinical trial.

Any termination of our licenses with MD Anderson or our research and development agreements with MD Anderson could result in the loss of significant rights and could significantly harm our ability to develop and commercialize our product candidates.

Our clinical programs, if resumed, depend on patents, know-how, and proprietary technology that are licensed from others, particularly MD Anderson, as well as the contributions by MD Anderson under our research and development agreements.

Any termination of these licenses or research and development agreements could result in the loss of significant rights and could harm our ability to develop or monetize our product candidates.

Disputes may also arise between us and these licensors regarding intellectual property subject to a license agreement, including those relating to:

• the scope of rights granted under the applicable license agreement and other interpretation-related issues;

• whether and the extent to which our technology and processes, and the technology and processes of Precigen, MD Anderson and our other licensors, infringe intellectual property of the licensor that is not subject to the applicable license agreement;

• our right to sublicense patent and other rights to third parties pursuant to our relationships with our licensors and partners;

• whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our potential products under the MD Anderson License;

• whether or not our partners are complying with all of their obligations to support our programs under licenses and research and development agreements;

• the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements, particularly with MD Anderson and Precigen, on acceptable terms, we may be unable to successfully monetize the affected potential products.

Further, if we are unable to reacquire the rights from the NCI that we had under the Patent License prior to its termination, on terms acceptable to us or at all, our clinical development programs will be negatively impacted.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own.

If we or our licensors fail to adequately protect this intellectual property, our ability to monetize potential products under our applicable licenses could suffer.

There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, and reexamination proceedings before the United States Patent and Trademark Office, or USPTO, or oppositions and other comparable proceedings in foreign jurisdictions.

Recently, due to changes in

law referred to as patent reform, new procedures including inter partes review and post-grant review have been implemented, which adds uncertainty to the possibility of challenge to our or our licensors’ patents in the future.

We may not be able to retain the rights licensed to us and Precigen by MD Anderson to technologies relating to TCR-T cell therapies and other related technologies.

Under the MD Anderson License, we, together with Precigen, received an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel TCR-T cell therapies as well as either co-exclusive or non-exclusive licenses under certain related technologies.

These proprietary methods and technologies, along with others within Precigen's technology suite and licensed to us by Precigen, may help realize the promise of genetically modified TCR-T cell therapies by controlling cell expansion and activation in the body, minimizing off-target and unwanted on-target effects and toxicity while maximizing therapeutic efficacy.

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, we and Precigen shall then have a fully-paid up, royalty free, perpetual, irrevocable and sublicensable license to use the licensed intellectual property thereunder.

After 10 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 we 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 we 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 us or 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 us or Precigen and may be terminated by the mutual written agreement of us, Precigen and MD Anderson.

Should we in the future resume development of our TCR-T product candidates, there can be no assurance that we will be able to successfully perform under the MD Anderson License or regain our terminated rights under the Patent License and if the MD Anderson License is terminated, we may be prevented from achieving our business objectives.

Should we resume development of our TCR-T product candidates, we may not be able to commercialize them, generate significant revenues, or attain profitability.

To date, none of our TCR-T product candidates have been approved for commercial sale in any country.

The process to develop, obtain regulatory approval for, and commercialize potential product candidates is long, complex and costly.

Should we resume clinical development, unless and until we receive approval from the FDA and/or other foreign regulatory authorities for our TCR-T product candidates, we cannot sell our products and will not have product revenues.

Even if we should in the future resume development of our TCR-T product candidates and obtain regulatory approval for one or more of our TCR-T product candidates, if we are unable to successfully commercialize our TCR-T products, we may not be able to generate sufficient revenues to achieve or maintain profitability or to continue our business without raising significant additional capital, which may not be available.

Our failure to achieve or maintain profitability could negatively impact the trading price of our common stock.

We have no products approved for commercial sale and have not generated any revenue from product sales.

We may never generate any revenue from product sales or become profitable and, if we achieve profitability, we may not be able to sustain it.

To date, we have not generated any revenue from product sales.

We do not expect to generate any revenue from the sale of products for a number of years, and we may never generate revenue from the sale of products.

Our ability to generate revenue from product sales depends on a number of factors, including our ability to:

• successfully complete our ongoing and planned preclinical studies and clinical trials for any current or future product candidates;

• successfully receive U.S.

Food and Drug Administration, or FDA, clearance for any investigational new drug application, or IND, for any current or future product candidates;

• successfully initiate and complete clinical trials for our clinical-stage product candidates and any other current or future product candidates, including all safety and efficacy studies necessary to obtain U.S.

and foreign regulatory approval for our product candidates;

• establish and maintain clinical and commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing;

• launch commercial sales of our products, if and when approved, whether alone or in collaboration with others;

• obtain and maintain acceptance of the products, if and when approved, by patients, the medical community and third-party payors;

• effectively compete with other therapies;

• obtain and maintain healthcare coverage and adequate reimbursement for our products, if and when approved;

• maintain a continued acceptable safety profile of our products following approval;

• enforce and defend intellectual property rights and claims.

Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of expenses we may incur in connection with these activities prior to generating revenue from product sales.

In addition, we may never succeed in these activities, and, even if we do, we may never generate revenues that are significant enough to achieve profitability.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates or even continue our operations.

A decline in the value of our company could also cause our stockholders to lose all or part of their investment.

Our obesity program is in an early preclinical stage and faces significant risks as we progress through additional animal studies and pursue a pathway to conducting IND enabling studies.

We may never be able to advance the program to an IND filing, commercialize any product candidate, generate significant revenues, or attain profitability.

Our obesity assets are small molecules that have undergone limited testing in two non-GLP diet-induced obesity (DIO) mouse studies.

These early studies showed dose-related body weight loss, favorable body composition changes, reductions in liver weight, and improvements in select biomarkers associated with liver injury compared to untreated controls.

However, these results are from non-GLP studies in a single animal model and are subject to the inherent risks and limitations of preclinical development.

The data from these studies are based on analyses to date and remain subject to further review as additional animal studies are completed.

As we progress through additional animal studies, optimized formulation development, refined manufacturing processes, and IND-enabling toxicology and other studies, it is possible that the small molecules will demonstrate unanticipated safety or tolerability issues, or lack of consistent efficacy across models or species.

Preclinical data in animal models are not necessarily predictive of results in later studies or in humans, and many product candidates that appear promising in early animal testing fail to advance.

Manufacturing small molecules for ongoing preclinical work and potential future IND-enabling or clinical use involves complex synthesis, scale-up, purity, and stability challenges that may cause delays, increased costs, or failure to produce material of suitable quality.

We will require substantial additional capital to complete additional animal studies, conduct full IND-enabling work (including GLP toxicology, CMC, and other regulatory requirements), file an IND, and conduct any future clinical trials.

There can be no assurance that we will be able to raise sufficient capital on acceptable terms, or at all, or that the data from additional studies will support progression to IND filing.

These factors, combined with intense competition from multiple approved GLP-1-based and other obesity therapies, make it highly uncertain whether we will ever successfully advance our obesity program to IND status or commercialize any product candidate.

Our business is highly dependent on the success of our Obesity and Metabolic Disorders Program, which is in the early stages of development and will require significant additional preclinical and clinical development before we can seek regulatory approval for and commercially launch a product.

Commencing clinical trials in the U.S.

is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities.

In the event that the FDA requires us to complete additional preclinical studies, or we are required to satisfy other FDA requests prior to commencing clinical trials, the start of our clinical trials may be delayed.

Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect.

There are equivalent processes and risks applicable to clinical trial applications in other countries, including countries in the European Union, or EU.

To date, we have had no interactions with the FDA regarding our Obesity and Metabolic Disorders Program.

We may experience issues surrounding preliminary trial execution, such as delays in FDA acceptance of any future INDs, revisions in trial design and finalization of trial protocols, difficulties with patient recruitment and enrollment, quality and provision of clinical supplies, or early safety signals.

We are not permitted to market any pharmaceutical product in the U.S.

until we receive approval of a New Drug Application, or NDA, from the FDA.

We have not previously submitted an NDA to the FDA, or similar marketing application to comparable foreign regulatory authorities.

An NDA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure and

potent for each desired indication.

An NDA must also include significant information regarding the chemistry, manufacturing and controls for the product.

FDA approval of an NDA is not guaranteed, and the review and approval process is expensive, uncertain and may take several years.

The FDA also has substantial discretion in the approval process.

The number and types of preclinical studies and clinical trials that will be required for an NDA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to treat and the regulations applicable to any particular product candidate.

Despite the time and expense associated with preclinical studies and clinical trials, failure can occur at any stage.

The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval.

The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain approval of any product candidate that we develop based on the completed clinical trials.

Generally, public concern regarding the safety of biopharmaceutical products could delay or limit our ability to obtain regulatory approval, result in the inclusion of unfavorable information in our labeling or require us to undertake other activities that may entail additional costs.

We have not obtained FDA approval for any product.

This lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for any current or future product candidates.

The success of our business, including our ability to finance our company and generate any revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of our current and any future product candidates, which may never occur.

However, given our early stage of development, it will be years before we are able to demonstrate the safety and efficacy of a treatment sufficient to warrant approval for commercialization, and we may never be able to do so.

If we are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize our current or any future product candidates, we may not be able to generate sufficient revenue to continue our business.

Preclinical development is uncertain.

Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.

We are in the preclinical stage of development, and the risk of failure is high.

Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies that support an IND in the U.S., or similar applications in other jurisdictions.

We cannot be certain of the timely completion or outcome of our preclinical testing and studies, and we cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our programs.

As a result, we cannot be sure that we will be able to submit an IND or similar applications for our current or future preclinical programs, including without limitation, on the timelines we expect, if at all, and we cannot be sure that submission of an IND or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin.

*Our reliance on third parties to formulate, manufacture and perform preclinical assays on our product candidates exposes us to a number of risks that may delay the development, regulatory approval and commercialization of our products or result in higher product costs.

We have limited experience in biopharmaceutical manufacturing.

We currently lack the internal resources and expertise to formulate or manufacture our own small molecule product candidates and, therefore, contract the manufacture of these with third parties for use in preclinical studies.

We also intend to contract with one or more manufacturers to manufacture, supply, store, and distribute material for additional animal studies and IND-enabling work.

In addition, we plan to use CDMOs, under our supervision, to perform our in vitro and in vivo preclinical studies of the small molecules.

Our anticipated future reliance on a limited number of third-party manufacturers exposes us to risks including inability to identify or retain suitable manufacturers on acceptable terms, failure of manufacturers to perform as agreed, noncompliance with cGMP or other regulations, and loss of control over manufacturing processes and quality.

Each of these risks could delay advancement of our obesityand metabolic disorders program or result in higher costs.

We face competition from entities that have developed or may develop programs for the medical needs we plan to address with our Obesity and Metabolic Disorders Program.

The development and commercialization of pharmaceutical products is highly competitive.

If approved, ALN1003 or any other drug candidates we may develop will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration.

We compete with a variety of multinational biopharmaceutical companies, specialized biotechnology companies and emerging biotechnology companies, as well as academic institutions, governmental agencies, and public and private research institutions, among others.

Many of the companies with which we are currently competing or will compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industry may result in even more resources being concentrated among a smaller number of our competitors.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, ALN1003 and any other drug candidates we may develop.

Our operating history makes it difficult to evaluate our business and prospects.

We have not previously completed any pivotal clinical trials, submitted a BLA or demonstrated an ability to perform the functions necessary for the successful commercialization of any product candidates.

If our preclinical obesity program is successful or we resume development of our TCR-T product candidates, successful commercialization of any product candidates will require us to perform a variety of functions, including:

If our preclinical Obesity and Metabolic Disorders Program is successful, successful commercialization of any product candidates will require us to perform a variety of functions, including:

• Continuing to undertake preclinical development and clinical trials;

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• Conducting sales and marketing activities.

Our operations have been limited to organizing and staffing our company, acquiring, developing and securing our proprietary product candidates and undertaking preclinical and clinical trials of our product candidates.

Our operations have been limited to organizing and staffing our company, acquiring, developing and securing our proprietary product candidates, and undertaking pre-clinical animal studies of our product candidates.

These operations provide a limited basis for you to assess our ability to commercialize our product candidates and the advisability of investing in our securities.

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In the event of such an accident, we could be held liable for any resulting damages, and any liability could have a materially adverse effect on our business, financial condition, results of operations, cash flows and prospects.

In addition, the federal, state and local laws and regulations

governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products may require our contractors to incur substantial compliance costs that could materially adversely affect our business, financial condition, results of operations, cash flows and prospects.

In addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products may require our contractors to incur substantial compliance costs that could materially adversely affect our business, financial condition, results of operations, cash flows and prospects.

We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.

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An inability to renew our policies or to obtain sufficient insurance at an acceptable cost could prevent or inhibit the commercialization of pharmaceutical products that we develop, alone or with collaborators.

Our legacy TCR-T cell therapy programs and related intellectual property are no longer in active development and may not generate any meaningful value.

We have historically relied on license and research agreements, including the MD Anderson License and related R&D agreements, to access key technologies for our former TCR-T cell therapy programs.

Following our August 2023 strategic reprioritization and wind-down of the TCR-T Library Phase 1/2 Trial, we are no longer conducting clinical development under these arrangements.

In December 2025, we entered into a Settlement and Release Agreement with MD Anderson to resolve certain outstanding invoices and payment disputes related to historical research

and development activities, pursuant to which we agreed to pay $285,000 in six installments through May 30, 2026.

Residual obligations, including trial close-out and long-term follow-up, may result in limited ongoing payments or interactions.

We have terminated our engagement with Cantor Fitzgerald & Co.

as strategic advisor effective January 8, 2026.

We are not actively pursuing broad strategic alternatives.

Our primary focus is advancing our Obesity and Metabolic Disorders Program.

Efforts to consummate a sale or out-license transaction of this legacy intellectual property portfolio have been unsuccessful to date.

We may never realize any meaningful value from our legacy assets.

*Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

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The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

*For our obesity assets, and should we in the future resume development of our TCR-T product candidates, will rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology or loss of data, including any cybersecurity incidents, could compromise sensitive information related to our business, prevent us from accessing critical information or expose us to liability which could significantly harm our ability to operate our business effectively and adversely affect our business and reputation.

In the ordinary course of our business, we, our CROs and other third parties on which we rely have and will collect and store sensitive data, including legally protected patient health information, personally identifiable information about our employee and certain consultants, intellectual property, and proprietary business information.

We manage and maintain our applications and data utilizing cloud-based systems.

These applications and data encompass a wide variety of business-critical information including research and development information and business and financial information.

The secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy.

Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable to damage from cyber-attacks, computer viruses, breaches, unauthorized access, interruptions due to employee error or malfeasance or other disruptions, or damage from natural disasters, terrorism, war and telecommunication and electrical failures.

Any such event could compromise our networks and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen.

Although we have measures in place that are designed to detect and respond to such security incidents and breaches of privacy and security mandates, we cannot guarantee that those measures will be successful in preventing any such security incident.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, government enforcement actions and regulatory penalties.

Such legal claims or proceedings, liability or government enforcement actions may make it more difficult to consummate

opportunities presented to us during our search for a strategic alternative.

Unauthorized access, loss or dissemination could also disrupt our operations, including our ability to resume research, development and commercialization activities, process and prepare Company financial information, manage various general and administrative aspects of our business and damage our reputation, in addition to possibly requiring substantial expenditures of resources to remedy, any of which could adversely affect our business.

In addition, there can be no assurance that we will promptly detect any such disruption or security breach, if at all.

If the technology supporting our obesity, TCR-T or hunTR discovery engine were to experience a cyber-incident resulting in the disclosure or theft of our proprietary data, processes or procedures, their value may decrease and our business, or ability to consummate a strategic transaction, may be materially and negatively impacted.

While we are not aware of any such material system failure, accident or security breach to date, to the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our search for a strategic alternative negatively impacted.

RISKS RELATED TO THE PRECLINICAL, CLINICAL TESTING, GOVERNMENT REGULATION AND MANUFACTURING OF OUR PRODUCT CANDIDATES

*Our obesity assets are small molecules subject to the inherent difficulties in manufacturing small molecules for preclinical and clinical testing in vitro , animals and humans.

Our obesity assets are small molecules that are and will be manufactured de novo by third party CDMOs.

Such manufacturing is potentially subject to complex synthesis processes that can be difficult to execute and expensive to conduct at either small scale for preclinical testing or large scale for clinical testing in humans, or both.

Our manufactured small molecules may be subject to purity concerns that could impact both the drug's safety and efficacy.

We are also susceptible to any future limited availability and supply chain disruptions of needed, critical raw materials which could affect our ability to manufacture sufficient materials needed for our testing and therefore delay clinical trials and commercialization.

We have limited experience in biopharmaceutical manufacturing.

We also intend to contract with one or more manufacturers to manufacture, supply, store, and distribute supplies for our clinical trials.

In addition, we plan to use CDMOs, under our supervision, to perform our in vitro studies of the small molecules.

If a product candidate we develop or acquire in the future receives FDA approval, we may also rely on one or more third-party contractors to manufacture our commercial products.

Our anticipated future reliance on a limited number of third-party manufacturers exposes us to at least the following risks:

• We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor.

• The approval would require new testing and compliance inspections.

In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our products after receipt of FDA approval, if any.

• Our third-party manufacturers might be unable to formulate and manufacture our products in the volume and of the quality required to meet our clinical and commercial needs, if any.

• Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store, and distribute our products.

• Biopharmaceutical manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Administration and corresponding state and foreign agencies to ensure strict compliance with current good manufacturing practices, or cGMP, and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’ compliance with these regulations and standards.

• Our future contract manufacturers may not perform as agreed or may remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products.

• Pharmaceutical manufacturers are subject to ongoing, periodic unannounced inspection by the FDA, the Drug Enforcement Administration and corresponding state and foreign agencies to ensure strict compliance with current good manufacturing practices, or cGMP, and other government regulations and corresponding foreign standards.

We do not have control over third party manufacturers' compliance with these regulations and standards.

• If any third party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights to the innovations.

• Our third party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United ed States.

Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

Each of these risks could delay our clinical trials and the approval, of the same,

*Our obesity assets are in early, preclinical stage and may not produce the desired results in animals or in human subjects, if clinical trials are initiated.

Our obesity assets are small molecules that have not yet been tested or have been subject to limited testing in animals or humans.

As we progress through pre-clinical to clinical stage assessments of these small molecules, it is possible that these small molecules have limited bioavailability wherein the drug is not effectively absorbed into the bloodstream, or once it has entered the bloodstream, the drug is rapidly broken down in the body before it is able to render the desired pharmaceutical effect in the patient, or that the drug is unable to timely reach the target(s) in sufficient concentrations to demonstrate efficacy.

*Clinical trials are very expensive, time-consuming, and difficult to design, initiate and implement.

Human clinical trials are expensive and difficult to design, initiate and implement, in part because they are subject to rigorous regulatory requirements.

The clinical trial start-up and process itself is also time-consuming and results are inherently uncertain.

We estimate that clinical trials of our product candidates will take at least several years to complete.

Furthermore, failure can occur at any stage of the trials, and we could encounter problems that cause us to delay the start of, abandon or repeat clinical trials.

The commencement and completion of clinical trials may be delayed by several factors, including:

• Additional nonclinical data requests by regulatory agencies;

• Unforeseen safety issues;

• determination of dosing issues;

• lack of effectiveness during clinical trials;

• slower than expected rates of patient recruitment and enrollment;

• inability to monitor patients adequately during or after treatment;

• inability or unwillingness of medical investigators to follow our clinical protocols;

• regulatory determinations to temporarily or permanently cease enrollment for other reasons not related to patient safety.

Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful.

In addition, we or the FDA may suspend our clinical trials at any time if it appears that we are exposing participants to unacceptable health risks or if the FDA finds deficiencies in our IND submission or in the conduct of these trials.

Our business may be materially harmed if we or our partners are unable to adequately address the FDA’s requests for this trial in a timely manner.

Each of these risks could delay our clinical trials, the approval, if any, of our product candidates by the FDA or the commercialization of our product candidates or result in higher costs or deprive us of potential product revenues.

*Should we resume development of our TCR-T product candidates, we may encounter difficulties enrolling patients in our clinical trials, and our clinical development activities could be delayed or otherwise materially and adversely affected.

We have not yet begun to enroll patients for any obesity targeting clinical trial and we have experienced, and may in the future experience, difficulties in patient enrollment in our TCR-T Library Phase 1/2 Trial and any future clinical trials for a variety of reasons.

The timely completion of clinical trials in accordance with their protocols depends on, among other things, our ability to enroll a sufficient number of patients who remain in the clinical trial until its conclusion.

The enrollment of patients depends on many factors, including:

• Our reputation as a result of halting our ongoing clinical development;

• The patient eligibility criteria defined in the clinical trial protocol;

• The size of the patient population required for analysis of the clinical trial’s primary endpoints;

• The proximity of patients to clinical trial sites;

• The number of clinical trial sites;

• The design of the clinical trial;

• Our ability to recruit and retain clinical trial investigators with the appropriate competencies and experience;

• Our ability to obtain and maintain patient consents;

• Reporting of the preliminary results of any of our clinical trials;

• Patient insurance approvals of trial participation;

• The risk that patients enrolled in clinical trials will drop out of the clinical trials before the manufacturing and infusion of our product candidates or clinical trial completion.

Should we resume clinical development of our TCR-T trial, they would compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition could reduce the number and types of patients available to us because some of our potential patients may instead opt to enroll in a clinical trial being conducted by one of our competitors.

In addition, patients may be unwilling to participate in our studies because of negative publicity from adverse events in the biotechnology industry or for other reasons.

Since the number of qualified clinical investigators is limited, we would expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use if we resume development of our product candidates, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites.

Moreover, because our product candidates represent a departure from more commonly used methods or previously approved therapeutics for obesity or cancer treatment, potential patients and their doctors may be inclined to use conventional therapies rather than enroll patients in any future clinical trial.

Additionally, because our TCR-T product candidates address patients with relapsed/refractory cancer, the patients are typically in the late stages of their disease and may experience disease progression independent from our product candidates, making them unevaluable for purposes of the clinical trial, which would require additional patient enrollment.

Delays in completing patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion or commencement of these clinical trials and adversely affect our ability to advance the development of our product candidates.

Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates, should we resume development.

The clinical development, manufacturing, labeling, packaging, storage, record-keeping, advertising, promotion, import, export, marketing, distribution and adverse event reporting, including the submission of safety and other information, of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets.

The process of obtaining regulatory approval is expensive and often takes many years following the commencement of clinical trials.

Approval policies or regulations may change, and the FDA has substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons.

Regulatory approval is never guaranteed.

Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective, or with respect to a biological product candidate, safe, pure and potent, for their intended uses.

The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:

• Such authorities may disagree with the design or implementation of our or our collaborators’ clinical trials;

• Negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval;

• Serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs or biologics similar to our therapeutic product candidates;

• Such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States;

• We, or any of our collaborators, may be unable to demonstrate that a product candidate is safe and effective, and that the therapeutic product candidate’s clinical and other benefits outweigh its safety risks;

• We may be unable to demonstrate to the satisfaction of such authorities that our companion diagnostics are suitable to identify appropriate patient populations;

• Such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

• Such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of a BLA, New Drug Application, premarket approval, or PMA, or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials;

• Such authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates;

• Approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use;

• Such authorities may find deficiencies in the manufacturing processes, test procedures and specifications or facilities of our third-party manufacturers with which we or any of our current or future collaborators contract for clinical and commercial supplies;

• Regulations and approval policies of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval;

• Such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.

This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failing to obtain regulatory approval to market any of our product candidates should we resume clinical development, which would significantly harm our business, financial condition, results of operations, cash flows and prospects.

In addition, even if we obtain regulatory approval of our product candidates, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request and may impose significant limitations in the form of narrow indications, warnings, or a Risk Evaluation and Mitigation Strategy, or REMS.

Events raising questions about the safety of certain marketed biopharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new drugs or biologics based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals.

Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us or any of our potential future collaborators from commercializing our product candidates.

*We have halted development of our TCR-T product candidates very early in our development efforts.

Our most advanced product candidates were only in an early-stage clinical trial, which is very expensive and time-consuming while our obesity assets have not yet completed in vitro testing.

We cannot be certain if or when we will be able to submit a BLA or an NDA to the FDA and the delay, or any failure, in completing clinical trials for our product candidates could significantly harm our business.

Our obesity assets have not yet completed in vitro testing while our most advanced TCR-T product candidates were only in a Phase 1/2 trial when we ceased development activity and will require extensive clinical testing should we resume development.

Human clinical trials are very expensive and difficult to design, initiate and implement, in part because they are subject to rigorous regulatory requirements.

Failure can occur at any stage of a clinical trial, and we can encounter problems that cause us to delay the start of, abandon or repeat clinical trials.

Some factors which may lead to a delay in the commencement or completion of our clinical trials, if resumed, include:

requests for additional nonclinical data from regulators, unforeseen safety issues, dosing issues, lack of effectiveness during clinical trials, difficulty recruiting or monitoring patients, or difficulty manufacturing clinical products, among other factors.

As they enter later stages of development, product candidates generally will become subject to more stringent regulatory requirements, including the FDA’s requirements for chemistry, manufacturing and controls for product candidates entering Phase 3 clinical trials.

There is no guarantee the FDA will allow us or any potential licensee to commence Phase 3 clinical trials for product candidates studied in earlier clinical trials.

If the FDA does not allow our product candidates to enter later stage clinical trials or requires changes to the formulation or manufacture of our product candidates before commencing Phase 3 clinical trials, the ability to further develop, or seek approval for, such product candidates may

be materially impacted.

As such, for our obesity asset or if we resume clinical development of our TCR-T product candidates, we cannot predict with any certainty if or when we might submit a NDA or biologics license application or BLA for regulatory approval of our product candidates or whether such NDA or BLA will be accepted.

Because we do not anticipate generating significant revenues unless and until we submit one or more NDAs or BLAs and thereafter obtain requisite FDA approvals, the timing of our NDA and BLA submissions and FDA determinations regarding approval thereof will directly affect if and when we are able to generate significant revenues.

In addition, we have halted development of our TCR-T product candidates.

There is an additive degree of risk to any development program that is paused because the time to restart the program and the associated expense may be longer and more costly than previously anticipated.

It may also not be possible to restart the program altogether.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any potential marketing approval.

As with many pharmaceutical and biological products, treatment with our product candidates, if resumed, may produce undesirable side effects or adverse reactions or events, including, with respect to our TCR-T product candidates, potential adverse side effects related to cytokine release.

If our product candidates or similar products or product candidates under development by third parties demonstrate unacceptable adverse events, we may be required to halt or delay further clinical development of our product candidates, should we resume it.

The FDA or foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.

If a serious adverse event were to occur in a trial, the FDA may place a hold on the clinical trial.

The product-related side effects could affect patient recruitment or the ability of enrolled patients to resume and complete the trial or result in potential product liability claims.

In addition, these side effects may not be appropriately or timely recognized or managed by the treating medical staff, particularly outside of the institutions that collaborate with us, as toxicities resulting from our novel technologies may not be normally encountered in the general patient population and by medical personnel.

Should we resume product development or begin commercialization, we expect to have to train medical personnel using our product candidates to understand their side effect profiles.

Inadequate training in recognizing or managing the potential side effects of our product candidates could result in adverse effects to patients, including death.

Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our product candidates, a number of potentially significant negative consequences could result, including:

• regulatory authorities may withdraw approvals of such product;

• regulatory authorities may require additional warnings on the product’s label;

• we may be required to create a risk evaluation and mitigation strategy plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use;

• we could be sued and held liable for harm caused to patients;

• our reputation may suffer.

Any of the foregoing could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved.

Furthermore, any of these occurrences may harm our business, financial condition and prospects significantly.

Our cellular therapy immuno-oncology TCR-T product candidates relied on the availability of reagents, specialized equipment and other specialty materials and infrastructure, which may not be available to us on acceptable terms or at all if we resume our clinical trial.

For some of these reagents, equipment and materials, we relied or may rely on sole source vendors or a limited number of vendors, which could significantly impair our ability to manufacture and supply our products, should we resume these activities.

Manufacturing our TCR-T product candidates required many reagents, which are substances used in our manufacturing processes to bring about chemical or biological reactions, and other specialty materials and equipment, some of which are manufactured or supplied by small companies with limited resources and experience to support commercial biologics production.

We have depended on a limited number of vendors for certain materials and equipment used in the manufacture of our TCR-T product candidates, including DNA plasmids, which we used as the vector to insert our TCRs into human T cells.

Should we resume product manufacturing, some or all of these suppliers may not have the capacity to support commercial products manufactured under current good manufacturing practices by biopharmaceutical firms or may otherwise be ill-equipped to support our needs, should we resume manufacturing.

We also do not have supply contracts with some of these suppliers and may not be able to obtain supply contracts with them on acceptable terms or at all.

Accordingly, we may experience significant delays in receiving key materials and equipment to support clinical or commercial manufacturing, should we resume those activities.

For some of these reagents, equipment, infrastructure, and materials, we may rely on sole source vendors or a limited number of vendors.

An inability to source product from any of these suppliers, or source product on commercially reasonable terms, which could be due to, among other things, regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands, supply chain issues or quality issues, could materially and adversely affect our ability to satisfy

demand for our product candidates, which could adversely and materially affect our ability to conduct clinical trials, should we resume them, which could significantly harm our business.

In addition, some of the reagents and products used by us may be stored at a single vendor.

The loss of materials located at a single vendor, or the failure of such a vendor to manufacture clinical product in accordance with our specifications, would impact our ability to conduct clinical trials and continue the development of our products, should we resume it.

Further, manufacturing replacement material may be expensive and require a significant amount of time, which may further impact our clinical programs.

If we resume developing and scaling our manufacturing process, we expect that we will need to obtain additional rights to and supplies of certain materials and equipment to be used as part of that process.

We may not be able to maintain rights to such materials on commercially reasonable terms, or at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a suitable substitute, it would have a material adverse effect on our business.

Even if we are able to alter our process so as to use other materials or equipment, such a change may lead to a delay in clinical development and/or commercialization plans.

If such a change occurs for a product candidate that is already in clinical trials, the change may require us to perform both ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.

*We have limited experience producing and supplying our TCR-T product candidates.

We may be unable to consistently manufacture our TCR-T product candidates to the necessary specifications or in quantities necessary to treat patients in clinical trials, should we resume the activities.

We have limited experience in biopharmaceutical manufacturing.

In 2021, we began manufacturing our product candidates at our in-house current good manufacturing practices, or cGMP, manufacturing facility at our leased headquarters in Houston, Texas.

In connection with our exploration of strategic alternatives, we have halted manufacturing of our product candidates and eliminated positions relating to the same.

We have also permanently closed our Houston manufacturing facility as of November 2023 as a part of our lease termination.

Accordingly, should we elect to in the future, our ability to resume manufacturing our product candidates will depend on our acquisition of new manufacturing space.

hiring and retaining personnel with the appropriate background and training to staff and operate the facility on a daily basis.

Should we be unable to hire or retain these individuals, we may need to train additional personnel to fill the needed roles or engage with external contractors.

There are a small number of individuals with experience in cell therapy and the competition for these individuals is high.

Specifically, the operation of a cell-therapy manufacturing facility is a complex endeavor requiring knowledgeable individuals who have successful previous experience in cleanroom environments.

Cell therapy facilities, like other biological agent manufacturing facilities, require appropriate commissioning and validation activities to demonstrate that they operate as designed.

Additionally, each manufacturing process must be proven through the performance of process validation runs to guarantee that the facility, personnel, equipment, and process work as designed.

Although we have developed our own manufacturing processes using an in-house team, there is timing risk associated with increased in-house product manufacture, including as a result of implementing the Plan.

The manufacture of our product candidates is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.

Manufacturers of cell therapy products often encounter difficulties in production, particularly in scaling out and validating initial production and ensuring the absence of contamination.

These include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.

It is possible that stability or other issues relating to the manufacture of our product candidates could occur in the future.

Before we halted clinical development, we had amended our clinical trial IND to use cryopreservation-based storage of clinical products.

This process is new and should we resume clinical development and in-house manufacturing, we may experience manufacturing failures or difficulties producing sufficient quantities of our clinical products as a result of this change.

Our TCR-T product candidates have been manufactured on a patient-by-patient basis.

Delays in manufacturing could adversely impact the treatment of each patient and may discourage participation in clinical trials should clinical development be resumed.

We have not manufactured our clinical trial product candidates on a large scale and may not be able to achieve large scale clinical trial or commercial manufacturing and processing on our own to satisfy expected clinical trial or commercial demands for any of our product candidates, should development resume in the future.

The manufacturing processes employed by us may not result in product candidates that will be safe and effective.

If we are unable to manufacture sufficient number of TCR-T cells for our product candidates, development efforts would be delayed, which would adversely affect our business and prospects.

Manufacturing operations are subject to review and oversight by the FDA.

If we resume internal manufacturing operations, we will be subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Administration and corresponding state agencies to ensure strict compliance with cGMP and other government regulations.

Our license to manufacture product candidates is subject to continued regulatory review.

We do not yet have sufficient information to reliably estimate the cost of commercial manufacturing and processing of our product candidates.

The actual cost to manufacture and process our product candidates could materially and adversely affect the commercial viability of our product candidates.

As a result, we may never be able to develop a commercially viable product.

We also may fail to manage the logistics of collecting and shipping patient material to our manufacturing site and shipping the product candidate back to the patient.

Logistical and shipment delays and problems, whether or not caused by us or our vendors, could prevent or delay the delivery of product candidates to patients, should we resume the trial.

We may have difficulty validating our manufacturing process as we manufacture our product candidates from an increasingly diverse patient population for our clinical trials, should we resume these activities.

During our development of the manufacturing process, our TCR-T cell product candidates have demonstrated consistency from lot to lot and from donor to donor.

However, our sample size is small and the starting material used during our preclinical development work came from healthy donors.

If our development work is continued, we may encounter unforeseen difficulties due to starting with material from donors who are not healthy, including challenges inherent in harvesting white blood cells from unhealthy patients.

Although we believe our TCR-T manufacturing process is scalable for clinical development and commercialization, if any of our product candidates are approved or commercialized, we may encounter challenges in validating our process due to the heterogeneity of the product starting material.

We cannot guarantee that any other issues relating to the heterogeneity of the starting material will not impact our ability to commercially manufacture our product candidates.

The gene transfer vectors from our Sleeping Beauty system used to manufacture our TCR-T product candidates may incorrectly modify the genetic material of a patient’s T cells, potentially triggering the development of a new cancer or other adverse events.

Our TCR-T cells were manufactured using the Sleeping Beauty system, a non-viral vector to insert genetic information encoding the TCR construct into the patient’s T cells.

The TCR construct was then primarily integrated at thymine-adenine, or TA, dinucleotide sites throughout the patient’s genome and, once expressed as protein, is transported to the surface of the patient’s T cells.

Because the gene transfer vector modifies the genetic information of the T cell, there is a theoretical risk that modification will occur in the wrong place in the T cell’s genetic code, leading to vector-related insertional oncogenesis, and causing the T cell to become cancerous.

If the cancerous T cell is then administered to the patient, the cancerous T cell could trigger the development of a new cancer in the patient.

We used non-viral vectors to insert genetic information into T cells, which we believe have a lower risk of insertional oncogenesis as opposed to viral vectors.

However, the risk of insertional oncogenesis remains a concern for gene therapy, and we cannot assure you that it will not occur in any clinical trials of our product candidates.

There is also the potential risk of delayed adverse events following exposure to gene therapy products due to persistent biological activity of the genetic material or other components of the vectors used to carry the genetic material.

Although our product candidates use non-viral vectors, the FDA has stated that lentiviral vectors possess characteristics that may pose high risks of delayed adverse events.

If any such adverse events occur from our non-viral vector, preclinical studies or clinical trials could be halted or delayed, which would have a material adverse effect on our business and operations.

For our product candidates, any product candidate for which we obtain marketing approval could be subject to post-marketing restrictions or withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other regulatory authorities.

These requirements include, among other things, submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping.

Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including the requirement to implement a REMS, which could include requirements for a restricted distribution system.

If any of our product candidates receives marketing approval, the accompanying label may limit the approved uses, which could limit sales of the product.

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of our approved products.

The FDA closely regulates the post-approval marketing and promotion of products to ensure that they are marketed only for the approved indications and in accordance with the provisions of the approved labeling.

However, companies may share truthful and not misleading information that is otherwise consistent with the labeling.

The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we market our products outside of their approved indications, we may be subject to enforcement action for off-label marketing.

Violations of the Federal Food, Drug and Cosmetic Act relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with our product candidates, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

• Litigation involving patients taking our products;

• Restrictions on such products, manufacturers or manufacturing processes;

• Restrictions on the labeling or marketing of a product;

• Restrictions on product distribution or use;

• Requirements to conduct post-marketing studies or clinical trials;

• Warning letters;

• Withdrawal of the products from the market;

• Refusal to approve pending applications or supplements to approved applications that we submit;

• Recall of products;

• Fines, restitution or disgorgement of profits or revenues;

• Suspension or withdrawal of marketing approvals;

• Damage to relationships with existing and potential collaborators;

• Unfavorable press coverage and damage to our reputation;

• Refusal to permit the import or export of our products;

• Product seizure;

• Injunctions or the imposition of civil or criminal penalties.

Noncompliance with requirements regarding safety monitoring or pharmacovigilance can also result in significant financial penalties.

Similarly, failure to comply with U.S.

and foreign regulatory requirements regarding the development of products for pediatric populations and the protection of personal health information can also lead to significant penalties and sanctions.

*Disruptions at the FDA, the SEC, and other government agencies caused by funding shortages or personnel changes could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

In addition, government funding of the SEC and other government agencies on which our operations rely, including those that fund research and development activities, is subject to the political process, which is fluid and unpredictable.

Furthermore, the risk of a protracted government shutdown could adversely affect our business.

Over the last several years, the U.S.

government has shut down several times and certain regulatory agencies, like the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

If a prolonged government shutdown occurs, it would significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Future government shutdowns could also impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

RISKS RELATED TO OUR ABILITY TO COMMERCIALIZE OUR PRODUCT CANDIDATES

Our inability to obtain the necessary U.S.

or worldwide regulatory approvals to commercialize any product candidate would cause our business to suffer significantly.

For our obesity assets, and if we resume clinical development of our TCR-T product candidates, we may not be able to obtain the approvals necessary to commercialize our product candidates, or any product candidate that we may acquire or develop in the future for commercial sale.

We will need FDA approval to commercialize our product candidates in the United States and approvals from regulatory authorities in foreign jurisdictions equivalent to the FDA to commercialize our product candidates in those jurisdictions.

In order to obtain FDA approval of any product candidate, we must submit to the FDA a NDA or BLA demonstrating that the product candidate is safe for humans and effective for its intended use.

This demonstration requires significant research and animal tests, which are referred to as preclinical studies, as well as human tests, which are referred to as clinical trials.

Satisfaction of the FDA’s regulatory requirements typically takes many years, depending upon the type, complexity and novelty of the product candidate, and will require substantial resources for research, development and testing.

We cannot predict whether our research, development, and clinical approaches will result in products that the FDA will consider safe for humans and effective for their intended uses.

The FDA has substantial discretion in the approval process and may require us to conduct additional preclinical studies and clinical trials or to perform post-marketing studies.

The approval process may also be delayed by changes in government regulation,

future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review.

Delays in obtaining regulatory approvals may:

• Delay commercialization of, and our ability to derive product revenues from, our product candidates;

• Impose costly procedures on us;

• Diminish any competitive advantages that we may otherwise enjoy.

Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our NDAs or BLAs.

We cannot be sure that we will ever obtain regulatory approval for any of our product candidates.

Failure to obtain FDA approval for our product candidates will severely undermine our business by leaving us without a marketable product, and therefore without any potential revenue source, until another product candidate can be developed.

There is no guarantee that we will ever be able to develop or acquire another product candidate or that we will obtain FDA approval if we are able to do so.

In foreign jurisdictions, we similarly must receive approval from applicable regulatory authorities before we can commercialize any of our product candidates.

Foreign regulatory approval processes generally include all of the risks associated with the FDA approval procedures described above.

If we are unable either to create sales, marketing and distribution capabilities or enter into agreements with third parties to perform these functions, we will be unable to commercialize our product candidates successfully.

We currently have no marketing, sales, or distribution capabilities.

We anticipate allocating resources to the marketing, sales and distribution of our proposed small molecule products, as well as our TCR-T product candidates if we resume work on these, in North America and in certain other geographies;

however, we cannot assure that we will be able to market, sell, and distribute our products successfully.

Our future success also may depend, in part, on our ability to enter into and maintain collaborative relationships for such capabilities and to encourage the collaborator’s strategic interest in the product candidates under development, and such collaborator’s ability to successfully market and sell any such products.

Although we intend to pursue certain collaborative arrangements regarding the sale and marketing of certain of our product candidates, there are no assurances that we will be able to establish or maintain collaborative arrangements or, if we are able to do so, whether we would be able to conduct our own sales efforts.

There can also be no assurance that we will be able to establish or maintain relationships with third-party collaborators or develop in-house sales and distribution capabilities.

To the extent that we depend on third parties for marketing and distribution, any revenues we receive will depend upon the efforts of such third parties, and there can be no assurance that such efforts will be successful.

In addition, there can also be no assurance that we will be able to market and sell our product candidates in the United States or overseas.

If we are not able to partner with a third party and are not successful in recruiting sales and marketing personnel or in building a sales and marketing infrastructure, we will have difficulty commercializing our product candidates, which would harm our business.

If we rely on pharmaceutical or biotechnology companies with established distribution systems to market our products, we will need to establish and maintain partnership arrangements, and we may not be able to enter into these arrangements on acceptable terms or at all.

To the extent that we enter into co-promotion or other arrangements, any revenues we receive will depend upon the efforts of third parties that may not be successful and that will be only partially in our control.

If physicians and patients do not accept and use our product candidates, once approved, our ability to generate revenue from sales of our products will be materially impaired.

Even if the FDA and/or foreign equivalents thereof approve our product candidates, physicians and patients may not accept and use them.

The use of engineered T cells as potential cancer treatments is a relatively recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers for our TCR-T products, third-party payors and others in the medical community.

Acceptance and use of our products will depend upon a number of factors, including:

• The clinical indications for which our product candidates are approved;

• Perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our products;

• The prevalence and severity of any side effects;

• Pharmacological benefit and cost-effectiveness of our products relative to competing products;

• Relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies;

• Availability of coverage and adequate reimbursement for our products from government or other third-party payors;

• Effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any;

• The price at which we sell our products.

Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.

Our ability to generate product revenues will be diminished if our products do not obtain coverage and adequate reimbursement from payors.

Our ability to commercialize our product candidates, if approved, alone or with collaborators, will depend in part on the extent to which coverage and reimbursement will be available from third-party payors, including government and health administration authorities, private health maintenance organizations and health insurers and other payors.

Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs.

Sufficient coverage and adequate reimbursement from third-party payors are critical to new product acceptance.

Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

It is difficult to predict the coverage and reimbursement decisions that will be made by third-party payors for novel gene and cell therapy products such as ours.

Even if we obtain coverage for our product candidates, the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high.

Patients are unlikely to use our product candidates unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our product candidates.

In addition, the market for our product candidates for which we may receive regulatory approval will depend significantly on access to third-party payors’ drug formularies or lists of medications for which third-party payors provide coverage and reimbursement, which might not include all of the FDA-approved drugs for a particular indication.

The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies.

Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative is available.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.

In addition, in the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors.

Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor.

As a result, the coverage determination process is often a time-consuming and costly process that would require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that approval will be obtained.

If we are unable to obtain coverage of and adequate payment levels for our product candidates, if approved, from third-party payors, physicians may limit how much or under what circumstances they will prescribe or administer our products and patients may decline to purchase them.

This in turn could affect our ability to successfully commercialize our products and materially and adversely impact our business, financial condition, results of operations, cash flows and prospects.

In addition, in many foreign countries, particularly the countries of the European Union, or EU, the pricing of prescription drugs is subject to government control.

In some non-U.S.

jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing drug pricing vary widely from country to country.

For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

We may face competition for our product candidates from lower-priced products in foreign countries that have placed price controls on pharmaceutical products.

In addition, there may be importation of foreign products that compete with our own products, which could negatively impact our profitability.

The market opportunities for our TCR-T product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small.

Cancer therapies are sometimes characterized as first line, second line or third line, and the FDA often approves new therapies initially only for third line use.

When cancer is detected early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure.

Whenever first line therapy, usually chemotherapy, hormone therapy, surgery, or a combination of these, proves unsuccessful, second line therapy may be administered.

Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor targeted small molecules, or a combination of these.

Third line therapies can include bone marrow transplantation, antibody and small molecule targeted therapies, more invasive forms of surgery and new technologies.

We expect to initially seek approval of our product candidates as a third line therapy for patients who have failed other approved treatments.

Subsequently, for those product candidates that prove to be sufficiently beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved, would be approved for second line or first line therapy.

In addition, we may have to conduct additional clinical trials prior to gaining approval for second line or first line therapy.

Our projections of both the number of people who have the cancers we targeted, as well as the subset of people with these cancers in a position to receive therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.

These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research and may prove to be incorrect.

Further, new studies may change the estimated incidence or prevalence of these cancers.

The number of patients may turn out to be lower than expected.

Additionally, the potentially addressable patient population for our product candidates may be limited or

may not be amenable to treatment with our product candidates.

Our market opportunities may also be limited by competitor treatments that may enter the market.

*Several drugs have already been approved for diabetes and/or obesity treatment, which may affect our ability to gain a profitable share of the market.

Even if our obesity assets are approved by FDA and successfully launched as a commercial product, the market may be saturated by previously approved drugs that have been demonstrated to be effective in treating obesity already, making the market difficult to penetrate.

The availability of previously approved drugs may also limit the availability of insurance reimbursement/coverage of our product candidates.

Healthcare legislative reform measures may have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory enactments in recent years that change the healthcare system in ways that could impact our future ability to sell our product candidates profitably.

Furthermore, there have been and continue to be a number of initiatives at the federal and state level that seek to reduce healthcare costs.

Most significantly, in March 2010, President Obama signed into law the ACA, which included measures that have significantly changed the way healthcare is financed by both governmental and private insurers.

The ACA, among other things, imposed a methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program, extended the rebate program to individuals enrolled in Medicaid managed care organizations, added a provision to increase the Medicaid rebate for line extensions or reformulated drugs, established annual fees on manufacturers and importers of certain branded prescription drugs and biologic agents, promoted a new Medicare Part D coverage gap discount program, expanded the entities eligible for discounts under the Public Health Service Act pharmaceutical pricing program and imposed a number of substantial new compliance provisions related to pharmaceutical companies’ interactions with healthcare practitioners.

The ACA also expanded eligibility for Medicaid programs and introduced a new Patient Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research and a new Center for Medicare & Medicaid Innovation at CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

There have been executive, legal and political challenges to certain aspects of the ACA.

For example, President Trump signed several executive orders and other directives designed to delay, circumvent or loosen certain requirements mandated by the ACA.

Concurrently, Congress considered legislation to repeal or repeal and replace all or part of the ACA.

While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been signed into law.

In December 2017, Congress repealed the tax penalty, effective January 1, 2019, for an individual’s failure to maintain ACA-mandated health insurance as part of the Tax Act.

The IRA, among other things, extended enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and implementing a newly established manufacturer discount program.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future, particularly in light of the Trump administration's interest in reducing federal expenditures to include those under federal healthcare programs.

It is unclear how any such challenges of the Trump administration will impact ACA and our business.

The ultimate content, timing or effect of any healthcare reform measures on the U.S.

healthcare industry is unclear.

Further, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.

As a result, there have been several U.S.

Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs.

At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals.

The FDA also released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.

Further, on November 30, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The IRA delayed the implementation of the rule to January 1, 2032.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed until January 1, 2032.

In addition, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate price cap, which was set at 100% of a drug's average manufacturer price for single source and innovator multiple source products, beginning on January 1, 2024.

The IRA, among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

The IRA permits HHS to implement many of these provisions through

guidance, as opposed to regulation, for the initial years.

These provisions began to take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

It is currently unclear how the IRA will be effectuated but is likely to have a significant impact on the pharmaceutical industry.

Individual states in the United States also have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive for any approved product.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or, if we receive regulatory approval, commercialize our products.

If we fail to comply with federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, we could face substantial penalties and our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected.

As a pharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business.

For example, we could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business.

The laws that may affect our ability to operate include, among others:

• The federal Anti-Kickback Statute, which regulates our business activities, including our clinical research and relationships with healthcare providers or other entities as well as our future marketing practices, educational programs and pricing policies, and by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

• Federal civil and criminal false claims laws, including the False Claims Act, which permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent;

• HIPAA, which created new federal civil and criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• HITECH, and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on entities and individuals subject to the law including certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as individuals and entities that perform services for them which involve the use, or disclosure of, individually identifiable health information, known as business associates and their subcontractors that use, disclose or otherwise process individually identifiable health information;

• Requirements under the Physician Payments Sunshine Act to report annually to CMS certain financial arrangements with prescribers and teaching hospitals, as defined in the ACA and its implementing regulations, including reporting any “transfer of value” made or distributed to teaching hospitals, and physicians, as defined by such law and reporting any ownership and investment interests held by physicians and their immediate family members during the preceding calendar year;

• State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers;

state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to healthcare providers and entities;

state laws that require drug manufacturers to report information related to payments and other transfer of value to physicians and other healthcare providers and entities;

state laws that require the reporting of information related to drug pricing;

state and local laws that require the registration of pharmaceutical sales representatives;

and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities, including any consulting agreements with physicians who may receive stock or stock options as compensation for their services, could be subject to challenge under one or more of such laws.

In addition, recent health care reform legislation has further strengthened these laws.

For example, the ACA, among other things, amended the intent requirement of the federal Anti-Kickback Statute and certain criminal healthcare fraud statutes.

A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it.

Moreover, the

ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

To the extent that any of our product candidates is ultimately sold in a foreign country, we may be subject to similar foreign laws and regulations.

Efforts to ensure that our business arrangements comply with applicable healthcare laws involve substantial costs.

It is possible that governmental and enforcement authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, exclusion from participation in United States federal or state health care programs, such as Medicare and Medicaid, disgorgement, imprisonment, integrity oversight and reporting obligations, and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.

Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

*Our small molecule and immuno-oncology product candidates may face competition in the future from generics and biosimilars respectively and/or new technologies.

The Hatch Waxman Act provides a pathway for companies to gain entry to the market for certain small molecule-based drugs more quickly and less expensively than brand companies.

The Biologics Price Competition and Innovation Act of 2009, or BPCIA, provides a similar abbreviated pathway for the approval of follow-on biological products.

Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved under a BLA.

However, there is a risk that the U.S.

Congress could amend the BPCIA to significantly shorten this exclusivity period, potentially creating the opportunity for generic competition sooner than anticipated.

Further, this data exclusivity does not prevent another company from developing a product that is highly similar to the original branded product, generating its own data and seeking approval.

Data exclusivity only assures that another company cannot rely upon the data within the innovator’s application to support the biosimilar product’s approval.

The entry of a generic or biosimilar to our product candidates to the market would significantly affect our profitability and return on investment.

Our ability to advance our Obesity and Metabolic Disorders Program depends on our ability to retain our remaining employee and consultants.

Our ability to advance our Obesity and Metabolic Disorders Program depends upon our ability to retain our remaining employee and consultants, the loss of whose services may adversely impact our progress.

We are highly dependent on our sole full-time employee, who serves as our Chief Executive Officer and performs multiple executive, operational, and oversight roles.

The loss of this individual’s services for any reason (including death, disability, resignation, or distraction) could severely disrupt our operations, delay advancement of our obesity program, impair our ability to meet regulatory and public-company obligations, and have a material adverse effect on our business, as there is no immediate successor or internal bench strength.

We do not currently maintain key-person life insurance on this individual.

Our heavy reliance on consultants for key functions such as finance (including accounting and financial reporting), legal, and other expertise further increases operational fragility, continuity risk, knowledge gaps, divided attention across clients, and the potential for coordination failures or inconsistent application of policies.

If we are unable to successfully retain our personnel, we are at risk of a disruption to our business operations.

Any future growth would impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees.

For example, further workforce constraints could negatively impact our ability to advance our Obesity and Metabolic Disorders Program.

Our future financial performance and our ability to develop our product candidates will depend, in part, on our ability to effectively manage any future growth or restructuring, as the case may be.

These events may also result in investigations by the SEC or other governmental agencies.

We may be exposed to such litigation even if no wrongdoing occurred.

* Artificial intelligence and other advanced technologies used by us, our employees, consultants, or business partners may expose us to significant risks, including the loss or unauthorized disclosure of confidential information, intellectual property, or clinical and preclinical data, while the rapidly evolving regulatory and legal landscape surrounding artificial intelligence could materially and adversely affect our business.

We and our employees, consultants, contract research organizations, contract development and manufacturing organizations, and other business partners may use commercially available artificial intelligence tools and platforms, including generative AI models, machine learning algorithms, and other advanced computational technologies, in connection with our preclinical research, data analysis, formulation development, computational chemistry efforts, and other business activities.

These tools often require the input of large datasets, including potentially sensitive, proprietary, or confidential information such as research results, preclinical study data, clinical trial protocols, trade secrets, pending patent applications, and other intellectual property.

If our personnel or third-party service providers inadvertently or intentionally input confidential or proprietary information into external AI systems that are not fully controlled by us, such information may be stored, processed, or incorporated into the AI model’s training data and could be exposed to third parties, reproduced in AI-generated outputs, or otherwise compromised.

This risk is heightened because many publicly available or third-party AI platforms do not guarantee confidentiality and may use submitted data to improve their own models.

Any such exposure could result in the loss of our competitive advantage, impairment of our intellectual property rights (including the ability to obtain or enforce patents), breaches of confidentiality obligations to third parties (such as licensors or collaborators), or the inability to protect our Obesity and Metabolic Disorders Program, including ALN1003 and related analogs.

In addition, the legal and regulatory framework governing artificial intelligence is uncertain and evolving rapidly at the federal, state, and international levels.

Issues such as ownership of AI-generated outputs, potential infringement of third-party intellectual property rights embedded in AI training data, data privacy and security obligations, algorithmic bias, and liability for inaccuracies or harmful outputs remain unclear and subject to change.

New laws, regulations, or enforcement actions could impose significant compliance burdens, restrict our ability to use certain AI tools, or expose us to litigation, regulatory investigations, fines, or other penalties.

We have not yet adopted a formal artificial intelligence use policy or implemented comprehensive controls and procedures governing the use of AI tools by our personnel and third parties.

As a result, we may be unable to adequately prevent or mitigate the risks associated with AI usage.

Any failure to manage these risks appropriately could lead to the loss or unauthorized disclosure of valuable proprietary information, regulatory scrutiny, legal claims, reputational harm, delays in our development programs, or other adverse consequences that could materially and adversely affect our business, financial condition, results of operations, and prospects.

*Cybersecurity incidents or IT failures could compromise sensitive information, disrupt operations, or reduce the value of our assets and impair our strategic alternatives.

In the ordinary course of our business, we, our CROs, consultants, and other third parties collect and store sensitive data, including intellectual property, proprietary business information, financial data, and personally identifiable information.

We rely on cloud-based systems to manage and maintain this information.

The secure processing, storage, and transmission of this data is critical to our operations and our ability to pursue strategic alternatives.

Despite security measures, our systems and those of third parties are vulnerable to cyber-attacks, breaches, viruses, unauthorized access, employee error, malfeasance, or disruptions from natural disasters, terrorism, war, or telecommunications failures.

Any such event could result in unauthorized access, public disclosure, theft, or loss of sensitive data.

This could lead to legal claims, liability under privacy laws, government enforcement actions, regulatory penalties, reputational harm, and substantial remediation costs.

A breach involving proprietary data (e.g., obesity program results) could materially decrease the value of our assets and make it more difficult to consummate a strategic transaction.

While we are not aware of any material system failure or security breach to date, any disruption or breach could adversely affect our business, financial condition, and ability to pursue strategic opportunities.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

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Our ability to consummate certain strategic transactions, including strategic partnerships or out-licensing opportunities, among others, may also be impaired if we are unable to adequately protect our intellectual property or if we infringe on the proprietary rights of others.

To date, we have maintained our TCR-T related patent portfolio including those exclusive rights in the field of cancer treatment to certain U.S.

To date, we have maintained our legacy TCR-T related patent portfolio including those exclusive rights in the field of cancer treatment to certain U.S.

and foreign intellectual property with respect to certain cell therapy and related technologies licensed from MD Anderson.

Under the MD Anderson License, future patent applications require the agreement of each of MD Anderson, Precigen and us, and MD Anderson has the right to control the preparation, filing, and prosecution of such patent applications unless the parties agree that we or Precigen instead may control such activities.

Although under the License Agreement MD Anderson has agreed to review and incorporate any reasonable comments that we or Precigen may have regarding licensed patents and patent applications, we cannot guarantee that our comments will be solicited or implemented.

Without direct control of the in-licensed patents and patent applications, we are dependent on MD Anderson or Precigen, as applicable, to keep us advised of prosecution, particularly in foreign jurisdictions where prosecution information may not be publicly available.

We anticipate that we will file additional patent applications both in the United States and in other jurisdictions on all of our product candidates.

We anticipate that we will file additional patent applications both in the United States and in other jurisdictions for our Obesity and Metabolic Disorders Program and related technologies.

However, we cannot predict or guarantee for either our in-licensed patent portfolios or for Alaunos’ proprietary patent portfolio:

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The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost, in a timely manner or at all.

It is also possible that we will fail to identify patentable aspects of our research and

development output before it is too late to obtain patent protection.

It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Moreover, in some circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties.

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Our pending and future patent applications may not result in the issuance of patents that protect our technology or products, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products.

In addition, our own earlier filed patents and applications or those of MD Anderson or Precigen, to the extent not then terminated, may limit the scope of later patents we obtain, if any.

If third parties file or have filed patent applications or obtained patents on technologies, compositions and methods of use that are relevant to our business and that cover or conflict with our owned or licensed patent applications, technologies or product candidates, we may be required to challenge such protection, terminate or modify our programs impacted by such protection, or obtain licenses from such third parties, which might not be available on acceptable terms, or at all.

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To help protect our proprietary know-how and our inventions for which patents may be unobtainable or difficult to obtain, and to maintain our competitive position, we rely on trade secret protection and confidentiality agreements.

To this end, it is our general policy to require our employee, consultants, advisors and contractors to enter into agreements that prohibit the disclosure of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business.

These agreements may not provide adequate protection for our trade secrets, know-how, confidential information or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information.

To this end, it is our general policy to require our sole employee, consultants, advisors and contractors to enter into agreements that prohibit the disclosure of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business.

These agreements may not provide adequate protection for our trade secrets, know-how, confidential information or

other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information.

Moreover, we may not be able to obtain adequate remedies for any breaches of these agreements.

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In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.

If any of our trade secrets or other confidential information were to be lawfully obtained or independently developed by competitors, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.

If any of our trade secrets or other confidential information were to be lawfully obtained or independently developed by competitors, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us.

If any of our trade secrets, know-how or other proprietary information is disclosed, the value of our trade secrets, know-how and other proprietary rights would be significantly impaired and our business and competitive position would suffer.

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Our patent position cannot and does not provide any assurance that we are not infringing or will not be asserted to infringe the patent rights of another.

The patent landscape in the field of immuno-oncology is particularly complex.

We are aware of numerous United States and foreign patents and pending patent applications of third parties directed to compositions, methods of use and methods of manufacture of immuno-oncology products.

The patent landscape in the fields of obesity and legacy immuno-oncology is particularly complex.

We are aware of numerous United States and foreign patents and pending patent applications of third parties directed to compositions, methods of use and methods of manufacture relevant to our programs.

In addition, there may be patents and patent applications in the field of which we are not aware.

The technology we currently license from MD Anderson and Precigen is early-stage technology, and we were in the process of designing and developing products using this technology.

Although we sought and, should we resume development activities, will seek to avoid pursuing the development of products that may infringe any third-party patent claims that we believe to be valid and enforceable, we may fail to do so.

The Obesity and Metabolic Disorders Program we have developed is early-stage technology and we are pursuing patent protection for this program.

Although we seek to avoid pursuing the development of products that may infringe any third-party patent claims that we believe to be valid and enforceable, we may fail to do so.

Moreover, given the breadth and number of claims in patents and pending patent applications in the field of immuno-oncology and the complexities and uncertainties associated with them, third parties may allege that we are infringing patent claims even if we do not believe such claims have merit.

If a claim for patent infringement is asserted, there can be no assurance that the resolution of the claim would permit us to continue marketing the relevant product on commercially reasonable terms, if at all.

If a claim for patent infringement is asserted, there can be no assurance that the resolution of the claim would permit us to continue developing or monetizing relevant product on commercially reasonable terms, if at all.

We may not have sufficient resources to bring these actions to a successful conclusion.

If we do not successfully defend any infringement actions to which we become a party or if we are unable to have any asserted third-party patents declared invalid or unenforceable, we may have to pay substantial monetary damages, which can be tripled if the infringement is deemed willful, and/or we may be required to discontinue or significantly delay commercialization and development of the affected products.

If we do not successfully defend any infringement actions to which we become a party or if we are unable to have any asserted third-party patents declared invalid or unenforceable, we may have to pay substantial monetary damages, which can be tripled if the infringement is deemed willful, and/or we may be required to discontinue or significantly delay development or monetization of the affected products.

Any legal action against us or our collaborators claiming damages and seeking to enjoin developmental or marketing activities relating to affected products could, in addition to subjecting us to potential liability for damages, require us or our collaborators to obtain licenses to continue to develop, manufacture or market the affected products.

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Further, patent authorities in jurisdictions worldwide require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.

While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Noncompliance events

that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to submit documents with the necessary formal requirements, such as notarization and legalization.

While an inadvertent lapse can in many cases be cured by payment

of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to submit documents with the necessary formal requirements, such as notarization and legalization.

In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

We license rights to products and technology that are important to our business, and we expect to enter into additional licenses in the future.

For instance, we have in-licensed patents and patent applications under the MD Anderson License and the License Agreement.

Under these agreements, we are subject to a range of obligations pertaining to commercialization and development, sublicensing, royalty, patent prosecution and maintenance, and insurance.

Any failure by us to obtain a needed license, comply with any of these obligations or any other breach by us of our license agreements could give the licensor the right to terminate the license in whole, terminate the exclusive nature of the license or bring a claim against us for damages.

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We may be subject to claims by third parties asserting that our employee or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Many of our former employees were previously employed at universities or at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Many of our current and former employees and consultants were previously employed at universities or at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our former employees and our current employee does not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these employees or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer.

Litigation may be necessary to defend against these claims.

In addition, while it is our policy to require our employee and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.

In addition, while it is our policy to require our sole employee and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.

Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

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Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management.

OTHER RISKS RELATED TO OUR COMPANY

RISKS RELATED TO STOCK OWNERSHIP IN OUR COMPANY AND OTHER RISKS

Our stock price has been, and may continue to be, volatile.

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• Price and volume fluctuations in the overall stock market;

• Changes in operating results and performance and stock market valuations of other biopharmaceutical companies generally, or those that develop and commercialize cancer drugs in particular;

• Changes in operating results and performance and stock market valuations of other biopharmaceutical companies generally, or those that develop and commercialize obesity or metabolic disorder drugs in particular;

• Market conditions or trends in our industry or the economy as a whole;

• Preclinical studies or clinical trial results, should we resume clinical development;

• Preclinical studies or clinical trial results, if we initiate clinical development;

• The commencement, enrollment or results of clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates;

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Section 203 could have the effect of delaying, deferring or preventing a change in control that our stockholders might consider to be in their best interests.

We have begun exploring strategic alternatives, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions.

If we are approached by a third-party in connection with such process, and our Board of Directors does not believe that a transaction with such party is in the best interest of our stockholders, we may rely on the provisions described above to prevent an acquisition by such party in order to maximize stockholder value.

If we are approached by a third-party in connection with an acquisition, merger or reverse merger, and our Board of Directors does not believe that a transaction with such party is in the best interest of our stockholders, we may rely on the provisions described above to prevent an acquisition by such party in order to maximize stockholder value.

There is no guarantee that we will be able to find a transaction that delivers superior value to our stockholders.

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The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.

If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we could lose visibility

in the financial markets, which in turn could cause our stock price or trading volume to decline.

In addition, it is likely that in some future period our operating results will be below the expectations of securities analysts or investors.

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If our Board of Directors elects to pursue a strategic alternative requiring a stockholder vote, activists may pursue a campaign against the transaction and as a result may make consummating the transaction more difficult, or impossible, despite the Board of Directors' conclusions that such transaction is in the best interest of our stockholders.

In addition, on October 30, 2025, a group of stockholders led by Adrian Price filed a Schedule 13D reporting beneficial ownership of approximately 8.6% of our outstanding common stock (as amended through Amendment No.

4 filed March 5, 2026).

The group consists of Adrian Price and numerous individual and entity co-filers (including HexagonONE Ltd, Alimenta Holding Limited, Krakatau Holding Limited, and others), with aggregate reported beneficial ownership of 189,061 shares.

In a letter dated February 20, 2026 (attached as Exhibit 21 to Amendment No.

4), the group proposed a $7 million private placement financing (potentially resulting in a change of control) through affiliated entities, reiterated the nomination of Gerald W.

Bruce for the Board, and requested a meeting with the Board within five business days to discuss terms and begin due diligence.

The letter stated that if the Board did not engage meaningfully within five business days, the group may seek to purchase additional shares in the market, undertake a tender offer to shareholders, or pursue other activist actions (including a deliberate investor relations campaign).

The Company held a meeting with representatives of the group following the letter, and requested follow-up information regarding the three foreign entities (HexagonONE Ltd, Alimenta Holding Limited, and Krakatau Holding Limited) that were proposed to participate in the financing.

As of the date of this Annual Report, the Company has not received the requested follow-up information, and there can be no assurance that further discussions or a transaction will occur on terms acceptable to the Company or at all.

Any escalation by this group into a proxy contest, tender offer, or other adversarial actions could increase costs, divert management attention, create uncertainty, and materially harm our business, stock price, and ability to consummate value-maximizing transactions.

Our principal stockholders, executive officers and directors have substantial control over the Company, which may prevent you and other stockholders from influencing significant corporate decisions and may significantly harm the market price of our common stock.

As of December 31, 2024, our executive officers, directors and holders of five percent or more of our outstanding common stock beneficially owned, in the aggregate, 3.45% of our outstanding common stock.

Our executive officers and directors beneficially owned, in the aggregate, approximately 25.71% of our outstanding common stock (including options exercisable within 60 days).

This includes significant holdings by certain directors and former executives, such as Robert W.

Postma (approximately 17.47% beneficial ownership, including shares issuable upon conversion of preferred stock and options).

These stockholders may have interests that conflict with our other stockholders and, if acting together, have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets.

Accordingly, this concentration of ownership may harm the market price of our common stock by:

In addition, we have issued Series A-1 Convertible Preferred Stock and Series A-2 Convertible Preferred Stock (collectively, the “Series A Preferred Stock”), each with a liquidation preference of $1,000 per share, cumulative dividends at 10% per annum (payable in additional shares of Series A Preferred Stock), and rights to convert into Common Stock at initial conversion prices of $2.76 (Series A-1) and $4.49 (Series A-2), subject to adjustments.

Holders of Series A Preferred Stock are entitled to vote on an as-converted basis (1:1 with Common Stock) on all matters submitted to stockholders (voting together as a single class), except as otherwise required by law or the Certificate of Designation.

Upon a Change of Control (as defined in the Certificates of Designation), the Series A Preferred Stock automatically converts into Common Stock.

The Series A Preferred Stock ranks senior to Common Stock with respect to dividends and liquidation distributions, and the issuance of additional preferred stock or conversion of existing shares could further concentrate voting control, dilute common stockholders, or affect our ability to consummate certain transactions.

These rights, preferences, and privileges senior to common stock could adversely affect the voting power, economic interests, and market price of our common stock.

Accordingly, this concentration of ownership and the rights associated with our Series A Preferred Stock may harm the market price of our common stock by:

• Delaying, deferring or preventing a change in control;

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• Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

In addition, this significant concentration of stock ownership may adversely affect the trading price of our common stock should investors perceive disadvantages in owning shares of common stock in a company that has such concentrated ownership.

In addition, this significant concentration of stock ownership and preferred stock rights may adversely affect the trading price of our common stock should investors perceive disadvantages in owning shares of common stock in a company that has such concentrated ownership.

We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

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We will remain a smaller reporting company until our public float exceeds $250 million as of the last business day of our most recently completed second quarter if our annual revenues are $100 million or more as of our most recently completed fiscal year, or until our public float exceeds $700 million as of the last business day of our most recently completed second quarter if our annual revenues are less than $100 million as of our most recently completed fiscal year.

*Artificial intelligence used by us and our partners and vendors may have negative effects on our company.

Artificial intelligence or AI use in many industries has rapidly expanded.

While we do not utilize any specific AI technologies internal to Alaunos, we may work with vendors or service providers that do utilize AI technologies with or without our knowledge.

Areas in which our business that could be negatively impacted include novel cybersecurity threats such as malicious code or phishing attempts.

AI could also perpetrate fraud or misappropriation of company funds.

From a regulatory standpoint, we could be liable for noncompliance related to data compromise or perceived or actual noncompliance with data privacy or protection or AI requirements to various agencies or jurisdictions.

There are also potential risks around ethical, social, and reputational risks should AI cause us to infringe on privacy rights or violate intellectual property rights.

AI is also known for “deep fakes” or false information being spread electronically and attributed to innocent companies and their management or directors.

Such accusations could negatively impact human rights, privacy, employment, or other social concerns, which may result in claims, lawsuits, brand or reputational harm, and increased regulatory scrutiny, any of which could harm our business, financial condition, and operating results.

Operational risks potentially caused by AI technologies include unanticipated disruptions to systems, potential loss or corruption of data, implementation delays, and cost overruns that could stem from underlying defects in the AI tools used.

Finally, competition risk may result from rapid adoption of AI that could provide unforeseen advantages to our competitors and lead to the erosion of our market share by potentially leading to the emergence of new products and categories, the rapid maturation of categories, cannibalization of categories, changing price points and product replacement and upgrade cycles.

*We have issued preferred stock, and future issuances of preferred stock could adversely affect the rights of holders of our common stock.

Our amended and restated certificate of incorporation authorizes our Board of Directors to issue up to 30,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions of those shares, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series, without any further vote or action by our stockholders.

The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company and may adversely affect the market price of, and the voting and other rights of the holders of, our common stock.

We currently have outstanding shares of Series A Preferred Stock, which have certain rights, preferences and privileges senior to our common stock.

Future issuances of preferred stock could further dilute the voting power and economic interests of common stockholders and may adversely affect the market price of our common stock.

*Ineffective investor relations and public relations efforts could harm our reputation, stock price, and ability to attract capital or strategic partners.

As a small company with limited resources and a single full-time employee, our ability to effectively communicate with investors, analysts, media, and the public is constrained.

Inadequate investor relations (IR) and public relations (PR) efforts could result in:

• Reduced visibility and credibility in the financial and biotech communities;

• Failure to timely or accurately disclose material information, leading to increased volatility or regulatory scrutiny;

• Loss of analyst coverage or negative analyst sentiment;

• Difficulty attracting institutional investors, potential partners, or strategic alternatives;

• Perceived lack of transparency or management accessibility, harming our reputation;

• Challenges in marketing our obesity program or legacy assets effectively to potential stakeholders.

These factors could materially and adversely affect our stock price, liquidity, and ability to raise capital or consummate strategic transactions.

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 1A. Risk Factors