What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 335 added, 414 removed, 540 unchanged (58% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer and our principal accounting officer, we have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of December 31, 2025.

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

Based on that evaluation, our principal executive officer and principal financial officer has 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 note that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving the stated goals under all potential future conditions.

6 unchanged sentences

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer and our principal accounting officer, we assessed our internal control over financial reporting as of December 31, 2025, based on criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Because we are a smaller reporting company, our independent registered public accounting firm is not required to, and has not, issued an attestation report on our internal control over financial reporting.

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

1 unchanged sentence

Inherent Limitations on Internal Controls

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

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

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

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute

assurance that all control issues and instances of fraud, if any, within our company have been detected.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

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

28 unchanged sentences

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2024 and 2023

Balance Sheets as of December 31, 2025 and December 31, 2024

Statements of Operations for the Years Ended December 31, 2025 and 2024

6 unchanged sentences

Description of Document

Agreement and Plan of Merger among the Registrant (formerly “EasyWeb, Inc.”), ZIO Acquisition Corp.

and ZIOPHARM, Inc., dated August 3, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, SEC File No.

000-32353, filed August 9, 2005).

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

Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 10, 2025)

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

001-33038, filed July 1, 2016)

Amended and Restated Bylaws of the Registrant, dated as of September 21, 2020 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed September 22, 2020).

Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form SB-2, SEC File No.

333-129020, filed October 14, 2005).

Form of Option for the Purchase of Shares of common stock dated August 30, 2004 and issued to The University of Texas M.

Anderson Cancer Center (incorporated by reference to Exhibit 4.6 to the Registrant’s Annual Report on Form 10-KSB, SEC File No.

000-32353, filed March 20, 2006).

Schedule identifying Material Terms of Options for the Purchase of Shares of Common Stock (incorporated by reference to Exhibit 4.7 to the Registrant’s Annual Report on Form 10-KSB, SEC File No.

000-32353, filed March 20, 2006).

Certificate of Designation of Series A-1 Convertible Preferred Stock of Alaunos Therapeutics, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 14, 2025)

Certificate of Designation of Series A-2 Convertible Preferred Stock of Alaunos Therapeutics, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 26, 2025)

Amended and Restated Bylaws of the Registrant, dated as of January 8, 2026 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed January 8, 2026)

Form of Warrant to Purchase Common Stock (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K SEC File No.

5 unchanged sentences

001-33038, filed March 30, 2022)

Common Stock Purchase Warrant, dated May 19, 2025, issued by Alaunos Therapeutics, Inc.

to Mast Hill Fund, L.P.

(incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 23, 2025).

Amendment No.

1 to the Common Stock Purchase Warrant Issued on May 19, 2025, dated June 9, 2025, by and between Alaunos Therapeutics, Inc.

and Mast Hill Fund, L.P.

(incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 9, 2025)

Form of Prefunded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 26, 2025)

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.7 to the Registrant's Annual Report on Form 10-K, SEC File No.

001-33038, filed March 30, 2022).

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

001-33038, filed May 15, 2024.

ZIOPHARM Oncology, Inc.

2012 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K SEC File No.

001-33038 filed September 24, 2018).

Form of Restricted Stock Agreement Granted Under the ZIOPHARM Oncology, Inc.

2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K SEC File No.

001-33038 filed June 26, 2012).

Form of Option Agreement Granted Under the ZIOPHARM Oncology, Inc.

2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K SEC File No.

001-33038 filed June 26, 2012).

Form of Inducement Award Grant Notice and Inducement Award Grant Agreement (incorporated by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8, SEC File No.

9 unchanged sentences

001-33038, filed March 1, 2021 )

Form of Indemnity Agreement for directors and executive officers (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed January 31, 2013).

Employment Agreement, dated August 24, 2021, by and between the Registrant and Kevin S.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed August 30, 2021).

Form of Retention Bonus Agreement (incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K, SEC File No.

82 unchanged sentences

001-33038, filed March 30, 2022)

Equity Distribution Agreement, dated August 12, 2022, by and between Piper Sandler & Co.

and the Registrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No.

001-33038, filed August 15, 2022).

Underwriting Agreement, dated as of November 29, 2022, by and between Cantor Fitzgerald & Co.

and the Registrant (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed November 30, 2022).

Retention Agreement, dated as of August 14, 2023, between the Registrant and Melinda Lackey (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q, SEC File No.

001-33038, filed November 14, 2023).

Retention Agreement, dated as of August 14, 2023, between the Registrant and Drew Deniger (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q, SEC File No.

001-33038, filed November 14, 2023).

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

001-33038, filed April 1, 2024).

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

5 unchanged sentences

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

Termination of August 14, 2023 Engagement Letter between Cantor Fitzgerald & Co (“Cantor”) and Alaunos Therapeutics, Inc.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No.

001-33038, filed January 8, 2026)

Consent of Independent Registered Public Accounting Firm

Insider Trading Policy

Consent of Independent Registered Public Accounting Firm

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

15 unchanged sentences

March 31, 2026

/s/ Dale Curtis Hogue, Jr.

Dale Curtis Hogue, Jr.

Interim Chief Executive Officer and Director

/s/ Holger Weis

Chief Executive Officer and Director

(Principal Executive Officer and Principal Financial Officer)

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Dale Curtis Hogue, Jr.

Dale Curtis Hogue, Jr.

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

/s/ Holger Weis

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

March 31, 2026

3 unchanged sentences

March 31, 2026

/s/ Robert Hofmeister

Robert Hofmeister

/s/ Michael A.

March 31, 2026

3 unchanged sentences

March 31, 2026

/s/ Holger Weis

March 31, 2025

Alaunos Therapeutics, Inc.

1 unchanged sentence

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2025 and 2024

6 unchanged sentences

Alaunos Therapeutics, Inc.

Houston, Texas

Fort Lauderdale, Florida

Opinion on the Financial Statements

33 unchanged sentences

March 31, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

Opinion on the Financial Statements

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

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

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

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

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

Those adjustments were audited by other auditors.

The Company’s Ability to Continue as a Going Concern

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

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

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

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

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

Basis for Opinion

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

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

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

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

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

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

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

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

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

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

/s/ RSM US LLP

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

Boston, Massachusetts

April 1, 2024

A launos Therapeutics, Inc.

3 unchanged sentences

Cash and cash equivalents

Prepaid expenses and other current assets

Prepaid expenses and other current assets, current

Total current assets

Property and equipment, net

Prepaid expenses and other assets, non current

LIABILITIES AND STOCKHOLDERS' EQUITY

6 unchanged sentences

Stockholders' equity

Series A-1 preferred stock $ 0.001 par value;

1,000 shares authorized, 500 and 0 shares issued and outstanding at December 31, 2025 and at December 31, 2024, respectively

Series A-2 preferred stock $ 0.001 par value;

1,000 shares authorized, 850 and 0 shares issued and outstanding at December 31, 2025 and at December 31, 2024, respectively

Common stock $ 0.001 par value;

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

50,000,000 shares authorized, 2,349,480 and 1,601,252 shares issued and outstanding at December 31, 2025 and at December 31, 2024, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands, except share and per share data)

For the Year Ended December 31,

For the years ended December 31,

Operating expenses:

1 unchanged sentence

General and administrative

Gain on lease modification

Restructuring costs

Property and equipment and right-of-use asset impairment

Total operating expenses

1 unchanged sentence

Other income (expense):

Interest expense

Change in fair value of warrant liability

Other income, net

Other income (expense), net

Basic and diluted net loss per share

Basic and diluted earnings per share

Weighted average common shares outstanding, basic and diluted

3 unchanged sentences

(in thousands, except share and per share data)

Series A-1 Preferred Stock

Series A-2 Preferred Stock

Additional Paid in Capital

3 unchanged sentences

Stock-based compensation

Issuance of common stock, net of expenses

Cancelled restricted common stock

Shares issued as consideration for board service fees

Shares issued as consideration for services

Sale of Series A-1 preferred stock

Issuance of common stock in registered direct offering, net of offering costs

Issuance of prefunded warrants in registered direct offering

Reclassification of Warrant Liability to equity

Exercise of prefunded warrants

Sale of Series A-2 preferred stock

Balance at December 31, 2025

Additional Paid in Capital

Accumulated Deficit

Total Stockholders' Equity

Balance at January 1, 2024

Stock-based compensation

4 unchanged sentences

(in thousands)

For the Year Ended December 31,

For the years ended December 31,

Cash flows from operating activities:

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

Property and equipment right-of-use asset impairment

Amortization of financing costs

Change in fair value of warrant liability

Common stock issued for services rendered

Stock-based compensation

Decrease in the carrying amount of right-of-use assets

Gain on lease modification and termination

Loss on sale of equipment, net

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other non-current liability

Accounts payable

Accrued expenses

Lease liabilities

Other liabilities, non-current

Net cash used in operating activities

Net cash flows from operating activities

Cash flows from investing activities:

Purchases of property and equipment

Proceeds from the disposal of property and equipment

Net cash provided by investing activities

Net cash flows from investing activities

Cash flows from financing activities:

Proceeds from the issuance of common stock

Repayment of long-term debt

Debt extinguishment

Net cash used in financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Proceeds from the issuance of common stock and pre funded warrants, net of offering costs

Proceeds from sale of Series A-1 preferred stock

Proceeds from sale of Series A-2 preferred stock

Net cash flows from financing activities

Net increase (decrease) in cash, cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

1 unchanged sentence

Cash paid for interest

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

Noncash financing activities:

Recognition of warrant liability in connection with the equity line of credit agreement

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

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

1 unchanged sentence

NOTES TO FINANCIAL STATEMENTS

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

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

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

(in thousands, except share and per share data)

Alaunos Therapeutics, Inc., which is referred to herein as “Alaunos,” or the “Company,” is a pre-clinical stage obesity and metabolic disorders company with a current focus on developing oral small molecules for obesity and other metabolic disorders.

The Company was historically involved in the development of adoptive TCR therapies, designed to treat multiple solid tumor types in large cancer patient populations with unmet clinical needs.

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

1 unchanged sentence

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

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

Liquidity and Going Concern

The Company has operated at a loss since its inception in 2003 and has minimal recurring revenue from operations.

The Company anticipates that losses will continue for the foreseeable future.

2 unchanged sentences

Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the second quarter of 2026.

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

The Company’s ability to continue operations after its current cash resources are exhausted depends on future events, including its ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given, nor are within the Company's control.

If adequate additional funds are not available when required, or if the Company is unsuccessful in entering into partnership agreements for further development of its product candidates, management may need to curtail its development efforts and planned operations to conserve cash until sufficient additional capital is raised.

The Company’s ability to continue operations after its current cash resources are exhausted depends on future events including its ability to obtain additional financing or to achieve profitable results, as to which no assurances can be given.

If adequate additional funds are not available when required, management may need to curtail its development efforts and planned operations to conserve cash until sufficient additional capital is raised.

There can be no assurances that such a plan would be successful.

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

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

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

2021 Loan and Security Agreement

On August 6, 2021, the Company entered into a Loan and Security Agreement, or the Loan and Security Agreement, with Silicon Valley Bank and affiliates of Silicon Valley Bank, or collectively, SVB.

The Loan and Security Agreement provided for an initial term loan of $ 25.0 million funded at the closing, or the Term A Tranche, with an additional tranche of $ 25.0 million available if certain funding and clinical milestones were met by August 31, 2022, or the Term B Tranche.

Effective December 28, 2021, the Company, entered into an amendment to the Loan and Security Agreement, or the First Amendment.

The First Amendment extended the interest-only period through August 31, 2022.

The First Amendment also eliminated the Term B Tranche, which remained unfunded, leaving only the Term A Tranche, or the SVB Facility.

Under the amended Loan and Security Agreement, the SVB Facility was to mature on August 1, 2023.

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

2022 Public Offering

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

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

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

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

(in thousands, except share and per share data)

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Use of Estimates

8 unchanged sentences

• Income taxes.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

Cash and Cash Equivalents

9 unchanged sentences

Property and equipment are stated at cost, less accumulated depreciation and amortization.

Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized.

Depreciation and amortization is calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:

1 unchanged sentence

Laboratory equipment

Leasehold improvements

Life of the lease

Costs, including certain design, construction and installation costs related to assets that are under construction and are in the process of being readied for their intended use, are recorded as construction in progress and are not depreciated until such time as the subject asset is placed in service.

Repairs and maintenance that do not extend the useful life of the asset are expensed as incurred.

Upon sale, retirement or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included in the statements of operations.

Long-Lived Assets

Assessments of long-lived assets and the remaining useful lives of such long-lived assets are reviewed for impairment whenever a triggering event occurs or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

An asset, or group of assets, is considered to be impaired when the undiscounted estimated net cash flows expected to be generated by the asset, or group of assets, are less than its carrying amount.

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

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

Operating Segments

3 unchanged sentences

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

The Company assesses whether warrants issued require accounting as derivatives.

1 unchanged sentence

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

Derivative Liabilities

In accordance with applicable accounting standards, upon issuance of financial instruments, whether stand alone or embedded, the Company performs an analysis to determine the appropriate classification of the financial instrument as either a derivative liability, or if certain conditions are met, as equity.

Derivative liabilities are initially recorded at fair value and subsequently remeasures the derivative liability at each reporting period with changes in fair value recognized in earnings.

The Company continually evaluates the classification and if the terms of the agreement are modified, the Company performs an assessment of the impact.

Upon modification, if the instrument qualifies for equity classification, at that time it is remeasured at fair value, with changes in fair value since last measurement recognized in earnings and thereafter the balance is reclassified at its then fair value to equity.

During the year ended December 31, 2025, the Company determined that certain warrants initially qualified as derivative liabilities.

Such warrants were subsequently modified at which point the warrants qualified for equity classification.

See further discussion in Note 9 - Warrants.

Fair Value Measurements

24 unchanged sentences

There have been no changes to the valuation methods during the years ended December 31, 2025 and 2024 .

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Revenue Recognition from Collaboration Agreements

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

Revenue for the year ended December 31, 2025 consisted of $ 5 and for the year ended December 31, 2024 consisted of $ 10 .

For the years ended December 31, 2025 and 2024, the Company recognized revenue through its Collaboration Agreement with Solasia Pharma K.K.

1 unchanged sentence

Research and Development Costs

As part of the process of preparing the Company's financial statements, the Company is required to estimate its accrued research and development expenses.

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

The majority of the Company's service providers invoice the Company in arrears for services performed, on a predetermined schedule or when contractual milestones are met;

however, a few require advanced payments.

The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it at that time.

Examples of estimated accrued research and development expenses include fees paid to:

• clinical research organizations, or CROs, in connection with performing research services on its behalf and clinical trials;

• investigative sites or other providers in connection with clinical trials;

• vendors in connection with preclinical and clinical development activities;

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances in which payments made to the Company's vendors will exceed the level of services provided and result in a prepayment of the clinical expense.

Payments under some of these contracts depend on factors such as the completion of clinical trial milestones.

In accruing service fees, the Company estimates the time period over which services will be performed, enrollment of patients, number of sites activated and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from its estimate, the Company adjusts the accrual or amount of prepaid expense accordingly.

Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low in any particular period.

Research and development expenses are recognized as incurred.

The Company is required to estimate accrued research and development expenses as of each balance sheet date based on the facts and circumstances known at that time.

This process includes reviewing open contracts and purchase orders, communicating with internal personnel and third-party service providers, and estimating the amount of services performed and the related costs incurred for which invoices have not yet been received.

The Company’s research and development activities are primarily related to its preclinical obesity and metabolic disorders program, including the development of oral small molecules for obesity and other metabolic disorders.

The Company also incurs limited costs related to its historical oncology focused cell therapy programs.

Estimated accrued research and development expenses primarily include amounts due to third-party vendors supporting preclinical development, manufacturing, regulatory, and other research and development activities.

The Company records accruals based on its estimates of the services received and efforts expended under contractual arrangements.

Certain agreements may involve milestone-based or uneven payment terms, and payments to vendors may, at times, exceed the level of services provided as of the reporting date, resulting in prepaid research and development assets.

Significant judgment is required in estimating accrued research and development expenses.

Differences between the Company’s estimates and actual amounts incurred are recorded in the period in which such differences become known.

Although the Company does not expect these estimates to be materially different from actual results, changes in the status or timing of services performed may result in reported amounts being higher or lower in any particular period.

Income taxes are accounted for under the liability method.

10 unchanged sentences

Consistent with prior years, the Company uses the Black-Scholes option pricing model, which requires estimates of the expected term option holders will retain their options before exercising them and the estimated volatility of the Company’s common stock price over the expected term.

The Company recognized the full impact of its share-based employee payment plans in the statements of operations for each of the years ended December 31, 2024 and 2023 and did not capitalize any such costs on the balance sheets.

The Company recognized $ 0.4 million of compensation expense related to stock options for the year ended December 31, 2024 and $ 2.5 million of compensation expense related to stock options for the year ended December 31, 2023.

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

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

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

For the Year Ended December 31,

(in thousands)

Research and development

General and administrative

Stock-based compensation expense

The Company recognized the full impact of its share-based employee payment plans in the statements of operations for each of the years ended December 31, 2025 and 2024 and did not capitalize any such costs on the balan ce sheets.

The Company recognized $ 0.4 million of compensation expense related to stock options for the year ended December 31, 2025 and $ 0.4 million of compensation expense related to stock options for the

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

year ended December 31, 2024.

The total compensation expense relating to vesting of stock options and stock issued for board service fees and other services for the year ended December 31, 2025 was $ 0.8 million and $ 0.4 million for the year ended December 31, 2024.

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

2 unchanged sentences

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

Reverse Stock Splits

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

The Charter Amendment decreased the number of authorized shares of common stock from 520,000,000 to 34,666,667 .

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

The Charter Amendment became effective on January 31, 2024.

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

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

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

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

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

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

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

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of amounts paid in advance for goods and services to be received in future periods.

Such amounts are recorded at cost and amortized to expense over the period in which the related goods or services are received.

The Company classifies prepaid amounts expected to be realized within twelve months as current assets and the remaining portion as non-current assets.

The Company reviews prepaid balances for recoverability and records expense when it is determined that the future economic benefit is no longer probable.

As of December 31, 2025, the Company’s prepaid balances included a multi-year insurance contract, of which $222 was classified in prepaid expenses and other current assets and $887 was classified in prepaid expenses and other non-current assets.

Net Loss per Share

2 unchanged sentences

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

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

Certain shares related to some of the Company’s outstanding common stock options and warrants have not been included in the computation of diluted net loss per share for the years ended December 31, 2025 and 2024 as the result would be antidilutive.

Such potential common shares on December 31, 2025 and 2024 consist of the following:

Common stock options

Series A-1 Preferred Stock

Series A-2 Preferred Stock

The following table show the net loss attributable to common shareholders after including undeclared cumulative preferred dividend used to calculate the basic and diluted earnings per share, as shown on the statement of operations (See Note 6.

Equity - Series A-1 and A-2 Preferred Stock Cumulative Dividends):

For the years ended December 31,

Cumulative preferred dividends

Net loss attributable to common stockholders

New Accounting Pronouncements

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

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

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

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

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

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

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

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

Early adoption is permitted.

The Company is currently evaluating the impact of this standard.

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

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

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

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

On December 28, 2021, the Company entered into the First Amendment to the Loan and Security Agreement.

The First Amendment eliminated the unfunded Term B Tranche, among other things.

The SVB Facility bore interest at a floating rate per annum on outstanding loans, payable monthly, at the greater of (a) 7.75 % and (b) the current published U.S.

prime rate, plus a margin of 4.5 %.

All outstanding obligations under the amended Loan and Security Agreement were due and payable on August 1, 2023 .

In connection with the payment of all of the Company's outstanding obligations, the Company also owed SVB 5.75 % of the original principal amounts borrowed as a final payment, or the Final Payment.

Effective March 30, 2023, the Company entered into a Third Amendment to the Loan and Security Agreement, or the Third Amendment.

Under the terms of the Third Amendment, the Company was no longer required to maintain all of its operating accounts, depository accounts and excess cash with SVB or one of its affiliates, and was instead only required to maintain a single operating or depository account at Silicon Valley Bank.

The Third Amendment also modified the cash collateralization requirement, such that the Company was required to cash collateralize the entire sum of the outstanding principal amount of the SVB Facility, plus an amount equal to the Final Payment, which amount was to be reduced commensurate with each regularly scheduled monthly payment of principal and interest on the SVB Facility.

On May 1, 2023, the Company paid SVB an amount equal to the entire outstanding principal amount under the SVB Facility, all accrued and unpaid interest and the Final Payment.

In accordance with the First Amendment, the payment was subject to a prepayment premium of 2.00 %.

During the year ended December 31, 2023, the Company recorded the remaining amounts associated with the Final Payment of $ 0.5 million and the prepayment premium of $ 0.1 million as interest expense within the statement of operations.

In connection with its entry into the Loan and Security Agreement in August 2021, the Company issued to SVB warrants to purchase (i) up to 2,886 shares of the Company’s common stock, in the aggregate, and (ii) up to an additional 2,886 shares of common stock, in the aggregate, in the event the Company achieved certain clinical milestones, in each case at an exercise price per share of $ 333 .

In connection with its entry into the First Amendment in December 2021, the Company amended and restated the warrants issued to SVB.

As amended and restated, the warrants are for up to 4,331 shares of the Company's common stock, in the aggregate, with an exercise price of $ 174 per share, or the SVB Warrants.

The SVB Warrants expire on August 6, 2031 .

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

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

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

(in thousands, except share and per share data)

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

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 enhances income tax disclosures, including disclosures related to the rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for public business entities for annual periods beginning after December 15, 2024.

The Company adopted ASU 2023-09 effective January 1, 2025 on a Prospective basis.

The adoption of this guidance impacted the Company’s disclosures only and did not have a material effect on its consolidated financial position, results of operations, or cash flows.

In March 2024, the FASB issued ASU No.

2024-02, Codification Improvements—Amendments to Remove References to the Concept Statements .

The amendments in ASU 2024-02 are effective for public business entities for fiscal years beginning after December 15, 2024.

The Company adopted ASU 2024-02 effective January 1, 2025.

The adoption of this standard did not have a material impact on the Company’s financial statements or related disclosures.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

For public business entities, the amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company is evaluating the impact of this guidance.

Because the amendments relate principally to interim reporting, the Company does not expect the standard to materially affect its annual financial statements, but adoption may affect the format and content of future interim disclosures.

In December 2025, the FASB issued ASU No.

2025-12, Codification Improvements .

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

The Company is evaluating the impact of this guidance and does not currently expect adoption to have a material impact on its financial statements.

Property and Equipment, net

2 unchanged sentences

Office and computer equipment

Laboratory equipment

accumulated depreciation

Property and equipment, net

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

Depreciation expense for the year ended December 31, 2025 and 2024 was $ 7 and was $ 2 , respectively.

Accrued Expenses

1 unchanged sentence

($ in thousands)

Employee compensation

Preclinical services

Sales and use taxes

Professional services

Manufacturing services

Related Party Transactions

Joint Venture with TriArm Therapeutics/Eden BioCell

On December 18, 2018, the Company and TriArm Therapeutics, Ltd., or TriArm, launched Eden BioCell, Ltd., or Eden BioCell, as a joint venture to lead commercialization of the Company’s Sleeping Beauty -generated CAR-T therapies in the People’s Republic of China (including Macau and Hong Kong), Taiwan and Korea.

The Company licensed to Eden BioCell the rights in Greater China for its third-generation Sleeping Beauty-generated CAR-T therapies targeting the CD19 antigen.

Eden BioCell is owned equally by the Company and TriArm and the parties share decision-making authority.

TriArm contributed $ 10.0 million to Eden BioCell and has committed up to an additional $ 25.0 million to this joint venture.

TriArm also managed all clinical development in the territory pursuant to a master services agreement between TriArm and Eden BioCell.

James Huang was the founder and serves as managing partner of Panacea Venture, which is an investor in TriArm.

Huang was the Chair of the Company's board of directors until September 22, 2023 and had been a director since July 2020.

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

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

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

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

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

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

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

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

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

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

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

Collaboration with Dune Lake Capital

In January 2023, the Company entered into a consulting agreement with Dune Lake Capital, LLC, or Dune Lake Capital, which was founded by Dale Curtis Hogue, Jr., the Company's interim Chief Executive Officer.

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

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

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

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

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

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

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

As a result, the associated lease liability and right-of-use asset were remeasured to $ 0.4 million based on revised lease payments.

A gain of $ 0.1 million was recorded on the lease modification during the year ended December 31, 2022.

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

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

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

On April 19, 2023 , the Company terminated its office lease in Boston, Massachusetts, which was set to expire on August 31, 2026.

In connection with the termination, the Company also assigned to the landlord its sub-sublease of the Boston office space, which had a term expiring on June 30, 2025 with an option to extend through July 31, 2026 .

Termination costs for the Boston office lease were $ 0.2 million.

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

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

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

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

As a result, the Company agreed to make a final payment of $ 0.1 million to the landlord.

A gain of $ 0.1 million was recorded on the lease termination during the year ended December 31, 2023.

The components of lease expense were as follows:

Year Ended December 31,

($ in thousands)

Operating lease cost

Total lease cost

Weighted-average remaining lease term (years)

Weighted-average discount rate

The Company paid $ 0.4 million in operating lease costs for the year-ended December 31, 2023.

The Company did no t recognize new operating lease assets obtained in exchange for operating lease liabilities for the year-ended December 31, 2023.

The Company did no t have any leases, other than a short-term lease, as of December 31, 2023.

(in thousands, except share and per share data)

Commitments and Contingencies

Exclusive License Agreement with Precigen

On October 5, 2018, the Company entered into an exclusive license agreement, or License Agreement, with PGEN Therapeutics, or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation.

Except where the context otherwise requires, the Company refers to PGEN and Precigen together as Precigen.

Pursuant to the terms of the License Agreement, the Company had exclusive, worldwide rights to research, develop and commercialize (i) TCR products designed for neoantigens for the treatment of cancer, (ii) products utilizing Precigen’s RheoSwitch® gene switch, or RTS, for the treatment of cancer, referred to as IL-12 Products and (iii) CAR products directed to (A) CD19 for the treatment of cancer, referred to as CD19 Products, and (B) BCMA for the treatment of cancer, subject to certain obligations to pursue such target under the License and Collaboration Agreement effective March 27, 2015 between the Company, Precigen and ARES TRADING S.A., a subsidiary of Merck KGaA, as assigned by Precigen to PGEN.

Under the License Agreement, the Company also had exclusive, worldwide rights for certain patents relating to the Sleeping Beauty technology to research, develop and commercialize TCR products for both neoantigens and shared antigens for the treatment of cancer, referred to as TCR Products.

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

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

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

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

1 unchanged sentence

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

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

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

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

The A&R License Agreement further eliminates any royalty or milestone obligations to Precigen, with an annual license fee of $ 75 thousand due on the anniversary of the A&R License Agreement effective date.

Precigen is no longer obligated to pay the Company royalties on the net sales derived from the sale of Precigen's CAR products.

The decision to terminate the A&R License Agreement was made after a thorough review of our strategic priorities and business objectives, including recognizing that the non-viral Sleeping Beauty gene transfer platform patent will expire in 2026.

The Company continues to prosecute certain of the intellectual property underlying the TCRs targeting driver mutations such as KRAS, TP53 and EGFR, and the hunTR TCR discovery platform used in the discovery of our proprietary TCR library.

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

On January 13, 2015 , the Company, together with Precigen, entered into a license agreement, or the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN).

In 2015, the Company, together with Precigen, entered into a license agreement, or the MD Anderson License with MD Anderson (which Precigen subsequently assigned to PGEN).

Pursuant to the MD Anderson License, the Company, together with Precigen, holds an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel CAR T-cell therapies, non-viral gene transfer systems, genetic modification and/or propagation of immune cells and other cellular therapy approaches, Natural Killer, or NK Cells, and TCRs.

On August 17, 2015, the Company, Precigen and MD Anderson entered into the 2015 R&D Agreement to formalize the scope and process for the transfer by MD Anderson, pursuant to the terms of the MD Anderson License, of certain existing research programs and related technology rights, as well as the terms and conditions for future collaborative research and development of new and ongoing research programs.

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

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

On November 14, 2017, the Company entered into an amendment to the 2015 R&D Agreement, extending its term until April 15, 2021.

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

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

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

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

Under the 2019 R&D Agreement, the Company and MD Anderson will, among other things, collaborate on programs to expand the Company's TCR library and conduct clinical trials.

The activities under the 2019 R&D Agreement are directed by a joint steering committee comprised of two members from the Company and one member from MD Anderson.

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

The Company has granted MD Anderson an exclusive license for such

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

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

In addition, the Company will pay MD Anderson royalties on net sales of its TCR products.

The Company is required to make performance-based payments upon the successful completion of clinical and regulatory benchmarks relating to its TCR products.

The aggregate potential benchmark payments are $ 36.5 million, of which only $ 3.0 million will be due prior to the first marketing approval of the Company's TCR products.

The royalty rates and benchmark payments owed to MD Anderson may be reduced upon the occurrence of certain events.

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

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

In 2015, the Company, Precigen and MD Anderson entered into the 2015 R&D Agreement to formalize the scope and process for the transfer by MD Anderson, pursuant to the terms of the MD Anderson License, of certain existing research programs and related technology rights, as well as the terms and conditions for future collaborative research and development of new and ongoing research programs.

As provided under the MD Anderson License, the Company provided funding for research and development activities in support of the research programs under the 2015 R&D Agreement.

At various times, the Company amended the 2015 R&D Agreement to extend the term until December 31, 2026 and in 2019 entered into the 2019 R&D Agreement, pursuant to which the Company agreed to collaborate with respect to the TCR program.

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

The 2019 R&D Agreement also contains customary provisions related to indemnification obligations, confidentiality and other matters.

In connection with the execution of the 2019 R&D Agreement, on October 22, 2019, the Company issued MD Anderson a warrant to purchase 22,222 shares of the Company's common stock, which is referred to as the MD Anderson Warrant.

The MD Anderson Warrant has an initial exercise price of $ 0.15 per share, expires on December 31, 2026 , and vests upon the occurrence of certain clinical milestones.

As of December 31, 2024, the milestones have not been met.

License Agreement with the NCI

On May 28, 2019, the Company entered into a patent license agreement, or the Patent License, with the NCI.

Pursuant to the Patent License, the Company held an exclusive, worldwide license to certain intellectual property to develop and commercialize patient-derived (autologous), peripheral blood T-cell therapy products engineered by transposon-mediated gene transfer to express TCRs reactive to mutated KRAS, TP53 and EGFR neoantigens.

In addition, pursuant to the Patent License, the Company held an exclusive, worldwide license to certain intellectual property for manufacturing technologies to develop and commercialize autologous, peripheral blood T-cell therapy products engineered by non-viral gene transfer to express TCRs, as well as a non-exclusive, worldwide license to certain additional manufacturing technologies.

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

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

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

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

Cooperative Research and Development Agreement (CRADA) with the NCI

On January 9, 2017, the Company entered into a Cooperative Research and Development Agreement, or the CRADA, with the NCI.

The purpose of this collaboration was to advance a personalized TCR-T approach for the treatment of solid tumors.

Using the Company's Sleeping Beauty technology, the NCI would analyze a patient’s own cancer cells, identify their unique neoantigens and TCRs reactive against those neoantigens and then use the Company's Sleeping Beauty technology to transpose one or more TCRs into T cells for re-infusion.

Research conducted under the CRADA was under the direction of Steven A.

Rosenberg, M.D., Ph.D., Chief of the Surgery Branch at the NCI, in collaboration with the Company's researchers.

The Company was responsible for providing the NCI with the test materials necessary for them to conduct their studies, and eventually, clinical trials pursuant to the CRADA.

Inventions, data and materials discovered or produced in connection with performance of the research plan under the CRADA would have remained the sole property of the party who produced the discovery.

The parties would have jointly owned all inventions jointly discovered under the research plan.

The owner of any invention under the CRADA would have made the decision to file a patent covering the invention, or in the case of a jointly owned invention, the Company would have the first opportunity to file a patent covering the invention.

If the Company failed to provide timely notice of its decision to the NCI or decided not to file a patent covering the joint invention, the NCI had the right to make the filing.

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

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

government a non-exclusive, non-transferable, irrevocable and paid up license to practice the invention or have the invention practiced on its behalf throughout the world.

The Company was also required to grant the U.S.

government a non-exclusive, non-transferable, irrevocable and paid up license to practice the invention or have the invention practiced on its behalf throughout the world for any of the Company's solely owned inventions.

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

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

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

During the reporting period, the Company continued to engage with The University of Texas M.D.

Anderson Cancer Center (“MD Anderson”) to wind down the TCR trials.

The parties completed the final reconciliation of amounts due under the related R&D agreements, and the Company received the final invoice during the second quarter of 2025.

Amounts due to MD Anderson and recorded in accounts payable were $ 143 and $ 257 as of December 31, 2025 and 2024, respectively.

On November 4, 2025, the Office of the Attorney General of Texas, on behalf of MD Anderson, issued a demand for payment.

On December 17, 2025, the Company entered into a Settlement and Release Agreement with MD Anderson to resolve the matter.

Pursuant to the agreement, the Company agreed to pay $ 285 thousand in six installments through May 30, 2026, in full satisfaction of the outstanding invoices.

The agreement also provides for mutual general releases, subject to customary exceptions, including for breach of the settlement agreement and certain ongoing matters such as Protocol 2006-0676.

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

On August 24, 2004, the Company entered into a patent and technology license agreement with MD Anderson and the Texas A&M University System, which the Company refers to, collectively, as the Licensors.

In August 2004, the Company entered into a patent and technology license agreement with MD Anderson and the Texas A&M University System, which the Company refers to, collectively, as the Licensors.

Under this agreement, the Company was granted an exclusive, worldwide license to rights (including rights to U.S.

1 unchanged sentence

The class of water-based organic arsenicals includes darinaparsin.

Under the terms of the agreement, the Company may be required to make additional payments to the Licensors upon achievement of certain milestones in varying amounts which, on a cumulative basis could total up to an additional $ 4.5 million.

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

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

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

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Under the terms of the agreement, the Company may be required to make payments to the Licensors upon achievement of certain milestones in varying amounts which, on a cumulative basis could total up to an additional $ 4.5 million.

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

During the years ended December 31, 2025 and 2024, the Company did no t incur any milestone expenses or royalty expenses under this agreement.

Collaboration Agreement with Solasia Pharma K.K.

On March 7, 2011, the Company entered into a License and Collaboration Agreement with Solasia Pharma K.

K., or Solasia, which was amended on July 31, 2014 to include an exclusive worldwide license and amended on October 14, 2021 to revise certain payment schedule details, or, as so amended, the Solasia License and Collaboration Agreement.

In 2011, the Company entered into a License and Collaboration Agreement with Solasia Pharma K.

K., or Solasia, which was amended in 2014 to include an exclusive worldwide license and further amended in 2021 to revise certain payment schedule details, or, as so amended, the Solasia License and Collaboration Agreement.

Pursuant to the Solasia License and Collaboration Agreement, the Company granted Solasia an exclusive license to develop and commercialize darinaparsin in both intravenous and oral forms and related organic arsenic molecules, in all indications for human use.

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

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

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

KBI Biopharma Litigation

On March 17, 2023, KBI Biopharma , Inc., or KBI, filed a complaint against the Company in the District Court of Harris County, Texas, 165th Judicial District, asserting breach of an Amended and Restated Master Services Agreement between the Company and KBI relating to the development of an autologous gene modified T-cell therapy product, or the KBI Agreement.

KBI was primarily seeking unspecified monetary damages in excess of $ 3.2 million.

On May 1, 2023, the Company filed an answer generally denying all of KBI’s allegations and asserting affirmative and other defenses as well as counterclaims for breach of the KBI Agreement and conversion.

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

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

During the years ended December 31, 2025 and 2024, the Company earned royalty revenue totaling $ 5 and $ 10 , respectively, on net sales under this agreement.

Insurance Contract

During the year ended December 31, 2025 , the Company's insurance arrangement for certain risks which were previously paid in full began to be in force for a period of six years.

Accordingly, the Company began amortizing the prepaid expense related to the contract.

The Company has classified the prepaid contract between its current portion and long term-portion.

As of December 31, 2025 , $ 222 is included in prepaid expenses and other current assets and $ 887 is included in prepaid expense and other non-current assets in the accompanying balance sheet.

Director Resignation

On April 15, 2025, Dr.

Robert Hofmeister, Ph.D.

resigned as a member of the Board of Directors of the Company with immediate effect.

Robert Hofmeister's, Ph.D.

resignation was not the result of any disagreement on any matter relating to the Company’s operations, policies or practices.

Changes in Corporate Governance

On July 1, 2025, Dale Curtis Hogue, Jr.

resigned from his positions as Chief Executive Officer and a member of the Board of Directors of the Company, effective immediately.

His resignation was not due to any disagreement with the Company.

In connection with his departure, the Company entered into a Consulting Agreement with Mr.

Hogue, effective July 1, 2025, under which he will provide strategic and advisory services to the Company at a rate of $ 250 per hour.

The agreement remains in effect until terminated by either party.

On July 2, 2025, the Board appointed Holger Weis as Chief Executive Officer, effective immediately.

Weis will continue to serve as Chair of the Board of Directors, but has relinquished his roles on the Audit and Compensation Committees, pursuant to applicable Nasdaq Listing Rules.

In connection with his appointment, the Company entered into an Employment Agreement with Mr.

Weis, providing for an annual base salary of $ 275 and a stock option to purchase 130,000 shares of common stock at an exercise price of $ 5.06 per share.

One-quarter of the option vested immediately, with the remainder vesting in equal quarterly installments over three years.

On July 15, 2025, the Board of Directors of the Company appointed Mr.

Jerman as an independent director of the Company, effective immediately, to fill the vacancy on the Board of Directors created by the resignation of Mr.

Hogue and the vacancies on the audit and compensation committees from Mr.

Weis’s appointment as CEO.

In connection with his appointment, Mr.

Jerman was also named to the Audit Committee and the Compensation Committee of the Board, and will serve as the Chair of the Audit Committee.

Upon his appointment, Mr.

Jerman was awarded options to purchase Common Stock pursuant to the Company's Non-employee Director Compensation Policy.

On July 16, 2025, Melinda Lackey notified the Company of her decision to terminate the Consulting Agreement dated November 14, 2023 (the “Agreement”) pursuant to terms of the agreement, with such termination to be effective 30 days from the date of notice, or August 15, 2025.

Alaunos Therapeutics, Inc.

1 unchanged sentence

(in thousands, except share and per share data)

connection with the termination of the Agreement, Ms.

Lackey resigned from her roles as Legal and Administrative Officer and Corporate Secretary of the Company as of the effective Date.

Lackey’s departure is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

On August 14, 2025, the Board of Directors of the Company appointed Mr.

Ferdinand Groenewald as Corporate Secretary effective upon the resignation of Ms.

Sales Tax Contingency

The Company is subject to examination by certain state and local taxing authorities related to sales and use tax matters.

The Company records a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.

As of December 31, 2025 , the Company has recorded an estimated liability of $ 54 to these matters.

In addition, the Company may be exposed to additional loss;

however, the Company cannot reasonably estimate the amount or range of additional loss at this time.

Increase in Authorized Shares

On July 3, 2025, the Company stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 5,000,000 to 50,000,000 .

The amendment was filed with the Secretary of State of the State of Delaware and became effective upon filing.

Equity Incentive Plan Amendment

On July 3, 2025, the Company's s tockholders approved an amendment to the Company’s 2020 Equity Incentive Plan to increase the number of shares of common stock authorized for issuance under the plan from 130,745 to 1,130,745 shares.

Series A-1 Preferred Stock

In April 2025, the Company entered into a Subscription Agreement (the “A-1 Agreement”), with an accredited investor, pursuant to which the Company sold 500 shares of Series A-1 Convertible Preferred Stock, par value of $ 0.001 per share (the “Series A-1 Preferred Stock”), at a price per share of $ 1,000 (the “Preferred Offering”) for an aggregate purchase price of $ 0.5 million.

The Preferred Offering also relates to the offering of the shares of the Company's common stock (the "Common Stock") issuable upon the conversion of or otherwise pursuant to the terms of the Series A-1 Preferred Stock.

In connection therewith, the Company filed with the Secretary of State of the State of Delaware the Certificate of Designation of Series A-1 Convertible Preferred Stock of the Company, designating 1,000 shares of preferred stock as Series A-1 Preferred Stock.

Series A-1 Preferred Stock together with the aggregate accrued or accumulated and unpaid dividends thereon, is convertible, at any time at option of the holder, into shares of Common Stock at initial fixed “Conversion Price” of $ 2.76 per share, subject to customary anti-dilution provisions.

Prior thereto, the holders of Series A-1 Preferred Stock are entitled to receive dividends at a rate of 10 % per annum, payable in shares of Series A-1 Preferred Stock, if and when declared by the Board of Directors.

In addition, to the extent any other dividends or distributions are declared for holders of the common stock, the holders of Series A-1 Preferred Stock have participation rights on an as-converted basis.

The holders of Series A-1 Preferred Stock are entitled to vote, together as a single class, on any and all matters presented to the stockholders of the Company for their action on an as-converted basis, a number of votes equal to the number of shares of common stock into which the shares of Series A-1 Preferred Stock are convertible under the terms of the Certificate of Designation.

Director Compensation

On April 13, 2025, the Board of Directors of the Company elected to receive compensation in the form of shares of common stock and stock

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

options in lieu of cash for the then outstanding cumulative deferred board service fees for the first quarter of 2025, totaling $ 139 .

Accordingly, the Company issued 38,269 shares of common stock with an aggregate fair value of $ 112 and granted 10,904 fully vested stock options, with an exercise price of $ 2.92 per share and an aggregate grant date fair value of $ 27 .

On July 3, 2025, the Board of Directors of the Company elected to receive compensation in the form of shares of common stock and stock options in lieu of cash for the second quarter board service fees.

The total deferred board service fees amounted to $ 37 .

In exchange for these deferred fees, the Company issued 7,450 shares of common stock and on August 18, 2025 granted 13,676 fully vested stock options, with an exercise price of $ 2.32 per share and an aggregate grant date fair value of $ 27 .

On November 21, 2025, members of the Board of Directors of the Company elected to receive compensation in equity rather than in cash for their third quarter board service fees.

Accordingly, the Company issued 14,665 shares of common stock with an aggregate fair value of $ 49 .

Securities Purchase Agreement for Registered Direct Offering

In June 2025, the Company entered into a Securities Purchase Agreement with certain institutional investors, pursuant to which the Company agreed to sell (i) 338,725 shares of common stock at a purchase price of $ 3.36 per share and (ii) 271,674 pre-funded warrants to purchase common stock at a purchase price of $ 3.359 per warrant share, in a registered direct offering.

In connection therewith, Company received net proceeds totaling $ 1.91 million after deduction of transaction related expenses.

As of December 31, 2025, all pre-funded warrants had been exercised, including certain warrants exercised on a cashless basis, resulting in the issuance of an aggregate of 271,656 shares of common stock.

Series A-2 Preferred Stock

In June 2025, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company sold, in a private placement, 850 shares of Series A-2 Convertible Preferred Stock, par value $ 0.001 per share, at a price of $ 1,000 per share, for aggregate gross proceeds of $ 0.85 million.

In connection therewith, the Company filed with the Secretary of State of the State of Delaware the Certificate of Designation of Series A-2 Convertible Preferred Stock of the Company, designating 1,000 shares of preferred stock as Series A-2 Preferred Stock.

Series A-2 Preferred Stock, together with the aggregate accrued or accumulated and unpaid dividends thereon, is convertible, at any time at the option of the holder, into shares of Common Stock at an initial fixed “Conversion Price” of $ 4.49 per share, subject to customary anti-dilution provisions.

Prior thereto, the holders of Series A-2 Preferred Stock are entitled to receive dividends at a rate of 10 % per annum, payable in shares of Series A-2 Preferred Stock, if and when declared by the Board of Directors.

In addition, to the extent any other dividends or distributions are declared for holders of the Common Stock, the holders of Series A-2 Preferred Stock have participation rights on an as-converted basis.

The holders of Series A-2 Preferred Stock are entitled to vote, together as a single class, on any and all matters presented to the stockholders of the Company for their action on an as-converted basis, a number of votes equal to the number of shares of Common Stock into which the shares of Series A-2 Preferred Stock are convertible under the terms of the Certificate of Designation.

Series A-1 and A-2 Preferred Stock Cumulative Dividends

Cumulative dividends on the Company’s Series A-1 and Series A-2 Convertible Preferred Stock accrue at 10 % per annum and compound quarterly by increasing the liquidation preference.

Undeclared cumulative dividends are not recorded as a liability.

Because the Company reported a net loss for the periods presented, cumulative preferred dividends increased the net loss attributable to common stockholders in the earnings-per-share calculation.

As of December 31, 2025 , undeclared cumulative dividends totaled $ 60 for Series A-1 and $ 45 for Series A-2.

Consulting Services

On August 18, 2025, the Company issued 10,775 shares of common stock for services, with an aggregate grant-date fair value of $ 25 to the Company's Vice President of Finance.

In addition, the Company issued 4,000 stock options to the consultant with a grant date fair value of $ 8 .

One-sixteenth of the shares underlying the option vest in equal quarterly installments measured from August 18, 2025, with the first vesting occurring on November 18, 2025.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

On October 10, 2025, the Company issued 53,832 shares of common stock for services, with an aggregate grant-date fair value of $ 199 .

The issuance partially settled accounts payable outstanding at September 30, 2025 pursuant to a revised consulting agreement.

For services render through out the remainder of the year ended December 31, 2025 the Company issued an aggregate of 12,856 shares of common stock for services, with an aggregate grant-date fair value of $ 38 pursuant to the consulting agreement.

The following is a summary of the Company's warrant activity for the years ended December 31, 2025:

(in thousands, except share and per share data)

Number of Shares

3 unchanged sentences

Outstanding, December 31, 2025

Outstanding, December 31, 2024

Restructuring

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

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

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

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

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

In May 2025, the Company entered into an equity purchase agreement with an investor under which the Company has the option to sell up to $ 25.0 million of common stock over a period of 24 months at 97 % of the prior trading day’s volume-weighted average price, subject to volume and ownership limitations.

In connection with the agreement, the Company issued a warrant to purchase 79,900 shares of common stock at $ 4.00 per share, with a five-year term.

Due to anti-dilution and variable pricing features, the warrant was initially classified as a derivative liability measured at fair value using the Black-Scholes model, which was determined to be approximately equivalent to a lattice or monte carlo model.

On the issuance date, the fair value of the derivative liability totaled $ 177 , with a corresponding increase in deferred issuance costs for the same amount, which is included in other assets in the balance sheet and will be amortized as a reduction to the proceeds received equity instruments sold pursuant to the agreement or upon its termination in the event the entirety of the shares are not sold.

On June 9, 2025, the Company and the investor agreed to amend the warrant to introduce a $ 0.57 floor price, eliminate certain share-count adjustments, and remove certain fundamental transaction rights.

As a result, the warrant, as amended, qualified for equity classification, was remeasured at fair value, and was reclassified from liabilities to equity, which resulted in a charge of $ 31 recognized as a change in fair value of derivative liability and is included in other expense in the statement of operations.

The fair value of the warrant issued to the investor was initially measured using the Black-Scholes option pricing model as of May 19, 2025, based on the following assumptions:

expected volatility of 118.36 %, risk-free interest rate of 4.19 %, dividend yield of 0 %, expected term of 5.0 years, stock price of $ 3.12 , and exercise price of $ 3.48 .

On June 9, 2025, in connection with the amendment of the warrant terms, the fair value was remeasured using updated inputs, which included an expected volatility of 125.81 %, risk-free interest rate of 4.09 %, dividend yield of 0 %, expected term of 5.0 years, stock price of $ 3.12 , and a revised exercise price of $ 3.36 .

Both valuations reflect management’s best estimates at the respective measurement dates.

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

The volatility assumption is based on the historical experience

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

The reported amounts of income tax expense for the years ended December 31, 2024 and 2023 differ from the amounts that would result from applying domestic federal statutory tax rates to pretax losses primarily because of the changes in the valuation allowance.

The reported amounts of income tax expense for the years ended December 31, 2025 and 2024 differ from the amounts that would result from applying domestic federal statutory tax

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

rates to pretax losses primarily because of the changes in the valuation allowance.

Significant components of the Company’s deferred tax assets at December 31, 2025 and 2024 are as follows:

15 unchanged sentences

At December 31, 2025 , the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $ 775 million, of which approximately $ 339 million expire at various dates through December 31, 2037 and approximately $ 436 million can be carried forward indefinitely.

The Company is reducing its approximately $ 498 million

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

The Company has generated a gross net operating loss of approximate $ 10.9 million in Florida for the current year.

The Company is reducing its approximately $ 498 million of state net operating loss carryforwards to $ 0 as these state net operating loss carryforwards all related to Massachusetts filings and, as of December 31, 2024 the Company no longer had any employees or property in Massachusetts and, as a result, the Company will no longer have income tax nexus in Massachusetts or an income tax filing obligation after the year ended December 31, 2024 .

Additionally, the Company has approximately $ 40.3 million of federal and state research and development credits at December 31, 2025 , expiring in varying amounts through 2045 , which may be available to reduce future taxes.

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

The Company has reduced its Massachusetts credits carryforward to $ 0 as well at December 31, 2024.

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

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

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

The valuation allowance increased by $ 303 in 2025 due primarily to net operating loss carryforwards and the increase in research and development credits.

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

A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:

Beginning in 2025 annual reporting, we adopted ASU 2023-09 prospectively.

See Note 2 — Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU 2023-09.

A reconciliation of the U.S.

federal statutory income tax expense (benefit) to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Year Ended December 31,

8 unchanged sentences

Effective tax rate

A reconciliation of the U.S.

federal statutory income tax expense (benefit) to our effective tax rate for the years ended December 31, 2024 is as follows (in percentages):

Year Ended December 31,

(in thousands)

Federal income tax at statutory rates

State income tax, net of federal tax benefit

Research and development credits

Research and development true-up

Stock-based compensation

Federal/state rate change

Change in valuation allowance

Effective tax rate

The Company adopted ASC 740, Accounting for Uncertain Tax Positions on January 1, 2007.

14 unchanged sentences

Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis.

The following table presents share-based compensation expense on all employee and non-employee awards included in the accompanying statements of operations as follows:

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share data)

For the years ended December 31,

(in thousands)

Research and development

General and administrative

Stock-based compensation expense

Stock option activity under the Company's stock options plans for the years ending December 31, 2025 and 2024 were as follows:

6 unchanged sentences

Outstanding, December 31, 2025

Outstanding, December 31, 2024

Options exercisable, December 31, 2025

Options available for future grant, December 31, 2025

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

On December 31, 2025 , total unrecognized compensation costs related to non-vested stock options outstanding amounted to $ 0.4 million, which is expected to be recognized over a weighted-average period of 1.75 years.

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

For the Year Ended December 31,

For the years ended December 31,

Risk-free interest rate

6 unchanged sentences

Expected dividend yield

Restricted Stock

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

No restricted shares remained unvested at December 31, 2023.

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

Employee Benefit Plan

1 unchanged sentence

The Company may make contributions to the 401(k) Plan at its discretion.

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

The Company contributed approximately $ 13 and $ 0 to the 401(k) Plan during the year ended December 31, 2025 and 2024, respectively.

Segment Information

1 unchanged sentence

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

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

This decision-making process reflects the way in which financial information is regularly reviewed and used by the CODM to evaluate performance, set operational targets, forecast future financial results, and allocate resources.

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

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

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

The CODM utilizes combined operating

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

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

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

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

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

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

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

(in thousands, except share and per share data)

results by comparing actual results against budgeted amounts.

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

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

5 unchanged sentences

General and administrative

Gain on lease modification

Restructuring costs

Property and equipment and right-of-use asset impairment

Total operating and segment expense

Interest expense

Change in fair value of warrant liability

Other income, net

3 unchanged sentences

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

Director Compensation

On January 12, 2026, members of the Board of Directors of the Company elected to receive compensation in equity rather than in cash for their fourth quarter board service fees.

Accordingly, the Company issued 16,867 shares of common stock with an aggregate fair value of $ 49 .

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

What changed 10-K

Item 9A. Controls and Procedures