Alaunos Therapeutics, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures. 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, 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. 40 Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and our principal accounting officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 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. In management’s opinion, we have determined that our internal controls over our financial reporting was not effective due to the lack of sufficient number of personal to allow for the required segregation of duties as of December 31, 2025, based on the criteria discussed above. Inherent Limitations on Internal Controls 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. 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. Additionally, controls can be circumvented by individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Changes in Internal Controls over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) of the Exchange Act) that occurred during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Trading Plans During the year ended December 31, 2025 , no director or Section 16 officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 41 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Policy Prohibiting Insider Trading and Related Procedures. Our insider trading policy has been reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and Nasdaq listing standards . Our Insider Trading Policy is filed hereto as Exhibit 19.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Item 11. Executive Compensation The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. 42 PART IV Item 15. Exhibits, Financial Statement Schedules (1) Financial Statements: The Financial Statements required to be filed by Item 8 of this Annual Report, and filed in this Item 15, are as follows: Page Report of Independent Registered Public Accounting Firm F- 1 Report of Independent Registered Public Accounting Firm F-2 Balance Sheets as of December 31, 2025 and December 31, 2024 F-3 Statements of Operations for the Years Ended December 31, 2025 and 2024 F-4 Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 F-5 Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-6 Notes to Financial Statements F-7 (2) Financial Statement Schedules: Schedules are omitted because they are not applicable, or are not required, or because the information is included in the financial statements and notes thereto. (3) Exhibits: Exhibit No. Description of Document 3.1 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) 3.2 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) 3.3 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) 3.4 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) 3.5 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) 3.6 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) 4.1 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. 001-33038 filed November 13, 2018) 4.2# Warrant to Purchase Common Stock issued to The University of Texas M. D. Anderson Cancer Center (incorporated by reference to Exhibit 4.7 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 2, 2020) 4.3 Form of Warrant to Purchase Shares of Common Stock issued to SVB and certain of its Affiliates, dated December 28, 2021 (incorporated by reference to Exhibit 4.6 to the Registrant's Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 4.4 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). 4.5 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) 4.6 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) 4.7* 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). 10.1+ 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. 333-238090, filed May 8, 2020) 10.2+ ZIOPHARM Oncology, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K SEC File No. 001-33038 filed July 1, 2020) 10.3+ Form of Restricted Stock Agreement Granted Under the ZIOPHARM Oncology, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 43 10.4+ Form of Stock Option Agreement Granted Under the ZIOPHARM Oncology, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021 ) 10.5# 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. 001-33038, filed March 1, 2021) 10.6# License Agreement by and among the Registrant, Intrexon Corporation and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center dated as of January 13, 2015 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, SEC File No. 001-33038, filed January 28, 2015) 10.7† Exclusive License Agreement by and between the Registrant, Precigen, Inc. and Intrexon Corporation, dated October 5, 2018 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No. 001-33038, filed November 9, 2018) 10.8# Amendment No. 1 to the Exclusive License Agreement by and between the Registrant and PGEN Therapeutics, Inc. (formerly known as Precigen, Inc.), dated October 15, 2020 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q SEC File No. 001-33038, filed November 5, 2020) 10.9 Amended and Restated Exclusive License Agreement, dated, April 3, 2023, by and between the Registrant and Precigen, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q SEC File No. 001-33038, filed May 10, 2023) 10.10† License and Collaboration Agreement by and among the Registrant, Intrexon Corporation and Ares Trading S.A. dated as of March 27, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No. 001-33038, filed April 2, 2015) 10.11# Research and Development Agreement by and among the Registrant, Intrexon Corporation and The University of Texas M.D. Anderson Cancer Center dated as of August 17, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No. 001-33038, filed August 21, 2015) 10.12 First Amendment to the Research and Development Agreement by and among the Registrant, Intrexon Corporation and The University of Texas M.D. Anderson Cancer Center dated as of August 30, 2016 (incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 5, 2019) 10.13 Second Amendment to the Research and Development Agreement by and among the Registrant, Intrexon Corporation and The University of Texas M.D. Anderson Cancer Center dated as of January 17, 2017 (incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 5, 2019) 10.14 Third Amendment to the Research and Development Agreement by and among the Registrant, Intrexon Corporation and The University of Texas M.D. Anderson Cancer Center dated as of November 14, 2017 (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 5, 2019) 10.15 Fourth Amendment to Research and Development Agreement, dated September 19, 2019 by and among the Registrant, The University of Texas MD Anderson Cancer Center and Precigen, Inc. (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No. 001-33038, filed November 7, 2019) 10.16# Fifth Amendment to Research and Development Agreement, dated October 22, 2019 by and among the Registrant and The University of Texas MD Anderson Cancer Center (incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 2, 2020) 10.17# 2019 Research and Development Agreement, dated October 22, 2019, by and between the Registrant and The University of Texas MD Anderson Cancer Center (incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 2, 2020) 10.18# Patent License Agreement, dated as of May 28, 2019, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No. 001-33038, filed August 8, 2019) 10.19# First Amendment to Patent License Agreement, dated as of January 8, 2020, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 2, 2020) 10.20# Second Amendment to Patent License Agreement, dated as of September 28, 2020, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No. 000-33038, filed November 5, 2020) 10.21# Third Amendment to Patent License Agreement, dated as of April 16, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 10.22# Fourth Amendment to Patent License Agreement, dated as of May 4, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 44 10.23# Fifth Amendment to Patent License Agreement, dated as of August 13, 2021, by and between the Registrant and the National Cancer Institute (incorporated by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 10.24# Cooperative Research and Development Agreement, dated January 9, 2017, by and among the Registrant, the National Cancer Institute, and Intrexon Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K SEC File No. 001-33038, filed September 26, 2019) 10.25 First Amendment to the Cooperative Research and Development Agreement, dated March 23, 2018, by and among the Registrant, National Cancer Institute, Intrexon Corporation and Precigen, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K SEC File No. 001-33038, filed September 26, 2019) 10.26# Second Amendment to the Cooperative Research and Development Agreement, dated February 1, 2019, by and among the National Cancer Institute, the Registrant and Precigen, Inc. (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K SEC File No. 001-33038, filed September 26, 2019) 10.27 Third Amendment to the Cooperative Research and Development Agreement, dated March 15, 2022, by and among the National Cancer Institute and the Registrant (incorporated by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 10.28 Fourth Amendment to the Cooperative Research and Development Agreement, dated June 24, 2022, by and between the National Cancer Institute and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q, SEC File No. 001-33038, filed August 15, 2022) 10.29 Lease Agreement, dated as of October 15, 2019, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center (incorporated by reference to Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 10.30 First Amendment, dated as of April 7, 2020, to the Lease Agreement, dated as of October 15, 2019, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center (incorporated by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 10.31 Second Amendment, dated as of April 7, 2020, to the Lease Agreement, dated as of October 15, 2019, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center (incorporated by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 10.32 Third Amendment, dated as of December 15, 2020, to the Lease Agreement, dated as of October 15, 2019, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center (incorporated by reference to Exhibit 10.42 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 10.33 Lease Agreement dated as of December 15, 2020, by and between the Registrant and The University of Texas System Board of Regents on behalf of The University of Texas M.D. Anderson Cancer Center (incorporated by reference to Exhibit 10.43 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 1, 2021) 10.34 Agreement dated February 4, 2021, by and among the Registrant, WaterMill Asset Management Corp. and Robert W. Postma (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, SEC File No. 001-33038, filed February 5, 2021) 10.35 Loan and Security Agreement by and among the Registrant, the lenders party thereto and Silicon Valley Bank, as administrative agent and collateral agent, dated August 6, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No. 001-33038, filed November 8, 2021) 10.36 First Amendment to the Loan and Security Agreement by and among the Registrant, the lenders party thereto and Silicon Valley Bank, as administrative agent and collateral agent, dated December 28, 2021 (incorporated by reference to Exhibit 10.52 to the Registrant’s Annual Report on Form 10-K, SEC File No. 001-33038, filed March 30, 2022) 10.37+ Separation Agreement, dated as of December 22, 2023, between the Registrant and Kevin S. Boyle, Sr. (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) 10.38+ Consulting Agreement, dated as of December 22, 2023, between the Registrant and Kevin S. Boyle, Sr. (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) 10.39+* Consulting Agreement, dated as of February 21, 2024, between the Registrant and Ferdinand Groenewald 10.40 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) 23.1* Consent of Independent Registered Public Accounting Firm 19.1* Insider Trading Policy 31.1* 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 45 32.1** Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Alaunos Therapeutics, Inc. Clawback Policy 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104* Cover Page Interactive Data File-the cover page interactive data is embedded within the Inline XBRL document or included within the Exhibit 101 attachments * Filed herewith. ** Furnished herewith. + Indicates management contract or compensatory plan. † Confidential treatment has been granted by the Securities and Exchange Commission as to certain portions of this document. # Portions of this document (indicated by “[***]”) have been omitted because such information is not material and is the type of information that the Registrant treats as private or confidential. Item 16. Form 10-K Summary None. 46 SIGN ATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALAUNOS THERAPEUTICS, INC. Date: March 31, 2026 By: /s/ Holger Weis Holger Weis Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer) Date: March 31, 2026 By: /s/ Ferdinand Groenewald Ferdinand Groenewald Vice President, Finance (Principal Accounting Officer) 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. Signature Title Date /s/ Holger Weis Holger Weis Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer) March 31, 2026 /s/ Ferdinand Groenewald Ferdinand Groenewald Vice President, Finance (Principal Accounting Officer) March 31, 2026 /s/ Michael A. Jerman Michael A. Jerman Director March 31, 2026 /s/ Robert W. Postma Robert W. Postma Director March 31, 2026 /s/ Jaime Vieser Jaime Vieser Director March 31, 2026 47 Alaunos Therapeutics, Inc. INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 00 677 ) F- 1 Balance Sheets as of December 31, 2025 and 2024 F-2 Statements of Operations for the Years Ended December 31, 2025 and 2024 F-3 Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 F-4 Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-5 Notes to Financial Statements F-6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders Alaunos Therapeutics, Inc. Fort Lauderdale, Florida Opinion on the Financial Statements We have audited the accompanying balance sheet of Alaunos Therapeutics, Inc. (the “Company”) as of December 31, 2025, and the related statements of operations, stockholders’ equity, and cash flows the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. The financial statements of the Company as of and for the year ended December 31, 2023, before the retroactive adjustments described in Note 3 with respect to the July 2024 one-for-ten reverse stock split were audited by other auditors whose report, dated April 1, 2024, expressed an unqualified opinion, with an explanatory paragraph expressing substantial doubt regarding the Company’s ability to continue as a going concern, on those statements. We also audited the adjustments described in Note 3 that were applied retroactively to the 2023 financial statements to reflect the July 2024 one-for-ten reverse stock split and the related disclosures included therein. In our opinion, such adjustments and related disclosures are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2023 financial statements of the Company other than with respect to the adjustments and disclosures referred to herein and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s evaluations of the events and conditions and management’s plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our 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. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ Cherry Bekaert LLP We have served as the Company’s auditor since 2024. Tampa, Florida March 31, 2026 F- 1 A launos Therapeutics, Inc. BALANCE SHEETS (in thousands, except share and per share data) December 31, December 31, 2025 2024 ASSETS: Current assets: Cash and cash equivalents $ 1,385 $ 1,091 Receivables 3 5 Prepaid expenses and other current assets, current 600 1,659 Total current assets 1,988 2,755 Property and equipment, net 91 — Prepaid expenses and other assets, non current 887 — Total assets $ 2,966 $ 2,755 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 613 $ 516 Accrued expenses 200 176 Total current liabilities 813 692 Total liabilities $ 813 $ 692 Commitments and contingencies (Note 5) 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; 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 2 2 Additional paid-in capital 926,773 922,507 Accumulated deficit ( 924,622 ) ( 920,446 ) Total stockholders' equity 2,153 2,063 Total liabilities and stockholders' equity $ 2,966 $ 2,755 The accompanying notes are an integral part of these financial statements. F- 2 A launos Therapeutics, Inc. STATEMENTS OF OPERATIONS (in thousands, except share and per share data) For the years ended December 31, 2025 2024 Revenue $ 5 $ 10 Operating expenses: Research and development 1,363 362 General and administrative 2,867 4,460 Total operating expenses 4,230 4,822 Loss from operations ( 4,225 ) ( 4,812 ) Other income (expense): Change in fair value of warrant liability ( 31 ) — Other income, net 80 133 Other income (expense), net 49 133 Net loss $ ( 4,176 ) $ ( 4,679 ) Basic and diluted earnings per share $ ( 2.20 ) $ ( 2.92 ) Weighted average common shares outstanding, basic and diluted 1,948,357 1,601,252 The accompanying notes are an integral part of these financial statements. F- 3 A launos Therapeutics, Inc. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in thousands, except share and per share data) Common Stock Series A-1 Preferred Stock Series A-2 Preferred Stock Additional Paid in Capital Accumulated Deficit Total Stockholders' Equity Shares Amount Shares Amount Shares Amount Balance at January 1, 2025 1,601,252 $ 2 — $ — — $ — $ 922,507 $ ( 920,446 ) $ 2,063 Stock-based compensation — — — — — — 414 — 414 Shares issued as consideration for board service fees 60,384 — — — — — 195 — 195 Shares issued as consideration for services 77,463 — — — — — 187 — 187 Sale of Series A-1 preferred stock — — 500 — — — 500 — 500 Issuance of common stock in registered direct offering, net of offering costs 338,725 — — — — — 998 — 998 Issuance of prefunded warrants in registered direct offering — — — — — — 913 — 913 Reclassification of Warrant Liability to equity — — — — — — 209 — 209 Exercise of prefunded warrants 271,656 — — — — — — — — Sale of Series A-2 preferred stock — — — — 850 — 850 — 850 Net loss — — — — — — — ( 4,176 ) ( 4,176 ) Balance at December 31, 2025 2,349,480 $ 2 500 $ - 850 $ - $ 926,773 $ ( 924,622 ) $ 2,153 Common Stock Additional Paid in Capital Accumulated Deficit Total Stockholders' Equity Shares Amount Balance at January 1, 2024 1,601,252 $ 2 $ 922,072 $ ( 915,767 ) $ 6,307 Stock-based compensation — — 435 — 435 Net loss — — — ( 4,679 ) ( 4,679 ) Balance at December 31, 2024 1,601,252 $ 2 $ 922,507 $ ( 920,446 ) $ 2,063 The accompanying notes are an integral part of these financial statements. F- 4 A launos Therapeutics, Inc. STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 4,176 ) $ ( 4,679 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 7 2 Change in fair value of warrant liability 31 — Common stock issued for services rendered 382 — Stock-based compensation 414 435 Changes in operating assets and liabilities: Receivables 2 ( 4 ) Prepaid expenses and other current assets 350 539 Accounts payable 97 ( 100 ) Accrued expenses 24 ( 1,164 ) Net cash flows from operating activities ( 2,869 ) ( 4,971 ) Cash flows from investing activities: Purchases of property and equipment ( 98 ) — Net cash flows from investing activities ( 98 ) — Cash flows from financing activities: Proceeds from the issuance of common stock and pre funded warrants, net of offering costs 1,911 — Proceeds from sale of Series A-1 preferred stock 500 — Proceeds from sale of Series A-2 preferred stock 850 — Net cash flows from financing activities 3,261 — Net increase (decrease) in cash, cash equivalents 294 ( 4,971 ) Cash and cash equivalents, beginning of period 1,091 6,062 Cash and cash equivalents, end of period $ 1,385 $ 1,091 Supplementary disclosure of cash flow information: Cash paid for interest $ — $ — Noncash financing activities: Recognition of warrant liability in connection with the equity line of credit agreement $ 178 $ — Amounts included in accrued expenses and accounts payable related to property and equipment $ 67 $ — The accompanying notes are an integral part of these financial statements. F- 5 Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) 1. Organization 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. As of December 31, 2025 there were 2,349,480 shares of common stock outstanding and an additional 328,937 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants. 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. 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. As of December 31, 2025 , the Company had approximately $ 1.4 million of cash and cash equivalents. The Company’s accumulated deficit at December 31, 2025 was approximately $ 924.6 million. 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’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 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. F- 6 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) 2. 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 (“U.S. GAAP”) . Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known. The Company’s most significant estimates and judgments used in the preparation of the financial statements are: • Clinical trial expenses and other research and development expenses; • Collaboration agreements; • Fair value measurements of stock-based compensation; and • Income taxes. Cash and Cash Equivalents Cash equivalents consist primarily of demand deposit accounts, certificates of deposit and deposits in short-term U.S. treasury money market mutual funds. Cash equivalents are stated at cost, which approximates fair market value. Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets: Office and computer equipment 3 years Software 3 years Laboratory equipment 5 years Operating Segments Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification; using this information to make decisions on a company-wide basis. The Company views its operations and manages its business in one operating segment. F- 7 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) Warrants The Company assesses whether warrants issued require accounting as derivatives. The Company determined that the warrants were (1) indexed to the Company’s own stock and (2) classified in stockholders’ equity in accordance with Financial Accounting Standards Board, or FASB, ASC Topic 815, Derivatives and Hedging . 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. 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 The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements. • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value on a recurring and nonrecurring basis as of December 31, 2025 and 2024 are as follows: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Balance as of December 31, 2025 Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 1,135 $ 1,135 $ — $ — ($ in thousands) Fair Value Measurements at Reporting Date Using Description Balance as of December 31, 2024 Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 779 $ 779 $ — $ — The cash equivalents represent demand deposit accounts and deposits in a short-term United States treasury money market mutual fund quoted in an active market and classified as a Level 1 asset. There have been no changes to the valuation methods during the years ended December 31, 2025 and 2024 . F- 8 Table of Contents 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, 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. primarily due to the achievement of milestones, as further described in Note 5, Commitments and Contingencies. Research and Development Costs 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 Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates this tax position on an annual basis. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense (Refer to Note 11, Income Taxes ). Accounting for Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period. Stock-based compensation expense is based on the number of awards ultimately expected to vest and is reduced for forfeitures as they occur. 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, 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 F- 9 Table of Contents 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. 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. The Company calculated expected term using the simplified method described in SEC Staff Accounting Bulletin, or SAB, No. 107 and No. 110. 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 Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period, plus the dilutive effect of outstanding options and warrants, using the treasury stock method and the average market price of the Company’s common stock during the applicable period, unless their effect on net loss per share is antidilutive. 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 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: December 31, 2025 2024 Common stock options 222,485 33,237 Warrants 106,452 26,552 Series A-1 Preferred Stock 181,159 - Series A-2 Preferred Stock 189,309 - 699,405 59,789 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, 2025 2024 Net loss $ ( 4,176 ) $ ( 4,679 ) Cumulative preferred dividends ( 106 ) - Net loss attributable to common stockholders $ ( 4,282 ) $ ( 4,679 ) New Accounting Pronouncements F- 10 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (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. 3. Property and Equipment, net Property and equipment, net, consists of the following: December 31, December 31, ($ in thousands) 2025 2024 Office and computer equipment $ - $ 15 Laboratory equipment 98 - 98 15 Less: accumulated depreciation ( 7 ) ( 15 ) Property and equipment, net $ 91 $ - Depreciation expense for the year ended December 31, 2025 and 2024 was $ 7 and was $ 2 , respectively. 4. Accrued Expenses Accrued expenses consist of the following: ($ in thousands) 2025 2024 Preclinical services $ 123 $ 97 Sales and use taxes 54 - Professional services 23 79 $ 200 $ 176 F- 11 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) 5. Commitments and Contingencies Exclusive License Agreement with Precigen On April 3, 2023, the Company entered into the Amended and Restated Exclusive License Agreement with Precigen, or the A&R License Agreement, which restated and amended the parties' previous license agreement in full. Under the A&R License Agreement, the Company still had exclusive, worldwide rights to research, develop and commercialize TCR products designed for neoantigens or driver mutations for the treatment of cancer and non-exclusive rights to use non-driver mutation TCRs. On October 4, 2024, pursuant to Section 10.2 of the License Agreement, the Company duly notified Precigen of its full termination of all rights under the License Agreement. The 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. 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. License Agreement and Research and Development Agreement —The University of Texas MD Anderson Cancer Center 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. 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. 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 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. and foreign patent and patent applications and related improvements and know-how) for the manufacture and commercialization of two classes of organic arsenicals (water- and lipid-based) for human and animal use. The class of water-based organic arsenicals includes darinaparsin. F- 12 Table of Contents 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. 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 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. Dr. 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. Mr. 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. Michael A. 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. In F- 13 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (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. Ms. 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. Lackey. 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. 6. Equity 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 F- 14 Table of Contents 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. F- 15 Table of Contents 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. 7. Warrants 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 Weighted- Average Exercise Price Weighted- Average Contractual Term (Years) Outstanding, December 31, 2024 26,552 $ 28.50 2.75 Granted 351,574 0.76 Exercised ( 271,674 ) 0.001 Outstanding, December 31, 2025 106,452 $ 9.63 3.73 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 8. Income Taxes 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, 2025 and 2024 differ from the amounts that would result from applying domestic federal statutory tax F- 16 Table of Contents 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: December 31, (in thousands) 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 163,254 $ 154,634 Start-up and pre-clinical studies 8,683 11,011 Research and development credit carryforwards 40,345 40,486 Stock-based compensation 766 699 Capitalized acquisition costs 556 1,050 Lease liability — — Depreciation 0 1 Capitalized research expenses 0 5,400 Other ( 20 ) 0 213,584 213,281 Less valuation allowance ( 213,584 ) ( 213,281 ) Total deferred tax assets — — Right-of-use asset — — Total deferred tax liabilities $ — $ — Net deferred taxes $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 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 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 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 $ 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. 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: F- 17 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) Year Ended December 31, (in thousands) 2025 Federal income tax at statutory rates $ ( 859 ) 21 % State income tax, net of federal tax benefit 196 ( 5 )% Research and development credits - — % Research and development true-up 1,254 ( 31 )% Stock-based compensation 18 — % Federal/state rate change ( 914 ) 22 % Change in valuation allowance 305 ( 7 )% Effective tax rate $ - 0 % 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) 2024 Federal income tax at statutory rates 21 % State income tax, net of federal tax benefit ( 2 )% Research and development credits — % Research and development true-up 29 % Stock-based compensation — % Federal/state rate change 0 % Change in valuation allowance ( 48 )% Effective tax rate — % The Company adopted ASC 740, Accounting for Uncertain Tax Positions on January 1, 2007. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” ASC 740 prescribes a recognition threshold and measurement of a tax position taken or expected to be taken in a tax return. The Company did not establish any additional reserves for uncertain tax liabilities upon adoption of ASC 740. There were no adjustments to its uncertain tax positions in the years ended December 31, 2025 and 2024. The Company has no t recognized any interest and penalties in the statements of operations because of the Company’s net operating losses and tax credits that are available to be carried forward. When necessary, the Company will account for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company does not expect the amounts of unrecognized benefits will change significantly within the next twelve months. 9. Stock Option Plan The Company adopted the 2020 Equity Incentive Plan, or the 2020 Plan, in June 2020. As of December 31, 2025 , there were 222,485 shares reserved for issuance and 953,496 shares available for future grant. The Company reserved 1,140,000 shares for issuance plus a carryover of 7,109 shares from the 2012 Plan for a total of 1,147,109 shares. In addition, returning shares from the 2012 Plan are available for issuance under the 2020 Plan. Stock options generally vest ratably in either quarterly or annual installments over three or four years, commencing on the first anniversary of the grant date and have contractual terms of ten years. Stock options to directors generally vest ratably over one or two years and have contractual terms of ten years. 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: F- 18 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share data) For the years ended December 31, (in thousands) 2025 2024 Research and development $ 210 $ 17 General and administrative 586 418 Stock-based compensation expense $ 796 $ 435 Stock option activity under the Company's stock options plans for the years ending December 31, 2025 and 2024 were as follows: (in thousands, except share and per share data) Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Term (Years) Aggregate Intrinsic Value Outstanding, December 31, 2024 33,237 $ 153.79 7.15 $ — Granted 196,580 4.33 Exercised - - Cancelled ( 7,332 ) 176.07 Outstanding, December 31, 2025 222,485 $ 23.98 9.04 $ 31 Options exercisable, December 31, 2025 96,435 $ 49.11 8.54 $ 31 Options available for future grant, December 31, 2025 953,496 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 years ended December 31, 2025 2024 Risk-free interest rate 4.05 - 4.15 % 3.70 - 4.09 % Expected life in years 5.04 - 6.06 5.04 - 6.06 Expected volatility 113.26 - 127.03 % 112.17 - 170.50 % Expected dividend yield — % — % 10. Employee Benefit Plan The Company sponsors a qualified 401(k) retirement plan under which employees are allowed to contribute certain percentages of their pay, up to the maximum allowed under Section 401(k) of the IRC, or the 401(k) Plan. The Company may make contributions to the 401(k) Plan at its discretion. The Company contributed approximately $ 13 and $ 0 to the 401(k) Plan during the year ended December 31, 2025 and 2024, respectively. 11. Segment Information The CODM for the Company is the Chief Executive Officer (the "CEO"). The Company’s CEO reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. This decision-making process reflects the way in which financial information is regularly reviewed and used by the CODM to evaluate performance, set 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 F- 19 Table of Contents Alaunos Therapeutics, Inc. NOTES TO FINANCIAL STATEMENTS (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. The table below provides information about the Company’s revenue, significant segment expenses and other segment expenses. For the years ended December 31, ($ in thousands) 2025 2024 Revenues $ 5 $ 10 Less segment expenses: Research and development 1,363 362 General and administrative 2,867 4,460 Total operating and segment expense 4,230 4,822 Plus: Change in fair value of warrant liability ( 31 ) - Other income, net 80 133 Segment Net loss $ ( 4,176 ) $ ( 4,679 ) 12. Subsequent Events The Company evaluated all events and transactions that occurred after the balance sheet date through the date of this Annual Report on Form 10-K. Other than as described in the notes to the financial statements, the Company did not have any material subsequent events that impacted its financial statements or disclosures. 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 . F- 20