[10-Q] Alaunos Therapeutics, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Alaunos Therapeutics (TCRT) filed its Q3 2025 10‑Q, highlighting continued cost control alongside funding actions to support its shift to an oral small‑molecule obesity program. The company posted a net loss of $1,159 thousand for the quarter, with operating expenses of $1,187 thousand. Cash and cash equivalents were $1,938 thousand, and stockholders’ equity was $2,803 thousand as of September 30, 2025.

Alaunos raised capital during 2025 via a registered direct offering of common stock and pre‑funded warrants, and private placements of Series A‑1 and Series A‑2 preferred stock. It also entered an equity purchase agreement permitting sales of up to $25.0 million of common stock over 24 months, and issued a five‑year warrant at $4.00 per share in connection with that agreement. The company reports cash runway into the first quarter of 2026 and discloses substantial doubt about its ability to continue as a going concern absent additional financing.

The strategic focus remains on preclinical obesity candidates, with in vitro and in vivo work underway. Alaunos regained compliance with Nasdaq continued listing requirements in August 2025. Common shares outstanding were 2,205,846 as of September 30, 2025.

Positive

• None.

Negative

• Going concern risk: The company discloses substantial doubt about its ability to continue as a going concern without additional financing, despite runway into Q1 2026.

Insights

Biotech credit & liquidity analyst

Runway into Q1 2026 with going concern risk; funding remains pivotal.

Alaunos reported Q3 net loss of $1.159M and cash of $1.938M. Operating expenses were modest at $1.187M, reflecting a lean cost base post-reprioritization. Financing steps in 2025 included a registered direct offering, private preferred issuances (Series A‑1 and A‑2), and an equity purchase agreement permitting up to $25.0M of future stock sales.

The filing states cash runway into the first quarter of 2026 and explicitly notes substantial doubt about the ability to continue as a going concern without additional capital. Preferred shares carry 10% cumulative dividends, which increase the loss attributable to common holders when the company is in a net loss position.

Key dependencies are successful access to external financing and controlled spend while preclinical obesity data mature. The company regained Nasdaq compliance in Aug 2025; durability depends on equity levels and losses. Subsequent filings may detail equity draws or partnerships if executed.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-33038

Alaunos Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-1475642
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
501 E. Las Olas Blvd., Suite 300 Fort Lauderdale, FL 33301 (346) 355-4099 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		TCRT		The Nasdaq Capital Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer		☐		Accelerated Filer		☐
Non-Accelerated Filer		☒		Smaller Reporting Company		☒
				Emerging Growth Company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 14, 2025 the number of outstanding shares of the registrant's common stock, $0.001 par value, was 2,231,829 shares.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are all statements contained in this Quarterly Report that are not historical fact, and in some cases can be identified by terms such as: “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “target,” "potential," “will” and other words and terms of similar meaning.

These statements are based on management’s current beliefs and assumptions and on information currently available to management. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

•our ability to successfully implement our strategic reprioritization or realize any or all of the anticipated benefits once implemented;

•our ability to raise substantial additional capital to continue as a going concern and fund our planned operations in the near term and our strategic reprioritization in the longer term;

•our ability to successfully consummate any strategic transactions, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions;

•estimates regarding our expenses, use of cash, cash runway, timing of future cash needs and anticipated capital requirements;

•our ability to license additional intellectual property to support our strategic reprioritization or out-license our intellectual property and to comply with our existing license agreements;

•our ability to enter into partnerships or strategic collaboration agreements and our ability to achieve the results and potential benefits contemplated from relationships with collaborators;

•our ability to maintain collaborations and licenses;

•our expectation of developments and projections relating to competition from other pharmaceutical and biotechnology companies or our industry;

•our plans relating to conducting future in vitro testing, in vivo efficacy studies, and non-clinical and investigational new drug or IND-enabling activities;

•the anticipated amount, timing and accounting of contract liabilities, milestones and other payments under licensing, collaboration or acquisition agreements, research and development costs and other expenses;

•our ability to remain listed on the Nasdaq Capital Market; and

•our intellectual property position, including the strength and enforceability of our intellectual property rights.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from any future results, level of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results, levels of activity or performance of achievements to differ materially from current expectations include, among other things, those described in our Annual Report under Part I, Item 1A, “Risk Factors” for the year ended December 31, 2024, those described in Part II, Item IA “Risk Factors” for the quarters ended March 31, 2025 and June 30, 2025, and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Unless the context requires otherwise, references in this Quarterly Report to “Alaunos,” the “Company,” “we,” “us” or “our” refer to Alaunos Therapeutics, Inc.

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. We own the Alaunos® and hunTR® trademarks as well as the graphic trademark found on our website. Other trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to

i

in this Quarterly Report on Form 10-Q are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.

ii

SUMMARY OF SELECTED RISKS ASSOCIATED WITH OUR BUSINESS

Our business faces significant risks and uncertainties. If any of the following risks are realized, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected. You should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report, filed with the SEC on March 31, 2025 and as amended by Amendment No. 1 filed with the SEC on April 30, 2025, in the section titled “Risk Factors” in Part II, Item 1A of our Quarterly Reports for the quarters ended March 31, 2025, filed with the SEC on May 15, 2025 and June 30, 2025, filed with the SEC on August 14, 2025, and in this Quarterly Report. Some of the more significant risks include the following:

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

•If a strategic transaction is not consummated, our Board of Directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

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

•Our ability to consummate a strategic transaction depends on our ability to retain our current employees and consultants.

•Our stock price has been, and may continue to be, volatile.

•Our decreasing cash reserves has, in the past, resulted in our stockholder’s equity falling below $2,500,000 as required by Nasdaq Listing Rule 5550(b)(1), which resulted in our receipt of a delisting notice from Nasdaq. On August 19, 2025, Nasdaq notified the Company that it had regained compliance with the continued listing requirements of the Nasdaq Capital Market. Based on the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $3.66 million, the Listing Qualifications staff determined that the Company now complies with the Nasdaq Listing Rules and confirmed that the matter is closed. As of September 30, 2025, we had $2,823,000 in stockholder’ equity resulting in compliance with the Nasdaq rule. However, due to the Company’s limited cash runway and ongoing operating losses, there can be no assurance that the Company will maintain compliance with Nasdaq’s continued listing requirements in the future.

•We have identified a material weakness and failed to maintain an effective internal control environment, which may result in material misstatements of our financial statements or have a material adverse effect on our business or stock price.

•We may not be able to commercialize, generate significant revenues from, or attain profitability from our small molecule oral obesity program or, should we resume development of, our TCR-T product candidates.

•Our small molecule obesity program is early stage and may encounter issues with manufacturing of the active pharmaceutical ingredient(s) or with the in vitro or in vivo studies that could preclude clinical trials or be costly to address with respect to time or money.

•For our small molecule oral and metabolic obesity program or should we resume development of our TCR-T product candidates, any candidate for which we obtain marketing approval could be subject to post-marketing restrictions or withdrawal from the market and we may be subject to significant penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

•For our small molecule oral and metabolic obesity program, or should we resume development of our TCR-T product candidates, if we fail to obtain the necessary U.S. or worldwide regulatory approvals to commercialize any product candidate, our business will suffer materially.

•The termination of our TCR-T related licenses and research and development agreements could limit our ability to resume our TCR-T clinical trial or begin new clinical trials.

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

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

iii

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

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

•If physicians and patients do not accept and use our product candidates, once approved, or if we do not obtain coverage and adequate reimbursement from payors, our ability to generate revenue from sales of our products will be materially and adversely impaired.

•Our small molecule and immuno-oncology product candidates may face competition in the future from generics or biosimilars and/or new technologies and our pending patent applications may not be granted, further limiting our ability to compete with other companies.

•If we fail to adequately protect or enforce our intellectual property rights or secure rights to patents of others, the value of our intellectual property rights would diminish and our ability to successfully commercialize our products may be materially impaired.

•Third-party claims of intellectual property infringement would require us to spend significant time and money and could prevent us from developing or commercializing our products.

•We have and will rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology or loss of data, including any cybersecurity incidents, could compromise sensitive information related to our business, prevent us from accessing critical information or expose us to liability which could harm our ability to operate our business effectively and materially and adversely affect our business and reputation.

•Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of us, which may be beneficial to our stockholders, more difficult.

•Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

•Because we do not expect to pay dividends on our common stock, you will not realize any income from an investment in our common stock unless and until you sell your shares at a profit.

•Our ability to use net operating loss carryforwards and research tax credits to reduce future tax payments may be limited or restricted.

•The exercise of outstanding warrants, and issuance of equity awards may have a dilutive effect on our stock, and negatively and materially impact the price of our common stock.

•Our principal stockholders, executive officers and directors have substantial control over the Company, which may prevent you and other stockholders from influencing significant corporate decisions and may significantly harm the market price of our common stock.

•We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

iv

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (unaudited)	2
	Condensed Balance Sheets as of September 30, 2025 and December 31, 2024 (unaudited)	2
	Condensed Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited)	3
	Condensed Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024 (unaudited)	4
	Condensed Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited)	7
	Notes to Condensed Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25

1

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (unaudited)

Alaunos Therapeutics, Inc.

CONDENSED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share data)

		September 30,				December 31,
		2025				2024
ASSETS:
Current assets:
Cash and cash equivalents		$	1,938			$	1,091
Receivables			—				5
Prepaid expenses and other current assets, current			747				1,659
Total current assets			2,685				2,755
Property and equipment, net			97
Prepaid expenses and other assets, non current			942				—
Total assets		$	3,724			$	2,755
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	843			$	516
Accrued expenses			78				176
Total current liabilities			921				692
Total liabilities		$	921			$	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 September 30, 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 September 30, 2025 and at December 31, 2024, respectively			-				-
Common stock $0.001 par value; 50,000,000 shares authorized, 2,205,846 and 1,601,252 shares issued and outstanding at September 30, 2025 and at December 31, 2024, respectively			2				2
Additional paid-in capital			926,530				922,507
Accumulated deficit			(923,729	)			(920,446	)
Total stockholders' equity			2,803				2,063
Total liabilities and stockholders' equity		$	3,724			$	2,755

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

2

Alaunos Therapeutics, Inc.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share data)

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2025				2024				2025				2024
Revenue		$	—			$	—			$	2			$	6
Operating expenses:
Research and development			469				143				1,002				448
General and administrative			718				1,007				2,318				3,615
Total operating expenses			1,187				1,150				3,320				4,063
Loss from operations			(1,187	)			(1,150	)			(3,318	)			(4,057	)
Other income (expense):
Change in fair value of warrant liability			—				—				(31	)			—
Other income, net			28				23				66				120
Other income (expense), net			28				23				35				120
Net loss		$	(1,159	)		$	(1,127	)		$	(3,283	)		$	(3,937	)
Basic and diluted earnings per share		$	(0.55	)		$	(0.70	)		$	(1.84	)		$	(2.46	)
Weighted average common shares outstanding, basic and diluted			2,183,039				1,601,252				1,822,500				1,601,252

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

3

Alaunos Therapeutics, Inc.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands, except share and per share data)

For the Three Months Ended September 30, 2025

		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 June 30, 2025			2,074,746			$	2				500			$	—				850			$	—			$	926,229			$	(922,570	)		$	3,661
Stock-based compensation			—				—				—				—				—				—				239				—				239
Shares issued as consideration for board service fees			7,450				—				—				—				—				—				37				—				37
Shares issued as consideration for services			10,775				—				—				—				—				—				25				—				25
Exercise of prefunded warrants			112,875				—				—				—				—				—				—				—				—
Net loss			—				—				—				—				—				—				—				(1,159	)			(1,159	)
Balance at September 30, 2025			2,205,846			$	2				500			$	-				850			$	-			$	926,530			$	(923,729	)		$	2,803

4

Alaunos Therapeutics, Inc.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands, except share and per share data)

For the Nine Months Ended September 30, 2025

		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			—				—				—				—				—				—				379				—				379
Shares issued as consideration for board service fees			45,719				—				—				—				—				—				149				—				149
Shares issued as consideration for services			10,775				—				—				—				—				—				25				—				25
Sale of Series A-1 preferred stock			—				—				500				—				—				—				500				—				500
Issuance of common stock in registered direct offering, net of offering cost			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			209,375				—				—				—				—				—				—				—				—
Sale of Series A-2 preferred stock			—				—				—				—				850				—				850				—				850
Net loss			—				—				—				—				—				—				—				(3,283	)			(3,283	)
Balance at September 30, 2025			2,205,846			$	2				500			$	-				850			$	-			$	926,530			$	(923,729	)		$	2,803

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

5

Alaunos Therapeutics, Inc.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands, except share and per share data)

For the Three Months Ended September 30, 2024

		Common Stock								Additional Paid in Capital				Accumulated Deficit				Total Stockholders' Equity
		Shares				Amount
Balance at June 30, 2024			1,601,252			$	2			$	922,346			$	(918,577	)		$	3,771
Stock-based compensation			—				—				80				—				80
Net loss			—				—				—				(1,127	)			(1,127	)
Balance at September 30, 2024			1,601,252			$	2			$	922,426			$	(919,704	)		$	2,724

For the Nine Months Ended September 30, 2024

		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			—				—				354				—				354
Net loss			—				—				—				(3,937	)			(3,937	)
Balance at September 30, 2024			1,601,252			$	2			$	922,426			$	(919,704	)		$	2,724

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

6

Alaunos Therapeutics, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

		For the Nine Months Ended September 30,
		2025				2024
Cash flows from operating activities:
Net loss		$	(3,283	)		$	(3,937	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			—				3
Change in fair value of warrant liability			31				—
Common stock issued for services rendered			174				—
Stock-based compensation			379				354
Changes in operating assets and liabilities:
Receivables			5				1
Prepaid expenses and other current assets			148				331
Accounts payable			327				(159	)
Accrued expenses			(98	)			(972	)
Net cash flows from operating activities			(2,317	)			(4,379	)
Cash flows from investing activities:
Purchases of property and equipment			(97	)			—
Net cash flows from investing activities			(97	)			—
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			847				(4,379	)
Cash and cash equivalents, beginning of period			1,091				6,062
Cash and cash equivalents, end of period		$	1,938			$	1,683
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			$	—

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

7

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1.Organization

Overview

Alaunos Therapeutics, Inc., which is referred to herein as “Alaunos,” or the “Company,” is a pre-clinical stage obesity and metabolic disorder and clinical-stage oncology-focused cell therapy 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 September 30, 2025, there were 2,205,846 shares of common stock outstanding, 500 Series A-1 shares of preferred stock outstanding, 850 Series A-2 shares of preferred stock outstanding and an additional 394,301 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants. The Company also has 1,130,745 shares available for issuance under its 2020 Equity Incentive Plan.

The accompanying condensed 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 no recurring revenue from operations. The Company anticipates that losses will continue for the foreseeable future. As of September 30, 2025, the Company had approximately $1.9 million of cash and cash equivalents. The Company’s accumulated deficit at September 30, 2025 was approximately $923.7 million. Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the first quarter of 2026. The Company’s ability to continue operations after its current cash resources are exhausted depends on future events outside of the Company's control, 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, 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. 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 condensed financial statements, and substantial doubt as to the Company's ability to continue as a going concern exists. This forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of expenses could vary materially and adversely as a result of a number of factors.

Basis of Presentation

The accompanying unaudited interim condensed financial statements reflect all adjustments (which are normal and recurring) that are necessary for a fair presentation of the financial position of the Company and its results of operations and cash flows for the periods presented. The unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 31, 2025 and as amended by Amendment No. 1 filed with the SEC on April 30, 2025. (collectively, the “2024 Annual Report”)

The results disclosed in the statements of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year 2025.

Use of Estimates

The preparation of condensed financial statements in conformity with 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company

8

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

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 stockholders 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.
 

Nasdaq Stockholders' Equity Deficiency Notice

On April 7, 2025, the Company received a notice (the “Notice”) from the Listing Qualifications staff of Nasdaq notifying the Company that the Company’s stockholders equity, as reported in its 2024 Annual Report, did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed company’s stockholder equity be at least $2.5 million. In its 2024 Form 10-K, the Company reported stockholders’ equity of $2.1 million, and, as a result, does not currently satisfy Nasdaq Listing Rule 5550(b)(1).

The Notice had no immediate effect on the Company’s listing on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company had 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1). On May 22, 2025, The Company submitted its compliance plan to Nasdaq.

On August 19, 2025, Nasdaq notified the Company that it had regained compliance with the continued listing requirements of the Nasdaq Capital Market. Based on the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $3.66 million, the Listing Qualifications staff determined that the Company now complies with the Nasdaq Listing Rules and confirmed that the matter is closed. As of September 30, 2025, we had $2.80 million in stockholder’ equity resulting in compliance with the Nasdaq rule. However, due to the Company’s limited cash runway and ongoing operating losses, there can be no assurance that the Company will maintain compliance with Nasdaq’s continued listing requirements in the future.

2.Summary of Significant Accounting Policies

Certain of our accounting estimates are important to the portrayal of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently certain. Estimates are susceptible to material changes as a result of changes in facts and circumstances. Management believes that clinical trial expenses and other research and development expenses, collaboration agreements, fair value measurements of share based arrangements, and income taxes are its most critical accounting estimates. Our accounting policies are discussed in detail in Note 3 – Summary of Significant Accounting Policies in the audited financial statements included in the Company’s 2024 Annual Report. There have been no material changes in those policies since the filing of the 2024 Annual Report, except as described below under the heading Derivative Liabilities.

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 nine months ended September 30, 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 8 - Warrants.

9

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

3.Net earnings per share

Basic earnings per share of common stock 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 earnings 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 , unless the effect on net earnings per share is antidilutive. The following have been excluded from the calculation of dilutive earnings per share, as the effect was antidilutive:

		September 30,
		2025				2024
Common stock options			225,550				33,237
Warrants			168,751				26,555
			394,301				59,792

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

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2025				2024				2025				2024
Net loss		$	(1,159	)		$	(1,127	)		$	(3,283	)		$	(3,937	)
Cumulative preferred dividends			(42	)			-				(62	)			-
Net loss attributable to common stockholders		$	(1,201	)		$	(1,127	)		$	(3,345	)		$	(3,937	)

4.Commitments and Contingencies

License Agreements

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.

10

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

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 Company incur $0 and $28 thousand clinical costs from MD Anderson related to the these agreements for the three and nine months ended September 30, 2025.

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 $257 thousand, $262 thousand, $285 thousand, and $285 thousand as of December 31, 2024, March 31, 2025, June 30, 2025, and September 30, 2025, respectively. On November 4, 2025, the Office of the Attorney General of Texas, on behalf of MD Anderson, issued a demand asserting that $192 thousand is owed under an R&D agreement and requested payment within 30 days. As of September 30, 2025, the Company included the asserted amount within accounts payable. The Company is in discussions to pay the amounts due on an agreed upon payment schedule over six months.

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.

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 three and nine months ended September 30, 2025 and 2024, the Company did not 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 nine months ended September 30, 2025, the Company earned royalty revenue totaling $2 thousand under this agreement, all of which was earned during the three months ended March 31, 2025. During the three and nine months ended September 30, 2024, the Company earned $0 thousand and $6 thousand, respectively, in royalty revenues on net sales under this agreement.

Insurance Contract

During the nine months ended September 30, 2025 , the Company entered into an 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 September 30, 2025, $747 thousand is included in prepaid expenses and other current assets and $942 thousand is included in prepaid expense and other non-current assets in the accompanying condensed consolidated balance sheet.

Director Resignation

11

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

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 thousand 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 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.

5.Equity

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

12

Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

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

On July 3, 2025, certain members of the Board of Directors of the Company elected to receive compensation in equity rather than in cash for their second quarter board service fees. The total deferred board service fees amounted to $37 thousand. In exchange for these deferred fees, the Company issued 7,450 shares of common stock, each with a par value of $0.001.

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. Subsequent thereto and through September 30, 2025, a total of 209,375 of the prefunded warrants were exercised at $0.001 per share, resulting in the issuance of 209,375 shares of common stock. Subsequent to September 30, 2025, an aggregate of 62,999 prefunded warrants were exercised cash less and resulting in the issuance of an additional 62,281 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 September 30, 2025, undeclared cumulative dividends totaled $39 thousand for Series A-1 and $23 thousand for Series A-2. For the three and six months ended September 30, 2025, cumulative preferred dividends across both series were $42 thousand and $62 thousand, respectively.

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Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

6.Stock-Based Compensation

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

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands)	2025				2024				2025				2024
Research and development	$	168			$	2			$	169			$	15
General and administrative		133				78				384				339
Stock-based compensation expense	$	301			$	80			$	553			$	354

The grant date fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2025		2024		2025		2024
Risk-free interest rate		3.86-4.13%		3.70%		4.05-4.15%		3.70 - 4.09%
Expected life in years		5.00-6.06		6.06		5.04-6.06		5.04-6.06
Expected volatility		119.26-127.03%		112.17%		113.26-127.03%		112.17 -170.50%
Expected dividend yield		—%		—%		—%		—%

2.

Stock option activity under the Company’s stock option plans for the nine months ended September 30, 2025 was 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			(4,265	)			71.68
Outstanding, September 30, 2025			225,550			$	25.08				8.26			$	12
Options exercisable, September 30, 2025			96,529			$	52.50				10.53			$	7
Options available for future grant, September 30, 2025			950,429

At September 30, 2025, total unrecognized compensation costs related to unvested stock options outstanding amounted to $492 and is expected to be recognized over a weighted-average period of 2.55 years.

7.Warrants

The following is a summary of the Company's warrant activity for the nine months ended September 30, 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			(209,375	)			0.001
Outstanding, September 30, 2025			168,751			$	6.08				6.10

Equity Purchase Agreement and Warrant

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Alaunos Therapeutics, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

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 VWAP, 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 thousand, with a corresponding increase in deferred issuance costs for the same amount, which is included in other assets in the accompanying 2025 condensed 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 thousand recognized as a change in fair value of derivative liability and is included in other expense in the accompanying 2025 condensed statements 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. Volatility assumptions were derived from the historical trading activity of the Company’s common stock and that of comparable public companies, while the risk-free rates were based on U.S. Treasury yields consistent with the expected term of the warrants.

8.Segment Information

The Chief Operating Decision Maker (“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 accompanying condensed 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.

9.Subsequent Events

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.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial information and related notes included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or the SEC, on March 31, 2025, or the Annual Report.

Except for the historical financial information contained herein, the matters discussed in this Quarterly Report on Form 10-Q may be deemed to contain forward-looking statements that reflect our plans, estimates and beliefs. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as “may,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements.

Our actual results could differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those risks identified under Part II, Item 1A. Risk Factors of our 2024 Annual Report and Part II Item 1.A of our Quarterly Reports for the quarters ended March 31, 2025 and June 30, 2025.

Overview

On October 10, 2024, we announced our continued progress and evaluation of our internally developed small molecule oral obesity program. The aim of this program is to develop a drug for obesity and metabolic disorders with a differentiated profile relative to currently marketed and in development oral and injectable products.

We have also operated as a clinical-stage oncology-focused cell therapy company developing adoptive TCR-T cell therapy, designed to treat multiple solid tumor types in large cancer patient populations with unmet clinical needs. On August 14, 2023, we announced a strategic reprioritization of our business and wind down of our TCR-T Library Phase 1/2 Trial.

In connection with the reprioritization, we reduced our workforce during the third and fourth quarters of 2023, and we continue working to reduce costs in order to extend our cash runway. We continue to explore strategic alternatives, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions.

We have not generated any product revenue and have incurred significant net losses in each year since our inception. For the nine months ended September 30, 2025, we had a net loss of $3.3 million, and as of September 30, 2025, we have incurred approximately $923.7 million of accumulated deficit since our inception in 2003. We expect to continue to incur significant operating expenditures and net losses for the foreseeable future.

Small Molecule Oral Obesity Program

We are advancing our internally developed, preclinical small molecule program for the treatment of obesity and related metabolic disorders. This program focuses on discovering and developing novel, orally administered therapeutics with the potential for a differentiated and complementary profile compared to currently available therapies. While other pipeline therapies for obesity explore alternative hormonal pathways such as amylin or dual GIP/GLP-1 receptor agonism, our approach is focused on a non-hormonal mechanism of action. The program seeks to develop an oral therapeutic with the potential to address certain limitations of existing hormonal therapies, including the potential for preservation of lean muscle mass during weight loss and an improved tolerability profile.

During the fourth quarter of 2024, we engaged a contract development and manufacturing organization (CDMO) to synthesize active pharmaceutical ingredients (APIs) for our product candidates. We have since initiated a portfolio of preclinical studies to evaluate these product candidates. Initial in vitro characterization studies conducted by a contract research organization (CRO) encountered methodological issues related to the assay, which prevented the generation of conclusive data. This CRO has since completed the necessary method development to resolve these issues, and these studies are being repeated. In parallel, we have conducted an in vivo pharmacokinetic (PK) study of our product candidate ALN1003 and have initiated two pilot in vivo proof-of-concept (PoC) studies of ALN1003 in a diet-induced obesity (DIO) mouse model.

Collectively, these ongoing studies are designed to assess our candidates’ effects on key biological pathways implicated in metabolic disease, including receptor binding, lipid accumulation, food consumption, weight loss, and the expression of genes related to thermogenesis and energy expenditure. We anticipate initial data from these ongoing in vitro and in vivo studies will be available no later than the fourth quarter of 2025. These data are intended to inform the future development strategy for our product candidates and guide indication selection.

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The advancement of this program is subject to numerous risks and uncertainties inherent in early-stage drug development. Subject to favorable data from these preclinical studies and our ability to secure additional capital, we plan to advance a selected development candidate into formal investigational new drug (IND)-enabling studies. We intend to actively explore strategic financing and collaboration opportunities to fund the continued development of this program.

Historical Development and Achievements in Cancer Therapeutics

While our primary focus has shifted to our preclinical small-molecule obesity and metabolic disorder program, with ongoing preclinical in vitro and in vivo studies, we previously focused on developing TCR-T cell therapies for solid tumors using our non-viral Sleeping Beauty platform and hunTR® TCR discovery platform. Key milestones included:

▪TCR-T Library Phase 1/2 Trial (2022-2023): Treated eight patients with solid tumors (e.g., pancreatic, colorectal, lung). The trial showed TCR-T cells were well-tolerated, with no dose-limiting toxicities or neurotoxicity. Cytokine release syndrome (grades 1-3) resolved with standard care. One non-small cell lung cancer patient achieved a partial response (13% response rate), and six others had stable disease (87% disease control rate), establishing proof-of-concept that Sleeping Beauty TCR-T cells can result in objective clinical responses an recognize established tumors in vivo.

▪hunTR® Platform: Identified proprietary TCRs targeting driver mutations (KRAS, TP53, others) and various HLAs, expanding the TCR library for potential patient treatment.

In August 2023, however, due to substantial development costs and a challenging financing environment, we announced a strategic reprioritization, including the wind-down of our TCR-T Library Phase 1/2 Trial and cessation of further clinical development of TCR-T programs. This involved:

▪Workforce reductions (approximately 95% by the end of 2023) and cost-cutting measures to extend cash runway.

▪Termination of key licenses and agreements:

oNCI patent license (effective December 26, 2023), after internally developing proprietary TCRs via hunTR targeting similar mutations.

oNCI CRADA (effective October 13, 2023).

oPrecigen exclusive license (fully terminated October 4, 2024, following an amendment in April 2023 that eliminated royalty/milestone obligations).

▪Trial close-out activities, including internal processes, with ongoing costs for long-term follow-up and regulatory obligations.

We are actively exploring strategic alternatives to maximize stockholder value, including but not limited to acquisitions, mergers, reverse mergers, asset sales, strategic partnerships, or capital raises. These may involve monetizing cancer-related assets, such as out-licensing the TCR library or hunTR platform. We engaged Cantor Fitzgerald & Co. as a strategic advisor for this process. However, there are no assurances that any transaction will be consummated, and failure to do so could lead to further operational curtailment or dissolution.

Nasdaq Shareholders Equity Deficiency Notice

On April 7, 2025, the Company received a notice (the “Notice”) from the Listing Qualifications staff of Nasdaq notifying the Company that the Company’s stockholders equity, as reported in its 2024 Annual Report, did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed company’s stockholder equity be at least $2.5 million. In its 2024 Form 10-K, the Company reported stockholders’ equity of $2.1 million, and, as a result, does not currently satisfy Nasdaq Listing Rule 5550(b)(1).

The Notice had no immediate effect on the Company’s listing on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company had 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1). On May 22, 2025, The Company submitted its compliance plan to Nasdaq.

On August 19, 2025, Nasdaq notified the Company that it had regained compliance with the continued listing requirements of the Nasdaq Capital Market. Based on the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $3.66 million, the Listing Qualifications staff determined that the Company now complies with the Nasdaq Listing Rules and confirmed that the matter is closed. As of September 30, 2025, we had $2.82 million in stockholder’ equity resulting in compliance with the Nasdaq rule. However, due to the Company’s limited cash runway and ongoing operating losses, there can be no assurance that the Company will maintain compliance with Nasdaq’s continued listing requirements in the future.

17

Results of Operations

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Royalty Revenue

Royalty revenue during the three months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended September 30,
	2025				2024				Change
($ in thousands)
Revenue	$	—			$	—			$	—				100	%

Research and Development Expenses

Research and development expenses during the three months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended September 30,
	2025				2024				Change
($ in thousands)
Research and development expenses	$	469			$	143			$	326				228	%

Research and development expenses for the three months ended September 30, 2025 increased by $326 thousand when compared to the three months ended September 30, 2024, primarily due to an increase in stock based compensation, salary expense and consulting fees incurred in pursuit of our obesity program.

General and Administrative Expenses

General and administrative expenses during the three months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended September 30,
	2025				2024				Change
($ in thousands)
General and administrative expenses	$	718			$	1,007			$	(289	)			(29	)%

General and administrative expenses for the three months ended September 30, 2025 decreased by $289 thousand as compared to the three months ended September 30, 2024, primarily due to a decrease in salary expense, insurance costs, filing fees, bank fees and travel costs due to our downsized operations.

Other Income

Other income during the three months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended September 30,
	2025				2024				Change
($ in thousands)
Other income, net	$	28			$	23				5				22	%

Other income, net, for the three months ended September 30, 2025 increased by $5 thousand as compared to the three months ended September 30, 2024, primarily due to interest earned on cash reserves.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Royalty Revenue

Royalty revenue during the nine months ended September 30, 2025 and 2024 were as follows:

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	For the Nine Months Ended September 30,
	2025				2024				Change
($ in thousands)
Revenue	$	2			$	6			$	(4	)			(67	)%

Research and Development Expenses

Research and development expenses during the nine months ended September 30, 2025 and 2024 were as follows:

	For the Nine Months Ended September 30,
	2025				2024				Change
($ in thousands)
Research and development expenses	$	1,002			$	448			$	554				124	%

Research and development expenses for the nine months ended September 30, 2025 increased by $554 thousand when compared to the nine months ended September 30, 2024, primarily due to an increase in increase in stock based compensation, salary expense and consulting fees incurred in pursuit of our obesity program and the remainder of the increase is related to regulatory submissions and close out fees as part of our wind-down clinical activities

General and Administrative Expenses

General and administrative expenses during the nine months ended September 30, 2025 and 2024 were as follows:

	For the Nine Months Ended September 30,
	2025				2024				Change
($ in thousands)
General and administrative expenses	$	2,318			$	3,615			$	(1,297	)			(36	)%

General and administrative expenses for the nine months ended September 30, 2025 decreased by $1.30 million as compared to nine months ended September 30, 2024, primarily due to a $0.43 million decrease in consulting expenses and a $0.58 million decrease in insurance cost and a decrease in employee-related expenses, insurance cost, filing fees, bank fees and travel costs and bank fees due to our downsized operations.

Other Income

Other income during the nine months ended September 30, 2025 and 2024 were as follows:

	For the Nine Months Ended September 30,
	2025				2024				Change
($ in thousands)
Other income, net		66				120				(54	)			(45	)%

Other income, net, for the nine months ended September 30, 2025 decreased be $54 thousand as compared to the nine months ended September 30, 2024, primarily due to reduced interest income from our cash reserves, as our reduced cash reserves period over period, partially offset by a gain in the change of fair value of our warrant liability.

Liquidity and Capital Resources

Liquidity

Sources of Liquidity

We have not generated any revenue from product sales and have only generated nominal royalty revenue. Since inception, we have incurred net losses and negative cash flows from our operations.

To date, we have financed our operations primarily through public offerings of our common stock, private placements of our convertible and preferred equity securities, term debt and collaborations.

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Given our current development plans and cash management efforts, we anticipate that our cash resources will be sufficient to fund operations into the first quarter of 2026. Our current monthly cash burn rate is approximately $0.28 million (based on the nine months ended September 30, 2025). At this rate, our $1.9 million in cash and cash equivalents as of September 30, 2025, is expected to fund operations through approximately March 2026. This estimate excludes any potential costs related to strategic transactions, wind-down, or unforeseen liabilities. Subsequent to September 30, 2025, the Company issued 53,832 shares of common stock to settle $199 thousand of accounts payable. This non-cash transaction had no impact on cash runway but reduced current liabilities.

We have operated at a loss since inception in 2003 and have no significant recurring revenue from operations. We anticipate that losses will continue for the foreseeable future. As of September 30, 2025, our accumulated deficit was approximately $923.7 million. Our working capital as of September 30, 2025 was $1.8 million, consisting of $2.7 million in current assets and $0.9 million in current liabilities. Our actual cash requirements may vary materially from those planned because of a number of factors, including changes in the focus, direction and pace of our development programs.

As of September 30, 2025, we had approximately $1.9 million of cash and cash equivalents. In light of our 2023 announced strategic reprioritization and the ensuing streamlining and cost efficiency efforts, we anticipate our cash resources will be sufficient to fund our operations into the first quarter of 2026. In order to continue our operations beyond our forecasted runway, including, if necessary, to continue to explore strategic alternatives, we will need to raise additional capital. Aside from the equity line of credit, we have no committed sources of additional capital at this time. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Management does not know whether additional financing will be on terms favorable or acceptable to us when needed, if at all. If adequate additional funds are not available when required, we may be unable to persist as a going concern for sufficient time to identify or execute on any strategic alternatives.

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

Series A-1 Preferred Stock

In April 2025, we entered into a Subscription Agreement, with an accredited investor, pursuant to which we 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 our 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, we filed with the Secretary of State of the State of Delaware the Certificate of Designation of Series A-1 Convertible Preferred Stock, designating 1,000 shares of preferred stock as our 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 our stockholders 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.

Securities Purchase Agreement for Registered Direct Offering

In June 2025, we entered into a Securities Purchase Agreement with certain institutional investors, pursuant to which we 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, we received net proceeds totaling $1,911,000 after deduction of transaction related expenses. Subsequent thereto and through June 30, 2025, a total of 96,500 the prefunded warrants were exercised at $0.001 per share, resulting in the issuance of 96,500 shares of common stock. Subsequent to June 30, 2025, an aggregate of 112,875 prefunded warrants were exercised resulting in the issuance of an additional 112,875 shares of common stock.

Series A-2 Preferred Stock

20

In June 2025, we entered into a subscription agreement with certain accredited investors, pursuant to which we 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, we filed with the Secretary of State of the State of Delaware the Certificate of Designation of Series A-2 Convertible Preferred Stock, designating 1,000 shares of preferred stock as our 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 our stockholders 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 September 30, 2025, undeclared cumulative dividends totaled $39 thousand for Series A-1 and $23 thousand for Series A-2. For the three and six months ended September 30, 2025, cumulative preferred dividends across both series were $42 thousand and $62 thousand, respectively.

Cash Flows

The following table summarizes our net decrease in cash and cash equivalents for the nine months ended September 30, 2025 and 2024:

		For the Nine Months Ended September 30,
		2025				2024
($ in thousands)
Net cash flows from:
Operating activities		$	(2,317	)		$	(4,379	)
Investing activities			(97	)			—
Financing activities			3,261				—
Net increase (decrease) in cash and cash equivalents		$	847			$	(4,379	)

Net cash flows used in operating activities for the nine months ended September 30, 2025 was $2.5 thousand, as compared to net cash used in operating activities of $4.38 million for the nine months ended September 30, 2024. The decrease in net cash used in operating activities was primarily related to reductions in our net loss, offset by an increase in timing of accounts payable and accrued expenses.

The net cash flows used in investing activities for the nine months ended September 30, 2025 was $97 thousand as compared to $0 for the nine months ended September 30, 2024. The increase in net cash used in investing activities was directly attributed to an equipment purchase made during the period to be used in our obesity program.

The net cash flows from financing activities for the nine months ended September 30, 2025 was $3.26 million as compared to $0 for the nine months ended September 30, 2024. The financing activity was directly attributable to proceeds from the issuance of common stock and prefunded warrants, the sale of Series A-1 Preferred Stock, and the sale of Series A-2 Preferred Stock.

Capital Resources

Operating Leases

As of September 30, 2025, we have no lease commitments, other than a short-term lease.

21

Royalty and License Fees

In June 2022, Solasia Pharma K. K., or Solasia, announced that darinaparsin had been approved for relapsed or refractory Peripheral T-Cell Lymphoma by the Ministry of Health, Labor and Welfare in Japan. During the nine months ended September 30, 2025 and 2024, the Company earned $2 thousand and $6 thousand, respectively, in royalty revenues on net sales under the Solasia License and Collaboration Agreement. No such royalty revenues were earned in the three months ended September 30, 2025 and September 30, 2024.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a smaller reporting company, as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive officer and principal accounting officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal accounting officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our principal executive officer and principal financial officer has concluded that as of September 30, 2025, our disclosure controls and procedures were not effective.

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 nine months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities from time to time. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially affect our business, financial condition, results of operations, cash flows and prospects. In addition, regardless of the outcome, litigation could have an adverse impact on us because of defense costs, diversion of management attention and resources and other factors.

We do not have any pending litigation that, separately or in the aggregate, would, in the opinion of management, be reasonably likely to have a material adverse effect on our business, financial condition, results of operations, cash flows or prospects.

Item 1A. Risk Factors

Our business faces significant and evolving risks, many of which are described in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, as amended by Amendment No. 1 filed on April 30, 2025, and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 (filed May 15, 2025), June 30, 2025 (filed August 14, 2025), and September 30, 2025 (this Quarterly Report). These risks are compounded by external events beyond our control, including the ongoing U.S. government shutdown (effective October 1, 2025), which has introduced new and material risks related to SEC registration statement effectiveness, Nasdaq compliance, and our ability to execute strategic alternatives.

The risks described in our prior and current filings may not be exhaustive. Additional risks of which we are currently unaware, or that we presently deem immaterial, may also emerge or intensify and materially impair our business, financial condition, results of operations, cash flows, or prospects. If any of the events or circumstances described in these risk factors occur — including, without limitation, a prolonged government shutdown, SEC stop order, or Nasdaq delisting — our operations may be curtailed, our strategic process may fail, and we may be forced to pursue dissolution or bankruptcy, resulting in a total loss of your investment. Investors and prospective investors must carefully consider the risks detailed in our Annual Report, Quarterly Reports, and this Form 10-Q, along with the “Forward-Looking Statements” section and all other information herein, before making any investment decision.

The Ongoing U.S. Government Shutdown and Its Impact on SEC and FDA Operations Pose Existential Risks to Our Business.

The federal government shutdown, effective October 1, 2025, has furloughed non-essential personnel at the SEC, severely disrupting operations critical to our survival as a pre-clinical biotech with $1.9 million in cash and a runway into Q1 2026. While EDGAR remains operational for filings, the absence of agency staff creates material risks across capital raising, regulatory advancement, Nasdaq compliance, and strategic alternatives.

SEC Registration Statement Risks

Our Form S-1, filed October 22, 2025, became automatically effective on November 11, 2025 — the 20th calendar day after the deemed filing date pursuant to SEC Rule 473. Our Form S-3, filed November 7, 2025, is scheduled for automatic effectiveness on November 27, 2025 (Thanksgiving Day), with the 20-calendar-day clock unaffected by weekends or federal holidays. The shutdown does not suspend this automatic effectiveness but eliminates pre-effectiveness review, comment resolution, and acceleration. Upon resumption of SEC operations, a post-effectiveness stop order under Section 8(d) of the Securities Act could be issued if material deficiencies are identified in backlog reviews. Such an order would suspend all sales under our $25 million equity line of credit and follow-on offerings, blocking the capital necessary to extend our runway beyond March 2026.

Nasdaq Delisting and Strategic Transaction Risks

Filing deadlines remain in force. Any inability to resolve SEC comment backlogs on future 10-Qs/10-Ks risks Nasdaq delisting under Rule 5250(c)(1). Our stockholders’ equity, at $2.82 million on September 30, 2025, is vulnerable to erosion from operating losses (~$0.28 million/month), potentially triggering a deficiency notice. The shutdown also freezes SEC review of proxy statements and Form S-4 filings, stalling our Cantor Fitzgerald-led strategic process (e.g., reverse merger, asset sale). Historical data from the 2018–19 shutdown shows 40% of micro-cap biotechs in similar positions faced delisting or dissolution within 12 months due to funding and regulatory gridlock. If the shutdown extends beyond 30 days, or if SEC backlogs persist post-resumption, we may be forced to curtail operations, pursue dissolution, or file for bankruptcy. These outcomes could result in a total loss for stockholders and materially adversely affect our business, financial condition, results of operations, cash flows, and prospects.

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Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 in reliance on Section 4(a)(2) of the Securities Act, and/or Regulation D promulgated thereunder.

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.

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 options in lieu of cash for the then outstanding cumulative deferred board service fees for the first quarter of 2025, totaling $139 thousand. Accordingly, the Company issued 38,269 shares of common stock with an aggregate fair value of $112 thousand 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 thousand.

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 VWAP, 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.

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.

On July 3, 2025, certain members of the Board of Directors of the Company elected to receive compensation in equity rather than in cash for their second quarter board service fees. The total deferred board service fees amounted to $37 thousand. In exchange for these deferred fees, the Company issued 7,450 shares of common stock, each with a par value of $0.001.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of Alaunos Therapeutics, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, SEC File No. 001-33038, filed February 1, 2024).
3.2	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 on April 14, 2025).
3.3	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 on June 26, 2025).
3.4	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).
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.
32.1++	Certifications 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
101.INS+	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH+	Inline XBRL Taxonomy Extension Schema Document
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.
++	This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

Pursuant to the requirements 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.

By:

/s/ Holger Weis

Holger Weis

Chief Executive Officer

(On Behalf of the Registrant and as Principal Executive Officer and Principal Financial Officer)

Dated: November 14, 2025

By:

/s/ Ferdinand Groenewald

Ferdinand Groenewald

Vice President, Finance

(Principal Accounting Officer)

Dated: November 14, 2025

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FAQ

What did Alaunos (TCRT) report for Q3 2025 net loss?

Q3 2025 net loss was $1,159 thousand.

How much cash did Alaunos (TCRT) have at quarter-end?

Cash and cash equivalents were $1,938 thousand as of September 30, 2025.

What is Alaunos’ stockholders’ equity as of Q3 2025?

Stockholders’ equity was $2,803 thousand as of September 30, 2025.

What is the disclosed cash runway for Alaunos (TCRT)?

The company anticipates runway into the first quarter of 2026.

Did Alaunos regain Nasdaq compliance?

Yes. Nasdaq notified the company on August 19, 2025 that it had regained compliance.

What financing options did Alaunos add in 2025?

A registered direct offering, private placements of Series A‑1 and Series A‑2 preferred stock, and an equity purchase agreement for up to $25.0 million.

How many common shares were outstanding at quarter-end?

Common shares outstanding were 2,205,846 as of September 30, 2025.