# Alaunos Therapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Alaunos Therapeutics, Inc.](/companies/tcrt.md) (CIK 1107421)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 20:15 ET
- Period: 2025-06-30
- Accession: 0000950170-25-108887
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1107421/000095017025108887/tcrt-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1107421/000095017025108887/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $0 | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $2.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $185.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $531.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$1.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$2.1m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$1.1m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$2.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.63 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$1.30 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.63 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$1.30 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 1,676,345 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 1,639,123 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$1.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $2.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $3.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $4.7m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $1.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $3.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 24,386 characters.

*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.*

### 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 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 six months ended June 30, 2025, we had a net loss of $2.1 million, and as of June 30, 2025, we have incurred approximately $922.6 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 a pilot in vivo proof-of-concept (PoC) study 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.

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

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:
- NCI patent license (effective December 26, 2023), after internally developing proprietary TCRs via hunTR targeting similar mutations.
- NCI CRADA (effective October 13, 2023).
- Precigen 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.

As a result, research and development expenses related to cancer programs have significantly declined, from $11.7 million for the six months ended June 30, 2023, to $0.3 million for the same period in 2025, reflecting the shift away from active oncology development.

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 have 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. Our primary focus has shifted to our preclinical small-molecule obesity and metabolic disorder program, with ongoing preclinical *in vitro* and *in vivo* studies.

### 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 Annual Report on Form 10-K for the period ended December 31, 2024 (the “2024 10-K”), 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 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 has no immediate effect on the Company’s listing on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company has 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1) to Nasdaq. The Company submitted a compliance plan within 45 days of the date of the notification, as required, and is evaluating available options to resolve the deficiency and regain compliance.

On May 22, 2025, the Company submitted its compliance plan to Nasdaq and is currently awaiting a response. If the compliance plan is accepted, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the notice, or until October 4, 2025, to evidence compliance with the rule. The Company is evaluating and pursuing available options to address the deficiency and regain compliance.

### Results of Operations

### Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

#### Royalty Revenue

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

*($ in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $— | $4 | $(4) | (100)% |

#### Research and Development Expenses

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

*($ in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development expenses | $185 | $180 | $5 | 3% |

Research and development expenses for the three months ended June 30, 2025 increased by $5,000 when compared to the three months ended June 30, 2024, primarily due to an increase in consulting fees incurred in pursuit of our obesity program.

#### General and Administrative Expenses

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

*($ in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expenses | $854 | $990 | $(136) | (14)% |

General and administrative expenses for the three months ended June 30, 2025 decreased by $136,000 as compared to the three months ended June 30, 2024, primarily due to a decrease in insurance costs, filing fees, bank fees and travel costs due to our downsized operations.

#### Other Income

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

*($ in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | $19 | $37 | (18) | (49)% |

Other income, net, for the three months ended June 30, 2025 decreased by $18,000 as compared to the three months ended June 30, 2024, primarily due to reduced interest cash reserves, corresponding to the reduced cash balances quarter over quarter.

### Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

#### Royalty Revenue

Royalty revenue during the six months ended June 30, 2025 and 2024 were as follows:

*($ in thousands)*

|  | For the six months ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $2 | $6 | $(4) | (67)% |

18

#### Research and Development Expenses

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

*($ in thousands)*

|  | For the six months ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development expenses | $531 | $306 | $225 | 74% |

Research and development expenses for the six months ended June 30, 2025 increased by $255,000 when compared to the six months ended June 30, 2024, primarily due to an increase of $200,0000 related to regulatory submissions as part of our wind-down clinical activities and consulting fees incurred in pursuit of our obesity program.

#### General and Administrative Expenses

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

*($ in thousands)*

|  | For the six months ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expenses | $1,603 | $2,607 | $(1,004) | (39)% |

General and administrative expenses for the six months ended June 30, 2025 decreased by $1,004,000 as compared to six months ended June 30, 2024, primarily due to a $200,000 decrease in employee-related expenses as a result of lower salaries and employee related costs, a $400,000 decrease in consulting expenses and a $400,000 decrease in insurance cost, filing fees, bank fees and travel costs and bank fees due to our downsized operations.

#### Other Income

Other income during the six months ended June 30, 2025 and 2024 were as follows:

*($ in thousands)*

|  | For the six months ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | 39 | 97 | (58) | (60)% |

Other income, net, for the six months ended June 30, 2025 decreased be $58,000 as compared to the six months ended June 30, 2024, primarily due to reduced interest income from our cash reserves, as our reduced cash reserves quarter over quarter.

### 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.

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 ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in our focus and direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, management may need to curtail its development efforts and planned operations to conserve cash.

We 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 June 30, 2025, our accumulated deficit was approximately $922.6 million. Our working capital as of June 30, 2025 was $2.6 million, consisting of $3.7 million in current assets and $1.1 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 June 30, 2025, we had approximately $2.9 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 $500,000. 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

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 $850,000.

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.

### Cash Flows

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

*($ in thousands)*

| Net cash flows from: | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(1,473) | $(3,598) |
| Financing activities | 3,261 | — |
| Net decrease in cash and cash equivalents | $1,788 | $(3,598) |

Net cash flows used in operating activities for the six months ended June 30, 2025 was $1,473, as compared to net cash used in operating activities of $3,598 for the six months ended June 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 from financing activities for the six months ended June 30, 2025 was $3,261 as compared to $0 for the six months ended June 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 June 30, 2025, we have no lease commitments, other than a short-term lease.

#### 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 six months ended June 30, 2025 and 2024, the Company earned $2 and $6, respectively, in royalty revenues on net sales under the Solasia License and Collaboration Agreement. During the three months ended June 30, 2024, the Company earned $4, in royalty revenues on net sales under the Solasia License and Collaboration Agreement. No such royalty revenues were earned in the three months ended June 30, 2025.

## Market risk

As filed, 196 characters.

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.

## Controls and procedures

As filed, 2,119 characters.

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

## Risk factors

As filed, 6,654 characters.

The following important factors could cause our actual business and financial results to differ materially from those contained in forward-looking statements made in this Quarterly Report on Form 10-Q or elsewhere by management from time to time. The risk factors in this Quarterly Report have been revised to incorporate changes to our risk factors from those included in our Annual Report. The risk factors set forth below with an asterisk (\*) before the title are new risk factors or ones containing substantive changes from the risk factors previously disclosed in Item 1A of our 2024 Annual Report. The market price of our common stock could decline if one or more of these risks or uncertainties actually occur, causing you to lose all or part of your investment. This situation is changing rapidly and additional impacts may arise. Additional risks that we currently do not know about, or that we currently believe to be immaterial, may also impair our business. Certain statements below are forward-looking statements. See “Special Note Regarding Forward-Looking Statements” in this Quarterly Report.

### RISKS RELATED TO OUR BUSINESS

***\*Changes to United States tariff and import/export regulations may have an adverse effect on our business, financial condition and results of operations.***

The United States has enacted and continues to enact significant new tariffs, and President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy. There has been and are ongoing discussions and commentaries regarding potential significant changes to U.S. trade policies, treaties and tariffs. There exists significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global and domestic economic conditions, whether or not there will be a recession, and the stability of global and domestic financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. These actions and policies may adversely affect the ability of the Company to fund our operations, affect our ability to develop products and work with partner companies and generally carry on our respective businesses. Although it is not yet possible to assess their impact, any of these factors could depress economic activity and restrict access to suppliers or customers, hinder our ability to obtain funding from the government through grants and from investors, and have a material adverse effect on our overall business, financial condition and results of operations.

**\*** ***If Nasdaq does not approve our plan for compliance with Nasdaq List Rule 5550(b)(1) following the April 7, 2025 notice that our stockholders' equity had fallen below the required $2,500,000, we may be delisted from the Nasdaq Capital Market exchange.***

On April 7, 2025, the Company received the Notice from the Listing Qualifications staff of Nasdaq notifying us that our stockholders equity as reported in our 2024 10-K, did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market (the "Nasdaq SE Rule"), which requires that a listed company’s stockholder equity be at least $2,500,000. In our 2024 10-K, we reported stockholders’ equity of $2,063,000, and, as a result, did not currently satisfy Nasdaq Listing Rule 5550(b)(1). While the Notice has no immediate effect on our Nasdaq listing, in order to regain compliance, we were required to present a our plan within 45 calendar days or by May 22, 2025 to Nasdaq staff and we did so. If our compliance plan is accepted, we may be granted up to 180 calendar days from April 7, 2025, to evidence compliance.

We timely presented a plan for compliance within the requisite 45 days. Even though we did present a compliance plan within the prescribed deadline, Nasdaq staff may find it insufficient to evidence compliance with the Nasdaq SE Rule. If they do not find it sufficient, we may be delisted. If the Nasdaq staff do find our plan to sufficiently demonstrate compliance with the Nasdaq SE Rule, we may be granted up to 180 calendar days to implement the plan and regain compliance. Nasdaq may provide us insufficient time to implement our compliance plan or at the end of the compliance period, we may not be able to demonstrate compliance for any number of reasons. If any of these events occur, we could be delisted.

### OTHER RISKS RELATED TO OUR COMPANY

***\*Artificial intelligence used by us and our partners and vendors may have negative effects on our company.***

Artificial intelligence ("AI") use in many industries has rapidly expanded. While we do not utilize any specific AI technologies internal to Alaunos, we may work with vendors or service providers that do utilize AI technologies with or without our knowledge. Areas in which our business that could be negatively impacted include novel cybersecurity threats such as malicious code or phishing attempts. AI could also perpetrate fraud or misappropriation of company funds. From a regulatory standpoint, we could be liable for noncompliance related to data compromise or perceived or actual noncompliance with data privacy or protection or AI requirements to various agencies or jurisdictions. There are also potential risks around ethical, social, and reputational risks should AI cause us to infringe on privacy rights or violate intellectual property rights. AI is also known for “deep fakes” or false information being spread electronically and attributed to innocent companies and their management or directors. Such accusations could negatively impact human rights, privacy, employment, or other social concerns, which may result in claims, lawsuits, brand or reputational harm, and increased regulatory scrutiny, any of which could harm our business, financial condition, and operating results. Operational risks potentially caused by AI technologies include unanticipated disruptions to systems, potential loss or corruption of data, implementation delays, and cost overruns that could stem from underlying defects in the AI tools used. Finally, competition risk may result from rapid adoption of AI that could provide unforeseen advantages to our competitors and lead to the erosion of our market share by potentially leading to the emergence of new products and categories, the rapid maturation of categories, cannibalization of categories, changing price points and product replacement and upgrade cycles.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-108887. Last ingested by Listed: Oct 24, 2026, 15:04 ET. No prices; not investment advice.