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 ...

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - Powell Max Limited (PMAX) increased by 115% to $5.59 - Solidion Technology, Inc. (STI) rose by 102% to $11.14 - ESS Tech, Inc. (GWH) saw a 44% increase to $6.11 - Aclarion, Inc. (ACON) gained 27% reaching $10.98 - Mannatech, Incorporated (MTEX) was up 20% at $10.80 - USA Rare Earth, Inc. (USAR) increased by 19% to $38.80 - Critical Metals Corp. (CRML) rose by 18% to $17.73 - United States Antimony Corporation (UAMY) gained 13% to $13.86 - Compass Diversified (CODI) increased by 12% to $9.46 - Forward Industries, Inc. (FORD) was up 11% at $22.69 [3] Premarket Losers - Yunhong Green CTI Ltd. (YHGJ) decreased by 24% to $7.00 - Kentucky First Federal Bancorp (KFFB) fell by 22% to $2.85 - One and One Green Technologies, Inc. (YDDL) dropped 20% to $5.23 - Safe & Green Holdings Corp. (SGBX) declined by 15% to $5.25 - Lazydays Holdings, Inc. (GORV) was down 14% at $2.12 - Acurx Pharmaceuticals, Inc. (ACXP) decreased by 10% to $6.69 - Top KingWin Ltd (WAI) fell by 10% to $3.82 - Super League Enterprise, Inc. (SLE) dropped 10% to $3.75 - Chanson International Holding (CHSN) decreased by 10% to $2.28 - Alaunos Therapeutics, Inc. (TCRT) was down 5% at $3.28 [4]

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part provides unaudited condensed financial statements, including balance sheets, statements of operations, cash flows, and detailed notes on accounting policies and financing activities [Item 1. Condensed Financial Statements (unaudited)](index=9&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, cash flows, and comprehensive notes for the reporting period [Condensed Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024](index=9&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) This section provides a comparative overview of the company's financial position as of June 30, 2025, and December 31, 2024 Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :-------------------------------- | :------------ | :----------- | :----- | | Cash and cash equivalents | $2,879 | $1,091 | +$1,788 | | Total current assets | $3,738 | $2,755 | +$983 | | Total assets | $4,735 | $2,755 | +$1,980 | | Total current liabilities | $1,074 | $692 | +$382 | | Total liabilities | $1,074 | $692 | +$382 | | Total stockholders' equity | $3,661 | $2,063 | +$1,598 | [Condensed Statements of Operations for the three and six months ended June 30, 2025 and 2024 (unaudited)](index=10&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section details the company's financial performance for the three and six months ended June 30, 2025, compared to the prior year Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Revenue | $0 | $4 | $(4) | -100% | | Research and development | $185 | $180 | $5 | +3% | | General and administrative | $854 | $990 | $(136) | -14% | | Total operating expenses | $1,039 | $1,170 | $(131) | -11% | | Net loss | $(1,051) | $(1,129) | $78 | -7% | | Basic and diluted EPS | $(0.63) | $(0.71) | $0.08 | -11% | Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Revenue | $2 | $6 | $(4) | -67% | | Research and development | $531 | $306 | $225 | +74% | | General and administrative | $1,603 | $2,607 | $(1,004) | -39% | | Total operating expenses | $2,134 | $2,913 | $(779) | -27% | | Net loss | $(2,124) | $(2,810) | $686 | -24% | | Basic and diluted EPS | $(1.30) | $(1.75) | $0.45 | -26% | [Condensed Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2025 and 2024 (unaudited)](index=11&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section outlines changes in stockholders' equity for the three and six months ended June 30, 2025, and 2024 Total Stockholders' Equity (in thousands) | Period | Balance at Start | Net Loss | Equity Issuances/Compensation | Balance at End | | :-------------------------------- | :--------------- | :------- | :---------------------------- | :------------- | | Three Months Ended June 30, 2025 | $1,058 | $(1,051) | $3,654 | $3,661 | | Six Months Ended June 30, 2025 | $2,063 | $(2,124) | $3,722 | $3,661 | | Three Months Ended June 30, 2024 | $4,798 | $(1,129) | $102 | $3,771 | | Six Months Ended June 30, 2024 | $6,307 | $(2,810) | $274 | $3,771 | - Equity issuances for the six months ended June 30, 2025, included **$500 thousand** from Series A-1 preferred stock, **$998 thousand** from common stock in a registered direct offering, **$913 thousand** from prefunded warrants, and **$850 thousand** from Series A-2 preferred stock[28](index=28&type=chunk) [Condensed Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (unaudited)](index=14&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents the company's cash flow activities for the six months ended June 30, 2025, and 2024 Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net cash flows from operating activities | $(1,473) | $(3,598) | +$2,125 | | Net cash flows from financing activities | $3,261 | $0 | +$3,261 | | Net increase (decrease) in cash | $1,788 | $(3,598) | +$5,386 | | Cash and cash equivalents, end of period | $2,879 | $2,464 | +$415 | - Financing activities for the six months ended June 30, 2025, included **$1,911 thousand** from common stock and prefunded warrants, **$500 thousand** from Series A-1 preferred stock, and **$850 thousand** from Series A-2 preferred stock[34](index=34&type=chunk) [Notes to Condensed Financial Statements (unaudited)](index=15&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(unaudited)) This section provides detailed explanatory notes to the unaudited condensed financial statements, covering key accounting policies and financial events - The company has operated at a loss since inception, has no recurring revenue, and anticipates cash resources will only fund operations into **Q1 2026**, raising substantial doubt about its ability to continue as a going concern[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - The company received a notice from Nasdaq on **April 7, 2025**, for failing to meet the **$2.5 million** stockholders' equity requirement, reporting **$2.1 million** as of December 31, 2024. A compliance plan was submitted[48](index=48&type=chunk)[49](index=49&type=chunk) [Note 1. Organization](index=15&type=section&id=Note%201.%20Organization) This note describes the company's business, liquidity, going concern status, and significant corporate governance changes - Alaunos Therapeutics, Inc. is a preclinical obesity and metabolic disorder and clinical-stage oncology-focused cell therapy company, currently prioritizing small molecules for obesity, having historically developed adoptive TCR therapies for solid tumors[37](index=37&type=chunk) Shares Outstanding (June 30, 2025) | Metric | Shares | | :-------------------------------- | :------- | | Common Stock | 2,074,746 | | Series A-1 Preferred Stock | 500 | | Series A-2 Preferred Stock | 850 | | Common stock reserved for options/warrants | 337,081 | [Overview](index=15&type=section&id=Overview) This subsection provides a general description of the company's primary operations and strategic focus - The company's operations to date have consisted primarily of conducting research and development and raising capital to fund those efforts[38](index=38&type=chunk) [Liquidity and Going Concern](index=15&type=section&id=Liquidity%20and%20Going%20Concern) This subsection addresses the company's financial viability and ability to continue operations for the foreseeable future - The company has operated at a loss since its inception in 2003, has no recurring revenue, and had an accumulated deficit of approximately **$922.6 million** as of June 30, 2025[40](index=40&type=chunk) - As of June 30, 2025, the company had approximately **$2.9 million** of cash and cash equivalents, which are anticipated to fund operations into the **first quarter of 2026**[40](index=40&type=chunk) - Management has determined that the company's present capital resources will not be sufficient to fund its planned operations for at least one year, raising substantial doubt about its ability to continue as a going concern[41](index=41&type=chunk) [Basis of Presentation](index=15&type=section&id=Basis%20of%20Presentation) This subsection outlines the principles and assumptions underlying the preparation of the interim financial statements - The accompanying unaudited interim condensed financial statements reflect all necessary adjustments for fair presentation and should be read in conjunction with the audited financial statements for the year ended December 31, 2024[42](index=42&type=chunk) [Use of Estimates](index=15&type=section&id=Use%20of%20Estimates) This subsection highlights critical accounting estimates and judgments made by management in preparing financial statements - Management identifies clinical trial expenses, other research and development expenses, collaboration agreements, fair value measurements of share-based arrangements, and income taxes as its most critical accounting estimates[52](index=52&type=chunk) [Increase in Authorized Shares](index=17&type=section&id=Increase%20in%20Authorized%20Shares) This subsection details the recent approval to increase the number of authorized common stock shares - On **July 3, 2025**, company stockholders approved an amendment to increase the number of authorized shares of common stock from **5,000,000 to 50,000,000**[46](index=46&type=chunk) [Equity Incentive Plan Amendment](index=17&type=section&id=Equity%20Incentive%20Plan%20Amendment) This subsection describes the amendment to the company's equity incentive plan, increasing authorized shares for awards - On **July 3, 2025**, stockholders approved an amendment to the 2020 Equity Incentive Plan to increase authorized shares from **130,745 to 1,130,745**[47](index=47&type=chunk) [Nasdaq Stockholders' Equity Deficiency Notice](index=17&type=section&id=Nasdaq%20Stockholders'%20Equity%20Deficiency%20Notice) This subsection addresses the company's non-compliance with Nasdaq's minimum stockholders' equity requirement - On **April 7, 2025**, Nasdaq notified the company of non-compliance with the **$2.5 million** stockholders' equity requirement, as reported stockholders' equity was **$2.1 million** as of December 31, 2024[48](index=48&type=chunk) - The company submitted a compliance plan on **May 22, 2025**, and is awaiting Nasdaq's response; if accepted, an extension of up to **180 calendar days** from **April 7, 2025**, may be granted[49](index=49&type=chunk) [Note 2. Financings](index=17&type=section&id=Note%202.%20Financings) This note details the company's financing activities, including equity distribution agreements and capital raising efforts - The company has an Equity Distribution Agreement with Piper Sandler & Co. to sell up to **$50.0 million** of common stock in an 'at the market offering,' but no sales occurred under this agreement during the six months ended June 30, 2025 or 2024[50](index=50&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=17&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - Derivative liabilities are initially recorded at fair value and subsequently remeasured at each reporting period, with changes recognized in earnings; if modified to qualify for equity classification, they are reclassified at fair value to equity[53](index=53&type=chunk)[55](index=55&type=chunk) - There have been no material changes in accounting policies since the 2024 Annual Report, except for those related to Derivative Liabilities[52](index=52&type=chunk) [Note 4. Net earnings per share](index=19&type=section&id=Note%204.%20Net%20earnings%20per%20share) This note explains the calculation of basic and diluted net earnings per share and related adjustments - Basic earnings per share is computed by dividing net loss by the weighted average common shares outstanding; diluted EPS includes dilutive effects of options and warrants unless antidilutive[56](index=56&type=chunk) Antidilutive Securities Excluded from Diluted EPS (June 30, 2025) | Type | Number of Shares | | :-------------------- | :--------------- | | Common stock options | 55,455 | | Warrants | 281,626 | | Total | 337,081 | [Note 5. Commitments and Contingencies](index=19&type=section&id=Note%205.%20Commitments%20and%20Contingencies) This note discloses the company's contractual obligations, license agreements, and potential liabilities - The company has various license agreements, including with Precigen (terminated), The University of Texas MD Anderson Cancer Center (for TCR technologies), and Solasia Pharma K.K. (for darinaparsin)[57](index=57&type=chunk)[59](index=59&type=chunk)[68](index=68&type=chunk) - During the six months ended June 30, 2025, the company entered into a six-year insurance arrangement, amortizing the prepaid expense related to the contract[71](index=71&type=chunk) [License Agreements](index=19&type=section&id=License%20Agreements) This subsection details the company's various intellectual property license agreements and their current status - The Amended and Restated Exclusive License Agreement with Precigen for TCR products was fully terminated on **October 4, 2024**, following a strategic review and recognition that the non-viral Sleeping Beauty gene transfer platform patent will expire in **2026**[57](index=57&type=chunk)[58](index=58&type=chunk) - The company holds an exclusive worldwide license with MD Anderson for certain CAR T-cell therapies, non-viral gene transfer systems, and TCRs, and a 2019 R&D Agreement for TCR program collaboration, which will terminate on **December 31, 2026**[59](index=59&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Under the Solasia License and Collaboration Agreement for darinaparsin, the company earned royalty revenue of **$2 thousand** for the six months ended June 30, 2025, a decrease from **$6 thousand** in the same period of 2024[68](index=68&type=chunk)[70](index=70&type=chunk) [Insurance Contract](index=21&type=section&id=Insurance%20Contract) This subsection describes the company's significant insurance arrangement and its financial classification - As of June 30, 2025, **$857 thousand** of the prepaid insurance contract is classified as current assets and **$997 thousand** as non-current assets[71](index=71&type=chunk) [Director Resignation](index=21&type=section&id=Director%20Resignation) This subsection reports on the recent resignation of a member from the Board of Directors - Dr. Hofmeister resigned as a member of the Board of Directors on **April 15, 2025**, with immediate effect, and his resignation was not due to any disagreement with the company[72](index=72&type=chunk) [Note 6. Equity](index=23&type=section&id=Note%206.%20Equity) This note details changes in the company's equity, including preferred stock issuances and director compensation - In **April 2025**, the company sold **500 shares** of Series A-1 Convertible Preferred Stock for an aggregate purchase price of **$500,000**, convertible into common stock at **$2.76 per share** with **10% annual dividends**[75](index=75&type=chunk)[77](index=77&type=chunk) - In **June 2025**, the company sold **850 shares** of Series A-2 Convertible Preferred Stock for aggregate gross proceeds of **$850,000**, convertible into common stock at **$4.49 per share** with **10% annual dividends**[80](index=80&type=chunk)[82](index=82&type=chunk) - In **June 2025**, a registered direct offering of **338,725 common shares** and **271,674 pre-funded warrants** generated **$1,911,000** in net proceeds; **96,500 prefunded warrants** were exercised by June 30, 2025[79](index=79&type=chunk) [Series A-1 Preferred Stock](index=23&type=section&id=Series%20A-1%20Preferred%20Stock) This subsection describes the terms and issuance of the company's Series A-1 Convertible Preferred Stock - **500 shares** of Series A-1 Convertible Preferred Stock were sold in **April 2025** at **$1,000 per share**, totaling **$500,000**[75](index=75&type=chunk) - The Series A-1 Preferred Stock is convertible into common stock at an initial fixed conversion price of **$2.76 per share** and entitles holders to **10% annual dividends**, payable in Series A-1 Preferred Stock[77](index=77&type=chunk) [Director Compensation](index=23&type=section&id=Director%20Compensation) This subsection outlines the equity-based compensation provided to the company's Board of Directors - On **April 13, 2025**, the Board elected to receive **$139,000** in equity for **Q1 2025** deferred board service fees, issuing **38,269 common shares** (fair value **$111,750**) and granting **10,904 fully vested stock options** (fair value **$27,250**)[78](index=78&type=chunk) [Securities Purchase Agreement for Registered Direct Offering](index=23&type=section&id=Securities%20Purchase%20Agreement%20for%20Registered%20Direct%20Offering) This subsection details the terms and proceeds from the company's recent registered direct offering of common stock and warrants - In **June 2025**, the company sold **338,725 common shares** at **$3.36 per share** and **271,674 pre-funded warrants** at **$3.359 per warrant share**, resulting in net proceeds of **$1,911,000**[79](index=79&type=chunk) - By **June 30, 2025**, **96,500 prefunded warrants** were exercised, with an additional **112,875** exercised subsequent to June 30, 2025[79](index=79&type=chunk) [Series A-2 Preferred Stock](index=23&type=section&id=Series%20A-2%20Preferred%20Stock) This subsection describes the terms and issuance of the company's Series A-2 Convertible Preferred Stock - In **June 2025**, **850 shares** of Series A-2 Convertible Preferred Stock were sold in a private placement for aggregate gross proceeds of **$850,000**[80](index=80&type=chunk) - The Series A-2 Preferred Stock is convertible into common stock at an initial fixed conversion price of **$4.49 per share** and entitles holders to **10% annual dividends**, payable in Series A-2 Preferred Stock[82](index=82&type=chunk) [Note 7. Stock-Based Compensation](index=25&type=section&id=Note%207.%20Stock-Based%20Compensation) This note provides details on the company's stock-based compensation expense and related option activity Stock-Based Compensation Expense (in thousands) | Period | R&D | G&A | Total | | :-------------------------------- | :---- | :---- | :---- | | Three Months Ended June 30, 2025 | $(1) | $185 | $184 | | Three Months Ended June 30, 2024 | $2 | $99 | $101 | | Six Months Ended June 30, 2025 | $1 | $251 | $252 | | Six Months Ended June 30, 2024 | $13 | $260 | $273 | Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Shares | Avg Exercise Price | | :-------------------------------- | :------- | :----------------- | | Outstanding, Dec 31, 2024 | 33,237 | $153.79 | | Granted | 22,904 | $2.16 | | Cancelled | (686) | $68.63 | | Outstanding, June 30, 2025 | 55,455 | $92.21 | - Total unrecognized compensation costs related to unvested stock options amounted to **$140 thousand** as of June 30, 2025, expected to be recognized over a weighted-average period of **1.67 years**[85](index=85&type=chunk) [Note 8. Warrants](index=25&type=section&id=Note%208.%20Warrants) This note details the company's warrant activity, including issuances, exercises, and reclassification events Warrant Activity (Six Months Ended June 30, 2025) | Metric | Number of Shares | Weighted Average Exercise Price | | :-------------------------------- | :--------------- | :------------------------------ | | Outstanding, Dec 31, 2024 | 26,552 | $28.50 | | Granted | 351,574 | $0.76 | | Exercised | (96,500) | $0.001 | | Outstanding, June 30, 2025 | 281,626 | $3.64 | [Equity Purchase Agreement and Warrant](index=26&type=section&id=Equity%20Purchase%20Agreement%20and%20Warrant) This subsection describes the equity purchase agreement and the associated warrant issued by the company - In **May 2025**, the company entered an equity purchase agreement to sell up to **$25.0 million** of common stock over **24 months** and issued a warrant to purchase **79,900 common shares** at **$4.00 per share**[89](index=89&type=chunk) - The warrant was initially classified as a derivative liability (**$177 thousand** fair value) due to anti-dilution and variable pricing features, but was reclassified to equity on **June 9, 2025**, after an amendment, resulting in a **$31 thousand** charge to earnings[90](index=90&type=chunk) [Note 9. Segment Information](index=26&type=section&id=Note%209.%20Segment%20Information) This note clarifies the company's operating segments, identifying it as a single reportable segment - The Chief Executive Officer, as the Chief Operating Decision Maker, reviews operating results on an aggregate basis, leading to the determination that the company has a single reportable and operating segment related to biopharmaceutical research and development[92](index=92&type=chunk) [Note 11. Subsequent Events](index=28&type=section&id=Note%2011.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including changes in corporate governance [Changes in Corporate Governance](index=28&type=section&id=Changes%20in%20Corporate%20Governance) This subsection details recent changes in the company's executive leadership and Board of Directors - Dale Curtis Hogue, Jr. resigned as CEO and Board member on **July 1, 2025**; Holger Weis was appointed CEO on **July 2, 2025**, with an annual base salary of **$275,000** and options for **130,000 shares**[96](index=96&type=chunk)[97](index=97&type=chunk) - On **July 3, 2025**, certain Board members received **7,450 common shares** for **$37,250** in **Q2** deferred board service fees[98](index=98&type=chunk) - Michael A. Jerman was appointed independent director on **July 15, 2025**, filling vacancies and becoming Chair of the Audit Committee[99](index=99&type=chunk) - Melinda Lackey will resign as Legal and Administrative Officer and Corporate Secretary effective **August 15, 2025**; Ferdinand Groenewald was appointed Corporate Secretary on **August 14, 2025**[100](index=100&type=chunk)[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operational results, focusing on its strategic shift to an obesity program, cost reductions, and liquidity needs [Overview](index=29&type=section&id=Overview) This subsection provides a high-level summary of the company's strategic reprioritization and financial performance - The company is evaluating its small molecule oral obesity program and has reprioritized its business, winding down its TCR-T Library Phase 1/2 Trial due to substantial development costs and a challenging financing environment[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - The company incurred a net loss of **$2.1 million** for the six months ended June 30, 2025, and an accumulated deficit of approximately **$922.6 million** since its inception[108](index=108&type=chunk) [Small Molecule Oral Obesity Program](index=29&type=section&id=Small%20Molecule%20Oral%20Obesity%20Program) This subsection details the company's preclinical development of a small molecule program for obesity and metabolic disorders - The company is advancing its preclinical small molecule program for obesity and metabolic disorders, focusing on a novel, non-hormonal mechanism of action with potential for lean muscle mass preservation and improved tolerability[109](index=109&type=chunk) - Preclinical studies are underway, including in vitro characterization (being repeated due to initial methodological issues) and in vivo pharmacokinetic and pilot proof-of-concept studies for ALN1003 in a diet-induced obesity mouse model[110](index=110&type=chunk) - Initial data from these studies are anticipated by the **fourth quarter of 2025**, which will inform future development strategy and indication selection, subject to securing additional capital[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Historical Development and Achievements in Cancer Therapeutics](index=31&type=section&id=Historical%20Development%20and%20Achievements%20in%20Cancer%20Therapeutics) This subsection reviews past achievements in cancer therapeutics and the strategic decision to wind down TCR-T programs - The TCR-T Library Phase 1/2 Trial (**2022-2023**) treated eight solid tumor patients, showing TCR-T cells were well-tolerated with **one partial response (13%)** and **six stable diseases (87% disease control rate)**, establishing proof-of-concept[120](index=120&type=chunk) - In **August 2023**, due to substantial development costs and a challenging financing environment, the company announced a strategic reprioritization, winding down the TCR-T Library Phase 1/2 Trial and ceasing further clinical development of TCR-T programs[114](index=114&type=chunk) - This reprioritization included workforce reductions (approximately **95% by end of 2023**), cost-cutting measures, and termination of key licenses and agreements, such as the NCI patent license and Precigen exclusive license[120](index=120&type=chunk) - The company is actively exploring strategic alternatives, including monetizing cancer-related assets like the TCR library or hunTR platform, with Cantor Fitzgerald & Co. as a strategic advisor[116](index=116&type=chunk) [Nasdaq Shareholders Equity Deficiency Notice](index=31&type=section&id=Nasdaq%20Shareholders%20Equity%20Deficiency%20Notice) This subsection addresses the company's non-compliance with Nasdaq's minimum stockholders' equity requirement and compliance plan - On **April 7, 2025**, Nasdaq notified the company of non-compliance with the **$2.5 million** stockholders' equity requirement, reporting **$2.1 million** as of December 31, 2024[117](index=117&type=chunk) - The company submitted a compliance plan on **May 22, 2025**, and is awaiting Nasdaq's response; if accepted, an extension until **October 4, 2025**, may be granted to evidence compliance[118](index=118&type=chunk)[119](index=119&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This subsection analyzes the company's financial results for the three and six months ended June 30, 2025, compared to 2024 - Net loss decreased by **$78 thousand (7%)** for the three months ended June 30, 2025, compared to the same period in 2024, and by **$686 thousand (24%)** for the six months ended June 30, 2025, compared to 2024[23](index=23&type=chunk) - Total operating expenses decreased by **$131 thousand (11%)** for the three months ended June 30, 2025, and by **$779 thousand (27%)** for the six months ended June 30, 2025, primarily due to reduced general and administrative expenses[23](index=23&type=chunk) [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=33&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This subsection compares the company's financial performance for the second quarter of 2025 against the same period in 2024 - Royalty revenue decreased by **$4 thousand (100%)** to **$0** in **Q2 2025**[121](index=121&type=chunk) - Research and development expenses increased by **$5 thousand (3%)** to **$185 thousand**, primarily due to increased consulting fees for the obesity program[122](index=122&type=chunk) - General and administrative expenses decreased by **$136 thousand (14%)** to **$854 thousand**, mainly due to lower insurance, filing fees, bank fees, and travel costs from downsized operations[123](index=123&type=chunk) - Other income, net, decreased by **$18 thousand (49%)** to **$19 thousand**, primarily due to reduced interest from lower cash reserves[124](index=124&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=33&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This subsection compares the company's financial performance for the first half of 2025 against the same period in 2024 - Royalty revenue decreased by **$4 thousand (67%)** to **$2 thousand**[125](index=125&type=chunk) - Research and development expenses increased by **$225 thousand (74%)** to **$531 thousand**, primarily due to **$200 thousand** for regulatory submissions for clinical wind-down activities and consulting fees for the obesity program[126](index=126&type=chunk) - General and administrative expenses decreased by **$1,004 thousand (39%)** to **$1,603 thousand**, driven by reductions in employee-related expenses (**$200k**), consulting expenses (**$400k**), and insurance/filing/travel costs (**$400k**)[127](index=127&type=chunk) - Other income, net, decreased by **$58 thousand (60%)** to **$39 thousand**, due to reduced interest income from lower cash reserves[128](index=128&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This subsection discusses the company's current cash position, funding sources, and future capital requirements - As of June 30, 2025, cash and cash equivalents were approximately **$2.9 million**[132](index=132&type=chunk) - The company anticipates its cash resources will be sufficient to fund operations into the **first quarter of 2026**[130](index=130&type=chunk)[132](index=132&type=chunk) - Additional capital will be required to continue operations beyond the forecasted runway, with no committed sources other than an equity line of credit[132](index=132&type=chunk) [Liquidity](index=35&type=section&id=Liquidity) This subsection assesses the company's ability to meet its short-term financial obligations and fund operations - The company has historically financed operations through public offerings, private placements of equity, term debt, and collaborations[129](index=129&type=chunk) - 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[131](index=131&type=chunk) - Management has determined that present capital resources are insufficient to fund planned operations for at least one year, raising substantial doubt about the company's ability to continue as a going concern[133](index=133&type=chunk) [Sources of Liquidity](index=35&type=section&id=Sources%20of%20Liquidity) This subsection identifies the company's available and potential sources of funding for its operations - Aside from an equity line of credit, the company has no committed sources of additional capital at this time[132](index=132&type=chunk) [Series A-1 Preferred Stock](index=36&type=section&id=Series%20A-1%20Preferred%20Stock) This subsection details the issuance and terms of the company's Series A-1 Convertible Preferred Stock - In **April 2025**, the company sold **500 shares** of Series A-1 Convertible Preferred Stock for an aggregate purchase price of **$500,000**[134](index=134&type=chunk) - The Series A-1 Preferred Stock is convertible into common stock at an initial fixed conversion price of **$2.76 per share** and entitles holders to **10% annual dividends**, payable in Series A-1 Preferred Stock[136](index=136&type=chunk) [Securities Purchase Agreement for Registered Direct Offering](index=36&type=section&id=Securities%20Purchase%20Agreement%20for%20Registered%20Direct%20Offering) This subsection describes the registered direct offering of common stock and pre-funded warrants - In **June 2025**, the company sold **338,725 common shares** and **271,674 pre-funded warrants**, generating net proceeds of **$1,911,000**[137](index=137&type=chunk) - By **June 30, 2025**, **96,500 prefunded warrants** were exercised, with an additional **112,875** exercised subsequent to June 30, 2025[137](index=137&type=chunk) [Series A-2 Preferred Stock](index=36&type=section&id=Series%20A-2%20Preferred%20Stock) This subsection details the issuance and terms of the company's Series A-2 Convertible Preferred Stock - In **June 2025**, the company sold **850 shares** of Series A-2 Convertible Preferred Stock for aggregate gross proceeds of **$850,000**[138](index=138&type=chunk) - The Series A-2 Preferred Stock is convertible into common stock at an initial fixed conversion price of **$4.49 per share** and entitles holders to **10% annual dividends**, payable in Series A-2 Preferred Stock[141](index=141&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) This subsection analyzes the company's cash inflows and outflows from operating, investing, and financing activities - Net cash used in operating activities decreased from **$(3,598) thousand** in **H1 2024** to **$(1,473) thousand** in **H1 2025**, primarily due to reductions in net loss[142](index=142&type=chunk) - Net cash flows from financing activities were **$3,261 thousand** in **H1 2025** (compared to **$0** in **H1 2024**), attributable to proceeds from common stock, prefunded warrants, and preferred stock sales[143](index=143&type=chunk) [Capital Resources](index=38&type=section&id=Capital%20Resources) This subsection outlines the company's available capital and future funding requirements - As of June 30, 2025, the company has no lease commitments other than a short-term lease[144](index=144&type=chunk) - Royalty revenue from Solasia Pharma K.K. decreased from **$6 thousand** in **H1 2024** to **$2 thousand** in **H1 2025**[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Alaunos Therapeutics, Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and procedures and internal controls over financial reporting. Management concluded that disclosure controls were not effective as of June 30, 2025, but reported no material changes in internal controls over financial reporting during the period [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This subsection presents management's assessment of the effectiveness of the company's disclosure controls and procedures - Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025[148](index=148&type=chunk) [Changes in Internal Controls over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) This subsection reports on any material changes in the company's internal controls over financial reporting during the period - There were no changes in internal control over financial reporting during the six months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[149](index=149&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending litigation that management believes would have a material adverse effect on its business, financial condition, results of operations, cash flows, or prospects - The company does not have any pending litigation that, separately or in the aggregate, would be reasonably likely to have a material adverse effect on its business, financial condition, results of operations, cash flows, or prospects[153](index=153&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks and uncertainties that could materially and adversely affect the company's business, financial condition, results of operations, cash flows, and prospects. Key risks include the potential failure of strategic reprioritization, the need for substantial additional financing, Nasdaq delisting risk due to equity deficiency, and the potential negative effects of artificial intelligence [RISKS RELATED TO OUR BUSINESS](index=41&type=section&id=RISKS%20RELATED%20TO%20OUR%20BUSINESS) This subsection details risks specific to the company's operations, strategic initiatives, and financial viability - The company's strategic reprioritization may not be successful, and it may be unsuccessful in identifying and implementing any strategic transaction, potentially leading to dissolution and liquidation[14](index=14&type=chunk) - The company may require substantial additional financial resources to continue as a going concern, and if additional funds are raised, it may affect the value of common stock[14](index=14&type=chunk) - The company received a delisting notice from Nasdaq due to stockholders' equity falling below **$2.5 million**; failure to get the compliance plan approved or to regain compliance could prevent maintaining an active trading market[14](index=14&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - The company has identified a material weakness in its internal control environment, which may result in material misstatements of financial statements or have a material adverse effect on its business or stock price[14](index=14&type=chunk) - The company may not be able to commercialize, generate significant revenues from, or attain profitability from its small molecule oral obesity program or, should it resume development of, its TCR-T product candidates[14](index=14&type=chunk) - Risks include failure to adequately protect or enforce intellectual property rights, third-party claims of infringement, and the expiration of the non-viral Sleeping Beauty gene transfer platform patent in **2026**[14](index=14&type=chunk)[15](index=15&type=chunk)[58](index=58&type=chunk) [OTHER RISKS RELATED TO OUR COMPANY](index=43&type=section&id=OTHER%20RISKS%20RELATED%20TO%20OUR%20COMPANY) This subsection addresses broader risks impacting the company, including those related to technology and corporate governance - Artificial intelligence used by the company or its partners/vendors may lead to negative effects such as cybersecurity threats, fraud, regulatory non-compliance, ethical/reputational harm, operational disruptions, and competitive disadvantages[158](index=158&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's unregistered sales of equity securities, including the issuance of Series A-1 and Series A-2 Convertible Preferred Stock, common stock and stock options for director compensation, and a warrant in connection with an equity purchase agreement - In **April 2025**, the company sold **500 shares** of Series A-1 Convertible Preferred Stock for **$500,000** to an accredited investor[160](index=160&type=chunk) - On **April 13, 2025**, the Board issued **38,269 common shares** (fair value **$111,750**) and **10,904 stock options** (fair value **$27,250**) as compensation for **$139,000** in **Q1 2025** deferred board service fees[161](index=161&type=chunk) - In **May 2025**, the company issued a warrant to purchase **79,900 common shares** at **$4.00 per share** in connection with an equity purchase agreement[162](index=162&type=chunk) - In **June 2025**, the company sold **850 shares** of Series A-2 Convertible Preferred Stock for **$850,000** in a private placement to accredited investors[163](index=163&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - This item is not applicable[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable[165](index=165&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No other information to report - None[166](index=166&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL data - Exhibits include the Second Amended and Restated Certificate of Incorporation, Certificates of Designation for Series A-1 and A-2 Preferred Stock, Amended and Restated Bylaws, certifications (**31.1+**, **32.1++**), and Inline XBRL documents[167](index=167&type=chunk)

Group 1 - Alaunos Therapeutics, Inc. has entered into a definitive agreement for the purchase and sale of 610,399 shares of common stock at a price of $3.36 per share in a registered direct offering, expected to close on or about June 24, 2025 [1][2]. - The gross proceeds from this offering are anticipated to be approximately $2.0 million, with net proceeds of about $1.9 million intended for the company's obesity program and general corporate purposes [2]. - The offering is being conducted under a shelf registration statement previously filed and declared effective by the U.S. Securities and Exchange Commission [3]. Group 2 - Alaunos is a preclinical stage company focused on developing small molecule-based drugs for obesity and metabolic health, aiming to create a treatment that does not rely on hormonal manipulation, unlike many current therapies [8].

Core Viewpoint - PMGC Capital LLC urges Alaunos Therapeutics, Inc. to accept a financing term sheet that could provide substantial capital and create significant shareholder value [1][4]. Group 1: PMGC Capital's Position - PMGC Capital holds a significant ownership position in Alaunos and is acting in the best interest of all shareholders [2]. - The proposed financing, introduced by PMGC Capital and led by a leading Wall Street bank, is described as a compelling opportunity for Alaunos [3]. - PMGC Capital emphasizes the importance of engaging with the bank to maximize long-term value for shareholders [4]. Group 2: Financing Details - The financing offer is characterized as non-toxic and well-structured, providing substantial capital to Alaunos [4]. - PMGC Capital commends Alaunos for maintaining a clean capital structure and prudent financial management during challenging market conditions [5]. Group 3: Company Background - PMGC Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies across diverse markets [6]. - PMGC Holdings Inc. manages a diversified portfolio through strategic acquisitions and investments across various industries [7].

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Financial Statements (unaudited)](index=8&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, changes in stockholders' equity, cash flows, and accompanying notes, providing a snapshot of the company's financial health and performance for the quarter ended March 31, 2025 [Condensed Balance Sheets](index=8&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) The condensed balance sheets show a decrease in the company's cash and cash equivalents, total current assets, and total stockholders' equity as of March 31, 2025, compared to December 31, 2024, while total current liabilities increased Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $319 | $1,091 | $(772) | | Total current assets | $1,067 | $2,755 | $(1,688) | | Total assets | $2,120 | $2,755 | $(635) | | Total current liabilities | $1,062 | $692 | $370 | | Total stockholders' equity | $1,058 | $2,063 | $(1,005) | [Condensed Statements of Operations](index=9&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(unaudited)) For the three months ended March 31, 2025, the company reported a reduced net loss compared to the same period in 2024, driven by a significant decrease in general and administrative expenses, despite an increase in research and development costs Statements of Operations Highlights (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Revenue | $2 | $1 | $1 | | Research and development | $347 | $126 | $221 | | General and administrative | $747 | $1,617 | $(870) | | Net loss | $(1,073) | $(1,682) | $609 | | Basic and diluted EPS | $(0.67) | $(1.05) | $0.38 | [Condensed Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(unaudited)) The statements of changes in stockholders' equity reflect the impact of net loss and stock-based compensation on the company's equity position for the three months ended March 31, 2025 and 2024, showing a decrease in total equity over the period Changes in Stockholders' Equity (in thousands) | Metric | Balance at Jan 1, 2025 | Stock-based compensation | Net loss | Balance at Mar 31, 2025 | | :-------------------- | :--------------------- | :----------------------- | :------- | :---------------------- | | Total Stockholders' Equity | $2,063 | $68 | $(1,073) | $1,058 | Changes in Stockholders' Equity (in thousands) | Metric | Balance at Jan 1, 2024 | Stock-based compensation | Net loss | Balance at Mar 31, 2024 | | :-------------------- | :--------------------- | :----------------------- | :------- | :---------------------- | | Total Stockholders' Equity | $6,307 | $172 | $(1,682) | $4,797 | [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(unaudited)) The condensed statements of cash flows indicate a significant reduction in net cash used in operating activities for the three months ended March 31, 2025, compared to the prior year, primarily due to a lower net loss Cash Flow Highlights (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash flows from operating activities | $(772) | $(1,917) | $1,145 | | Net decrease in cash and cash equivalents | $(772) | $(1,917) | $1,145 | | Cash and cash equivalents, end of period | $319 | $4,145 | $(3,826) | [Notes to Condensed Financial Statements (unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(unaudited)) These notes provide detailed explanations and disclosures for the condensed financial statements, covering the company's organization, liquidity and going concern issues, significant accounting policies, reverse stock splits, Nasdaq listing compliance, financing activities, commitments, stock-based compensation, warrants, segment information, and subsequent events - The company is a pre-clinical obesity and metabolic disorder and clinical-stage oncology-focused cell therapy company, currently focusing on developing novel small molecules for obesity therapeutics[32](index=32&type=chunk) - As of March 31, 2025, the company had approximately **$0.3 million** in cash and cash equivalents and an accumulated deficit of approximately **$921.5 million**, with cash resources anticipated to fund operations only into the second quarter of 2025, raising substantial doubt about its ability to continue as a going concern[35](index=35&type=chunk)[36](index=36&type=chunk) - The company completed a 1-for-15 reverse stock split in January 2024 and an additional 1-for-10 reverse stock split in July 2024, retroactively adjusting all share and per share data[41](index=41&type=chunk)[43](index=43&type=chunk) - On April 7, 2025, the company received a notice from Nasdaq regarding non-compliance with the **$2.5 million** stockholders' equity requirement, reporting **$2.1 million** as of December 31, 2024, and has 45 days to submit a compliance plan[44](index=44&type=chunk)[45](index=45&type=chunk) - The Exclusive License Agreement with Precigen was terminated on October 4, 2024, following a strategic review, while the company continues to prosecute intellectual property for TCRs targeting driver mutations and the hunTR TCR discovery platform[50](index=50&type=chunk)[51](index=51&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $2 | $11 | | General and administrative | $66 | $161 | | Total | $68 | $172 | - On April 11, 2025, the company closed a private offering of Series A-1 Convertible Preferred Stock for an aggregate purchase price of **$500,000** with Watermill Asset Management[72](index=72&type=chunk) - On April 13, 2025, the Board of Directors elected to receive **$139,000** in equity compensation for deferred board service fees, resulting in the issuance of **38,269** common shares and the grant of **10,904** fully vested stock options[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, detailing the strategic shift towards an oral obesity program, the wind-down of TCR-T clinical trials, cost reduction efforts, and the critical need for additional financing, alongside a detailed analysis of revenue, expenses, and liquidity [Overview](index=22&type=section&id=Overview) The company announced a strategic reprioritization in August 2023, winding down its TCR-T Library Phase 1/2 Trial to focus on a small molecule oral obesity program and reduce costs. It continues to explore strategic alternatives and has incurred significant net losses since inception - On August 14, 2023, the company announced a strategic reprioritization, including winding down its TCR-T Library Phase 1/2 Trial and reducing its workforce to cut costs and extend cash runway[81](index=81&type=chunk) - The company continues to explore strategic alternatives such as acquisition, merger, sale of assets, strategic partnerships, or capital raises[81](index=81&type=chunk) - For the three months ended March 31, 2025, the company had a net loss of **$1.6 million**, and an accumulated deficit of approximately **$921.5 million** since its inception in 2003[82](index=82&type=chunk) [2024 Developments](index=22&type=section&id=2024%20Developments) Key developments in 2024 include continued progress in the small molecule oral obesity program with in vitro testing, the wind-down of the TCR-T Library Phase 1/2 Trial despite encouraging results, ongoing exploration of strategic alternatives, and receipt of a Nasdaq deficiency notice regarding stockholders' equity [Obesity Program](index=22&type=section&id=Obesity%20Program) The company is advancing its small molecule oral obesity program, aiming for a differentiated profile that does not rely on hormonal manipulation and preserves lean muscle mass. In vitro testing of ALN1001 and its derivatives began in Q4 2024, with results expected in Q2 2025, potentially leading to a proof-of-concept mouse study by Q3 2025 - The company is developing a small molecule oral obesity program aiming for a differentiated profile that does not rely on hormonal manipulation and preserves lean muscle mass[83](index=83&type=chunk) - In vitro testing of ALN1001 and its derivatives began in **Q4 2024**, with results expected in **Q2 2025**, to evaluate impact on lipid deposition and gene expression related to metabolic activity[83](index=83&type=chunk)[84](index=84&type=chunk) - A proof-of-concept diet-induced obesity (DIO) mouse study is planned by **Q3 2025**, contingent on successful in vitro results and additional capital, before proceeding to IND-enabling studies[85](index=85&type=chunk) [TCR-T Library Phase 1/2 Trial](index=24&type=section&id=TCR-T%20Library%20Phase%201%2F2%20Trial) The TCR-T Library Phase 1/2 Trial, which treated eight patients with solid tumors, demonstrated that Sleeping Beauty TCR-T cells were generally well-tolerated and achieved an objective partial response in one patient and stable disease in six others, resulting in a 13% overall response rate and 87% disease control rate. Despite these encouraging results, further clinical development was halted in August 2023 due to substantial costs and the challenging financing environment - The TCR-T Library Phase 1/2 Trial treated **eight patients** with pancreatic, colorectal, and non-small cell lung cancer from **2022-2023**[86](index=86&type=chunk) - The trial showed T-cells were generally well-tolerated with no dose-limiting toxicities (DLTs) or immune effector cell-associated neurotoxicity syndrome (ICANS); cytokine release syndrome (CRS) events were manageable[86](index=86&type=chunk) - One NSCLC patient achieved an objective partial response with **six months** progression-free survival, and **six other patients** achieved stable disease, resulting in a **13%** overall response rate and **87%** disease control rate[86](index=86&type=chunk) - Despite encouraging data, further clinical development of the TCR-T programs was halted in **August 2023** due to substantial costs and the current financing environment[86](index=86&type=chunk) [hunTR® Platform](index=24&type=section&id=hunTR%C2%AE%20Platform) The company's hunTR TCR discovery platform has successfully identified multiple proprietary TCRs targeting driver mutations like KRAS and TP53, as well as TCRs restricted to additional HLAs, indicating potential for treating a large patient population - The hunTR TCR discovery platform has identified multiple proprietary TCRs targeting driver mutations (e.g., KRAS, TP53) and TCRs restricted to additional HLAs[87](index=87&type=chunk) - The hunTR library is believed to have the potential to treat a large patient population[87](index=87&type=chunk) [Strategic Alternatives](index=24&type=section&id=Strategic%20Alternatives) The company is actively exploring various strategic alternatives, including potential acquisition, merger, reverse merger, sale of assets, strategic partnerships, or capital raises, to enhance its business outlook - The company continues to explore strategic alternatives, including acquisition, merger, reverse merger, sale of assets, strategic partnerships, or capital raises[88](index=88&type=chunk) [Nasdaq Shareholders Equity Deficiency Notice](index=24&type=section&id=Nasdaq%20Shareholders%20Equity%20Deficiency%20Notice) On April 7, 2025, the company received a Nasdaq notice for failing to meet the $2.5 million stockholders' equity requirement, reporting $2.1 million as of December 31, 2024. The company has 45 days to submit a compliance plan to Nasdaq - On **April 7, 2025**, the company received a notice from Nasdaq for not satisfying the continued listing requirement of **$2.5 million** stockholders' equity, having reported **$2.1 million** as of **December 31, 2024**[89](index=89&type=chunk) - The company has **45 calendar days** from the notification date to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1)[90](index=90&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) The company's results of operations for the three months ended March 31, 2025, show a slight increase in royalty revenue, a significant increase in research and development expenses due to obesity program consulting and wind-down activities, a substantial decrease in general and administrative expenses from cost-cutting, and reduced other income due to lower cash reserves [Royalty Revenue](index=24&type=section&id=Royalty%20Revenue) Royalty revenue increased to $2 thousand for the three months ended March 31, 2025, from $1 thousand in the same period of 2024 Royalty Revenue (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change % | | :------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Revenue | $2 | $1 | $1 | 100% | [Research and Development Expenses](index=24&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses increased by $0.2 million, or 175%, to $347 thousand for the three months ended March 31, 2025, compared to $126 thousand in the prior year, primarily due to regulatory writing for clinical wind-down activities and consulting fees for the obesity program Research and Development Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change % | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Research and development expenses | $347 | $126 | $221 | 175% | - The increase in R&D expenses was primarily due to a **$0.2 million** increase in regulatory writing for wind-down clinical activities and consulting fees for the obesity program[93](index=93&type=chunk) [General and Administrative Expenses](index=26&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased significantly by $0.9 million, or 54%, to $747 thousand for the three months ended March 31, 2025, compared to $1,617 thousand in the prior year, mainly due to lower employee-related expenses, consulting fees, insurance costs, filing fees, travel, and bank fees from downsized operations General and Administrative Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change % | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | General and administrative expenses | $747 | $1,617 | $(870) | (54)% | - The decrease was primarily due to a **$0.1 million** decrease in employee-related expenses, a **$0.4 million** decrease in consulting expenses, and a **$0.4 million** decrease in insurance costs, filing fees, travel, and bank fees due to downsized operations[95](index=95&type=chunk) [Other Income](index=26&type=section&id=Other%20Income) Other income, net, decreased by $0.04 million, or 68%, to $19 thousand for the three months ended March 31, 2025, compared to $60 thousand in the prior year, primarily due to reduced interest income from lower cash reserves Other Income, Net (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change % | | :---------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Other income, net | $19 | $60 | $(41) | (68)% | - The decrease in other income was primarily due to reduced interest income from lower cash reserves[96](index=96&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company has no product revenue and continues to incur significant losses, relying on financing to fund operations. Despite cost-cutting efforts, cash resources are only anticipated to last into Q2 2025, raising substantial doubt about its going concern ability. Recent capital raises include a $500,000 private offering of Series A-1 Preferred Stock in April 2025 [Liquidity](index=26&type=section&id=Liquidity) The company has not generated product revenue and has incurred significant net losses and negative cash flows since inception. Despite strategic reprioritization and cost reductions, current cash resources are only expected to fund operations into the second quarter of 2025, leading to substantial doubt about its ability to continue as a going concern without additional financing - The company has not generated any revenue from product sales and has incurred significant net losses and negative cash flows since its inception[97](index=97&type=chunk) - Current cash resources are anticipated to be sufficient to fund operations into the **second quarter of 2025**[99](index=99&type=chunk)[101](index=101&type=chunk) - Management has determined that present capital resources are insufficient to fund planned operations for at least **one year**, raising substantial doubt about the company's ability to continue as a going concern[102](index=102&type=chunk) [Sales of Series A-1 Preferred Stock](index=28&type=section&id=Sales%20of%20Series%20A-1%20Preferred%20Stock) On April 11, 2025, the company completed a private offering, issuing and selling Series A-1 Convertible Preferred Stock for an aggregate purchase price of $500,000 to Watermill Asset Management - On **April 11, 2025**, the company entered into a Subscription Agreement to issue and sell Series A-1 Convertible Preferred Stock for an aggregate purchase price of **$500,000** in a private offering, which closed on the same day[103](index=103&type=chunk) [Cash Flows](index=28&type=section&id=Cash%20Flows) Net cash used in operating activities significantly decreased to $0.8 million for the three months ended March 31, 2025, from $1.9 million in the prior year, primarily due to a reduced net loss Net Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(772) | $(1,917) | | Investing activities | — | — | | Financing activities | — | — | | Net decrease | $(772) | $(1,917) | - The decrease in net cash used in operating activities was primarily related to changes in the company's net loss[104](index=104&type=chunk) [Capital Resources](index=30&type=section&id=Capital%20Resources) The company terminated its Patent License with the NCI effective December 26, 2023, and continues to earn royalty revenue from Solasia Pharma K.K. for darinaparsin, which amounted to $2 thousand in Q1 2025 - The Patent License with the NCI for engineered T-cell therapies was terminated effective **December 26, 2023**[108](index=108&type=chunk) - Royalty revenue from Solasia Pharma K.K. for darinaparsin sales was **$2 thousand** for the three months ended March 31, 2025, an increase from **$1 thousand** in the prior year[109](index=109&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - The company is a 'smaller reporting company' and is therefore not required to provide quantitative and qualitative disclosures about market risk[110](index=110&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025. No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025 - Management concluded that the company's disclosure controls and procedures were not effective as of **March 31, 2025**[111](index=111&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended **March 31, 2025**[112](index=112&type=chunk) [PART II. OTHER INFORMATION](index=31&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending litigation that management believes would have a material adverse effect on its business, financial condition, results of operations, cash flows, or prospects - The company does not have any pending litigation that is reasonably likely to have a material adverse effect on its business, financial condition, results of operations, cash flows, or prospects[115](index=115&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section highlights significant risks and uncertainties that could materially and adversely affect the company's business, financial condition, and results of operations. Key new or substantively changed risks include the impact of changes to U.S. tariff and import/export regulations, potential delisting from Nasdaq due to stockholders' equity deficiency, and negative effects from the use of artificial intelligence by the company or its partners - New or substantively changed risk factors include potential adverse effects from changes to United States tariff and import/export regulations[116](index=116&type=chunk)[117](index=117&type=chunk) - A significant risk is the potential delisting from the Nasdaq Capital Market if the company's plan for compliance with the **$2.5 million** stockholders' equity rule, following the **April 7, 2025** notice, is not approved or successfully implemented[118](index=118&type=chunk)[119](index=119&type=chunk) - The use of artificial intelligence (AI) by the company or its partners and vendors may have negative effects, including novel cybersecurity threats, fraud, regulatory noncompliance, ethical/social/reputational risks, operational disruptions, and competitive disadvantages[121](index=121&type=chunk) - Principal stockholders, executive officers, and directors have substantial control (**3.45%** beneficially owned as of **March 31, 2025**), which may prevent other stockholders from influencing significant corporate decisions and could harm the market price of common stock[120](index=120&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report[122](index=122&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the current reporting period - Not applicable[123](index=123&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the current reporting period - Not applicable[124](index=124&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None to report[124](index=124&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of this Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL data - Exhibits include the Second Amended and Restated Certificate of Incorporation, Certificate of Designation of Series A-1 Convertible Preferred Stock, Amended and Restated Bylaws, and various certifications (31.1+, 32.1++)[126](index=126&type=chunk)

Core Insights - PMGC Capital LLC plans to file a Schedule 13D with the U.S. Securities and Exchange Commission, disclosing beneficial ownership of common stock in Alaunos Therapeutics, Inc. [1] - PMGC Capital has acquired 83,500 shares of Alaunos Therapeutics, representing approximately 5.09% of the company's outstanding shares [2] - Alaunos Therapeutics is a clinical-stage oncology-focused cell therapy company exploring strategic alternatives, including mergers and acquisitions [3] Company Strategy - PMGC Capital believes Alaunos is undervalued and has significant potential to create shareholder value, intending to engage with Alaunos' management to explore strategic opportunities [4] - The company commends Alaunos Therapeutics for maintaining a clean capital structure and prudent financial stewardship during challenging market conditions [5] - PMGC Capital is focused on direct investments, strategic lending, and acquiring undervalued companies across diverse markets [6] Corporate Background - PMGC Holdings Inc. manages a diversified portfolio through strategic acquisitions and investments across various industries [7]

Financial Performance - For the year ended December 31, 2024, the company reported a net loss of $4.6 million, with an accumulated deficit of approximately $920.4 million since its inception in 2003[348]. - Revenue for the year ended December 31, 2024, was $10 thousand, a 100% increase from $5 thousand in 2023[364]. - The company has not generated any product revenue and continues to incur significant operating expenditures and net losses[348]. - As of December 31, 2024, the accumulated deficit was approximately $920.4 million, indicating ongoing financial challenges[381]. - Cash and cash equivalents as of December 31, 2024 were approximately $1.1 million, with expectations to fund operations into the second quarter of 2025[384]. - No collaboration revenue was earned in 2024, with only $10 thousand in royalty revenues compared to $5 thousand in 2023 under the Solasia License[387]. Expenses - Research and development expenses decreased by 98% to $362 thousand in 2024 from $16.3 million in 2023, primarily due to reduced clinical activities and workforce[365]. - General and administrative expenses decreased by 63% to $4.46 million in 2024 from $12.22 million in 2023, mainly due to a reduction in consulting and employee-related expenses[367]. - Impairments for the year ended December 31, 2024 were $0 million, a decrease of 100% from $4.8 million in 2023, following a strategic reprioritization announced in August 2023[371]. - Net cash used in operating activities for 2024 was $5.0 million, significantly reduced from $30.1 million in 2023, attributed to a net loss of $4.6 million and adjustments for non-cash items[378]. Strategic Initiatives - The company is exploring strategic alternatives, including acquisitions, mergers, and partnerships, to extend its cash runway[347]. - The company has engaged Cantor Fitzgerald & Co. as a strategic advisor to assist in exploring strategic alternatives[347]. - Management has raised substantial doubt about the company's ability to continue as a going concern beyond the forecasted cash runway[377]. Clinical Trials and Studies - The ongoing in vitro study aims to evaluate the impact of ALN1001 on lipid metabolism, with results expected in early Q2 2025[350]. - The TCR-T Library Phase 1/2 Trial showed a 13% overall response rate and an 87% disease control rate among evaluable patients[352]. - The company plans to conduct a proof-of-concept study for its obesity program by Q3 2025, contingent on successful in vitro study results[351]. Licensing and Agreements - The company terminated a Patent License agreement effective December 26, 2023, incurring no expenses under this agreement in 2024, compared to $0.3 million in 2023[386].

Financial Performance - For the six months ended June 30, 2024, the company reported a net loss of $3.2 million, with an accumulated deficit of approximately $918.9 million since inception in 2003[39]. - Revenue for the three months ended June 30, 2024, was $4 thousand, unchanged from the same period in 2023, while revenue for the six months ended June 30, 2024, increased by 50% to $6 thousand compared to $4 thousand in 2023[46]. - The company has not generated any product revenue and continues to incur significant operating expenditures and net losses for the foreseeable future[39]. - Other income (expense), net, for the three months ended June 30, 2024, increased by $0.8 million compared to the same period in 2023, primarily due to no interest expense associated with the former amended Loan and Security Agreement[51]. - For the six months ended June 30, 2024, other income (expense), net, increased by $1.3 million compared to the same period in 2023, again primarily due to no interest expense associated with the former amended Loan and Security Agreement[52]. - The company recorded revenue of $5 thousand and $6 thousand under the License and Collaboration Agreement for the three and six months ended June 30, 2024, respectively[57]. Expenses and Cost Management - Research and development expenses for the three months ended June 30, 2024, decreased by 97% to $180 thousand from $5.2 million in the same period in 2023, primarily due to the wind-down of clinical activities[47]. - General and administrative expenses for the three months ended June 30, 2024, decreased by 67% to $990 thousand from $3.0 million in the same period in 2023, attributed to reduced headcount[49]. - Net cash used in operating activities for the six months ended June 30, 2024, was $3.6 million, a decrease from $16.4 million for the same period in 2023, primarily due to changes in net loss[54]. Strategic Initiatives - The company has engaged Cantor Fitzgerald & Co. as a strategic advisor to explore alternatives including acquisitions, mergers, and capital raises[39]. - The company is exploring strategic alternatives, including acquisitions, mergers, and capital raises, while engaging Cantor as a strategic advisor[53]. - The company has reduced its workforce by approximately 95% to extend its cash runway amid strategic reprioritization[42]. Compliance and Financial Position - The company received a delisting determination from Nasdaq due to its stock price falling below $0.10 per share, but has since regained compliance with the minimum bid price requirement[43]. - As of June 30, 2024, the accumulated deficit was approximately $918.9 million, with cash and cash equivalents of approximately $2.5 million[55]. - Working capital as of June 30, 2024, was $3.4 million, down from $6.3 million as of December 31, 2023[55]. - The company anticipates that cash resources will be sufficient to fund operations into the third quarter of 2024, but additional financing will be necessary to continue operations beyond that point[55]. Research and Development Updates - The TCR-T Library Phase 1/2 Trial treated eight patients, achieving a total overall response rate of 13% and a disease control rate of 87% in evaluable patients[40]. - The company announced the termination of its Cooperative Research and Development Agreement with the National Cancer Institute effective October 13, 2023[39]. - No royalty payments were recognized under the Patent License for the three and six months ended June 30, 2024, while $0.3 million was recognized in the same periods of 2023[56].

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 March 31, 2024 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) (State or other jurisdiction of incorporation or organization) Delaware 8 ...