Alaunos Therapeutics, Inc.

Previous wording

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, 2026, or the Annual Report.

Current wording

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, 2026, as amended on April 30, 2026, or the Annual Report.

Previous wording

We have not generated any product revenue and have incurred significant net losses in each year since our inception. For the three months ended March 31, 2026, we had a net loss of $1.0 million, and as of March 31, 2026, we have incurred approximately $925.6 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 as we advance our internally developed preclinical small-molecule oral Obesity and Metabolic Disorders Program.

Current wording

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, 2026, we had a net loss of $1.9 million, and as of June 30, 2026, we have incurred approximately $926.6 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 as we advance our internally developed preclinical small-molecule oral Obesity and Metabolic Disorders Program.

Previous wording

In the longer-duration 48-day DIO model, ALN1003 was associated with significantly lower fasting insulin and significantly lower Homeostasis Model Assessment of Insulin Resistance (HOMA-IR), a calculated index derived from fasting glucose and insulin. ALN1003-treated animals had significantly lower HOMA-IR scores compared with controls after adjustment for percentage body fat in a standard ANCOVA analysis (p=0.0006) with the same conclusion confirmed using heteroscedasticity-robust HC3 standard errors sensitivity analysis (p=0.0014). ALN1003 was also associated with numerically lower leptin, significantly higher adiponectin, and a significantly higher adiponectin-to-leptin ratio. Together, these findings are consistent with improved insulin-resistance-related biomarkers and favorable adipose endocrine signaling in this preclinical model.

Current wording

On May 18, 2026, the Company announced preclinical ALN1003 data showing effects on insulin-resistance-related biomarkers and liver histology. In the longer-duration 48-day DIO model, ALN1003 was associated with significantly lower fasting insulin and significantly lower Homeostasis Model Assessment of Insulin Resistance (HOMA-IR), a calculated index derived from fasting glucose and insulin. ALN1003-treated animals had significantly lower HOMA-IR scores compared with controls after adjustment for percentage body fat in a standard ANCOVA analysis (p=0.0006) with the same conclusion confirmed using heteroscedasticity-robust HC3 standard errors sensitivity analysis (p=0.0014). ALN1003 was also associated with numerically lower leptin, significantly higher adiponectin, and a significantly higher adiponectin-to-leptin ratio. Together, these findings are consistent with improved insulin-resistance-related biomarkers and favorable adipose endocrine signaling in this preclinical model.

Previous wording

Taken together, these findings suggest that ALN1003 may influence multiple components of metabolic syndrome biology in DIO mouse models, including insulin-resistance-related biomarkers, adipose endocrine signaling, and hepatic lipid accumulation. This multi-axis preclinical profile may be relevant to a therapeutic landscape increasingly focused on metabolic health beyond body weight alone, including liver health, cardiometabolic risk, and preservation of lean mass.

Current wording

Taken together, these findings suggest that ALN1003 may influence multiple components of metabolic syndrome biology in DIO mouse models, including insulin-resistance-related biomarkers, adipose endocrine signaling, and hepatic lipid accumulation. This multi-axis preclinical profile may be relevant to a therapeutic landscape increasingly focused on metabolic health beyond body weight alone, including liver health, cardiometabolic risk, and relative preservation of lean mass.

Previous wording

-10.3% (p<0.0001) after 48 days of treatment. Peak reductions in absolute weight loss were observed by Day 13 and remained lower than DIO controls through Day 48 (p<0.0001 at selected timepoints).

Current wording

Relative to DIO controls, mean percent change in body weight for ALN1003-treated mice peaked at -12.9% (p<0.0001) on Day 34 and was -10.3% (p<0.0001) after 48 days of treatment. Peak reductions in absolute weight loss were observed by Day 13 and remained lower than DIO controls through Day 48 (p<0.0001 at selected time points).

Previous wording

On April 9, 2026, 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 2025 Annual Report, did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed company’s stockholder equity be at least $2.5 million. In its 2025 Form 10-K, the Company reported stockholders’ equity of $2.1 million, and, as a result, does not currently satisfy Nasdaq Listing Rule 5550(b)(1).

Current wording

On April 9, 2026, 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 2025 Annual Report, did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed company’s stockholder equity be at least $2.5 million. In its 2025 Form 10-K, the Company reported stockholders’ equity of $2.2 million, and, as a result, does not currently satisfy Nasdaq Listing Rule 5550(b)(1).

Previous wording

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

Current wording

The Notice had no immediate effect on the Company’s listing on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company had 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1). The Company has submitted its plan to regain compliance and is actively working with Nasdaq as it reviews and responds to the Company’s plan.

Previous wording

Research and development expenses for the three months ended March 31, 2026 increased by $80 when compared to the three months ended March 31, 2025, primarily due to an increase in stock based compensation, salary expense and consulting fees incurred in pursuit of our obesity and metabolic disorder program.

Current wording

Research and development expenses for the three months ended June 30, 2026 increased by $203 when compared to the three months ended June 30, 2025, primarily due to an increase in stock based compensation, salary expense and consulting fees incurred in pursuit of our obesity and metabolic disorder program.

Previous wording

General and administrative expenses for the three months ended March 31, 2026 decreased by $162 as compared to the three months ended March 31, 2025, primarily due to a decrease in salary expense, insurance costs, filing fees, bank fees and travel costs due to our downsized operations.

Current wording

General and administrative expenses for the three months ended June 30, 2026 decreased by $290 as compared to the three months ended June 30, 2025, primarily due to a decrease in salary expense, insurance costs, filing fees, bank fees, legal fees and travel costs due to our downsized operations.

Previous wording

Other income, net, for the three months ended March 31, 2026 decreased by $13 as compared to the three months ended March 31, 2025.

Current wording

Other income, net, for the three months ended June 30, 2026 decreased by $19 as compared to the three months ended June 30, 2025.

Previous wording

Royalty revenue during the three months ended March 31, 2026 and 2025 were as follows:

Current wording

Royalty revenue during the six months ended June 30, 2026 and 2025 were as follows:

Previous wording

We have not generated any revenue from product sales. Since inception, we have incurred net losses and negative cash flows from our operations. We have operated at a loss since inception in 2003 and have no significant recurring revenue from operations. We anticipate that losses will continue for the foreseeable future. As of March 31, 2026, our accumulated deficit was approximately $925.6 million. Our working capital as of March 31, 2026 was $0.375 million, consisting of $0.97 million in current assets and $0.595 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.

Current wording

We have not generated any revenue from product sales. Since inception, we have incurred net losses and negative cash flows from our operations. We have operated at a loss since inception in 2003 and have no significant recurring revenue from operations. We anticipate that losses will continue for the foreseeable future. As of June 30, 2026, our accumulated deficit was approximately $926.6 million. Our working capital deficit as of June 30, 2026 was $0.20 million, consisting of $0.70 million in current assets and $0.90 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.

Previous wording

As of March 31, 2026, we had approximately $0.35 million of cash and cash equivalents. Our current monthly cash burn rate is approximately $0.34 million. At this rate we anticipate that our existing cash resources will be sufficient to fund operations into the second quarter of 2026. This estimate excludes any potential costs related to strategic transactions, unexpected legacy wind-down activities, unforeseen liabilities, or acceleration of our obesity and metabolic disorders program.

Current wording

As of June 30, 2026, we had approximately $0.12 million of cash and cash equivalents. Our current monthly cash burn rate is approximately $0.21 million. At this rate we anticipate that our existing cash resources will be sufficient to fund operations into the third quarter of 2026. This estimate excludes any potential costs related to strategic transactions, unexpected legacy wind-down activities, unforeseen liabilities, or acceleration of our obesity and metabolic disorders program.

Previous wording

Cumulative dividends on the Company’s Series A-1 and Series A-2 Convertible Preferred Stock accrue at 10% per annum and compound quarterly by increasing the liquidation preference. Undeclared cumulative dividends are not recorded as a liability. Because the Company reported a net loss for the periods presented, cumulative preferred dividends increased the net loss attributable to common stockholders in the earnings-per-share calculation. As of March 31, 2026, undeclared cumulative dividends totaled $39 for Series A-1 and $67 for Series A-2.

Current wording

Cumulative dividends on the Company’s Series A-1 and Series A-2 Convertible Preferred Stock accrue at 10% per annum and compound quarterly by increasing the liquidation preference. Undeclared cumulative dividends are not recorded as a liability. Because the Company reported a net loss for the periods presented, cumulative preferred dividends increased the net loss attributable to common stockholders in the earnings-per-share calculation. As of June 30, 2026, undeclared cumulative dividends totaled $64 for Series A-1 and $89 for Series A-2.

Previous wording

The following table summarizes our net decrease in cash and cash equivalents for the three months ended March 31, 2026 and 2025:

Current wording

The following table summarizes our net decrease in cash and cash equivalents for the six months ended June 30, 2026 and 2025:

Previous wording

Net cash flows used in operating activities for the three months ended March 31, 2026 was $1.03 million, as compared to net cash used in operating activities of $0.77 million for the three months ended March 31, 2025. The increase in net cash used in operating activities was primarily related to increase in our net loss, offset by an increase in timing of accounts payable and accrued expenses.

Current wording

Net cash flows used in operating activities for the six months ended June 30, 2026 was $1.33 million, as compared to net cash used in operating activities of $1.47 million for the six months ended June 30, 2025. The decrease in net cash used in operating activities was primarily related to a decrease in our net loss, offset by an increase in timing of accounts payable and accrued expenses.

Previous wording

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 three months ended March 31, 2026 and 2025, the Company earned $0 and $2, respectively, in royalty revenues on net sales under the Solasia License and Collaboration Agreement.

Current wording

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 three and six months ended June 30, 2026, the Company earned collaboration revenue of $0, respectively under this agreement. During the three and six months ended June 30, 2025, the Company earned collaboration revenue of $0 and $2, respectively under this agreement.