Alaunos Therapeutics (TCRT) Risk Analysis

As a small company with limited resources and a single full-time employee, our ability to effectively communicate with investors, analysts, media, and the public is constrained. Inadequate investor relations (IR) and public relations (PR) efforts could result in: - Reduced visibility and credibility in the financial and biotech communities;- Failure to timely or accurately disclose material information, leading to increased volatility or regulatory scrutiny;- Loss of analyst coverage or negative analyst sentiment;- Difficulty attracting institutional investors, potential partners, or strategic alternatives;- Perceived lack of transparency or management accessibility, harming our reputation; and - Challenges in marketing our obesity program or legacy assets effectively to potential stakeholders. These factors could materially and adversely affect our stock price, liquidity, and ability to raise capital or consummate strategic transactions.

Our amended and restated certificate of incorporation authorizes our Board of Directors to issue up to 30,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions of those shares, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series, without any further vote or action by our stockholders. The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company and may adversely affect the market price of, and the voting and other rights of the holders of, our common stock. We currently have outstanding shares of Series A Preferred Stock, which have certain rights, preferences and privileges senior to our common stock. Future issuances of preferred stock could further dilute the voting power and economic interests of common stockholders and may adversely affect the market price of our common stock.

We are considered a "smaller reporting company" under Rule 12b-2 of the Exchange Act. We are therefore entitled to rely on certain reduced disclosure requirements, such as an exemption from providing selected financial data and executive compensation information. These exemptions and reduced disclosures in our SEC filings due to our status as a smaller reporting company also mean our auditors are not required to review our internal control over financial reporting and may make it harder for investors to analyze our business, financial condition, results of operations, cash flows and prospects. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our common stock prices may be more volatile. We will remain a smaller reporting company until our public float exceeds $250 million as of the last business day of our most recently completed second quarter if our annual revenues are $100 million or more as of our most recently completed fiscal year, or until our public float exceeds $700 million as of the last business day of our most recently completed second quarter if our annual revenues are less than $100 million as of our most recently completed fiscal year.

Our executive officers and directors beneficially owned, in the aggregate, approximately 25.71% of our outstanding common stock (including options exercisable within 60 days). This includes significant holdings by certain directors and former executives, such as Robert W. Postma (approximately 17.47% beneficial ownership, including shares issuable upon conversion of preferred stock and options). These stockholders may have interests that conflict with our other stockholders and, if acting together, have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, we have issued Series A-1 Convertible Preferred Stock and Series A-2 Convertible Preferred Stock (collectively, the "Series A Preferred Stock"), each with a liquidation preference of $1,000 per share, cumulative dividends at 10% per annum (payable in additional shares of Series A Preferred Stock), and rights to convert into Common Stock at initial conversion prices of $2.76 (Series A-1) and $4.49 (Series A-2), subject to adjustments. Holders of Series A Preferred Stock are entitled to vote on an as-converted basis (1:1 with Common Stock) on all matters submitted to stockholders (voting together as a single class), except as otherwise required by law or the Certificate of Designation. Upon a Change of Control (as defined in the Certificates of Designation), the Series A Preferred Stock automatically converts into Common Stock. The Series A Preferred Stock ranks senior to Common Stock with respect to dividends and liquidation distributions, and the issuance of additional preferred stock or conversion of existing shares could further concentrate voting control, dilute common stockholders, or affect our ability to consummate certain transactions. These rights, preferences, and privileges senior to common stock could adversely affect the voting power, economic interests, and market price of our common stock. Accordingly, this concentration of ownership and the rights associated with our Series A Preferred Stock may harm the market price of our common stock by: - Delaying, deferring or preventing a change in control;- Impeding a merger, consolidation, takeover or other business combination involving us; or - Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. In addition, this significant concentration of stock ownership and preferred stock rights may adversely affect the trading price of our common stock should investors perceive disadvantages in owning shares of common stock in a company that has such concentrated ownership.

In 2021, we were engaged in a consent solicitation led by WaterMill Asset Management Corp., or WaterMill, where three new directors were added to our Board of Directors. We could experience other stockholder activism in the future, including another consent solicitation or a proxy contest. Activist stockholders may advocate for certain governance and strategic changes at our company. In the event of stockholder activism, particularly with respect to matters which our Board of Directors, in exercising their fiduciary duties, disagree with or have determined not to pursue, our business could be adversely affected because responding to actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management, and perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, and customers. In addition, if faced with a consent solicitation or proxy contest, we may not be able to respond successfully to the contest or dispute, which would be disruptive to our business. If individuals are elected to our Board of Directors with a differing agenda, our ability to effectively and timely implement our strategic plan and create additional value for our stockholders may be adversely affected. If our Board of Directors elects to pursue a strategic alternative requiring a stockholder vote, activists may pursue a campaign against the transaction and as a result may make consummating the transaction more difficult, or impossible, despite the Board of Directors' conclusions that such transaction is in the best interest of our stockholders. In addition, on October 30, 2025, a group of stockholders led by Adrian Price filed a Schedule 13D reporting beneficial ownership of approximately 8.6% of our outstanding common stock (as amended through Amendment No. 4 filed March 5, 2026). The group consists of Adrian Price and numerous individual and entity co-filers (including HexagonONE Ltd, Alimenta Holding Limited, Krakatau Holding Limited, and others), with aggregate reported beneficial ownership of 189,061 shares. In a letter dated February 20, 2026 (attached as Exhibit 21 to Amendment No. 4), the group proposed a $7 million private placement financing (potentially resulting in a change of control) through affiliated entities, reiterated the nomination of Gerald W. Bruce for the Board, and requested a meeting with the Board within five business days to discuss terms and begin due diligence. The letter stated that if the Board did not engage meaningfully within five business days, the group may seek to purchase additional shares in the market, undertake a tender offer to shareholders, or pursue other activist actions (including a deliberate investor relations campaign). The Company held a meeting with representatives of the group following the letter, and requested follow-up information regarding the three foreign entities (HexagonONE Ltd, Alimenta Holding Limited, and Krakatau Holding Limited) that were proposed to participate in the financing. As of the date of this Annual Report, the Company has not received the requested follow-up information, and there can be no assurance that further discussions or a transaction will occur on terms acceptable to the Company or at all. Any escalation by this group into a proxy contest, tender offer, or other adversarial actions could increase costs, divert management attention, create uncertainty, and materially harm our business, stock price, and ability to consummate value-maximizing transactions.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. In addition, it is likely that in some future period our operating results will be below the expectations of securities analysts or investors. If one or more of the analysts who cover us downgrade our stock, or if our business, financial condition, results of operations, cash flows or prospects do not meet their expectations, our stock price could significantly decline. If our common stock is delisted by Nasdaq, the impact of analysts ceasing to cover our securities may negatively impact the price of our common stock more dramatically.

Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the amended and restated certificate of incorporation or our bylaws; (v) any claim or cause of action as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; or (vi) any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine. These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. These exclusive forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-forum provision to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.

Provisions of our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders. These provisions authorize the issuance of "blank check" preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares and hinder a takeover attempt, and limit who may call a special meeting of stockholders. In addition, Section 203 of the Delaware General Corporation Law, or Section 203, generally prohibits a publicly held Delaware corporation from engaging in a business combination with a party that owns at least 15% of its common stock unless the business combination is approved by our Board of Directors before the person acquires the 15% ownership stake or later by its Board of Directors and two-thirds of its stockholders. Section 203 could have the effect of delaying, deferring or preventing a change in control that our stockholders might consider to be in their best interests. If we are approached by a third-party in connection with an acquisition, merger or reverse merger, and our Board of Directors does not believe that a transaction with such party is in the best interest of our stockholders, we may rely on the provisions described above to prevent an acquisition by such party in order to maximize stockholder value. There is no guarantee that we will be able to find a transaction that delivers superior value to our stockholders.

The market price for our common stock is volatile and may fluctuate significantly in response to a number of factors, most of which we cannot control, including: - Price and volume fluctuations in the overall stock market;- Changes in operating results and performance and stock market valuations of other biopharmaceutical companies generally, or those that develop and commercialize obesity or metabolic disorder drugs in particular;- Market conditions or trends in our industry or the economy as a whole;- Preclinical studies or clinical trial results, if we initiate clinical development;- The commencement, enrollment or results of clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates;- Public statements by third parties like trial participants and clinical investigators regarding clinical trials;- Public concern as to the safety of drugs developed by us or others;- The financial or operational projections we may provide to the public, any changes in these projections or our failure to meet these projections;- Comments by securities analysts or changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;- The public's response to press releases or other public announcements by us or third parties, including our filings with the SEC, as well as announcements of the status of development of our products, announcements of technological innovations or new therapeutic products by us or our competitors, announcements regarding collaborative agreements and other announcements relating to product development, litigation and intellectual property impacting us or our business;- Government regulation;- FDA determinations on the approval of a product candidate NDA or BLA submission;- The sustainability of an active trading market for our common stock;- Future sales of our common stock by us, our executive officers, directors and significant stockholders;- Announcements of mergers or acquisition transactions;- Our inclusion or removal from certain stock indices;- Our delisting from Nasdaq;- Developments in patent or other proprietary rights;- Changes in reimbursement policies;- Announcements of medical innovations or new products by our competitors;- Announcements of changes in our senior management or directors;- General economic, industry, political and market conditions, including, but not limited to, the ongoing impact of global economic conditions;- Other events or factors, including those resulting from war, incidents of terrorism, natural disasters, pandemics or responses to these events; and - Changes in accounting principles. In addition, the stock market in general and our stock in particular from time to time experiences significant price and volume fluctuations unrelated to the operating performance of particular companies, which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects. Public debt and equity markets, and in particular the Nasdaq Capital Market, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many biopharmaceutical companies. Stock prices of many biopharmaceutical companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources, and the attention of management could be diverted from our business. Public statements made by third parties such as trial participants and clinical investigators about clinical trials without our consent may adversely impact our stock price. We may not be aware of these third-party statements when made, may not be able to respond to these third-party statements and may not be able to defend our business or the public's legitimate interests due to restrictions on what we may say about our product candidates, which may cause the price of our stock to fluctuate. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other significant harm to our business.

Unless and until we can generate a substantial amount of product revenue, we expect to seek additional capital through a combination of public or private equity offerings, debt, collaborations, licensing arrangements or other sources. Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline, and our stockholders may not agree with our plans for additional capital or the terms of such capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. In addition, the issuance of shares of common stock upon the exercise of our outstanding prefunded warrants or common stock warrants will result in immediate and substantial dilution to our existing stockholders. Similarly, if we issue additional shares of our common stock in one or more public or private offerings in the future, our existing stockholders will suffer further dilution. In addition, the incurrence of any indebtedness would result in additional payment obligations and is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, would be repaid before holders of our equity securities received any distribution of our corporate assets. Further, in raising funds through our collaborations and licensing arrangements with third parties, we have had to, and may in the future need to, relinquish valuable rights, partially or fully, to our technologies, future revenue streams, research programs or product candidates and grant licenses on terms unfavorable to us. In addition, securing additional capital would require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management's ability to oversee the development of our product candidates.