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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2023

   Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____ to _____.

Commission File Number: 001-37939

Graphic

MARKER THERAPEUTICS, INC.

(Name of registrant in its charter)

DELAWARE

    

45-4497941

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

4551 Kennedy Commerce Drive
Houston, Texas

    

77032

(Address of principal executive offices)

(Zip Code)

(713) 400-6400

    

(Issuer’s telephone number)

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

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.001 per share

MRKR

The Nasdaq Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

As of May 8, 2023, the Company had 8,798,829 shares of common stock issued and outstanding.

Table of Contents

Page

PART I – FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022

1

Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022

2

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2023 and 2022

3

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022

4

Notes to Condensed Consolidated Financial Statements

5

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

23

Item 4.

Controls and Procedures.

23

PART II – OTHER INFORMATION

24

Item 1.

Legal Proceedings.

24

Item 1A.

Risk Factors.

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

25

Item 3.

Defaults Upon Senior Securities.

25

Item 4.

Mine Safety Disclosure.

25

Item 5.

Other Information.

26

Item 6.

Exhibits.

27

Signatures

29

Table of Contents

PART I.      FINANCIAL INFORMATION

Item 1.        Financial Statements

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

    

March 31, 

    

December 31, 

 

2023

2022

ASSETS

Current assets:

Cash and cash equivalents

$

6,401,243

$

11,782,172

Prepaid expenses and deposits

2,428,743

2,435,079

Related party receivable

1,000,000

Other receivables

1,082,886

2,402,004

Total current assets

 

10,912,872

 

16,619,255

Non-current assets:

Property, plant and equipment, net

 

11,701,907

 

12,323,143

Right-of-use assets, net

5,326,268

5,479,786

Total non-current assets

17,028,175

17,802,929

Total assets

$

27,941,047

$

34,422,184

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable and accrued liabilities

$

4,538,966

$

4,704,611

Related party deferred revenue

2,500,000

Lease liability

665,082

577,198

Total current liabilities

 

5,204,048

 

7,781,809

Non-current liabilities:

Lease liability, net of current portion

6,823,651

7,039,338

Total non-current liabilities

6,823,651

7,039,338

Total liabilities

 

12,027,699

 

14,821,147

Stockholders’ equity:

 

 

Preferred stock - $0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Common stock, $0.001 par value, 30 million shares authorized, 8.8 million and 8.4 million shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

8,799

8,406

Additional paid-in capital

 

448,921,174

 

447,641,680

Accumulated deficit

 

(433,016,625)

 

(428,049,049)

Total stockholders’ equity

 

15,913,348

 

19,601,037

Total liabilities and stockholders’ equity

$

27,941,047

$

34,422,184

On January 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of its common stock and a corresponding reduction in the total number of authorized shares of its common stock from 300,000,000 to 30,000,000. All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

See accompanying notes to these unaudited condensed consolidated financial statements.

1

Table of Contents

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

    

For the Three Months Ended

March 31, 

    

2023

    

2022

Revenues:

Grant income

$

1,234,336

$

964,322

Related partry service revenue

3,500,000

Total revenues

 

4,734,336

 

964,322

Operating expenses:

Research and development

7,270,742

7,026,066

General and administrative

 

2,515,824

 

3,733,001

Total operating expenses

 

9,786,566

 

10,759,067

Loss from operations

 

(5,052,230)

 

(9,794,745)

Other income (expenses):

 

 

Arbitration settlement

(118,880)

Interest income

 

84,654

 

3,117

Net loss

$

(4,967,576)

$

(9,910,508)

Net loss per share, basic and diluted

$

(0.57)

$

(1.19)

Weighted average number of common shares outstanding, basic and diluted

 

8,721,031

 

8,310,765

On January 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of its common stock. All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

See accompanying notes to these unaudited condensed consolidated financial statements.

2

Table of Contents

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

For the Three Months Ended March 31, 2023

    

Total

Common Stock

Additional Paid-

Accumulated

Stockholders’

    

Shares

    

Par value

    

in Capital

    

Deficit

    

Equity

Balance at January 1, 2023

 

8,405,771

$

8,406

$

447,641,680

$

(428,049,049)

$

19,601,037

Issuance of common stock for cash

212,761

213

619,761

619,974

Issuance of common stock as commitment fee for future financing

180,410

180

(180)

Stock-based compensation

 

 

659,913

 

 

659,913

Net loss

 

 

 

 

(4,967,576)

 

(4,967,576)

Fractional shares adjustment due to reverse split

(113)

Balance at March 31, 2023

 

8,798,829

8,799

448,921,174

(433,016,625)

15,913,348

For the Three Months Ended March 31, 2022

Total

Common Stock

Additional Paid-

Accumulated

Stockholders’

    

Shares

    

Par value

    

in Capital

    

Deficit

    

Equity

Balance at January 1, 2022

8,307,868

$

8,308

$

442,095,642

$

(398,118,355)

$

43,985,595

Stock-based compensation

37,251

37

1,630,640

1,630,677

Net loss

(9,910,508)

(9,910,508)

Balance at March 31, 2022

8,345,119

$

8,345

$

443,726,282

$

(408,028,863)

$

35,705,764

On January 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of its common stock. All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

See accompanying notes to these unaudited condensed consolidated financial statements.

3

Table of Contents

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Three Months Ended

March 31, 2023

    

2023

    

2022

Cash Flows from Operating Activities:

Net loss

$

(4,967,576)

$

(9,910,508)

Reconciliation of net loss to net cash used in operating activities:

 

 

Depreciation and amortization

818,216

576,331

Stock-based compensation

 

659,913

 

1,630,677

Amortization on right-of-use assets

 

153,518

 

257,889

Changes in operating assets and liabilities:

 

 

Prepaid expenses and deposits

 

6,336

 

288,409

Related party receivable

(1,000,000)

Other receivables

 

1,319,118

 

(1,948)

Accounts payable and accrued expenses

 

(250,017)

 

(3,953,976)

Related party deferred revenue

(2,500,000)

Deferred revenue

(964,322)

Lease liability

(127,803)

(148,614)

Net cash used in operating activities

 

(5,888,295)

 

(12,226,062)

Cash Flows from Investing Activities:

 

 

Purchase of property and equipment

 

(112,608)

 

(826,583)

Purchase of construction in progress

(1,625,605)

Net cash used in investing activities

 

(112,608)

 

(2,452,188)

Cash Flows from Financing Activities:

 

 

Proceeds from issuance of common stock, net

 

619,974

 

Net cash provided by financing activities

 

619,974

 

Net decrease in cash and cash equivalents

 

(5,380,929)

 

(14,678,250)

Cash and cash equivalents at beginning of the period

 

11,782,172

 

43,497,331

Cash and cash equivalents at end of the period

$

6,401,243

$

28,819,081

    

For the Three Months Ended

March 31, 2023

    

2023

    

2022

Supplemental schedule of non-cash financing and investing activities:

Capital expenditures included in accounts payable

$

141,979

$

2,328,499

Issuance of common stock as commitment fee for future financing

$

180

$

See accompanying notes to these unaudited condensed consolidated financial statements.

4

Table of Contents

MARKER THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

NOTE 1: NATURE OF OPERATIONS

Marker Therapeutics, Inc., a Delaware corporation (the “Company” or “we”), is a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies for the treatment of hematological malignancies and solid tumor indications. The Company’s multiTAA T cell technology is based on the selective expansion of non-engineered, tumor-specific T cells that recognize tumor associated antigens, which are tumor targets, and kill tumor cells expressing those targets. These T cells are designed to recognize multiple tumor targets to produce broad spectrum anti-tumor activity. 

Reverse Stock Split

On January 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of its common stock (the “Reverse Stock Split”) and a corresponding reduction in the total number of authorized shares of its common stock from 300,000,000 to 30,000,000. The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 24, 2022, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on January 26, 2023. The Reverse Stock Split was effective on January 26, 2023. All references to common stock, warrants to purchase common stock, options to purchase common stock, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Payment for fractional shares resulting from the reverse stock split amounted to $394.80.

NOTE 2: BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results.

The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2023 or for any future interim period. The condensed consolidated balance sheet at March 31, 2023 has been derived from unaudited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022 and notes thereto included in the Company’s annual report on Form 10-K filed on March 22, 2023.

NOTE 3: LIQUIDITY, GOING CONCERN AND FINANCIAL CONDITION

As of March 31, 2023, the Company had cash and cash equivalents of approximately $6.4 million. The Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital, and performing research and development. Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent on future events, including, among other things, its ability to access potential markets; secure financing; successfully progress its product candidates through preclinical and clinical development; obtain regulatory approval of one or more of its product candidates; maintain and enforce intellectual property rights; develop a customer base; attract, retain and motivate qualified personnel; and develop strategic alliances and collaborations. From inception, the Company has been funded by a combination of equity and debt financings.

In August 2021, the Company entered into a Controlled Equity OfferingSM Sales Agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co. and RBC Capital Markets, LLC (the “Sales Agents”), pursuant to which the Company can offer and sell, from time to time at its sole discretion through the Sales Agents, shares of its common stock having an aggregate offering price of up to $75.0 million.

5

Table of Contents

Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-258687), which the SEC declared effective on August 19, 2021. The shelf registration statement on Form S-3 includes a prospectus supplement covering the offering up to $9.87 million of shares of common stock over the 12 months ending March 22, 2024 pursuant to General Instruction I.B.6 of Form S-3, which limits the amounts that the Company may sell under the registration statement, and in accordance with the ATM agreement. The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0% of the gross sales price per share sold under the ATM Agreement, and the Company has provided each of the Sales Agents with indemnification and contribution rights. During the three months ended March 31, 2023, the Company sold 200,261 shares of its common stock under the ATM Agreement for proceeds of $0.6 million.

In August 2021, the Company received notice of a Product Development Research award totaling approximately $13.1 million from the Cancer Prevention and Research Institute of Texas (“CPRIT”) to support the Company’s Phase 2 clinical trial of its lead multiTAA-specific T cell product MT-401. The CPRIT award is intended to support the adjuvant arm of the Company’s Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant. The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group. To date, the Company has received $4.8 million of funds from the CPRIT grant. The Company recorded $1.1 million of grant income related to the CPRIT grant as revenue for the three months ended March 31, 2023.

In April 2022, the Company entered into a binding services agreement (the “Agreement”), effective April 12, 2022 (see Note 9), with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”). Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Wilson Wolf, therefore Wilson Wolf is a related party. Wilson Wolf is in the business of creating products and services intended to simplify and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society (the “Wilson Wolf Mission”). Pursuant to the Agreement, Wilson Wolf made a cash payment to the Company in the amount of $8.0 million. For the three-month period ending March 31, 2023, the Company recognized the final $2.5 million of revenue pursuant to this Agreement. Additionally, pursuant to the Agreement, Wilson Wolf agreed to pay the Company an additional $1.0 million because the Company achieved the agreed milestone of completing the services within one year from the onset of the Agreement. As such, the Company recorded an additional $1.0 million of service fee revenue during the three months ended March 31, 2023, with a corresponding $1.0 million related party receivable on its condensed consolidated balance sheet as of March 31, 2023. The Company received the $1.0 million payment in May 2023.

In September 2022, the Company received notice from the U.S. Food and Drug Administration (the “FDA”) that it had awarded the Company a $2.0 million grant from the FDA’s Orphan Products Grant program to support the Company’s Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML. The Company recorded $0.1 million of grant income related to the FDA grant as revenue for the three months ended March 31, 2023.

In December 2022, the Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which provides that, upon the terms and subject to the conditions of the agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $25,000,000 of shares of its common stock (“the Purchase Shares”) from time to time over a 24-month term, at a variable price with certain market-based terms as defined in the Purchase Agreement. The Purchase Agreement does not exhibit any of the characteristics for liability classification under ASC Topic 480, Distinguishing Liabilities from Equity. Instead, the purchase agreement is indexed to the Company’s own stock under ASC Subtopic 815-40, Contracts in Entity’s Own Equity, and classified as equity. In January 2023, Lincoln Park was issued 180,410 shares of stock as a commitment fee at a value of $0.5 million. During the three months ended March 31, 2023, the Company sold 12,500 shares of its common stock under the Purchase Agreement for proceeds of approximately $33,000.

In March 2023, the Company signed an agreement with AlloVir, Inc. in which Marker will provide services for AlloVir’s long range process development and scale optimization. Under the terms of this agreement, Marker will receive total compensation in the amount of $0.4 million, estimated to be fully earned by the end of quarter ended September 30, 2023. As of March 31, 2023, the Company did not receive any funds from the Allovir agreement. The Company anticipates that the Allovir agreement will be a Purchased Asset under the Cell Ready Agreement.

In May 2023, the Company entered into a purchase agreement (the “Cell Ready Agreement”) with Cell Ready, LLC (“Cell Ready”), pursuant to which the Company will (i) assign to Cell Ready the leases for the Company’s two manufacturing facilities in Houston, Texas (the “Manufacturing Facilities”), (ii) sell to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assign to Cell Ready its rights, title and interest in the Company’s Master Services Agreement for Product Supply,

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dated April 7, 2023, by and between the Company, Cell Ready and Indapta Therapeutics, Inc., as well as its rights, title and interest in any contracts related to the equipment and Manufacturing Facilities (collectively, the “Purchased Assets”). Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Cell Ready, therefore Cell Ready is a related party. Pursuant to the Cell Ready Agreement, Cell Ready will acquire the Purchased Assets for total consideration of approximately $19.0 million. In connection with the purchase of the Manufacturing Facilities, Cell Ready also intends to extend offers of employment to approximately 50 of the Company’s employees currently employed in its manufacturing, development, quality and regulatory affairs functions. The Cell Ready Agreement contains representations, warranties and covenants of the Company and Cell Ready that are customary for a transaction of this nature. The transaction is expected to close on June 26, 2023, subject to the satisfaction of customary closing conditions.

The Company expects to continue to incur substantial losses over the next several years during its development phase. To fully execute its business plan, the Company will need to complete certain research and development activities and clinical trials. Further, the Company’s product candidates will require regulatory approval prior to commercialization. These activities will span many years and require substantial expenditures to complete and may ultimately be unsuccessful. Any delays in completing these activities could adversely impact the Company. The Company plans to meet its capital requirements primarily through issuances of debt and equity securities and, in the longer term, revenue from sales of its product candidates, if approved.

Based on the Company’s clinical and research and development plans and its timing expectations related to the progress of its programs, the Company expects that its cash and cash equivalents as of March 31, 2023 will enable the Company to fund its operating expenses and capital expenditure requirements into the third quarter of 2023. Such estimate does not include receipt of the approximately $19.0 million in connection with the closing of the Cell Ready Agreement, which is expected on June 26, 2023, subject to the satisfaction of customary closing conditions, and related anticipated cost savings. In an effort to further preserve the Company’s working capital, the Company’s employees took a portion of their 2022 earned bonus in the form of equity in lieu of cash.

The Company has based this estimate on assumptions that may prove to be wrong, and the Company could utilize its available capital resources sooner than it currently expects. Furthermore, the Company’s operating plan may change, and it may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization. Because of the numerous risks and uncertainties associated with the development and commercialization of the Company’s product candidates and the extent to which the Company may enter into additional collaborations with third parties to participate in their development and commercialization, the Company is unable to estimate the amounts of increased capital outlays and operating expenditures associated with its current and anticipated clinical trials. The Company’s future funding requirements will depend on many factors, as it:

initiates or continues clinical trials of its product candidates;
continues the research and development of its product candidates and seeks to discover additional product candidates;
seeks regulatory approvals for any product candidates that successfully complete clinical trials;
maintains and enforces intellectual property rights;
establishes sales, marketing and distribution infrastructure and establishes third-party manufacturing capabilities to commercialize any product candidates that may receive regulatory approval;
evaluates strategic transactions the Company may undertake; and
enhances operational, financial and information management systems and hires additional personnel, including personnel to support development of product candidates and, if a product candidate is approved, commercialization efforts.

The Company has no sources of revenue to provide incoming cash flows to sustain its future operations. As outlined above, its ability to pursue its planned business activities is dependent upon its successful efforts to raise additional capital.

These factors raise substantial doubt regarding its ability to continue as a going concern. The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which implies that it will continue to realize its assets and discharge its liabilities in the normal course of business. The Company’s financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern.

The COVID-19 pandemic, decades-high inflation and concerns about an economic recession in the United States or other major markets has resulted in, among other things, volatility in the capital markets that may have the effect of reducing the Company’s ability to access

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capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction due to these factors could materially affect the Company’s business and the value of its common stock.

NOTE 4: SIGNIFICANT ACCOUNTING POLICIES

New Accounting Standards

From time to time, new accounting pronouncements are issued by Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its consolidated financial position or results of operations upon adoption.

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 filed on March 22, 2023.

NOTE 5: NET LOSS PER SHARE

Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per common share is computed similarly to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

The following table sets forth the computation of net loss per share for the three months ended March 31, 2023 and 2022, respectively:

    

For the Three Months Ended

March 31, 

    

2023

    

2022

Numerator:

Net loss

$

(4,967,576)

$

(9,910,508)

Denominator:

 

 

Weighted average common shares outstanding

 

8,721,031

 

8,310,765

Net loss per share:

 

 

Basic and diluted

$

(0.57)

$

(1.19)

The following securities, rounded to the nearest thousand, were not included in the diluted net loss per share calculation because their effect was anti-dilutive for the periods presented:

For the Three Months Ended

March 31, 

    

2023

    

2022

Common stock options

 

1,297,000

 

938,900

Common stock purchase warrants

 

1,848,000

 

1,983,000

Potentially dilutive securities

 

3,145,000

 

2,921,900

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NOTE 6: PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of March 31, 2023 and December 31, 2022, respectively:

March 31, 

December 31, 

    

Estimated Useful Lives

    

2023

    

2022

Lab and manufacturing equipment

5 Years

$

12,020,000

$

11,824,000

Computers, equipment and software

 

3-5 Years

900,000

899,000

Office furniture

 

5 Years

 

924,000

 

924,000

Leasehold improvements

Lesser of lease term or estimated useful life

3,950,000

3,950,000

Total  

 

  

17,794,000

17,597,000

Less: accumulated depreciation

 

  

 

(6,092,000)

 

(5,274,000)

Total fixed assets, net

 

  

$

11,702,000

$

12,323,000

Depreciation expense for the three months ended March 31, 2023 and 2022 was approximately $0.8 million and $0.6 million, respectively.

$142,000 of property and equipment transactions are included in accounts payable and accrued liabilities as of March 31, 2023.

NOTE 7: LEASES

The Company leases manufacturing, research and administrative facilities under operating leases. The Company evaluates its contracts to determine if an arrangement is a lease at inception and classify it as a finance or operating lease. Currently, all of the Company’s leases are classified as operating leases. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term. The lease terms may include options to extend when it is reasonably certain that the Company will exercise that option.

Topic ASC 842 requires the Company to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. Right-of-use assets are recorded in other assets on the Company’s condensed consolidated balance sheets. Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on its condensed consolidated balance sheets. Costs associated with operating leases are recognized on a straight-line basis within operating expenses over the term of the lease.

As of March 31, 2023, the Company had total operating lease liabilities of approximately $7.5 million and right-of-use assets of approximately $5.3 million, which were included in the condensed consolidated balance sheet.

Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases.

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The following summarizes quantitative information about the Company’s operating leases for the three months ended March 31, 2023 and 2022, respectively:

    

For the Three Months Ended

March 31, 

    

2023

    

2022

Operating lease expense summary:

 

  

  

Operating lease expense

258,000

425,000

Short-term lease expense

 

26,000

 

3,000

Variable lease expense

 

109,000

 

179,000

Total

$

393,000

$

607,000

For the Three Months Ended

March 31, 

    

2023

    

2022

Other information:

 

  

 

  

Operating cash flows - operating leases

$

232,000

$

316,000

The weighted-average remaining lease term as of March 31, 2023 and December 31, 2022 was approximately 7.3 years and 7.5 years, respectively. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2023 and December 31, 2022 was approximately 5.5%, respectively.

Maturities of our operating leases, excluding short-term leases, are as follows:

Nine months ending December 31, 2023

    

751,000

Year ending December 31, 2024

 

1,254,000

Year ending December 31, 2025

 

1,290,000

Year ending December 31, 2026

 

1,177,000

Year ending December 31, 2027

1,163,000

Thereafter

3,590,000

Total

9,225,000

Less present value discount

 

(1,736,000)

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at March 31, 2023

$

7,489,000

NOTE 8: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of March 31, 2023 and December 31, 2022, respectively:

    

March 31, 

    

December 31, 

2023

2022

Accounts payable

$

2,863,000

$

1,612,000

Compensation and benefits

 

454,000

 

1,779,000

Process development expenses

329,000

342,000

Professional fees

 

598,000

 

558,000

Arbitration settlement fees

 

 

114,000

Other

 

295,000

 

300,000

Total accounts payable and accrued liabilities

$

4,539,000

$

4,705,000

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NOTE 9: RELATED PARTY RECEIVABLE AND RELATED PARTY DEFERRED REVENUE

In April 2022, the Company entered into a binding services agreement, effective April 12, 2022, with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”). Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Wilson Wolf. Wilson Wolf is in the business of creating products and services intended to simplify and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society (the “Wilson Wolf Mission”). Pursuant to the Services Agreement, Wilson Wolf made a cash payment to the Company in the amount of $8.0 million, as consideration for certain training and research services allocated as follows:

$2.0 million for non-exclusive training of Wilson Wolf to make, use, and sell the Company’s cell culture non-proprietary media formulation that has been cleared in an FDA investigational new drug application;
$1.0 million for non-exclusive training of Wilson Wolf to replicate the Company’s quality management system inclusive of all underlying documents related thereto, none of which shall include unique information specific to the manufacture of the Company’s multiTAA product candidates such as direct peptide stimulation;
$2.0 million for non-exclusive training of Wilson Wolf to be able to replicate the Company’s cGMP-compliant, linearly scalable, G-Rex based T-cell manufacturing process which Wilson Wolf shall use as it sees fit in pursuit of the Wilson Wolf Mission; and
$3.0 million for the Company to train Wilson Wolf on its expertise in the optimization of T-cell therapy manufacturing processes using G-Rex and to conduct CAR T and TCR G-Rex Optimization Work under the direction of Wilson Wolf (the “Work Direction”), whereunder all intellectual property provided by Wilson Wolf or created or derived by the Company will be solely owned by Wilson Wolf, and whereby the Company will make good faith efforts to complete the conduct of such work as soon as practicable within 18 months from the date of the agreement. Wilson Wolf has agreed to pay the Company an additional $1.0 million if the Work Direction is completed within one year from the onset of the Agreement.

The Company recognizes related party revenue over time in accordance with Accounting Standard Codification, or ASC, 606 Revenue from Contracts with Customers, as each of the training and/or research services are provided to Wilson Wolf. Revenue is recognized, using an output method based on progress toward satisfaction of the performance obligations. Additionally, in accordance with the spirit of the standard expressed in ASC 606-50-1, the timing of the revenue recognition is expected to be approximately 12 months.

For the three-month period ending March 31, 2023, the Company recognized the final $2.5 million of revenue pursuant to this $8.0 million agreement and at March 31, 2023, the Company had no related party deferred revenue on its condensed consolidated balance sheet.

Additionally, pursuant to the Agreement, Wilson Wolf agreed to pay the Company an additional $1.0 million because the Work Direction was completed within one year from the onset of the Agreement, achieving the agreed milestone. As such, the Company recorded an additional $1.0 million of service fee revenue during the three months ended March 31, 2023, with a corresponding $1.0 million related party receivable on its condensed consolidated balance sheet as of March 31, 2023. The Company received the $1.0 million payment in May 2023.

NOTE 10: STOCKHOLDERS’ EQUITY

Reverse Stock Split

On January 26, 2023, the Company effected the Reverse Stock Split and a corresponding reduction in the total number of authorized shares of its common stock from 300,000,000 to 30,000,000. The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 24, 2022, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on January 26, 2023. The Reverse Stock Split was effective on January 26, 2023. All historical share and per share amounts reflected in this report have been adjusted to reflect the Reverse Stock Split.

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Common Stock Transactions

Issuance of Stock Pursuant to ATM Agreement

During the three months ended March 31, 2023, the Company sold 200,261 shares of its common stock under the ATM Agreement for proceeds of $0.6 million.

Stock Purchase Agreement

In December 2022, the Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions of the agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $25,000,000 of shares of its common stock (the “Purchase Shares”) from time to time over a 24-month term, at a variable price with certain market-based terms as defined in the Purchase Agreement. The Purchase Agreement does not exhibit any of the characteristics for liability classification under ASC Topic 480, Distinguishing Liabilities from Equity. Instead, the purchase agreement is indexed to the Company’s own stock under ASC Subtopic 815-40, Contracts in Entity’s Own Equity, and classified as equity. In January 2023, Lincoln Park was issued 180,410 shares of stock as a commitment fee at a value of $0.5 million. During the three months ended March 31, 2023, the Company sold 12,500 shares of its common stock under the Purchase Agreement for proceeds of approximately $33,000.

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of March 31, 2023 and changes during the period is presented below:

    

    

Weighted Average

 

Number of

Weighted Average

Remaining Contractual

Total Intrinsic

    

Warrants

    

Exercise Price

    

Life (in years)

    

Value

Balance - January 1, 2023

 

1,848,000

$

44.51

0.79

$

Expired or cancelled

 

Balance - March 31, 2023

1,848,000

$

44.51

0.55

$

NOTE 11: STOCK-BASED COMPENSATION

Stock Options

2022 Equity Incentive Awards

On February 27, 2023, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 316,855 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers and management team. Each option award was granted with an exercise price of $2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date. Additionally, on February 27, 2023, the compensation committee of the Company’s board of directors approved a total of 87,677 options to purchase the Company’s common stock to non-executive employees and management team of the Company as equity-based incentive awards. Each option award was granted with an exercise price of $2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.

The above awards were in addition to 7,000 stock option awards issued during the three months ended March 31, 2023 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $2.769 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 3, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.

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A summary of the Company’s stock option activity for the three months ended March 31, 2023 is as follows:

    

    

    

Weighted Average

Remaining

Weighted Average 

Contractual

    

Number of Shares

    

Exercise Price

    

Total Intrinsic Value

    

Life (in years)

Outstanding as of January 1, 2023

 

886,173

$

42.90

$

7.3

Granted

 

411,532

2.15

9.9

Canceled/Expired

 

(1,000)

Outstanding as of March 31, 2023

 

1,296,705

$

29.98

$

8.0

Options vested and exercisable

 

604,335

$

56.39

$

6.5

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans. The weighted average assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2023 was as follows:

For the Three Months Ended

    

March 31, 2023

  

Exercise price

$

2.15

Expected term (years)

 

6.0

Expected stock price volatility

 

90

%

Risk-free rate of interest

 

4

%

Expected dividend rate

 

0

%

The following table sets forth stock-based compensation expenses recorded during the respective periods:

    

For the Three Months Ended

March 31, 

    

2023

    

2022

Stock Compensation expenses:

 

  

 

  

Research and development

$

408,000

$

878,000

General and administrative

 

252,000

 

753,000

Total stock compensation expenses

$

660,000

$

1,631,000

As of March 31, 2023, the total stock-based compensation cost related to unvested awards not yet recognized was $3.5 million. The expected weighted average period compensation costs to be recognized was approximately 2.0 years. Future option grants will impact the compensation expense recognized.

NOTE 12: GRANT INCOME

In August 2021, the Company received notice of a Product Development Research award totaling approximately $13.1 million from CPRIT to support the Company’s Phase 2 clinical trial of MT-401. The CPRIT award is intended to support the adjuvant arm of the Company’s Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant. The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group.

Restricted cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred. Qualifying grant income earned in advance of cash received from grants is recognized as revenue and recorded as other receivable.

The Company recorded $1.2 million of grant income related to the CPRIT grant as revenue for the three months ended March 31, 2023.

In September 2022, the Company received notice from the FDA that it had awarded the Company a $2.0 million grant from the FDA’s Orphan Products Grant program to support the Company’s Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML. The Company recorded $1.2 million of grant income related to the FDA grant as revenue for the three months ended March 31, 2023.

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NOTE 13: LEGAL PROCEEDINGS

From time to time, the Company may be party to ordinary, routine litigation incidental to their business. The Company knows of no material, active or pending legal proceedings against the Company, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company’s interest. The Company is not currently a party to any material legal proceedings, and the Company is not aware of any pending or threatened legal proceeding against it that it believes could have an adverse effect on its business, operating results or financial condition.

NOTE 14: RELATED PARTY EXPENSES

The following table sets forth related party transaction expenses recorded for the three months ended March 31, 2023 and 2022, respectively.

For the Three Months Ended

March 31, 

    

2023

    

2022

Baylor College of Medicine

$

11,000

$

856,000

Bio-Techne Corporation

101,000

Wilson Wolf Manufacturing Corporation

204,000

55,000

Total Research and development

$

215,000

 

$

1,012,000

$97,400 of related party transactions are included in accounts payable and accrued liabilities as of March 31, 2023.

Agreements with The Baylor College of Medicine (“BCM”).

In November 2018, January 2020 and February 2020, the Company entered in Sponsored Research Agreements with BCM, which provided for the conduct of research for the Company by credentialed personnel at BCM’s Center for Cell and Gene Therapy.

In September 2019, May 2020 and July 2021, the Company entered into Clinical Supply Agreements with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products.

In October 2019, the Company entered in a Workforce Grant Agreement with BCM, which provided for BCM to provide to the Company manpower costs of projects for manufacturing, quality control testing and validation run activities.

In August 2020, the Company entered in a Clinical Trial Agreement with BCM, which provided for BCM to provide to the Company investigator-initiated research studies.

Purchases from Bio-Techne Corporation.

The Company is currently utilizing Bio-Techne Corporation and two of its brands for the purchases of reagents, primarily cytokines. Mr. David Eansor is a member of the Company’s board of directors and was serving as the President of the Protein Sciences Segment of Bio-Techne Corporation. Mr. Eansor resigned from Bio-Techne Corporation on March 1, 2022, and as such, two months of transactions in 2022 are included in the table above.

Purchases from Wilson Wolf.

The Company is currently utilizing Wilson Wolf for the purchases of cell culture devices called G-Rexes. Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Wilson Wolf Manufacturing Corporation.

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NOTE 15: SUBSEQUENT EVENTS

The Cell Ready Agreement

In May 2023, the Company entered into a purchase agreement (the “Cell Ready Agreement”) with Cell Ready, LLC (“Cell Ready”), pursuant to which the Company will (i) assign to Cell Ready the leases for the Company’s two manufacturing facilities in Houston, Texas (the “Manufacturing Facilities”), (ii) sell to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assign to Cell Ready its rights, title and interest in the Company’s Master Services Agreement for Product Supply, dated April 7, 2023, by and between the Company, Cell Ready and Indapta Therapeutics, Inc., as well as its rights, title and interest in any contracts related to the equipment and Manufacturing Facilities (collectively, the “Purchased Assets”). Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Cell Ready.

Pursuant to the Cell Ready Agreement, Cell Ready will acquire the Purchased Assets for total consideration of approximately $19.0 million. In connection with the purchase of the Manufacturing Facilities, Cell Ready also intends to extend offers of employment to approximately 50 of the Company’s employees currently employed in its manufacturing, development, quality and regulatory affairs functions.

The Cell Ready Agreement contains representations, warranties and covenants of the Company and Cell Ready that are customary for a transaction of this nature. The transaction is expected to close on June 26, 2023, subject to the satisfaction of customary closing conditions.

Chief Executive Officer Change

On April 27, 2023, the Board appointed Juan Vera as the Company’s President and Chief Executive Officer, effective Peter Hoang’s resignation effective May 1, 2023.

There are no family relationships between Mr. Vera and any of the Company’s current or former directors or executive officers. The Company is party to a services agreement with AlloVir, Inc. (“AlloVir”), pursuant to which the Company provides AlloVir with development services. Mr. Vera serves on the board of directors of AlloVir. During the term of the services agreement, the Company and AlloVir may prepare work orders setting forth services to be provided by the Company. AlloVir has a $400,000 work order under the services agreement for long range process development and scale optimization services.

The Company estimates that the severance costs related to the departure of Mr. Hoang will total approximately $0.4 million and will be recorded and paid in the second quarter of 2023.

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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties. All statements other than statements relating to historical matters including statements to the effect that we “believe”, “expect”, “anticipate”, “plan”, “target”, “intend” and similar expressions should be considered forward-looking statements. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a number of important factors, including factors discussed in this section and elsewhere in this Quarterly Report on Form 10-Q, and the risks discussed in our other filings with the SEC. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as the date hereof. We assume no obligation to update these forward-looking statements to reflect events or circumstance that arise after the date hereof.

As used in this quarterly report: (i) the terms “we”, “us”, “our”, “Marker” and the “Company” mean Marker Therapeutics, Inc. and its wholly owned subsidiaries, Marker Cell Therapy, Inc. and GeneMax Pharmaceuticals Inc. which wholly owns GeneMax Pharmaceuticals Canada Inc., unless the context otherwise requires; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

The following should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q.

Company Overview

We are a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies for the treatment of hematological malignancies and solid tumor indications. We developed our lead product candidates from our multiTAA-specific T cell technology, which is based on the manufacture of non-engineered, tumor-specific T cells that recognize multiple tumor-associated antigens, or TAAs. multiTAA-specific T cells are able to recognize multiple tumor targets to produce broad spectrum anti-tumor activity. When infused into a cancer patient, the multiTAA-specific T cells are designed to kill cancer cells expressing the TAA targets and potentially recruit the patient’s immune system to participate in the cancer killing process.

We licensed the underlying technology for multiTAA-specific T cell therapy from The Baylor College of Medicine, or BCM, in March 2018. BCM had utilized the therapy in seven exploratory clinical trials. In these studies, BCM treated over 170 patients suffering from a variety of cancers including lymphoma, multiple myeloma, acute myeloid leukemia, acute lymphoblastic leukemia, pancreatic cancer, breast cancer and various sarcomas. In those studies, BCM saw evidence of clinical benefit, expansion of infused cells, epitope spreading, and decreased toxicity compared to other cellular therapies.

We are advancing three product candidates as part of our multiTAA-specific T cell program for:

1.autologous treatment of lymphoma, and selected solid tumors
2.allogeneic T cells for the treatment of acute myeloid leukemia, or AML
3.off-the-shelf products in various indications

Our current clinical development programs are:

MT-401 for the treatment of post-transplant AML
MT-401-OTS for the treatment of AML
MT-601 for the treatment of pancreatic cancer
MT-601 for the treatment of lymphoma

We are currently undertaking a strategic review of our clinical development programs, including with respect to clinical trial initiation and readout guidance, and look forward to providing an update once completed.

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We believe that the simplicity of our manufacturing process allows additional modifications to expand multiTAA-specific T cell recognition of cancer targets. In May 2023, we entered into a purchase agreement with Cell Ready, LLC with respect to our manufacturing facility and certain related assets. See “—Recent Developments.”

Pipeline

Our clinical-stage pipeline, including clinical trials being conducted by BCM and other partners, is set forth below:

Graphic

Recent Developments

On May 1, 2023, we entered into a purchase agreement, or the Cell Ready Agreement, with Cell Ready, LLC, or Cell Ready, pursuant to which we will (i) assign to Cell Ready the leases for our two manufacturing facilities in Houston, Texas, or the Manufacturing Facilities, (ii) sell to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assign to Cell Ready our rights, title and interest in our Master Services Agreement for Product Supply, dated April 7, 2023, or the Indapta Agreement, by and between the Company, Cell Ready and Indapta Therapeutics, Inc., or Indapta, as well as our rights, title and interest in any contracts related to the equipment and Manufacturing Facilities, collectively, the Purchased Assets. Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Cell Ready.

Pursuant to the Cell Ready Agreement, Cell Ready will acquire the Purchased Assets for total consideration of approximately $19.0 million. In connection with the purchase of the Manufacturing Facilities, Cell Ready also intends to extend offers of employment to approximately 50 of our employees currently employed in our manufacturing, development, quality and regulatory affairs functions.

The Cell Ready Agreement contains representations, warranties and covenants of the Company and Cell Ready that are customary for a transaction of this nature. The transaction is expected to close on June 26, 2023, subject to the satisfaction of customary closing conditions.

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Reverse Stock Split

On January 26, 2023, the Company effected the Reverse Stock Split and a corresponding reduction in the total number of authorized shares of its common stock from 300,000,000 to 30,000,000. The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 24, 2022, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on January 26, 2023. The Reverse Stock Split was effective on January 26, 2023. All historical share and per share amounts reflected in this report have been adjusted to reflect the Reverse Stock Split.

Results of Operations

In this discussion of our results of operations and financial condition, amounts in financial tables, other than per-share amounts, have been rounded to the nearest thousand.

Comparison of the Three Months Ended March 31, 2023 and 2022

The following table summarizes the results of our operations for the three months ended March 31, 2023 and 2022:

    

For the Three Months Ended

    

  

    

  

 

March 31, 2023

    

 

    

2023

    

2022

    

Change

 

Revenues:

Grant income

$

1,234,000

$

964,000

$

270,000

28

%

Related partry service revenue

3,500,000

3,500,000

100

%

Total revenues

 

4,734,000

 

964,000

 

3,770,000

 

391

%

Operating expenses:

 

 

 

 

  

Research and development

 

7,271,000

 

7,026,000

 

245,000

 

3

%

General and administrative

 

2,516,000

 

3,733,000

 

(1,217,000)

 

(33)

%

Total operating expenses

 

9,787,000

 

10,759,000

 

(972,000)

 

(9)

%

Loss from operations

 

(5,052,000)

 

(9,795,000)

 

4,743,000

 

(48)

%

Other income (expense):

 

 

 

 

Arbitration settlement

(119,000)

119,000

(100)

%

Interest income

 

85,000

 

3,000

 

82,000

 

2,733

%

Net loss

$

(4,968,000)

$

(9,911,000)

$

4,943,000

 

(50)

%

Net loss per share, basic and diluted

$

(0.57)

$

(1.19)

$

0.62

 

(52)

%

Weighted average number of common shares outstanding

 

8,721,000

 

8,311,000

 

410,000

 

5

%

Revenue

We did not generate any revenue during the three months ended March 31, 2023 and 2022, respectively, from the sales or licensing of our product candidates.

In August 2021, we received notice of a Product Development Research award totaling approximately $13.1 million from the Cancer Prevention and Research Institute of Texas, or CPRIT, to support our Phase 2 clinical trial of MT-401. During the three months ended March 31, 2023, we recognized $1.1 million of revenue associated with the CPRIT grant.

In September 2022, we received notice from the FDA that it had awarded us a $2.0 million grant from the FDA’s Orphan Products Grant program to support our Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML. During the three months ended March 31, 2023, we recognized $0.1 million of revenue associated with the FDA grant.

In April 2022, we entered into a binding services agreement with Wilson Wolf Manufacturing Corporation. Or Wilson Wolf. Wilson Wolf is in the business of creating products and services intended to simplify and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society. Pursuant to the agreement, Wilson Wolf made a cash payment to us in the amount of $8.0

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million, as consideration for certain training and research services. During the three-month period ending March 31, 2023, we recognized the final $2.5 million of revenue pursuant to this $8.0 million agreement. Additionally, pursuant to the Agreement, Wilson Wolf agreed to pay us an additional $1.0 million because we achieved the agreed milestone of completing the Work Direction, which included certain CAR T and TCR G-Rex optimization work under the direction of Wilson Wolf, within one year from the onset of the Agreement. As such, we recorded an additional $1.0 million of service fee revenue during the three months ended March 31, 2023, with a corresponding $1.0 million related party receivable on our condensed consolidated balance sheet as of March 31, 2023. We received the $1.0 million payment in May 2023.

Operating Expenses

Operating expenses incurred during the three months ended March 31, 2023 were $9.8 million compared to $10.8 million during the three months ended March 31, 2022.

Significant changes and expenditures in operating expenses are outlined as follows:

Research and Development Expenses

Research and development expenses increased by 3% to $7.3 million for the three months ended March 31, 2023, compared to $7.0 million for the three months ended March 31, 2022.

The increase of $0.3 million in 2023 was primarily attributable to the following:

increase of $0.6 million in process development expenses,
increase of $0.1 million in headcount-related expenses,
increase of $0.3 million in depreciation expenses,
increase of $0.2 million in professional and consulting fees,
increase of $0.2 million in clinical trial expenses, offset by
decrease of $0.3 million in stock-based compensation expenses, and
decrease of $0.8 million in sponsored research expenses from BCM agreements.

General and Administrative Expenses

General and administrative expenses decreased by 33% to $2.5 million for the three months ended March 31, 2023, compared to $3.7 million for the three months ended March 31, 2022.

The decrease of $1.2 million in 2023 was primarily attributable to the following:

decrease of $0.6 million in stock-based compensation expenses,
decrease of $0.3 million in headcount-related expenses,
decrease of $0.1 million in professional fees, and
decrease of $0.2 million in rent and utilities expenses.

Other Income (Expense)

Arbitration Settlement

An arbitration proceeding was brought against us before the FINRA by a broker seeking to be paid compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement brokered by another broker. The FINRA panel found in favor of the broker and awarded the broker $2.4 million for compensation, interest and attorney fees, which we recorded in the year ended December 31, 2021. During the three months ended March 31, 2022, we recorded an additional $0.1 million of expense related to this matter.

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Interest Income

Interest income was $0.1 million and $3,000 for the three months ended March 31, 2023 and 2022, respectively, and was attributable to interest income relating to funds that are held in U.S. Treasury notes and U.S. government agency-backed securities.

Net Loss

The decrease in our net loss during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due to the timing of process development expenses, lower costs associated with our BCM clinical supplies agreement and higher grant income, offset by the continued expansion of our research and development activities, increased expenses relating to future clinical trials, and the overall growth of our corporate infrastructure. We anticipate that we will continue to incur net losses in the future as we continue to invest in research and development activities, including clinical development of our multiTAA T cell product candidates.

Liquidity and Capital Resources

We have not generated any revenues from product sales since inception. We have financed our operations primarily through public and private offerings of our debt and equity securities.

The following table sets forth our cash and cash equivalents and working capital as of March 31, 2023 and December 31, 2022:

    

March 31, 

    

December 31, 

2023

2022

Cash and cash equivalents

$

6,401,000

$

11,782,000

Working capital

$

5,709,000

$

8,837,000

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2023 and 2022:

For the Three Months Ended

March 31, 

    

2023

    

2022

Net cash provided by (used in):

 

  

 

  

Operating activities

$

(5,888,000)

$

(12,226,000)

Investing activities

 

(113,000)

 

(2,452,000)

Financing activities

 

620,000

 

Net decrease in cash and cash equivalents

$

(5,381,000)

$

(14,678,000)

Operating Activities

Net cash used in operating activities during the three months ended March 31, 2023 was $5.9 million compared to $12.2 million for the same period last year.

Net cash used in operating activities during the three months ended March 31, 2023 was $5.9 million. The changes in cash flow from operating activities during the three months ended March 31, 2023 were due to $5.0 million of net losses and a $2.6 million decrease from changes in operating assets and liabilities. This was in addition to $0.7 million of stock-based compensation, $0.8 million of depreciation expense and $0.2 million right-of-use asset amortization and lease liability accretion.

Net cash used in operating activities during the three months ended March 31, 2022 was $12.2 million. The changes in cash flow from operating activities during the three months ended March 31, 2022 were due to $9.9 million of net losses and a $4.8 million decrease from changes in operating assets and liabilities. This was in addition to $1.6 million of stock-based compensation, $0.6 million of depreciation expense and $0.3 million right-of-use asset amortization and lease liability accretion.

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Investing Activities

Net cash used in investing activities was $0.1 million for the purchase of property and equipment during the three months ended March 31, 2023.

Net cash used in investing activities was $2.5 million for the purchase of property and equipment and construction in progress related to our manufacturing facility during the three months ended March 31, 2022.

Financing Activities

Net cash provided by financing activities was $0.6 million during the three months ended March 31, 2023, due to sales of common stock under the ATM Agreement and the Lincoln Park Purchase Agreement (as defined below).

Future Capital Requirements

To date, we have not generated any revenues from the commercial sale of approved drug products, and we do not expect to generate substantial revenue for at least the next several years. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be compromised. We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate significant revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of and seek marketing approval for our product candidates. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. We anticipate that we will need substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

In August 2021, we received notice of a Product Development Research award totaling approximately $13.1 million from CPRIT to support our Phase 2 clinical trial of MT-401. The CPRIT award is intended to support the adjuvant arm of the Company’s Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant. The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group. To date, we have received $4.8 million of funds from the CPRIT grant.

In April 2022, we entered into a binding services agreement with Wilson Wolf, pursuant to which Wilson Wolf made a cash payment to the Company in the amount of $8.0 million at the time of execution of the agreement. Further, we earned an additional $1.0 million upon the achievement of certain milestones, which was recorded during the three months ended March 31, 2023.

In September 2022, we received notice from the U.S. Food and Drug Administration (the “FDA”) that it had awarded us a $2.0 million grant from the FDA’s Orphan Products Grant program to support our Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML. In March 2023, we received $0.1 million of funds from the FDA grant. To date, we have received $0.2 million of funds from the FDA grant.

In March 2023, we signed an agreement with AlloVir, Inc. in which we will provide services for AlloVir’s long range process development and scale optimization. Under the terms of this agreement, we will receive total compensation in the amount of $400,000, estimated to be fully earned by the end of the third quarter in 2023. To date, we have not received any funds from the Allovir agreement. The Company anticipates that the Allovir agreement will be a Purchased Asset under the Cell Ready Agreement.

In April 2023, we signed the Indapta Agreement, pursuant to which provided services to Indapta. Under a work order of that agreement, now complete, we received approximately $0.8 million for the services rendered.

In May 2023, we entered into the Cell Ready Agreement with Cell Ready, pursuant to which we will (i) assign to Cell Ready the Manufacturing Facilities, (ii) sell to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assign to Cell Ready our rights, title and interest in the Indapta Agreement, as well as our rights, title and interest in any contracts related to the equipment and Manufacturing Facilities, collectively, the Purchased Assets. Pursuant to the Cell Ready Agreement, Cell Ready will acquire the Purchased Assets for total consideration of approximately $19.0 million. In connection with the purchase of the

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Manufacturing Facilities, Cell Ready also intends to extend offers of employment to approximately 50 of our employees currently employed in our manufacturing, development, quality and regulatory affairs functions. We expect to close this transaction on June 26, 2023.

As of March 31, 2023, we had working capital of $5.6 million, compared to working capital of $8.8 million as of December 31, 2022. Based on our revised clinical and research and development plans and our revised timing expectations related to the progress of our programs, we expect that our cash and cash equivalents as of March 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2023. Such estimate does not include receipt of the approximately $19.0 million in connection with the closing of the Cell Ready Agreement, which is expected on June 26, 2023, subject to the satisfaction of customary closing conditions, and related anticipated cost savings. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Furthermore, our operating plans may change, and we may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials. Our future funding requirements will depend on many factors, as we:

initiate or continue clinical trials of our product candidates;
continue the research and development of our product candidates and seek to discover additional product candidates;seek regulatory approvals for our product candidates if they successfully complete clinical trials;
establish sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize any product candidates that may receive regulatory approval;
evaluate strategic transactions we may undertake; and
enhance operational, financial and information management systems and hire additional personnel, including personnel to support development of our product candidates and, if a product candidate is approved, our commercialization efforts.

Because all of our product candidates are in the early stages of clinical and preclinical development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of product candidates or whether, or when, we may achieve profitability. Until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements.

We plan to continue to fund our operations and capital funding needs through equity and/or debt financing. We may also consider new collaborations or selectively partner our technology. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our existing stockholders’ common stock. The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms unfavorable to us. We may also be required to pay damages or have liabilities associated with litigation or other legal proceedings involving our company.

The COVID-19 pandemic, decades-high inflation and concerns about an economic recession in the United States or other major markets has resulted in, among other things, volatility in the capital markets that may have the effect of reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction due to these factors could materially affect the Company’s business and the value of its common stock.

ATM Agreement

In August 2021, we entered into a Controlled Equity OfferingSM Sales Agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co. and RBC Capital Markets, LLC (the “Sales Agents”), pursuant to which we can offer and sell, from time to time at our sole discretion through the Sales Agents, shares of our common stock having an aggregate offering price of up to $75.0 million. Any shares of our common stock sold will be issued pursuant to our shelf registration statement on Form S-3 (File No. 333-258687), which the SEC declared effective on August 19, 2021. The shelf registration statement on Form S-3 includes a prospectus supplement covering the

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offering up to $9.87 million of shares of common stock over the 12 months ending March 22, 2024 pursuant to General Instruction I.B.6 of Form S-3, which limits the amounts that the Company may sell under the registration statement, and in accordance with the ATM agreement. The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0% of the gross sales price per share sold under the ATM Agreement, and we have provided each of the Sales Agents with indemnification and contribution rights. During the three months ended March 31, 2023, we sold 200,261 shares of our common stock under the ATM Agreement for proceeds of $0.6 million.

Stock Purchase Agreement

In December 2022, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park up to $25,000,000 of shares of our common stock (the “Purchase Shares”) from time to time over a 24-month term, at a variable price with certain market-based terms as defined in the Purchase Agreement. The Purchase Agreement does not exhibit any of the characteristics for liability classification under ASC Topic 480, Distinguishing Liabilities from Equity. Instead, the purchase agreement is indexed to the Company’s own stock under ASC Subtopic 815-40, Contracts in Entity’s Own Equity, and classified as equity. In January 2023, Lincoln Park was issued 180,410 shares of stock as a commitment fee at a value of $0.5 million. During the three months ended March 31, 2023, we sold 12,500 shares of our common stock under the Purchase Agreement for proceeds of approximately $33,000.

Going Concern

We have no sources of revenue, other than grant and related party services income, to provide incoming cash flows to sustain our future operations. As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to raise additional capital.

These factors raise substantial doubt regarding our ability to continue as a going concern. Our condensed consolidated financial statements have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Critical Accounting Policies

The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described under Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 3.         Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4.         Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Disclosure controls and procedures include, without limitation, controls and

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procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our Chief Executive Officer and our Chief Accounting Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act.

It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals.

Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

(b)Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting during the three months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.         Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

Item 1A.         Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 12, 2023. There have been no material changes to the risk factors described in that report, other than as described below.

The announcement and pendency of the transaction with Cell Ready could adversely affect our business, financial condition, results and operations.

In May 2023, we entered into the Cell Ready Agreement with Cell Ready, pursuant to which we will (i) assign to Cell Ready the Manufacturing Facilities, (ii) sell to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assign to Cell Ready our rights, title and interest in the Indapta Agreement, as well as our rights, title and interest in any contracts related to the equipment and Manufacturing Facilities, collectively, the Purchased Assets for total consideration of approximately $19.0 million. In connection with the purchase of the Manufacturing Facilities, Cell Ready also intends to extend offers of employment to approximately 50 of our employees currently employed in our manufacturing, development, quality and regulatory affairs functions.

The announcement and pendency of the Cell Ready transaction could cause disruptions in and create uncertainty surrounding our business, which could have an adverse effect on our business, financial condition, results and operations, regardless of whether the Cell Ready transaction is completed. These risks to our business include the following, all of which could be exacerbated by a delay in the completion of the Cell Ready transaction:

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the diversion of significant management time and resources towards the completion of the Cell Ready transaction;

the impairment of our ability to attract, retain, and motivate key personnel, including our senior management, and particularly those employees to whom employment offers will be extended by Cell Ready;

difficulties maintaining relationships with customers, suppliers, and other business partners;

the inability to pursue alternative business opportunities or make appropriate changes to our business because of requirements in the Cell Ready Agreement that we conduct our business in the ordinary course and not engage in certain kinds of transactions prior to the completion of the Cell Ready transaction; and

litigation relating to the Cell Ready transaction and the costs and distractions related thereto.

The Cell Ready transaction may not be completed within the expected timeframe, or at all, and the failure to complete the Cell Ready transaction could adversely affect our business and the market price of our common stock.

The completion of the Cell Ready transaction is subject to a number of conditions, as set forth in the Cell Ready Agreement. None of us can predict when or if these conditions will be satisfied. There can be no assurance that our business, our relationships or our financial condition will not be adversely affected, as compared to the condition prior to the announcement of the Cell Ready transaction, if the Cell Ready transaction is not consummated. Failure to complete the Cell Ready transaction could adversely affect our business and the market price of our common stock in a number of ways, including the following:

if the Cell Ready transaction is not completed, the share price of our common stock will change to the extent that the current market price of our stock reflects an assumption that the Cell Ready transaction will be completed;

we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other costs in connection with the Cell Ready transaction, including with respect to the Indapta agreement, for which we may receive little or no benefit if the Cell Ready transaction is not completed. Many of these fees and costs will be payable by us even if the Cell Ready transaction is not completed and may relate to activities that we would not have undertaken other than to complete the Cell Ready transaction; and

a failed Cell Ready transaction may result in negative publicity and a negative impression of us in the investment community.

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

We did not record any issuances of unregistered securities during the three months ended March 31, 2023.

Item 3.         Defaults Upon Senior Securities

None.

Item 4.         Mine Safety Disclosure

Not applicable.

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Item 5.         Other Information

Juan Vera Option Grant

As previously disclosed in our Current Report on Form 8-K dated May 1, 2023, or the Prior 8-K, on April 27, 2023, our board of directors appointed Juan Vera as our President and Chief Executive Officer, effective as May 1, 2023. As of the filing of the Prior 8-K, and as of the date of this report, the compensation committee of our board of directors and our board of directors had not yet finalized the employment terms and compensation of Mr. Vera in connection with his appointment as President and Chief Executive Officer.

On May 10, 2023, our board of directors approved a one-time share option grant of 100,000 shares of the our common stock to Mr. Vera. The option has a term of ten years and will vest in equal annual installments on May 10, 2024, May 10, 2025, May 10, 2026 and May 10, 2027, subject to Mr. Vera’s continued service to the Company as of the applicable vesting date.

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Table of Contents

Item 6.         Exhibits

The following exhibits are included with this Quarterly Report on Form 10-Q:

 

Incorporated by Reference

Exhibit
number

  

Exhibit description

  

Form

  

File no.

  

Exhibit

  

Filing
date

  

Filed
herewith

3.1

Certificate of Incorporation (Delaware).

8-K

001-37939

3.4

10/17/18

3.1.1

Certificate of Amendment to Certificate of Incorporation.

8-K

001-37939

3.1

5/27/2022

3.1.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation

8-K

001-37939

3.1

1/26/2023

3.2

Bylaws of Marker Therapeutics, Inc.

8-K

001-37939

3.6

10/17/18

10.1

Separation Agreement between Marker Therapeutics, Inc. and Peter Hoang dated as of April 27, 2023.

X

10.2#

Purchase Agreement between Cell Ready, LLC and Marker Therapeutics, Inc., dated May 1, 2023

X

31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1933, as amended.

X

31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1933, as amended.

X

32.1*

Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X

32.2*

Certification of Chief Financial Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X

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Table of Contents

Exhibit 101

101.INS - XBRL Instance Document

101.SCH - XBRL Taxonomy Extension Schema Document

101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF - XBRL Taxonomy Extension Definition Linkbase Document

101.LAB - XBRL Taxonomy Extension Label Linkbase Document

101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document

104        - Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 filed herewith).

*

Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

#

Certain schedules to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K