What changed in this filing

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Item 1. Financial Statements

2020-08-10 compared with 2020-05-11 · 274 added, 721 removed, 186 unchanged (84% of the section changed)

Financial Statements

THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Current assets:

5 unchanged sentences

Property, plant and equipment, net

Construction in progress

Right-of-use assets, net

12 unchanged sentences

Stockholders’ equity:

Preferred stock - $0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively

Common stock, $0.001 par value, 150 million shares authorized, 46.5 million and 45.7 million shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 46.6 million and 45.7 million shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

4 unchanged sentences

Total liabilities and stockholders' equity

See accompanying notes to these unaudited

condensed consolidated financial statements.

See accompanying notes to these unaudited condensed consolidated financial statements.

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Six Months Ended

Total revenues

Operating expenses:

3 unchanged sentences

Loss from operations

( 6,357,556 )

( 5,873,565 )

( 13,001,169 )

( 11,512,035 )

Other income (expense):

3 unchanged sentences

( 5,570,391 )

( 12,827,343 )

( 10,889,316 )

Net loss per share, basic and diluted

Weighted average number of common shares outstanding

See accompanying notes

to these unaudited condensed consolidated financial statements.

See accompanying notes to these unaudited condensed consolidated financial statements.

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’

Additional Paid-in

Total Stockholders'

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2020

Additional Paid-

Stockholders’

Balance at April 1, 2020

( 334,019,058 )

Stock-based compensation

( 6,341,699 )

Balance at June 30, 2020

( 340,360,757 )

For the Six Months Ended June 30, 2020

Additional Paid-

Stockholders’

Balance at January 1, 2020

3 unchanged sentences

Stock-based compensation

Balance at March 31, 2020

( 12,827,343 )

Additional Paid-in

Total Stockholders'

Balance at June 30, 2020

( 340,360,757 )

For the Three Months Ended June 30, 2019

Additional Paid-

Stockholders’

Balance at April 1, 2019

( 311,424,375 )

Stock-based compensation

( 5,570,391 )

Balance, June 30, 2019

( 316,994,766 )

For the Six Months Ended June 30, 2019

Additional Paid-

Stockholders’

Balance at January 1, 2019

3 unchanged sentences

Stock-based compensation

Balance, March 31, 2019

( 10,889,316 )

See accompanying notes

to these unaudited condensed consolidated financial statements.

Balance, June 30, 2019

( 316,994,766 )

See accompanying notes to these unaudited condensed consolidated financial statements.

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

For the Three Months Ended

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

Cash Flows from Operating Activities:

8 unchanged sentences

Prepaid expenses and deposits

( 1,106,072 )

Interest receivable

2 unchanged sentences

Net cash used in operating activities

( 8,401,428 )

( 8,059,583 )

Cash Flows from Investing Activities:

Purchase of property and equipment

( 1,299,193 )

Purchase of construction in progress

( 2,629,141 )

Net cash used in investing activities

( 3,928,334 )

Cash Flows from Financing Activities:

3 unchanged sentences

Net decrease in cash

( 11,779,762 )

( 8,301,842 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

For the Three Months Ended

For the Six Months Ended

Supplemental schedule of non-cash financing activities:

Issuance of common stock as commitment fee for future financing

See accompanying notes to these unaudited

condensed consolidated financial statements.

Recognition of right-of-use assets and lease liability from new operating lease agreements

See accompanying notes to these unaudited condensed consolidated financial statements.

MARKER THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

March 31, 2020

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 and innovative peptide-based vaccines 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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

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 and innovative peptide-based vaccines 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.

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, 2020 or for any

future interim period.

The condensed consolidated balance sheet at March 31, 2020 has been derived from unaudited financial statements;

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, 2020 or for any future interim period.

The condensed consolidated balance sheet at June 30, 2020 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, 2019 and notes thereto included in the Company’s annual report on Form 10-K filed on March 12, 2020.

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s annual report on Form 10-K filed on March 12, 2020.

LIQUIDITY AND FINANCIAL CONDITION

As of March 31, 2020, the Company had cash

and cash equivalents of approximately $40.3 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;

As of June 30, 2020, the Company had cash and cash equivalents of approximately $ 32.1 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;

successfully progress its product candidates through preclinical and clinical development;

obtain regulatory approval of one or more of its product candidates;

enforce intellectual property rights;

maintain and enforce intellectual property rights;

develop a customer base;

attract, retain and motivate qualified personnel;

and develop strategic

alliances and collaborations.

and develop strategic alliances and collaborations.

From inception, the Company has been funded by a combination of equity and debt financings.

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.

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.

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 revised clinical and research and

development plans and its revised timing expectations related to the progress of its programs, and buildout of manufacturing and

research facilities, and expansion of the Company’s corporate headquarters, discussed in Footnotes #6, #9 and #13 below,

the Company expects that its cash and cash equivalents as of March 31, 2020 will enable the Company to fund its operating expenses

and capital expenditure requirements into the latter half of the second quarter of 2021.

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

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 scale-up manufacturing capabilities to commercialize any product candidates that may receive

regulatory approval;

evaluates strategic transactions

the Company may undertake;

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.

In addition to the foregoing, based on

the Company’s current assessment, the Company does not expect any material impact on its long-term liquidity due to the

COVID-19 pandemic.

However, the Company will continue to assess the effect of the pandemic on its operations, including its clinical

The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future

developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the

disease, the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate

effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States

and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, COVID-19

may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets,

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 resulting from the spread of COVID-19 could materially affect the Company’s

business and the value of its common stock.

ACCOUNTING POLICIES

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 revised clinical and research and development plans and its revised timing expectations related to the progress of its programs, and buildout of manufacturing and research facilities, and expansion of the Company’s corporate headquarters, discussed in Footnotes #7 and #10 below, the Company expects that its cash and cash equivalents as of June 30, 2020 will enable the Company to fund its operating expenses and capital expenditure requirements into the second quarter of 2021, as such these factors raise substantial doubt regarding the Company's ability to continue as a going concern.

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 scale-up manufacturing capabilities to commercialize any product candidates that may receive regulatory approval;

● evaluates strategic transactions the Company may undertake;

● 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.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

The condensed consolidated 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 the Company be unable to continue as a going concern.

In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term liquidity due to the COVID-19 pandemic.

However, the Company will continue to assess the effect of the pandemic on its operations, including its clinical programs.

The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, 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 resulting from the spread of COVID-19 could materially affect the Company’s business and the value of its common stock.

SIGNIFICANT ACCOUNTING POLICIES

Property and equipment - Construction in Progress

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

In connection with the manufacturing facility, the Company has incurred costs pursuant to an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in a manufacturing facility.

$ 2.6 million is recorded in fixed assets - construction in progress on the balance sheet as of June 30, 2020.

Upon completion of the facility's construction, all costs associated with the buildout will be recorded as manufacturing equipment and amortized over the estimated useful life of the facility.

New Accounting Standards

From time to time, new accounting pronouncements

are issued by the 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 financial position or results of operations upon adoption.

Recent Accounting Standards Not Yet

From time to time, new accounting pronouncements are issued by the 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 financial position or results of operations upon adoption.

Recent Accounting Standards Not Yet Adopted

In December 2019, the FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended

to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles

in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.

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:

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 and six months ended June 30, 2020 and 2019, respectively:

For the Three Months Ended

For the Six Months Ended

( 6,341,699 )

( 5,570,391 )

( 12,827,343 )

( 10,889,316 )

Weighted average common shares outstanding

1 unchanged sentence

Basic and Diluted

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

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 Six Months Ended

Common stock options

2 unchanged sentences

Potentially dilutive securities

The Company leases office space under agreements

classified as operating leases that expire on various dates through 2022.

All of the Company’s lease liabilities result from

the lease of its corporate headquarters in Houston, Texas, which expires in 2021, and its Jacksonville, Florida office space, which

expires in 2022.

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

Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

does not act as a lessor or have any leases classified as financing leases.

The Company excludes short-term leases

having initial terms of 12 months or less from the new accounting guidance as an accounting policy election and recognizes rent

expense on a straight-line basis over the lease term.

The Company has two lease agreements, an office at the Florida Atlantic Research

and Development Authority and laboratory space located at the Texas Medical Center in Houston, which are included in short-term

lease expense below.

At March 31, 2020, the Company had operating

lease liabilities of approximately $0.4 million and right of use assets of approximately $0.4 million, which were included in the

condensed consolidated balance sheet.

The following summarizes quantitative information about the

Company’s operating leases:

PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of June 30, 2020 and December 31, 2019, respectively:

Estimated Useful Lives

Lab equipment

Manufacturing equipment

Computers, equipment and software

Office furniture

Leasehold improvements

Lesser of lease term or estimated useful life

accumulated depreciation

Construction in progress

Total fixed assets, net

Depreciation expense for the three months ended June 30, 2020 and 2019 was approximately $ 0.09 million and $ 0.03 million, respectively.

Depreciation expense for the six months ended June 30, 2020 and 2019 was approximately $ 0.1 million and $ 0.04 million, respectively.

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

$ 2.6 million is recorded in fixed assets - construction in progress on the balance sheet as of June 30, 2020.

Upon completion of the facility's construction, all costs associated with the buildout will be recorded as manufacturing equipment and amortized over the estimated useful life of the facility.

In connection with the research facility that the Company opened during the second quarter of 2020, the Company incurred approximately $ 1.0 million of costs acquiring necessary lab equipment to carry out its experiments.

On March 23, 2020, the Company entered into an agreement to expand its corporate headquarters in Houston, Texas, which is expected to commence in the third or fourth quarter of 2020.

The initial lease term is ten years with two five-year renewal options.

Fixed rent payments under the initial term are approximately $ 5.6 million.

Additionally, the Company is also responsible for its share of operating expenses.

On April 30, 2020, the Company entered into a lease for a research facility in Houston, Texas.

The lease term is 71 months .

Fixed rent payments under the initial term are approximately $ 1.1 million.

In the second quarter of 2020, the Company recorded right-of use assets and related operating lease liabilities of approximately $ 0.9 million as result of entering into the lease for our research facility.

On June 26, 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.

The initial lease term is ten years from the expected commencement date in the third quarter of 2020 with two five-year renewal options.

Fixed rent payments under the initial term are approximately $ 11.1 million.

Additionally, the Company is also responsible for its share of operating expenses.

In the second quarter of 2020, the Company recorded right-of use assets and related operating lease liabilities of approximately $8.3 million as result of entering into the lease for its manufacturing facility.

The Company also leases office space under agreements classified as operating leases that expire on various dates through 2022.

The Company has a remaining lease liability of $ 0.2 million and $ 0.2 million of the related right-of-use asset resulting from the lease of its corporate headquarters in Houston, Texas, which expires in 2021.

In addition, the Company has a remaining lease liability of $ 0.2 million and $ 0.2 million of the related right-of-use asset from the lease of its Jacksonville, Florida office space, which expires in 2022.

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.

The Company excludes short-term leases having initial terms of 12 months or less from the new accounting guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

The Company has two lease agreements, an office at the Florida Atlantic Research and Development Authority and laboratory space located at the Texas Medical Center in Houston, which are included in short-term lease expense below.

At June 30, 2020, the Company had operating lease liabilities of approximately $ 9.5 million and right-of-use assets of approximately $ 9.5 million, which were included in the condensed consolidated balance sheet.

The following summarizes quantitative information about the Company’s operating leases for the three and six months ended June 30, 2020 and 2019, respectively:

For the Three Months Ended

For the Six Months Ended

Operating lease expense summary:

3 unchanged sentences

Other information:

Right of use assets exchanged for new operating lease liabilities as of adoption date

Weighted-average remaining lease term as of March 31, 2020 –

operating leases

Weighted-average discount rate as of adoption date –

operating leases

Maturities of the Company’s operating leases, excluding

short-term leases, are as follows:

Nine months ended December 31, 2020

Operating cash flows - operating leases

Weighted-average remaining lease term as of June 30, 2020 – operating leases

Weighted-average discount rate as of adoption date – operating leases

Maturities of the Company's operating leases, excluding short-term leases, are as follows:

Six months ended December 31, 2020

Year ended December 31, 2021

Year ended December 31, 2022

Year ended December 31, 2023

Year ended December 31, 2024

Less present value discount

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at March 31, 2020

On March 23, 2020, the Company entered

into an agreement to expand its corporate headquarters in Houston, Texas, which is expected to commence in the third quarter of

The initial lease term is ten years with two five-year renewal options.

Fixed rent payments under the initial term are approximately

$5.6 million.

Additionally, the Company is also responsible for its share of operating expenses.

On March 30, 2020, the Company entered

into a lease for a manufacturing facility in Houston, Texas.

The lease is contingent upon the landlord’s successful acquisition

of the property and is expected to commence in the second or third quarter of 2020.

The initial lease term is ten years with two

five-year renewal options.

Fixed rent payments under the initial term are approximately $11.1 million.

Additionally, the Company

is also responsible for its share of operating expenses.

PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following

as of March 31, 2020 and December 31, 2019, respectively:

( 3,024,000 )

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at June 30, 2020

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of June 30, 2020 and December 31, 2019, respectively:

Accounts payable

3 unchanged sentences

Total accounts payable and accrued liabilities

WARRANT LIABILITY

AND FAIR VALUE MEASUREMENTS

During the three months ended March 31,

2020, all of the Company’s common stock purchase warrants previously treated as a liability expired.

A summary of quantitative information with

respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants

that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2020 and 2019 is as follows:

WARRANT LIABILITY AND FAIR VALUE MEASUREMENTS

During the six months ended June 30, 2020, all of the Company's common stock purchase warrants previously treated as a liability expired.

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants that are categorized within Level 3 of the fair value hierarchy for the six months ended June 30, 2020 and 2019 is as follows:

Weighted Average Inputs

For the Three Months Ended

For the Six Months Ended

Exercise price

3 unchanged sentences

Dividend yield (per share)

Financial Liabilities Measured at

Fair Value on a Recurring Basis

Financial liabilities measured at fair

value on a recurring basis are summarized below and disclosed on the balance sheet under Warrant liability:

Fair value measured at March 31, 2020

Financial Liabilities Measured at Fair Value on a Recurring Basis

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Warrant liability:

Fair value measured at June 30, 2020

Quoted prices in active

3 unchanged sentences

Fair value at

March 31, 2020

June 30, 2020

Warrant liability

7 unchanged sentences

Warrant liability

The fair value accounting standards define

fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants.

As such, fair value is determined based upon assumptions that market participants would use in pricing an

asset or liability.

The fair value accounting standards define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability.

Fair value measurements are rated on a three-tier hierarchy as follows:

5 unchanged sentences

Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

There were no transfers between Level 1,

2 or 3 during the three months ended March 31, 2020.

The following table presents changes in

Level 3 liabilities measured at fair value for the three months ended March 31, 2020:

Balance –

January 1, 2020

There were no transfers between Level 1, 2 or 3 during the six months ended June 30, 2020.

The following table presents changes in Level 3 liabilities measured at fair value for the six months ended June 30, 2020:

Balance - January 1, 2020

Change in fair value of warrant liability

Balance –

March 31, 2020

AND CONTINGENCIES

An arbitration proceeding was brought against

the Company before the Financial Industry Regulatory Authority, Inc.

by a broker seeking to be paid approximately $1 million as

compensation for two 2018 transactions, a warrant conversion and a private placement brokered by another broker.

The broker’s

claims are based on a placement agent agreement for a private placement it brokered in 2017, under which it alleges it is entitled

to compensation for the 2018 transactions.

The Company believes it has defenses to all of the allegations and intends to vigorously

defend itself in this matter.

On March 26, 2020 the Company entered

into an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in a manufacturing facility,

which the Company expects to lease with a commencement date in the second or third quarter of 2020.

The total fees for this project

to be substantially completed by December 31, 2020 are estimated to be $6.0 million.

STOCKHOLDERS’

Balance - June 30, 2020

COMMITMENTS AND CONTINGENCIES

An arbitration proceeding was brought against the Company before the Financial Industry Regulatory Authority, Inc.

by a broker seeking to be paid approximately $ 1 million as compensation for two 2018 transactions, a warrant conversion and a private placement brokered by another broker.

The broker’s claims are based on a placement agent agreement for a private placement it brokered in 2017, under which it alleges it is entitled to compensation for the 2018 transactions.

The Company believes it has defenses to all of the allegations and intends to vigorously defend itself in this matter.

As discussed in Footnotes #6 and #7, on March 26, 2020 the Company entered into an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in a manufacturing facility in Houston, Texas, which the Company expects to lease with a commencement date in the third quarter of 2020.

The total fees for this project to be substantially completed by December 31, 2020 are estimated to be $ 6.0 million.

As of June 30, 2020, the Company has recorded $ 2.6 million of construction in progress costs associated with the building of the cleanrooms.

STOCKHOLDERS’ EQUITY

Common Stock Transactions

Exercise of Stock Warrants

During the three months ended March 31,

2020, certain outstanding warrants were exercised for 458,334 shares of common stock providing aggregate proceeds to the Company

of approximately $0.6 million.

During the six months ended June 30, 2020, certain outstanding warrants were exercised for 458,334 shares of common stock providing aggregate proceeds to the Company of approximately $ 0.6 million.

Board Compensation

During the six months ended June 30, 2020, the Company issued an aggregate of 85,110 shares of common stock to its non-employee directors.

The fair value of the common stock of approximately $ 0.2 million was recognized as a component of stock-based compensation expense in general and administrative expenses.

Aspire Capital

On February 28, 2020, the Company entered

into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”)

which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed

to purchase up to an aggregate of $30.0 million of shares of the Company’s common stock over the 30-month term of the purchase

In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 345,357 shares of the

Company’s common stock as a commitment fee.

On February 28, 2020, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 30.0 million of shares of the Company’s common stock over the 30 -month term of the purchase agreement.

In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 345,357 shares of the Company’s common stock as a commitment fee.

The Company recorded the commitment fee to additional paid in capital.

March 31, 2020, Aspire Capital had not purchased any shares under the Purchase Agreement.

The Company may request daily up to 0.1

million shares to be purchased with a maximum purchase commitment of 9.2 million shares over the term of the arrangement.

price will generally be 97% of the stock price on the date of purchase.

As of June 30, 2020, Aspire Capital had not purchased any shares under the Purchase Agreement.

The Company may request daily up to 0.1 million shares to be purchased with a maximum purchase commitment of 9.2 million shares over the term of the arrangement.

The purchase price will generally be 97% of the stock price on the date of purchase.

Share Purchase Warrants

A summary of the Company’s share

purchase warrants as of March 31, 2020 and changes during the period is presented below:

A summary of the Company’s share purchase warrants as of June 30, 2020 and changes during the period is presented below:

Weighted Average

7 unchanged sentences

Expired or cancelled

Balance - March 31, 2020

Balance - June 30, 2020

STOCK-BASED COMPENSATION

Stock Options

Award of 2019 Performance Bonuses and

2020 Equity Incentive Awards

On March 10, 2020, upon the recommendation

of the compensation committee and pursuant to the Company’s 2014 Omnibus Stock Ownership Plan, the Company’s board

of directors approved a total of 1,170,000 options to purchase the Company’s common stock as (i) performance bonuses for

2019 performance and (ii) equity-based incentive awards to the Company’s executive officers.

Each option award was granted

with an exercise price of $2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on

March 10, 2020, 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 March 10, 2020, the Company issued 111,000 options

to purchase the Company’s common stock to other employees of the Company as equity-based incentive awards.

Each option award

was granted with an exercise price of $2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global

Market on March 10, 2020, 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.

The above awards were in addition to stock option awards issued

during the three months ended March 31, 2020 to new employees upon their commencement of employment with the Company.

A summary of the Company’s stock option activity is as

Number of Shares

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life

Award of 2019 Performance Bonuses and 2020 Equity Incentive Awards

On March 10, 2020, upon the recommendation of the compensation committee and pursuant to the Company’s 2014 Omnibus Stock Ownership Plan, the Company’s board of directors approved a total of 1,170,000 options to purchase the Company’s common stock as (i) performance bonuses for 2019 performance and (ii) equity-based incentive awards to the Company’s executive officers.

Each option award was granted with an exercise price of $ 2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on March 10, 2020, 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 March 10, 2020, the Company issued 111,000 options to purchase the Company’s common stock to other employees of the Company as equity-based incentive awards.

The above awards were in addition to stock option awards issued during the six months ended June 30, 2020 to new employees upon their commencement of employment with the Company.

A summary of the Company’s stock option activity is as follows:

Total Intrinsic

Exercise Price

Life (in years)

Outstanding as of January 1, 2020

Outstanding as of March 31, 2020

Outstanding as of June 30, 2020

Options vested and exercisable

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.

average assumptions used in calculating the fair values of stock options that were granted during the three months ended March

31, 2020 was as follows:

For the Three Months Ended

March 31, 2020

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 six months ended June 30, 2020 was as follows:

For the Six Months Ended

June 30, 2020

Exercise price

3 unchanged sentences

Expected dividend rate

The following table sets forth stock-based

compensation expenses recorded during the respective periods:

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

For the Three Months Ended

For the Six Months Ended

Stock Compensation expenses:

2 unchanged sentences

Total stock compensation expenses

At March 31, 2020, the total stock-based

compensation cost related to unvested awards not yet recognized was $15.9 million.

The expected weighted average period compensation

costs to be recognized was approximately 3.0 years.

At June 30, 2020, the total stock-based compensation cost related to unvested awards not yet recognized was $ 12.9 million.

The expected weighted average period compensation costs to be recognized was approximately 3.0 years.

Future option grants will impact the compensation expense recognized.

During the six months ended June 30, 2020, the Company received $ 0.5 million of a grant awarded to the Mayo Foundation from the U.S.

Department of Defense to fund the Phase 2 clinical trial of TPIV100 for the treatment of HER2/neu breast cancer.

The portion of the grant the Company received compensated the Company for clinical supplies manufactured by the Company for the clinical trial.

In accordance with Accounting Standards Update No.

2014-09, "Revenue from Contracts with Customers (Topic 606)"

issued by the Financial Accounting Standards Board, the Company recorded the $ 0.5 million of grant income as revenue.

The Company did not record any grant income during the six months ended June 30, 2019.

RELATED PARTY TRANSACTIONS

The following table sets forth related

party transaction expenses recorded during the respective periods:

The following table sets forth related party transaction expenses recorded for the three and six months ended June 30, 2020 and 2019, respectively.

For the Three Months Ended

For the Six Months Ended

Research and development

What changed 10-Q

Item 1. Financial Statements