Marker Therapeutics, Inc. 10-Q

Item 1. Financial Statements MARKER THERAPEUTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2020 ​ 2019 ​ ​ (Unaudited) ​ (Audited) ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 26,956,737 ​ $ 43,903,949 Prepaid expenses and deposits ​ 2,367,145 ​ 1,526,442 Interest receivable ​ 135 ​ 56,189 Other receivable ​ ​ 1,000,000 ​ ​ — Total current assets ​ 30,324,017 ​ 45,486,580 Non-current assets: ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ 2,629,628 ​ 417,528 Construction in progress ​ ​ 4,557,581 ​ ​ — Right-of-use assets, net ​ ​ 11,059,962 ​ ​ 455,174 Total non-current assets ​ ​ 18,247,171 ​ ​ 872,702 ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 48,571,188 ​ $ 46,359,282 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable and accrued liabilities ​ $ 5,746,149 ​ $ 1,757,680 Lease liability ​ ​ 278,333 ​ ​ 204,132 Warrant liability ​ — ​ 31,000 Total current liabilities ​ 6,024,482 ​ 1,992,812 Non-current liabilities: ​ ​ ​ ​ ​ ​ Lease liability, net of current portion ​ ​ 11,948,781 ​ ​ 280,247 Total non-current liabilities ​ ​ 11,948,781 ​ ​ 280,247 ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 17,973,263 ​ 2,273,059 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (see Note 10) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: ​ ​ ​ Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively ​ ​ — ​ ​ — Common stock, $ 0.001 par value, 150 million shares authorized, 48.0 million and 45.7 million shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively ​ ​ 48,025 ​ ​ 45,728 Additional paid-in capital ​ 378,282,157 ​ 371,573,909 Accumulated deficit ​ ( 347,732,257 ) ​ ( 327,533,414 ) Total stockholders' equity ​ 30,597,925 ​ 44,086,223 ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 48,571,188 ​ $ 46,359,282 ​ 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 For the Nine Months Ended ​ ​ September 30, September 30, ​ 2020 2019 2020 2019 Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grant income ​ $ — ​ $ — ​ $ 466,785 ​ $ — ​ Total revenues ​ — ​ — ​ 466,785 ​ — ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 4,803,605 ​ 3,118,530 ​ 12,897,275 ​ 9,103,670 ​ General and administrative ​ 2,572,562 ​ 2,536,204 ​ 7,946,846 ​ 8,063,099 ​ Total operating expenses ​ 7,376,167 ​ 5,654,734 ​ 20,844,121 ​ 17,166,769 ​ Loss from operations ​ ( 7,376,167 ) ​ ( 5,654,734 ) ​ ( 20,377,336 ) ​ ( 17,166,769 ) ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of warrant liabilities ​ — ​ ( 64,000 ) ​ 31,000 ​ ( 80,000 ) ​ Interest income ​ 4,667 ​ 259,248 ​ 147,493 ​ 897,967 ​ Net loss ​ $ ( 7,371,500 ) ​ $ ( 5,459,486 ) ​ $ ( 20,198,843 ) ​ $ ( 16,348,802 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ ( 0.16 ) ​ $ ( 0.12 ) ​ $ ( 0.43 ) ​ $ ( 0.36 ) ​ Weighted average number of common shares outstanding ​ 46,867,119 ​ 45,655,387 ​ 46,509,391 ​ 45,541,434 ​ ​ 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 September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid- ​ Accumulated ​ Stockholders’ ​ ​ Shares ​ Par value ​ in Capital ​ Deficit ​ Equity Balance at July 1, 2020 46,617,632 ​ $ 46,617 ​ $ 374,828,385 ​ $ ( 340,360,757 ) ​ $ 34,514,245 Issuance common stock for cash ​ 1,407,470 ​ ​ 1,408 ​ ​ 2,184,601 ​ ​ — ​ ​ 2,186,009 Stock-based compensation — ​ — ​ 1,269,171 ​ — ​ 1,269,171 Net loss — ​ — ​ — ​ ( 7,371,500 ) ​ ( 7,371,500 ) Balance at September 30, 2020 48,025,102 ​ $ 48,025 ​ $ 378,282,157 ​ $ ( 347,732,257 ) ​ $ 30,597,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid- ​ Accumulated ​ Stockholders’ ​ Shares Par value in Capital Deficit Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at January 1, 2020 45,728,831 ​ $ 45,728 ​ $ 371,573,909 ​ $ ( 327,533,414 ) ​ $ 44,086,223 Issuance common stock for cash ​ 1,407,470 ​ ​ 1,408 ​ ​ 2,184,601 ​ ​ — ​ ​ 2,186,009 Warrants exercised for cash ​ 458,334 ​ 459 ​ 549,541 ​ — ​ 550,000 Issuance of common stock as commitment fee for future financing ​ 345,357 ​ ​ 345 ​ ​ ( 345 ) ​ ​ — ​ ​ — Stock-based compensation ​ 85,110 ​ 85 ​ 3,974,451 ​ — ​ 3,974,536 Net loss — ​ — ​ — ​ ( 20,198,843 ) ​ ( 20,198,843 ) Balance at September 30, 2020 48,025,102 ​ $ 48,025 ​ $ 378,282,157 ​ $ ( 347,732,257 ) ​ $ 30,597,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid- ​ Accumulated ​ Stockholders’ ​ Shares Par value in Capital Deficit Equity Balance at July 1, 2019 ​ 45,513,523 ​ $ 45,513 ​ $ 368,353,041 ​ $ ( 316,994,766 ) ​ $ 51,403,788 Stock warrants exercised for cash ​ 188,459 ​ ​ 188 ​ ​ 753,166 ​ ​ — ​ ​ 753,354 Stock warrants cashless exercised ​ 4,032 ​ ​ 4 ​ ​ ( 4 ) ​ ​ — ​ ​ — Stock-based compensation ​ 17,400 ​ ​ 18 ​ ​ 1,184,244 ​ ​ — ​ ​ 1,184,262 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 5,459,486 ) ​ ​ ( 5,459,486 ) Balance at September 30, 2019 ​ 45,723,414 ​ $ 45,723 ​ $ 370,290,447 ​ $ ( 322,454,252 ) ​ $ 47,881,918 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Common Stock ​ Additional Paid- ​ Accumulated ​ Stockholders’ ​ Shares Par value in Capital Deficit Equity Balance at January 1, 2019 ​ 45,440,704 ​ $ 45,440 ​ $ 365,400,748 ​ $ ( 306,105,450 ) ​ $ 59,340,738 Stock options exercised for cash ​ 11,980 ​ ​ 12 ​ ​ 57,732 ​ ​ — ​ ​ 57,744 Warrants exercised for cash ​ 190,258 ​ ​ 190 ​ ​ 758,543 ​ ​ — ​ ​ 758,733 Stock warrants cashless exercised ​ 4,032 ​ ​ 4 ​ ​ ( 4 ) ​ ​ — ​ ​ — Stock-based compensation ​ 76,440 ​ ​ 77 ​ ​ 4,073,428 ​ ​ — ​ ​ 4,073,505 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 16,348,802 ) ​ ​ ( 16,348,802 ) Balance at September 30, 2019 ​ 45,723,414 ​ $ 45,723 ​ $ 370,290,447 ​ $ ( 322,454,252 ) ​ $ 47,881,918 ​ 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 Nine Months Ended ​ ​ September 30, ​ 2020 2019 Cash Flows from Operating Activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 20,198,843 ) ​ $ ( 16,348,802 ) Reconciliation of net loss to net cash used in operating activities: ​ ​ ​ Depreciation and amortization ​ ​ 272,725 ​ ​ 70,908 Changes in fair value of warrant liabilities ​ ( 31,000 ) ​ 80,000 Stock-based compensation ​ 3,974,536 ​ 4,073,505 Amortization on right-of-use assets ​ 337,530 ​ 134,919 Changes in operating assets and liabilities: ​ ​ Prepaid expenses and deposits ​ ( 840,703 ) ​ ( 1,764,345 ) Interest receivable ​ 56,054 ​ 30,032 Accounts payable and accrued expenses ​ 3,955,609 ​ 137,161 Lease liability ​ ​ ( 166,723 ) ​ ​ ( 136,812 ) Net cash used in operating activities ​ ( 12,640,815 ) ​ ( 13,723,434 ) Cash Flows from Investing Activities: ​ ​ ​ Purchase of property and equipment ​ ( 2,484,825 ) ​ ( 362,121 ) Purchase of construction in progress ​ ​ ( 4,557,581 ) ​ ​ — Net cash used in investing activities ​ ( 7,042,406 ) ​ ( 362,121 ) Cash Flows from Financing Activities: ​ ​ ​ Proceeds from issuance of common stock ​ 2,186,009 ​ ​ Proceeds from exercise of stock options ​ — ​ 57,744 Proceeds from exercise of warrants ​ 550,000 ​ 758,733 Net cash provided by financing activities ​ 2,736,009 ​ 816,477 Net decrease in cash ​ ( 16,947,212 ) ​ ( 13,269,078 ) ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at beginning of the period ​ 43,903,949 ​ 61,746,748 Cash and cash equivalents at end of the period ​ $ 26,956,737 ​ $ 48,477,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended ​ ​ September 30, ​ 2020 2019 Supplemental schedule of non-cash financing activities: ​ ​ ​ ​ ​ ​ Issuance of common stock as commitment fee for future financing ​ $ 345 ​ $ — Recognition of right-of-use assets and lease liability from new operating lease agreements ​ $ 11,077,636 ​ $ — Stock warrants cashless exercised ​ $ — ​ $ 4 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ 4 Table of Contents MARKER THERAPEUTICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2020 (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 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. ​ 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, 2020 or for any future interim period. The condensed consolidated balance sheet at September 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. ​ NOTE 3: LIQUIDITY, FINANCIAL CONDITION AND GOING CONCERN As of September 30, 2020, the Company had cash and cash equivalents of approximately $ 27.0 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. 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. 5 Table of Contents 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 September 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; 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. 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. ​ 6 Table of Contents NOTE 4: SIGNIFICANT ACCOUNTING POLICIES Other Receivable Pursuant to the Company's lease agreement for its manufacturing facility, the Company incurs and pays for the construction invoices directly for both the structural improvements of the facility and the building of the manufacturing modular cleanroom (i.e. leasehold improvements and manufacturing equipment.) At the time the construction invoices are received by the Company, a fixed asset is recorded in construction-in-progress. In accordance with the agreement, upon completion of the facility's construction, the Company is owed up to $ 1.0 million as reimbursement, and as such a landlord receivable is recorded, which provides for a legal right to receive construction reimbursements from the landlord for tenant improvement allowances. During the third quarter of 2020, the Company recorded a $ 1.0 million receivable in its condensed consolidated financial statements. 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. $ 4.6 million is recorded in fixed assets - construction in progress on the balance sheet as of September 30, 2020. Upon completion of the facility's construction, all costs associated with the buildout will be recorded as either manufacturing equipment and/or leasehold improvements and amortized over the estimated useful life of the leasehold lease. 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 Adopted Income Taxes 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 disclosures. ​ 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. 7 Table of Contents The following table sets forth the computation of net loss per share for the three and nine months ended September 30, 2020 and 2019, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, September 30, ​ 2020 2019 2020 2019 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 7,371,500 ) ​ $ ( 5,459,486 ) ​ $ ( 20,198,843 ) ​ $ ( 16,348,802 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ 46,867,119 ​ 45,655,387 ​ 46,509,391 ​ 45,541,434 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share data: ​ ​ ​ ​ ​ ​ ​ ​ Basic and Diluted ​ $ ( 0.16 ) ​ $ ( 0.12 ) ​ $ ( 0.43 ) ​ $ ( 0.36 ) ​ ​ 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 Nine Months Ended ​ ​ ​ September 30, ​ ​ 2020 2019 Common stock options 5,882,000 4,655,000 Common stock purchase warrants 20,964,000 22,618,000 Common stock warrants - liability treatment — 56,000 Potentially dilutive securities 26,846,000 27,329,000 ​ ​ NOTE 6: PROPERTY AND EQUIPMENT Property and equipment consist of the following as of September 30, 2020 and December 31, 2019, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ Estimated Useful Lives 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ Lab equipment ​ 5 Years ​ $ 1,388,000 ​ $ 111,000 Computers, equipment and software 3 -5 Years ​ ​ 685,000 ​ ​ 211,000 Office furniture 5 Years ​ 646,000 ​ 178,000 Leasehold improvements ​ Lesser of lease term or estimated useful life ​ ​ 288,000 ​ ​ 23,000 Total ​ ​ 3,007,000 ​ ​ 523,000 Less: accumulated depreciation ​ ( 378,000 ) ​ ( 105,000 ) Construction in progress ​ ​ ​ ​ 4,558,000 ​ ​ — Total fixed assets, net ​ $ 7,187,000 ​ $ 418,000 ​ Depreciation expense for the three months ended September 30, 2020 and 2019 was approximately $ 0.1 million and $ 0.03 million, respectively. Depreciation expense for the nine months ended September 30, 2020 and 2019 was approximately $ 0.3 million and $ 0.07 million, respectively. 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. $ 4.6 million is recorded in fixed assets - construction in progress on the balance sheet as of September 30, 2020. Upon completion of the facility's construction, all costs associated with the buildout will be recorded as either manufacturing equipment and/or leasehold improvements and amortized over the estimated useful life of the leasehold lease. 8 Table of Contents In connection with the research facility that the Company opened during the second quarter of 2020, the Company incurred approximately $ 1.3 million of costs acquiring necessary lab equipment to carry out its experiments. The $ 1.3 million is included in Lab equipment within fixed assets and is being depreciated over five years . NOTE 7: LEASES On March 23, 2020, the Company entered into an agreement to expand its corporate headquarters in Houston, Texas, which commenced in the 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 $ 5.6 million. Additionally, the Company is also responsible for its share of operating expenses. In the third quarter of 2020, the Company recorded right-of use assets and related operating lease liabilities of approximately $ 4.1 million as result of entering into the lease for its new corporate facility. 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. 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 rent commencement date in the fourth quarter of 2020 with two five-year renewal options. Fixed rent payments under the initial term are approximately $ 9.8 million. Additionally, the Company is also responsible for its share of operating expenses. In connection with the lease for the manufacturing facility, the Company is to receive $ 1.0 million as reimbursement for out of pocket buildout costs. Accordingly, during the third quarter of 2020, the Company recorded a $ 1.0 million receivable, and a reduction in right-of use assets, in its condensed consolidated financial statements. The Company also leases office space under agreements classified as operating leases that expire in 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 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. At September 30, 2020, the Company had operating lease liabilities of approximately $ 12.2 million and right-of-use assets of approximately $ 11.1 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 nine months ended September 30, 2020 and 2019, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ 2020 2019 2020 2019 Operating lease expense summary: ​ ​ ​ ​ ​ ​ ​ ​ Operating lease expense ​ $ 375,000 ​ $ 55,000 ​ $ 533,000 ​ $ 165,000 ​ Short-term lease expense ​ — ​ 27,000 ​ 22,000 ​ 73,000 ​ Variable lease expense ​ 69,000 ​ 27,000 ​ 85,000 ​ 65,000 ​ Total ​ $ 444,000 ​ $ 109,000 ​ $ 640,000 ​ $ 303,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other information: ​ ​ ​ ​ ​ Operating cash flows - operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 362,000 ​ Weighted-average remaining lease term as of September 30, 2020 – operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9.6 ​ Weighted-average discount rate as of adoption date – operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5.7 % ​ 9 Table of Contents Maturities of our operating leases, excluding short-term leases, are as follows: ​ ​ ​ ​ ​ Three months ended December 31, 2020 $ 205,000 Year ended December 31, 2021 ​ 1,077,000 Year ended December 31, 2022 ​ 1,278,000 Year ended December 31, 2023 ​ 1,542,000 Year ended December 31, 2024 ​ ​ 1,826,000 Thereafter ​ ​ 10,540,000 Total ​ ​ 16,468,000 Less present value discount ​ ( 4,241,000 ) Operating lease liabilities included in the Condensed Consolidated Balance Sheet at September 30, 2020 ​ $ 12,227,000 ​ ​ ​ NOTE 8: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following as of September 30, 2020 and December 31, 2019, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2020 ​ 2019 Accounts payable ​ $ 3,696,000 ​ $ 993,000 Compensation and benefits ​ 1,392,000 ​ 323,000 Professional fees ​ 248,000 ​ 94,000 Technology license fees ​ — ​ 105,000 Other ​ 410,000 ​ 243,000 Total accounts payable and accrued liabilities ​ $ 5,746,000 ​ $ 1,758,000 ​ ​ NOTE 9: WARRANT LIABILITY AND FAIR VALUE MEASUREMENTS During the nine months ended September 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 nine months ended September 30, 2020 and 2019 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Inputs ​ ​ ​ For the Nine Months Ended ​ ​ ​ September 30, ​ ​ 2020 2019 ​ Exercise price ​ $ — ​ $ 6.92 ​ Contractual term (years) ​ — ​ 0.30 ​ Volatility (annual) ​ — ​ 92 % Risk-free rate ​ — ​ 2 % Dividend yield (per share) ​ — ​ 0 % ​ 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 September 30, 2020 ​ ​ Quoted prices in active ​ Significant other ​ Significant ​ ​ ​ ​ ​ markets ​ observable inputs ​ unobservable inputs ​ Fair value at ​ (Level 1) (Level 2) (Level 3) September 30, 2020 Warrant liability ​ $ — ​ $ — ​ $ — ​ $ — ​ 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value measured at December 31, 2019 ​ ​ Quoted prices in active ​ Significant other ​ Significant ​ ​ ​ ​ ​ markets ​ observable inputs ​ unobservable inputs ​ Fair value at ​ (Level 1) (Level 2) (Level 3) December 31, 2019 Warrant liability ​ $ — ​ $ — ​ $ 31,000 ​ $ 31,000 ​ 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: ● Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 inputs: Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly; and ● Level 3 inputs: 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 nine months ended September 30, 2020. The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ Warrant ​ ​ Liability Balance - January 1, 2020 ​ $ 31,000 Change in fair value of warrant liability ​ ( 31,000 ) Balance – September 30, 2020 ​ $ — ​ ​ NOTE 10: 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 financing transactions that occurred in 2018, 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 fourth quarter of 2020. The total fees for this project to be substantially completed by December 31, 2020 are estimated to be $ 6.5 million. As of September 30, 2020, the Company has recorded $ 4.6 million of construction in progress costs associated with the building of the cleanrooms and the manufacturing facility. ​ NOTE 11: STOCKHOLDERS’ EQUITY Common Stock Transactions Exercise of Stock Warrants During the nine months ended September 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. 11 Table of Contents Board Compensation During the nine months ended September 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 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. As of September 30, 2020, Aspire Capital had purchased 1,407,470 shares under the Purchase Agreement , providing aggregate proceeds to the Company of approximately $ 2.2 million. 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 September 30, 2020 and changes during the period is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Weighted Average ​ Remaining Contractual ​ Intrinsic ​ Warrants Exercise Price Life (in years) Value Balance - January 1, 2020 22,664,000 ​ $ 4.71 ​ 3.33 ​ $ 954,000 Exercised for cash ​ ( 458,000 ) ​ ​ 1.20 ​ — ​ — Expired or cancelled ​ ( 1,242,000 ) ​ ​ 9.75 ​ — ​ — Balance - September 30, 2020 ​ 20,964,000 ​ $ 4.49 ​ 2.84 ​ $ — ​ ​ NOTE 12: 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 nine months ended September 30, 2020 to new employees upon their commencement of employment with the Company. 12 Table of Contents A summary of the Company’s stock option activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Contractual Life (in ​ ​ ​ ​ ​ ​ Number of Shares ​ Exercise Price ​ years) ​ Intrinsic Value ​ Outstanding as of January 1, 2020 4,983,314 ​ $ 7.79 ​ 8.9 ​ $ 18,000 Granted 1,411,000 ​ ​ 2.13 ​ 9.4 ​ ​ — ​ Canceled ( 512,500 ) ​ ​ 9.13 ​ — ​ ​ — ​ Outstanding as of September 30, 2020 5,881,814 ​ $ 6.31 ​ 8.5 ​ $ — ​ Options vested and exercisable 2,196,946 ​ $ 7.41 ​ 8.1 ​ $ — ​ 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 nine months ended September 30, 2020 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended ​ ​ September 30, 2020 Exercise price ​ $ 2.13 ​ Expected term (years) ​ 6.0 ​ Expected stock price volatility ​ 109 % Risk-free rate of interest ​ 1 % Expected dividend rate ​ 0 % ​ The following table sets forth stock-based compensation expenses recorded during the respective periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, September 30, ​ 2020 2019 2020 2019 Stock Compensation expenses: ​ ​ ​ ​ ​ ​ Research and development ​ $ 636,000 ​ $ 553,000 ​ $ 1,945,000 ​ $ 1,844,000 ​ General and administrative ​ 634,000 ​ 631,000 ​ 2,030,000 ​ 2,230,000 ​ Total stock compensation expenses ​ $ 1,270,000 ​ $ 1,184,000 ​ $ 3,975,000 ​ $ 4,074,000 ​ ​ At September 30, 2020, the total stock-based compensation cost related to unvested awards not yet recognized was $ 11.7 million. The expected weighted average period compensation costs to be recognized was approximately 2.5 years. Future option grants will impact the compensation expense recognized. ​ NOTE 13: GRANT INCOME During the nine months ended September 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 nine months ended September 30, 2019. 13 Table of Contents NOTE 14: RELATED PARTY TRANSACTIONS The following table sets forth related party transaction expenses recorded for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, September 30, ​ 2020 2019 2020 2019 Research and development ​ $ 405,000 ​ $ 77,000 ​ $ 864,000 ​ $ 306,000 Total ​ $ 405,000 $ 77,000 ​ $ 864,000 $ 306,000 ​ The detailed information for the table above is below. Sponsored Research Agreements with The Baylor College of Medicine (“BCM”) . On November 16, 2018 and February 1, 2020, in furtherance of the BCM License Agreement and as contemplated by the terms thereof, the Company entered in Sponsored Research Agreements (“SRAs”) with BCM, which provided for the conduct of research for the Company by credentialed personnel at BCM’s Center for Cell and Gene Therapy. The following table sets forth related party transaction expenses recorded in connection with the SRAs for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ 11,000 ​ $ 15,000 ​ $ 68,000 ​ $ 30,000 Total ​ $ 11,000 ​ $ 15,000 ​ $ 68,000 ​ $ 30,000 ​ Clinical Supply Agreement with BCM . On September 9, 2019, in furtherance of the BCM License Agreement and as contemplated by the terms thereof, the Company entered in a Clinical Supply Agreement ("CSA") with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products. The following table sets forth related party transaction expenses recorded in connection with the CSA for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ — ​ $ — ​ $ 200,000 ​ $ — Total ​ $ — ​ $ — ​ $ 200,000 ​ $ — ​ Workforce Grant Agreement with BCM . On October 5, 2019, in furtherance of the BCM Clinical Supply Agreement and as contemplated by the terms thereof, the Company entered in a Workforce Grant Agreement ("WGA") with BCM, which provided for BCM to provide to the Company manpower costs of projects for manufacturing, quality control testing and validation run activities. The following table sets forth related party transaction expenses recorded in connection with the WGA for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ 130,000 ​ $ — ​ $ 278,000 ​ $ — Total ​ $ 130,000 ​ $ — ​ $ 278,000 ​ $ — ​ 14 Table of Contents Clinical Trial Agreement with BCM . On August 17, 2020, in furtherance of the BCM Clinical Supply Agreement and as contemplated by the terms thereof, the Company entered in a Clinical Trial Agreement ("CTA") with BCM, which provided for BCM to provide to the Company investigator-initiated research studies. The following table sets forth related party transaction expenses recorded in connection with the CTA for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ 213,000 ​ $ — ​ $ 213,000 ​ $ — Total ​ $ 213,000 $ — ​ $ 213,000 $ — ​ 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 is serving as the President of the Protein Sciences Segment of Bio-Techne Corporation. The following table sets forth related party transaction expenses recorded in connection with Bio-Techne Corporation for the three and nine months ended September 30, 2020 and 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ 51,000 ​ $ 4,000 ​ $ 105,000 ​ $ 43,000 Total ​ $ 51,000 ​ $ 4,000 ​ $ 105,000 ​ $ 43,000 ​ Consulting Agreement with Dr. Juan Vera . On October 19, 2018, after the closing of the Company’s merger, the Company entered into a consulting agreement with Dr. Juan Vera, a member of the Company’s board of directors, to serve as the Company’s Chief Development Officer. On September 1, 2019, Dr. Vera became an employee of the Company and his consulting agreement was terminated. During the three and nine months ended September 30, 2019, the Company incurred approximately $ 58,000 and $ 233,000 , respectively, of expenses under Dr. Vera’s consulting agreement. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 Research and development ​ $ — ​ $ 58,000 ​ $ — ​ $ 233,000 Total ​ $ — ​ $ 58,000 $ — $ 233,000 ​ ​ ​ 15 Table of Contents