What changed in this filing

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Item 9A. Controls and Procedures

2022-03-17 compared with 2021-03-09 · 234 added, 215 removed, 594 unchanged (43% of the section changed)

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OTHER INFORMATION

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item and not set forth below will be set forth in the sections headed “Election of Directors,” “Management and Named Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement for our 2020 Annual Meeting of Stockholders, or our Proxy Statement, to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2020 and is incorporated herein by reference.

The information required by this item and not set forth below will be set forth in the sections headed “Election of Directors,” “Executive Officers” and “Delinquent Section 16(a) Reports” in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, or our Proxy Statement, to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021 and is incorporated herein by reference.

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial and accounting officer or controller, or persons performing similar functions, known as the Code of Ethics and Business Conduct.

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EXECUTIVE COMPENSATION

The information required by this item will be set forth in the section headed “Executive Compensation-Compensation Discussion and Analysis” in our Proxy Statement and is incorporated herein by reference.

The information required by this item will be set forth in the section headed “Executive Compensation” in our Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be set forth in the section headed “Equity Compensation Plan Information” and “Security Ownership of Management and Certain Beneficial Owners” in our Proxy Statement and is incorporated herein by reference.

The information required by Item 201(d) of Regulation S-K will be set forth in the section headed “Executive Compensation-Compensation Discussion and Analysis” and “Board of Directors and Corporate Governance” in our Proxy Statement and is incorporated herein by reference.

The information required by this item will be set forth in the section headed “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement and is incorporated herein by reference.

The information required by Item 201(d) of Regulation S-K will be set forth in the section headed “Executive Compensation "

and "Information Regarding the Board of Directors and Corporate Governance” in our Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this item will be set forth in the section headed “Certain Relationships and Related Transactions” and “Board of Directors and Corporate Governance” in our Proxy Statement and is incorporated herein by reference.

The information required by this item will be set forth in the section headed “Transactions with Related Persons and Indemnification” and “Information Regarding the Board of Directors and Corporate Governance” in our Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be set forth in the section headed “Independent Auditors’ Fees and Services” in our Proxy Statement and is incorporated herein by reference.

The information required by this item will be set forth in the section headed “Principal Accountant Fees and Services” in our Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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Form of Common Stock Certificate of Marker Therapeutics, Inc.

Form of Common Stock Purchase Warrant

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series A

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series C

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series D

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series E

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series A-1

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series E-1

Form of Amended Series A Warrant

Form of Amended Series C Warrant

Form of Amended Series D Warrant

Form of Amended Series E Warrant

Incorporated by Reference

Exhibit description

Form of Amended Series A-1 Warrant

Form of Amended Series D-1 Warrant

Form of Series F Warrant

Form of Series F-1 Warrant

Form of August 2016 Private Placement Warrant

Form of 2016 Private Placement Agent Warrant

Form of June 2017 Private Placement Warrant

Form of 2017 Private Placement Agent Warrant

Form of Warrant Amendment Agreement August 2016 Private Placement

Form of Warrant Exercise Agreement

Form of Private Placement Warrant

Form of Marker Warrant

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License and Assignment Agreement with Mayo Foundation for Medical Education and Research dated May 19, 2016**

Incorporated by Reference

Exhibit description

Exclusive License Agreement between Baylor College of Medicine and Marker Therapeutics, Inc.

3 unchanged sentences

2009 Stock Incentive Plan*

Incorporated by Reference

Exhibit description

2014 Omnibus Stock Ownership Plan, as amended through August 29, 2017*

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Form of Director and Officer Indemnification Agreement*

Incorporated by Reference

Exhibit description

Amendment to Employment Agreement between Marker Therapeutics, Inc.

4 unchanged sentences

2020 Equity Incentive Plan

Incorporated by Reference

Exhibit description

Form of Stock Option Grant Notice and Stock Option Agreement under the Marker Therapeutics, Inc.

2 unchanged sentences

2020 Equity Incentive Plan.

Form of Common Stock Purchase Warrant

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series A

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series C

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series D

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series E

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series A-1

Form of Placement Agent Warrant Common Stock Purchase Warrants-Series E-1

Form of Amended Series A Warrant

Form of Amended Series C Warrant

Form of Amended Series D Warrant

Form of Amended Series E Warrant

Form of Amended Series A-1 Warrant

Incorporated by Reference

Exhibit description

Form of Amended Series D-1 Warrant

Form of Series F Warrant

Form of Series F-1 Warrant

Form of August 2016 Private Placement Warrant

Form of 2016 Private Placement Agent Warrant

Form of June 2017 Private Placement Warrant

Form of 2017 Private Placement Agent Warrant

Form of Warrant Amendment Agreement August 2016 Private Placement

Form of Warrant Exercise Agreement

Form of Private Placement Warrant

List of Subsidiaries

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Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002#

Incorporated by Reference

Exhibit description

XBRL Instance Document

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XBRL Taxonomy Extension Presentation Linkbase Document

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

* Executive management contract or compensatory plan or arrangement.

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March 17, 2022

/s/ Katharine Knobil

March 17, 2022

Katharine Knobil

/s/ Anthony Kim

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DECEMBER 31, 2021 AND DECEMBER 31, 2020

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688 )

Consolidated Balance Sheets

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Marker Therapeutics, Inc.

(the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Marker Therapeutics, Inc.

(the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

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The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

As more fully described in Note 2, the Company has incurred significant losses and needs to raise additional funds to sustain its operating expenses and capital expenditure requirements.

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

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Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

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Cash and cash equivalents

Restricted cash

Prepaid expenses and deposits

Interest receivable

Other receivable

Other receivables

Total current assets

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Lease liability

Warrant liability

Deferred revenue

Total current liabilities

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Total liabilities

Commitments and contingencies (see Note 15)

Stockholders' equity:

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( 28,885,812 )

Other income (expense):

Other income:

Change in fair value of warrant liabilities

Arbitration settlement

( 2,406,576 )

Interest income

2 unchanged sentences

Net loss per share, basic and diluted

Weighted average number of common shares outstanding

Weighted average number of common shares outstanding, basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.

MARKER THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Additional Paid-

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( 327,533,414 )

Stock options exercised for cash

Issuance common stock for cash

Warrants exercised for cash

Stock warrants cashless exercised

Issuance of common stock as commitment fee for future financing

Stock-based compensation

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( 356,239,484 )

Issuance common stock for cash

Warrants exercised for cash

Issuance of common stock as commitment fee for future financing

Issuance of common stock for cash (net of offering costs of $ 3.9 million)

Stock options exercised for cash

Stock-based compensation

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Prepaid expenses and deposits

( 1,384,725 )

Interest receivable

Other receivables

Accounts payable and accrued expenses

Deferred revenue

Lease liability

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( 1,572,161 )

( 3,422,754 )

Purchase of construction in progress

( 1,558,970 )

( 5,830,133 )

Net cash used in investing activities

( 3,131,131 )

( 9,252,887 )

Cash Flows from Financing Activities:

Proceeds from issuance of common stock

Proceeds from exercise of stock options

Proceeds from issuance of common stock, net

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Net cash provided by financing activities

Net decrease in cash

( 22,551,567 )

Net increase (decrease) in cash, cash equivlants and restricted cash

( 22,551,567 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

Cash, cash equivalents and restricted cash at beginning of the year

Cash, cash equivalents and restricted cash at end of the year

For the Years Ended

Supplemental schedule of non-cash financing activities:

Supplemental schedule of non-cash financing and investing activities:

Reclassifications between construction in progress and fixed assets

Capital expenditures included in accounts payable

Issuance of common stock as commitment fee for future financing

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

Stock warrants cashless exercised

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

The accompanying notes are an integral part of these consolidated financial statements.

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FINANCIAL CONDITION, GOING CONCERN AND MANAGEMENT PLANS

As of December 31, 2020, the Company had cash and cash equivalents of approximately $ 21.4 million.

As of December 31, 2021, the Company had cash, cash equivalents and restricted cash of approximately $ 43.5 million.

The Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital, and performing research and development.

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

On March 16, 2021, the Company issued an aggregate of 32,282,857 shares of its common stock, for net proceeds of $ 52.6 million.

In August 2021, the Company entered into a Controlled Equity Offering SM 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.

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 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.

To date, the Company has not sold any shares of its common stock under the ATM Agreement.

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 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 $ 2.4 million of funds from the CPRIT grant.

The Company recorded $ 1.2 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2021.

At December 31, 2021 , $ 1.1 million was recorded as Restricted Cash and Deferred Revenue on the Company’s consolidated financial statements.

The Company expects to continue to incur substantial losses over the next several years during its development phase.

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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 December 31, 2020 will enable the Company to fund its operating expenses and capital expenditure requirements into the third quarter of 2021, as such these factors raise substantial doubt regarding the Company's ability to continue as a going concern.

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, cash equivalents and restricted cash as of December 31, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into the first quarter of 2023, 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.

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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.

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 emergence of any new variant strains of COVID-19, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements, the timing, distribution, rate of public acceptance and efficacy of vaccines and other treatments, 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 the COVID-19 pandemic may be difficult to assess or predict it 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 and any variant strains thereof could materially affect the Company’s business and the value of its common stock.

SIGNIFICANT ACCOUNTING POLICIES

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All significant intercompany balances and transactions are eliminated upon consolidation.

Prior Period Reclassification

Certain reclassifications have been made to reclass certain non-cash capital expenditures on the consolidated statements of cash flows from a cash outflow from investing activity to a non-cash investing activity.

The Company has evaluated the materiality of this adjustment and concluded it was not material to the previously issued consolidated financial statements and had no impact to the reported consolidated balance sheets, consolidated statements of operations or net loss per share.

For the year ended December 31, 2020, this immaterial adjustment had the effect of increasing net cash used in operating activities and decreasing net cash used in investing activities by $1.2 million from what was previously reported.

Use of Estimates

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Significant areas requiring management’s estimates and assumptions include valuation allowance on deferred tax assets, determining the fair value of stock-based compensation and stock-based transactions, the fair value of the components of the warrant liabilities and accrued liabilities.

Cash, Cash Equivalents and Credit Risk

Cash, Cash Equivalents, Restricted Cash and Credit Risk

The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Cash and cash equivalents at December 31, 2020 consisted of cash and certificates of deposit in institutions in the United States.

Cash, cash equivalents and restricted cash at December 31, 2021 consisted of cash and certificates of deposit in institutions in the United States.

Balances at certain institutions have exceeded Federal Deposit Insurance Corporation insured limits and U.S.

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As of December 31, 2021, approximately $ 3.2 million in cash was uninsured based upon the FDIC insurance coverage limits.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows.

Cash, cash equivalents and restricted cash

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash shown in statements of cash flows

Cash received from grants in advance of incurring qualifying costs are recorded as restricted cash and deferred revenue until they are earned and recorded to grant income.

Property and Equipment

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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 asset and/or leasehold lease.

During the third and fourth quarters of 2021, and in connection with the Company's manufacturing facility in Houston, Texas, the Company incurred $ 2.2 million of costs pursuant to an agreement with a vendor to build and eventually install a second modular cleanroom.

Such costs were recorded in fixed assets - construction in progress on the balance sheet as of December 31, 2021.

Upon completion and installation of the modular cleanroom, all costs associated with the buildout will be recorded as manufacturing equipment and amortized over the estimated useful life.

Fair Value Measurements

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No interest or penalties were recorded during the years ended December 31, 2021 and 2020.

Warrant Liability

The Company evaluates options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for.

This accounting treatment requires that the carrying amounts of embedded derivatives be marked-to-market at each balance sheet date and carried at fair value.

If the fair value is recorded as a liability, the change in fair value during the period is recorded in the Statement of Operations as either income or expense.

Upon conversion, exercise or modification to the terms of a derivative instrument, the instrument is marked to fair value at the conversion date and then the related fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of financial instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date.

Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

Management must determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock.

An entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

This exercise affects the accounting for (i) certain freestanding warrants that contain exercise price adjustment features and (ii) convertible notes containing full-ratchet and anti-dilution protections (iii) certain free-standing warrants that contain contingently putable cash settlement.

The Company recognizes grant income in accordance with the terms stipulated under the grant awarded to the Company’s collaborators at the Mayo Foundation from the U.

Department of Defense.

In various situations, the Company receives certain payments from the U.S.

Department of Defense for reimbursement of clinical supplies.

In various situations, the Company receives certain payments from the Mayo Foundation for reimbursement of clinical supplies.

These payments are non-refundable and are not dependent on the Company’s ongoing future performance.

The Company has adopted a policy of recognizing these payments when received and as revenue in accordance with Accounting Standards Update No.

2014-09, “Revenue from Contracts with Customers (Topic 606)” issued by the Financial Accounting Standards Board.

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

issued by FASB.

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.

In accordance with ASC 730-20-25-8, the extent the financial risk associated with the research and development has been transferred to CPRIT, because repayment of the grant depends solely on the results of research and development having future economic benefit, the Company accounts for this obligation as a contract to perform research and development for others.

The funds received from CPRIT will initially be recorded as a deferred credit in the Company’s balance sheet.

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.

During the fourth quarter of 2021, the Company received $ 2.4 million advancement of funds in relation to the CPRIT grant.

The Company recorded $ 1.2 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2021.

At December 31, 2021, $ 1.1 million was recorded as restricted cash and deferred revenue on the Company's consolidated financial statements.

Loss per Common Share

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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 we adopt as of the specified effective date.

From time to time, new accounting pronouncements are issued by the 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

Recent Accounting Standards Adopted in the Year

In December 2019, the FASB issued ASU No.

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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 has adopted the new standard effective January 1, 2021 and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

The Company has adopted the new standard effective January 1, 2021 and has concluded that the adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures.

NET LOSS PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

Net Loss per Share Applicable to Common Stockholders

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 loss per share for the years ended December 31, 2020 and 2019, respectively:

The following table sets forth the computation of net loss per share for the years ended December 31, 2021 and 2020, respectively:

For the Years Ended

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Weighted average common shares outstanding

Net loss per share data:

Net loss per share:

Basic and diluted

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Common stock purchase warrants

Common stock warrants - liability treatment

Potentially dilutive securities

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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.

The construction of the facility was completed during December 2020, and a certificate was occupancy was delivered to the Company in January 2021.

In accordance with the agreement, upon completion of the facility’s construction, the Company was owed up to $ 1.0 million as reimbursement, and as such a landlord receivable was recorded, which provides for a legal right to receive construction reimbursements from the landlord for tenant improvement allowances.

During the fiscal year ended 2020, the Company recorded a $ 1.0 million receivable in its consolidated financial statements.

The Company expects to receive the $ 1.0 million in the first half of 2021.

The Company received the $ 1.0 million reimbursement in April 2021.

PROPERTY AND EQUIPMENT

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Estimated Useful Lives

Lab equipment

Lab and manufacturing equipment

Computers, equipment and software

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accumulated depreciation

( 2,740,000 )

Construction in progress

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Depreciation expense for the years ended December 31, 2021 and 2020 was approximately $ 2.1 million and $ 0.5 million, respectively.

In June 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.

In June 2020, the Company entered into a lease for a manufacturing facility in Houston, Texas.The Company has incurred costs pursuant to an agreement with a vendor to design, engineer, build and eventually install modular cleanrooms in the manufacturing facility.

$ 6.8 million is recorded in fixed assets – construction in progress on the balance sheet as of December 31, 2020.

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During January 2021, 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 asset and/or leasehold lease.

In connection with the research facility that the Company opened during the second quarter of 2020, the Company incurred approximately $ 2.2 million of costs acquiring necessary lab equipment to carry out its experiments.

The $ 2.2 million is included in Lab equipment within fixed assets and is being depreciated over five years .

Additionally, the Company incurred $ 0.3 million in leasehold improvements relating to the research facility.

The Company entered into a new agreement for its corporate headquarters in Houston, Texas, which commenced in August 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.

As of December 31, 2020, the Company had remaining $ 4.1 million from the lease liability and $ 4.0 million of the related right-of-use asset resulting from the lease of its corporate headquarters.

In April 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.

As of December 31, 2020, the Company had remaining $ 0.8 million from the lease liability and $ 0.8 million of the related right-of-use asset resulting from the lease of its research facility.

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

The initial lease term is ten years from the 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.

As of December 31, 2020, the Company had remaining $ 7.2 million from the lease liability and $ 5.8 million of the related right-of-use asset resulting from the lease of its manufacturing facility.

The Company also leases office space under agreements classified as operating leases that expire in 2022.

As of December 31, 2020, the Company had remaining $ 0.2 million from the lease liability 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.

During the year ended December 31, 2021, and in connection with the opening of the Company’s manufacturing facility in Houston, Texas, the Company incurred $ 2.2 million of costs pursuant to an agreement with a vendor to build and eventually install a second modular cleanroom.

Such costs were recorded in fixed assets – construction in progress on the balance sheet as of December 31, 2021.

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.

The company did not consider that option in calculating Right-of-use assets and lease liability as the Company is not reasonably certain it will extend the contract beyond the current terms.

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 non-current assets on the Company’s consolidated balance sheets.

Current and non-current lease liabilities are recorded within current liabilities and non-current liabilities, respectively, on its 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 December 31, 2021, the Company had total operating lease liabilities of approximately $ 11.9 million and right-of-use assets of approximately $ 9.8 million, which were included in the consolidated balance sheet.

Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

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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.

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 December 31, 2020, the Company had operating lease liabilities of approximately $ 12.3 million and right-of-use assets of approximately $ 10.8 million, which were included in the consolidated balance sheet.

The following summarizes quantitative information about the Company’s operating leases:

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Variable lease expense

For the Years Ended

Other information:

Operating cash flows - operating leases

Weighted-average remaining lease term – operating leases

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

The weighted-average remaining lease term as of December 31, 2021 and December 31, 2020 was approximately 8.4 years and 9.3 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of December 31, 2021 and December 31, 2020 was approximately 5.7 %.

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

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Compensation and benefits

Process development expenses

Professional fees

Technology license fees

Arbitration settlement fees

Total accounts payable and accrued liabilities

WARRANT LIABILITY

A weighted average 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 years ended 2020 and 2019, respectively:

Weighted Average Inputs

For the Years Ended

Exercise price

Contractual term (years)

Volatility (annual)

Risk-free rate

Dividend yield (per share)

The foregoing assumptions are recalculated every reporting period and are subject to change based primarily on management’s assessment of the probability of the events described occurring.

Accordingly, changes to these assessments could materially affect the valuations.

The following table presents changes in Level 3 warrant liabilities, reflected in accrued expenses measured at fair value for the years ended December 31, 2020 and 2019, respectively:

Balance - January 1, 2019

Change in fair value of warrant liability

Balance – December 31, 2019

Change in fair value of warrant liability

Balance – December 31, 2020

FAIR VALUE MEASUREMENTS

Financial assets and 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 December 31, 2020

Quoted prices in active

Significant other

observable inputs

unobservable inputs

Fair value at

December 31, 2020

Warrant liability

Fair value measured at December 31, 2019

Quoted prices in active

Significant other

observable inputs

unobservable inputs

Fair value at

December 31, 2019

Warrant liability

There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2020 and 2019, respectively.

The valuation of warrants is subjective and is affected by changes in inputs to the valuation model including the price per share of common stock, the historical volatility of the stock price, risk-free rates based on U.

Treasury security yields, the expected term of the warrants and dividend yield.

Changes in these assumptions can materially affect the fair value estimate.

The Company could ultimately incur amounts to settle the warrant at a cash settlement value that is significantly different than the carrying value of the liability on the financial statements.

The Company will continue to classify the fair value of the warrants as a liability until the warrants are exercised, expire, or are amended in a way that would no longer require these warrants to be classified as a liability.

Changes in the fair value of the common stock warrants liability are recognized as a component of other income (expense) in the Statements of Operations.

The net cash settlement value at the time of any future transactions, where the Company consolidates or merges with another entity, will depend upon the value of the following inputs at that time:

the consideration value per share of the Company’s common stock, the volatility of the Company’s common stock, the remaining term of the warrant from announcement date, the risk-free interest rate based on U.

Treasury security yields, and the Company’s dividend yield.

The warrant requires use of a volatility assumption equal to the greater of 100% and the 100-day volatility function determined as of the trading day immediately following announcement of a Fundamental Transaction.

STOCKHOLDERS’ EQUITY

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2021 Common Stock Transactions

Exercise of Stock Options

During the year ended December 31, 2021, certain outstanding options were exercised for 1,456 shares of common stock providing aggregate proceeds to the Company of approximately $ 3,100 .

Board Compensation

During the year ended December 31, 2021, the Company issued an aggregate of 0.1 million 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.

Underwritten Public Offering

On March 11, 2021, the Company entered into an underwriting agreement with Piper Sandler & Co., as representative of the several underwriters, to issue and sell 28,572,000 shares of common stock of the Company in an underwritten public offering.

The offering price to the public was $ 1.75 per share.

In addition, the Company granted the underwriters an option to purchase, for a period of 30 days , up to an additional 4,285,800 shares of common stock, which such option was partially exercised with respect to 3,710,857 shares.

An aggregate of 32,282,857 shares of the Company’s common stock was issued for net proceeds of $ 52.6 million.

2020 Common Stock Transactions

Exercise of Stock Warrants

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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 0.3 million shares of the Company’s common stock as a commitment fee.

In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 0.3 million

shares of the Company’s common stock as a commitment fee.

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

As of December 31, 2020, Aspire Capital had purchased 4.1 million shares under the Purchase Agreement, providing aggregate proceeds to the Company of approximately $ 6.2 million.

2019 Common Stock Transactions

Consulting Arrangements

During the year ended December 31, 2019, the Company issued 0.05 million shares of common stock in connection with consulting agreements.

The fair value of the common stock of approximately $ 0.3 million was recognized as stock-based compensation expense in general and administrative expenses.

Board Compensation

During the year ended December 31, 2019, the Company issued an aggregate of 0.03 million shares of common stock to its non-employee directors.

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

Aspire Capital did not purchase any shares under the Purchase Agreement during the year ended December 31, 2021.

Share Purchase Warrants

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Balance - January 1, 2020

Warrants granted

Exercised for cash

Cashless exercise

Expired or cancelled

( 1,376,000 )

Balance - December 31, 2020

Exercised for cash

Expired or cancelled

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During the year ended December 31, 2020, certain outstanding warrants were exercised for 0.5 million shares of common stock providing aggregate proceeds to the Company of approximately $ 0.6 million.

2019 Warrant Transactions

Exercise of Stock Warrants

During the year ended December 31, 2019, certain outstanding warrants were exercised for 0.2 million shares of common stock providing aggregate proceeds to the Company of approximately $ 0.8 million.

STOCK OPTION PLANS

Options to Purchase Shares of Common Stock

2020 Equity Incentive Plan

On May 19, 2020, the Board adopted the 2020 Equity Incentive Plan ("2020 Plan") which replaced the 2014 Omnibus Stock Option Plan (“2014 Plan”).

2021 Equity Incentive Awards

On May 19, 2020, the Board adopted the 2020 Equity Incentive Plan ("2020 Plan") which replaced the 2014 Omnibus Stock Option Plan.

The 2020 Plan allows for grants of stock options, restricted shares, stock bonuses and other equity-based awards to employees and non-employee directors of the Company.

Awards under the 2020 Plan may be at prices and for terms as determined by the Board of Directors and may have vesting requirements as determined by the Board, provided that the exercise price for any stock option must be at least equal to the fair market value (as defined in the 2020 Plan) of a share of the stock on the grant date.

Once granted, the exercise price of an option may not be reduced without the approval of the Company’s stockholders, other than under certain limited circumstances such as a stock split or take any other action with respect to a stock option that would be treated as a repricing under the rules and regulations of the New York Stock Exchange.

Options granted under the 2020 Plan have a maximum term of ten years from the date of grant.

Options granted in 2020 and 2019 generally vest over four years .

Awards under the 2020 Plan may be at prices and for terms as determined by the Company's board of directors and may have vesting requirements as determined by the Board, provided that the exercise price for any stock option must be at least equal to the fair market value (as defined in the 2020 Plan) of a share of the stock on the grant date.

Once granted, the exercise price of an option may not be reduced without the approval of the Company's stockholders, other than under certain limited circumstances such as a stock split or take any other action with respect to a stock option that would be treated as a repricing under the rules and regulations of the Nasdaq Stock Exchange.

Options granted under the 2020 Plan have a maximum term of ten years from the date of grant and generally vest over four years .

On February 10, 2021, pursuant to the Company's 2020 Equity Incentive Plan, the compensation committee of the Company's board of directors approved a total of 740,000 options to purchase the Company's common stock as equity-based incentive awards to the Company's executive officers, other than the Chief Executive Officer.

Each option award was granted with an exercise price of $ 3.29 per share, the closing price of the Company's common stock on the Nasdaq Global Market on February 10, 2021, 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 10, 2021, the compensation committee of the Company's board of directors approved a total of 260,000 options to purchase the Company's common stock to non-executive employees of the Company as equity-based incentive awards.

Each option award was granted with an exercise price of $ 3.29 per share, the closing price of the Company's common stock on

the Nasdaq Global Market on February 10, 2021, 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.

On February 11, 2021, upon the recommendation of the compensation committee and pursuant to the Company's 2020 Equity Incentive Plan, the Company's board of directors approved a total of 430,000 options to purchase the Company's common stock as (equity-based incentive awards to the Company's Chief Executive Officer.

The option award was granted with an exercise price of $ 3.06 per share, the closing price of the Company's common stock on the Nasdaq Global Market on February 11, 2021, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such Chief Executive Officer's continued service on the applicable vesting date.

The above awards were in addition to 90,000 stock option awards issued during the three months ended March 31, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 1.47 per share, the closing price of the Company's common stock on the Nasdaq Global Market on January 4, 2021, 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.

100,000 stock option awards were issued during the three months ended June 30, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 2.19 per share, the closing price of the Company's common stock on the Nasdaq Global Market on April 1, 2021, 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.

130,000 stock option awards were issued during the three months ended September 30, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 2.88 per share, the closing price of the Company's common stock on the Nasdaq Global Market on July 1, 2021, 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.

40,000 stock option awards were issued during the three months ended December 31, 2021 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 1.67 per share, the closing price of the Company's common stock on the Nasdaq Global Market on October 1, 2021, 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.

Also, 125,000 stock option awards were issued to a new outside director.

The option award was granted with an exercise price of $ 1.20 per share, the closing price of the Company's common stock on the Nasdaq Global Market on December 8, 2021, vesting in 36 equal monthly installments.

During the year ended December 31, 2021, 1,456 stock options were exercised for net proceeds of $ 3,100 .

As of December 31, 2021, approximately 2.9 million options are available to be issued from the 2020 Plan.

2014 Omnibus Stock Ownership Plan

The 2014 Plan, which the Board adopted on May 19, 2020 and subsequently amended from time to time, allowed for grants of stock options, restricted shares, stock bonuses and other equity-based awards to employees and non-employee directors of the Company.

The terms of the 2014 plan are substantially identical to the terms of the 2020 Plan described above.

Stock Options

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Outstanding as of January 1, 2021

Canceled/Expired

Outstanding as of December 31, 2021

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Future option grants will impact the compensation expense recognized.

During the years ended December 31, 2020 and 2019, the Company received $ 0.5 million and $ 0.2 million, respectively, of a grant awarded to Mayo Foundation from the U.S.

Department of Defense for the Phase II Clinical Trial of TPIV200.

During the years ended December 31, 2021 and 2020, the Company received $ 0 and $ 0.5 million, respectively, of a grant awarded to Mayo Foundation from the U.S.

Department of Defense for the Phase 2 Clinical Trial of TPIV200.

The grant compensated the Company for clinical supplies manufactured and provided by the Company for the clinical study.

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 and $ 0.2 million, respectively, of grant income as revenue.

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 $ 1.0 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.

Additionally, 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 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.

During the fourth quarter of 2021, the Company received $ 2.4 million advancement of funds in relation to the CPRIT grant.

The Company recorded $ 1.2 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2021.

At December 31, 2021 $ 1.1 million was recorded as Restricted Cash and Deferred Revenue on the Company's consolidated financial statements.

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.

Other than below, 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.

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

(“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 broker's claims were based on a placement agent agreement for a private placement it brokered in 2017, under which it alleged it was entitled to compensation for the 2018 transactions.

The FINRA panel found in favor of the broker and awarded the broker $ 2.4 million for compensation, interest and attorney fees.

As of September 30, 2021, the Company recorded an accrual of $ 2.4 million in accrued liabilities on its consolidated balance sheet and a $ 2.4 million charge to other expenses.

On September 17, 2021, the broker filed a petition to confirm the FINRA arbitration award in the Supreme Court of New York for the County of New York.

The Company removed the case to the United States District Court for the Southern District of New York on September 27, 2021.

On October 22, 2021, the Company filed a motion in federal court to vacate the award.

On March 9, 2022, the Company was notified that its motion to vacate the award was denied and the broker was awarded an additional $ 0.1 million in interest.

Post judgment interest will continue to accrue at 1.02 % until the judgement is paid.

RELATED PARTY TRANSACTIONS

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Bio-Techne Corporation

Wilson Wolf Manufacturing Corporation

Total Research and development

$ 1.0 million of related party transactions are included in accounts payable and accrued liabilities as of December 31, 2021.

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

In November 2018 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, the Company entered in a Clinical Supply Agreement with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products.

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.

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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.

Consulting Agreement with Dr.

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.

Purchases from Wilson Wolf Manufacturing Corporation .

The Company is currently utilizing Wilson Wolf Manufacturing Corporation for the purchases of cell culture devices called G-Rexes.

John Wilson is a member of the Company's board of directors and is serving as the CEO of Wilson Wolf Manufacturing Corporation.

Wilson Wolf Manufacturing became a related party during fiscal year 2021 and as such, $ 61,000 transactions for the period ended December 31, 2020 were included in the table above.

The Company has no income tax expense due to operating losses incurred for the years ended December 31, 2021 and 2020.

The effects of temporary differences that give rise to significant portions of the deferred tax assets as of December 31, 2021 and 2020 are as follows:

For the Years Ended

As of December 31,

Deferred Tax Assets

(As reported)

Net Operating Loss Carryforward

Stock Compensation

Accrued Expenses

License Agreements

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( 27,632,000 )

( 29,689,000 )

Total Deferred Tax Assets

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( 2,083,000 )

( 2,323,000 )

( 2,380,000 )

Total Deferred Tax Liabilities

( 2,177,000 )

( 2,380,000 )

Net Deferred Tax Assets/(Liabilities)

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Based upon the history of losses, management believes that it is more likely than not, that future benefits of deferred tax assets will not be realized and has established a full valuation allowance for the years ended December 31, 2021 and 2020.

The valuation allowance increased by $ 5.1 million as of December 31, 2020.

The Company has research and development tax credit carryforwards of $ 0.7 million available to offset future federal income taxes.

The Company decreased the prior period deferred tax asset by $ 2.1 million with a corresponding decrease in its valuation allowance.

This immaterial adjustment mostly related to the correction of the cumulative value of cancelled non-qualified stock options.

The Company has research and development tax credit carryforwards of $ 733,000 available to offset future federal income taxes.

The research and development tax credit carryforwards begin to expire in 2030.

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The federal net operating loss carryforwards of $ 88.9 million generated in 2018 and thereafter are subject to an 80 % limitation on taxable income, do not expire and will carry forward indefinitely.

The state net operating loss carryforwards of $ 21.9 million, if not utilized, will begin to expire in 2035.

The state net operating loss carryforwards of

$ 21.9 million, if not utilized, will begin to expire in 2035.

The state net operating loss carryforwards of $ 16.7 million generated in 2018 and thereafter are subject to an 80 % limitation on taxable income, do not expire and will carry forward indefinitely.

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Given the Company’s full valuation allowance position, the CARES Act did not have an impact on the financial statements.

SUBSEQUENT EVENTS

On February 16, 2022, the Company received a notice from the Nasdaq Global Market that the Company was not in compliance with Nasdaq's Listing Rule 5450(a)(1), as the minimum bid price of its common stock had been below $ 1.00 per share for 30 consecutive business days.

The Company has 180 calendar days, or until August 15, 2022, to regain compliance with the minimum bid price requirement.

To regain compliance, the minimum bid price of the Company's common stock must meet or exceed $ 1.00 per share for a minimum of ten consecutive business days during this 180 -calendar day grace period.

In the event the Company does not regain compliance with the minimum bid price requirement by August 15, 2022, the Company may be eligible for an additional 180 -calendar day compliance period if it elects to transfer to the Nasdaq Capital Market to take advantage of the additional compliance period offered on that market.

To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures