What changed in this filing

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Item 1. Financial Statements

2022-05-13 compared with 2021-11-10 · 139 added, 176 removed, 269 unchanged (54% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

Cash and cash equivalents

Restricted cash

Prepaid expenses and deposits

10 unchanged sentences

Lease liability

Deferred revenue

Total current liabilities

3 unchanged sentences

Total liabilities

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, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 83.1 million and 50.7 million shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Preferred stock - $ 0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at March 31, 2022 and December 31,2021, respectively

Common stock, $ 0.001 par value, 150 million shares authorized, 83.5 million and 83.1 million shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Total revenues

6 unchanged sentences

( 8,780,987 )

( 29,713,710 )

( 20,377,336 )

Other income:

Change in fair value of warrant liabilities

Other income (expenses):

Arbitration settlement

( 2,406,576 )

Interest income

1 unchanged sentence

( 8,779,450 )

( 32,115,555 )

( 20,198,843 )

Net loss per share, basic and diluted

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended September 30, 2021

Additional Paid-

Stockholders’

Balance at July 1, 2021

( 375,925,716 )

Stock-based compensation

( 12,429,323 )

Balance at September 30, 2021

( 388,355,039 )

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Additional Paid-

2 unchanged sentences

( 398,118,355 )

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

Stock options exercised for cash

Stock-based compensation

1 unchanged sentence

( 9,910,508 )

Balance at September 30, 2021

( 388,355,039 )

For the Three Months Ended September 30, 2020

Additional Paid-

Stockholders’

Balance at July 1, 2020

( 340,360,757 )

Issuance common stock for cash

Stock-based compensation

( 7,371,500 )

Balance at September 30, 2020

Balance at March 31, 2022

( 408,028,863 )

For the Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2021

Additional Paid-

2 unchanged sentences

( 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 cost of $ 3.9 million)

Stock-based compensation

1 unchanged sentence

( 8,779,450 )

Balance at September 30, 2020

Balance at March 31, 2021

( 365,018,934 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash Flows from Operating Activities:

3 unchanged sentences

Depreciation and amortization

Changes in fair value of warrant liabilities

Stock-based compensation

Amortization on right-of-use assets

Amortization of right-of-use assets

Changes in operating assets and liabilities:

2 unchanged sentences

Accounts payable and accrued expenses

( 3,953,976 )

( 1,482,473 )

Deferred revenue

Lease liability

4 unchanged sentences

Purchase of property and equipment

( 1,262,092 )

( 2,005,160 )

Purchase of construction in progress

( 1,519,196 )

Cash used for construction in progress

( 1,625,605 )

4 unchanged sentences

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 increase (decrease) in cash

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

( 14,678,250 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

For the Nine Months Ended

September 30,

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

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

For the Three Months Ended

Supplemental schedule of non-cash financing and investing activities:

Offering cost not yet paid

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 agreement

See accompanying notes to these unaudited condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

March 31, 2022

NATURE OF OPERATIONS

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The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2022 or for any future interim period.

The condensed consolidated balance sheet at September 30, 2021 has been derived from unaudited financial statements;

The condensed consolidated balance sheet at March 31, 2022 has been derived from unaudited financial statements;

however, it does not include all of the information and notes required by U.S.

1 unchanged sentence

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s annual report on Form 10-K filed on March 17, 2022.

LIQUIDITY AND FINANCIAL CONDITION

As of September 30, 2021, the Company had cash and cash equivalents of approximately $ 48.7 million.

LIQUIDITY , GOING CONCERN AND FINANCIAL CONDITION

As of March 31, 2022, the Company had cash, cash equivalents and restricted cash of approximately $ 28.8 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.

In August 2021, the Company entered into a Controlled Equity Offering SM Sales Agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co.

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

1 unchanged sentence

333-258687), which the SEC declared effective on August 19, 2021.

The shelf registration statement on Form S-3 includes a prospectus supplement covering the offering up to $ 19.8 million of shares of common stock over the 12 months ending March 18, 2023 in accordance with the ATM agreement.

The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0 % of the gross sales price per share sold under the ATM Agreement, and the Company has provided each of the Sales Agents with indemnification and contribution rights.

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

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.

From April 1, 2022 to the date of this filing, the Company sold 148,000 shares of its common stock under the ATM Agreement for net proceeds of $ 63,600 .

In August 2021, the Company received notice of a Product Development Research award totaling approximately $ 13.1 million from the Cancer Prevention and Research Institute of Texas (“CPRIT”) to support the Company's Phase 2 clinical trial of its lead MultiTAA-specific T cell product MT-401.

The CPRIT award is intended to support the adjuvant arm of the Company's Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant.

The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group.

To date, the Company has received $ 2.4 million of funds from the CPRIT grant.

On April 21, 2022, the Company entered into a binding services agreement (the “Agreement”), effective April 12, 2022, with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”).

Wilson Wolf is in the business of creating products and services intended to simply and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society (the “Wilson Wolf Mission”).

Pursuant to the Agreement, Wilson Wolf made a cash payment to the Company in the amount of $ 8.0 million.

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.

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 not received any funds from the CPRIT grant.

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 September 30, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into the first quarter of 2023.

This expectation does not account for any future funds that the Company may receive from the CPRIT award.

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 March 31, 2022 will enable the Company to fund its operating expenses and capital expenditure requirements into the second quarter of 2023.

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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● 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.

We have no sources of revenue to provide incoming cash flows to sustain our future operations.

As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to raise additional capital.

These factors raise substantial doubt regarding our ability to continue as a going concern.

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

Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

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 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.

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 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 any future business disruptions in the United States and other countries to contain and treat the disease and the rate of public acceptance and efficacy of vaccines and other treatments.

Further, disruption of global financial markets and a recession or market correction, including as a result of the COVID-19 pandemic and other global macroeconomic factors, could reduce the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity and could materially affect the Company’s business and the value of its common stock.

On February 16, 2022, the Company received a notice from The Nasdaq Stock 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.

SIGNIFICANT ACCOUNTING POLICIES

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.

For the nine months ended September 30, 2020, this immaterial adjustment had the effect of increasing net cash used in operating activities and decreasing net cash used in investing activities by $ 1.9 million from was previously reported.

Certain reclassifications have been made to reclass certain non-cash capital expenditures on the condensed 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 condensed consolidated balance sheets, consolidated statements of operations or net loss per share.

For the three months ended March 31, 2021, this immaterial adjustment had the effect of decreasing net cash used in operating activities and increasing net cash used in investing activities by $ 1.0 million from what was previously reported.

Property and equipment - Construction in Progress

During the third quarter of 2021, and in connection with the Company’s manufacturing facility in Houston, Texas, the Company incurred $ 0.6 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 September 30, 2021.

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.

Additionally, during the first quarter of 2022, the Company incurred $ 1.9 million of costs related to the second modular cleanroom.

Such costs were recorded in fixed assets – construction in progress on the balance sheet as of March 31, 2022.

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.

4 unchanged sentences

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 (“FASB”).

Cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred.

2014 09, “Revenue from Contracts with Customers (Topic 606)” issued by FASB.

In August 2021, the Company received notice of a Product Development Research award totaling approximately $ 13.1 million from CPRIT to support the 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.

The Company recorded $ 1.0 million of grant income related to the CPRIT grant as revenue for the three months ended March 31, 2022.

At March 31, 2022, $ 0.2 million was recorded as restricted cash and deferred revenue on the Company’s condensed consolidated financial statements.

New Accounting Standards

From time to time, new accounting pronouncements are issued by 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 Adopted in the Year

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 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 condensed consolidated financial statements and related disclosures.

Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its consolidated financial position or results of operations upon adoption.

NET LOSS PER SHARE

1 unchanged sentence

Diluted loss per common share is computed similarly to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

The following table sets forth the computation of net loss per share for the three and nine months ended September 30, 2021 and 2020, respectively:

The following table sets forth the computation of net loss per share for the three months ended March 31, 2022 and 2021, respectively:

For the Three Months Ended

For the Nine Months Ended

September 30,

( 9,910,508 )

( 8,779,450 )

( 32,115,555 )

( 20,198,843 )

Weighted average common shares outstanding

2 unchanged sentences

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,

For the Three Months Ended

Common stock options

1 unchanged sentence

Potentially dilutive securities

OTHER RECEIVABLES

Pursuant to the Company’s lease agreement for its manufacturing facility, the Company incurred and paid 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).

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 condensed consolidated financial statements.

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

PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of September 30, 2021 and December 31, 2020, respectively:

September 30,

Property and equipment consist of the following as of March 31, 2022 and December 31, 2021, respectively:

Estimated Useful Lives

6 unchanged sentences

( 3,316,000 )

( 2,740,000 )

Construction in progress

Total fixed assets, net

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 a manufacturing facility.

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

The completion of the facility’s construction occurred during December 2020 and the Company received its certificate of occupancy in January 2021, and as such was placed into service in January 2021 and became fully operational in July 2021.

During January 2021, $ 4.0 million of the costs previously recorded as construction in progress were recorded to lab and manufacturing equipment and $ 2.8 million were recorded to leasehold improvements.

During the third quarter of 2021, and in connection with the opening of the Company’s manufacturing facility in Houston, Texas, the Company incurred $ 0.6 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 September 30, 2021.

Depreciation expense for the three months ended September 30, 2021 and 2020 was approximately $ 0.6 million and $ 0.1 million, respectively.

Depreciation expense for the nine months ended September 30, 2021 and 2020 was approximately $ 1.6 million and $ 0.3 million, respectively.

Additionally, during the first quarter of 2022, the Company incurred $ 1.9 million of costs related to the second modular cleanroom.

Such costs were recorded in fixed assets – construction in progress on the balance sheet as of March 31, 2022.

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.

Depreciation expense for the three months ended March 31, 2022 and 2021 was approximately $ 0.6 million and $ 0.5 million, respectively.

$ 2.3 million of property and equipment transactions are included in accounts payable and accrued liabilities as of March 31, 2022.

The Company leases manufacturing, research and administrative facilities under operating leases.

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Costs associated with operating leases are recognized on a straight-line basis within operating expenses over the term of the lease.

As of September 30, 2021, the Company had total operating lease liabilities of approximately $ 12.0 million and right-of-use assets of approximately $ 10.1 million, which were included in the condensed consolidated balance sheet.

As of March 31, 2022, the Company had total operating lease liabilities of approximately $ 11.7 million and right-of-use assets of approximately $ 9.6 million, which were included in the condensed consolidated balance sheet.

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

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

The following summarizes quantitative information about the Company’s operating leases for the three and nine months ended September 30, 2021 and 2020, respectively:

The following summarizes quantitative information about the Company’s operating leases for the three months ended March 31, 2022 and 2021, respectively:

For the Three Months Ended

For the Nine Months Ended

September 30,

Operating lease expense summary:

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Variable lease expense

For the Nine Months Ended

September 30,

For the Three Months Ended

Other information:

Operating cash flows - operating leases

The weighted-average remaining lease term as of September 30, 2021 and December 31, 2020 was approximately 8.7 years and 9.3 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of September 30, 2021 and December 31, 2020 was approximately 5.7 % and 5.7 %, respectively.

The weighted-average remaining lease term as of March 31, 2022 and December 31, 2021 was approximately 8.2 years and 8.4 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of March 31, 2022 and December 31, 2021 was approximately 5.7 %.

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

Three months ended December 31, 2021

Nine months ending December 31, 2022

Year ended December 31, 2023

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( 3,255,000 )

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at September 30, 2021

Operating lease liabilities included in the Condensed Consolidated Balance Sheet at March 31, 2022

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of September 30, 2021 and December 31, 2020, respectively:

September 30,

Accounts payable and accrued liabilities consist of the following as of March 31, 2021 and December 31, 2021, respectively:

Accounts payable

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Total accounts payable and accrued liabilities

COMMITMENTS AND CONTINGENCIES

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 condensed 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.

STOCKHOLDERS’ EQUITY

Common Stock Transactions

Exercise of Stock Options

During the nine months ended September 30, 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 nine months ended September 30, 2021, the Company issued an aggregate of 63,290 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.

Issuance of Restricted Stock Units to Executives

During the three months ended March 31, 2022, upon the recommendation of the compensation committee and pursuant to the Company’s 2020 Equity Incentive Plan, the Company’s board of directors approved the issuance of a total of 372,512 shares of common stock subject to restricted stock units, which were immediately vested upon grant, to certain executives as performance bonuses for 2021 performance

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of September 30, 2021 and changes during the period is presented below:

A summary of the Company’s share purchase warrants as of March 31, 2022 and changes during the period is presented below:

Weighted Average

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Balance - January 1, 2022

Warrants granted

Expired or cancelled

( 1,000,000 )

Balance - September 30, 2021

Balance - March 31, 2022

STOCK-BASED COMPENSATION

1 unchanged sentence

2022 Equity Incentive Awards

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.

On February 17, 2022, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 1,250,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers.

Each option award was granted with an exercise price of $ 0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, 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.

1 unchanged sentence

Each option award was granted with an exercise price of $ 0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, 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 175,000 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 $ 1.00 per share, the closing price of the Company's common stock on the Nasdaq Global Market on January 3, 2022, with 25 % of the option award vesting in one year and the remaining 75 % vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.

Also, 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.

Additionally, 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.

During the nine months ended September 30, 2021, 1,456 stock options were exercised for net proceeds of $ 3,100 .

A summary of the Company’s stock option activity for the nine months ended September 30, 2021 is as follows:

A summary of the Company’s stock option activity for the three months ended March 31, 2022 is as follows:

Weighted Average

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Canceled/Expired

Outstanding as of September 30, 2021

Outstanding as of March 31, 2022

Options vested and exercisable

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans.

The weighted average assumptions used in calculating the fair values of stock options that were granted during the nine months ended September 30, 2021 was as follows:

For the Nine Months Ended

September 30, 2021

The weighted average assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2022 was as follows:

For the Three Months Ended

March 31, 2022

Exercise price

5 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Stock Compensation expenses:

2 unchanged sentences

Total stock compensation expenses

As of September 30, 2021, the total stock-based compensation cost related to unvested awards not yet recognized was $ 9.9 million.

As of March 31, 2022, the total stock-based compensation cost related to unvested awards not yet recognized was $ 7.6 million.

The expected weighted average period compensation costs to be recognized was approximately 1.9 years.

Future option grants will impact the compensation expense recognized.

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 $ 1.0 million of grant income related to the CPRIT grant as revenue for the three months ended March 31, 2022.

At March 31, 2022, $ 0.2 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.

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 December 31, 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 accrued at 1.02 % until the judgement was paid.

The Company paid the $ 2.5 million judgement on March 24, 2022.

RELATED PARTY TRANSACTIONS

The following table sets forth related party transaction expenses recorded for the three and nine months ended September 30, 2021 and 2020, respectively.

The following table sets forth related party transaction expenses recorded for the three months ended March 31, 2022 and 2021, respectively.

For the Three Months Ended

For the Nine Months Ended

September 30,

Baylor College of Medicine

Bio-Techne Corporation

Wilson Wolf Manufacturing Corporation

Total Research and development

$ 0.9 million of related party transactions are included in accounts payable and accrued liabilities as of March 31, 2022.

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

3 unchanged sentences

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

The Company has also entered into a Clinical Site Agreement with BCM, which provided for BCM to conduct clinical trials for the Company.

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.

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.

David Eansor is a member of the Company’s board of directors and was serving as the President of the Protein Sciences Segment of Bio-Techne Corporation.

Eansor resigned from Bio-Techne Corporation on March 1.

2022, and as such, two months of transactions in 2022 are included in the table above.

Purchases from Wilson Wolf 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 due to the amounts of the Company’s purchases and as such, $ 34,000 of purchases for the period ended March 31, 2021 were included in the table above.

SUBSEQUENT EVENTS

On April 21, 2022, the Company entered into a binding services agreement (the “Agreement”), effective April 12, 2022, with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”).

Pursuant to the Agreement, Wilson Wolf made a cash payment to the Company in the amount of $ 8.0 million, allocated as follows:

● $ 2.0 million as a prepaid expense for non-exclusive training of Wilson Wolf to make, use, and sell Marker’s cell culture non-proprietary media formulation that has been cleared in an FDA investigational new drug application in pursuit of the Wilson Wolf Mission;

● $ 1.0 million as a prepaid expense for non-exclusive training of Wilson Wolf to replicate Marker’s quality management system inclusive of all underlying documents related thereto, none of which shall include unique information specific to the manufacture of Marker’s MultiTAA product candidates such as direct peptide stimulation, which Wilson Wolf shall use as it sees fit in pursuit of the Wilson Wolf Mission;

● $ 2.0 million as a prepaid expense for non-exclusive training of Wilson Wolf to be able to replicate Marker’s cGMP-compliant, linearly scalable, G-Rex based T-cell manufacturing process which Wilson Wolf shall use as it sees fit in pursuit of the Wilson Wolf Mission;

● $ 3.0 million as a prepaid expense under the hired to invent doctrine for Marker to train Wilson Wolf on its expertise in the optimization of T-cell therapy manufacturing processes using G-Rex and to conduct CAR T and TCR G-Rex Optimization Work under the direction of Wilson Wolf (the “Work Direction”), whereunder all intellectual property provided by Wilson Wolf or created or derived by Marker will be solely owned by Wilson Wolf, and whereby Marker will make good faith efforts to complete the conduct of such work as soon as practicable within 18 months from the date of the agreement.

Wilson Wolf has agreed to pay Marker an additional $ 1.0 million if the Work Direction is completed within one year from the onset of the Agreement.

The Agreement shall continue until the fulfillment of all of Marker’s obligations set forth in the Agreement or in any mutually agreed upon subsequent agreements.

All intellectual property created or derived under the Work Direction will be owned by Wilson Wolf.

The Agreement contains certain representations made by Marker, as well as a mutual confidentiality provision and an indemnification provision by Wilson Wolf in favor of Marker.

Pursuant to the Agreement, in the event that Marker becomes insolvent, goes out of business, or an event other than force majeure occurs that cannot allow the Agreement to be fulfilled, Wilson Wolf will have right of first offer and right of first refusal for Marker’s manufacturing facility provided it is able and willing to meet whatever financial obligations are required to do so and provided further that such clause will not apply in the event of a merger, reorganization or consolidation of Marker with a third party that results in the outstanding voting securities of Marker immediately prior thereto ceasing to represent, or being converted into or exchanged for voting securities that do not represent, at least fifty percent (50%) of the combined voting power of the voting securities of the surviving entity or the parent corporation of the surviving entity immediately after such merger, reorganization or consolidation, or the sale or other transfer of all or substantially all of Marker’s business or assets.

Marker agrees to assist as needed to the extent permitted under any applicable law (including bankruptcy or insolvency statutes).

Further, prior to Marker undertaking any financing that would encumber any of Marker’s assets necessary for Marker’s performance under this Agreement, Wilson Wolf shall have the first right to provide such financing on equal terms to what Marker can obtain elsewhere.

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-Q

Item 1. Financial Statements