What changed in this filing

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Item 9A. Controls and Procedures

2024-03-26 compared with 2023-03-22 · 358 added, 369 removed, 515 unchanged (59% of the section changed)

5 unchanged sentences

Our management, with participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 to provide reasonable assurance that the information required to be disclosed by us in this Annual Report was (a) reported within the time periods specified by SEC rules and regulations and (b) communicated to our management, including our Chief Executive Officer and Chief Accounting Officer, to allow timely decisions regarding any required disclosure.

Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2023 to provide reasonable assurance that the information required to be disclosed by us in this Annual Report was (a) reported within the time periods specified by SEC rules and regulations and (b) communicated to our management, including our Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding any required disclosure.

Management’s Report on Internal Control Over Financial Reporting

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The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Our management, including our Chief Executive Officer and Chief Accounting Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level.

Our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level.

However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

OTHER INFORMATION

Rule 10b5–1 trading arrangement.

During the fourth quarter of 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 plan or non-Rule 10b5-1 trading arrangements.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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(a) The documents filed as part of this report are as follows:

The financial statements and accompanying report of independent registered public accounting firm are set forth immediately following the signature page of this report on pages F-1 through F-25.

The financial statements and accompanying report of independent registered public accounting firm are set forth immediately following the signature page of this report beginning on page F-1.

All financial statement schedules are omitted because they are inapplicable, not required or the information is included elsewhere in the financial statements or the notes thereto.

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Form of Common Stock Certificate of Marker Therapeutics, Inc.

Form of Marker Warrant

Description of Common Stock of Marker Therapeutics, Inc.

Form of Restructuring Agreement dated May 28, 2015

Amended and Restated Restructuring Agreement, dated as of June 2, 2015

Form of Securities Purchase Agreement (including registration rights)

Registration Rights Agreement

Description of Securities of Marker Therapeutics, Inc.

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

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dated November 16, 2018***

2009 Stock Incentive Plan*

Incorporated by Reference

Exhibit description

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

Amendment to 2014 Omnibus Stock Ownership Plan, as amended *

Form of Stock Option Award Agreement –Employee*

Form of Stock Option Award Agreement – Non-Employee Director*

Form of Stock Option Award Agreement – Consultant*

Form of Restricted Stock Award Agreement – Consultant*

Employment Agreement between TapImmune Inc.

and Peter Hoang dated as of September 22, 2017*

Employment Agreement by and between TapImmune Inc.

and Michael J.

Loiacono dated as of August 25, 2016*

Amendment to Employment Agreement between Marker Therapeutics, Inc.

and Michael J.

Loiacono dated as of November 27, 2018*

Employment Agreement between Marker Therapeutics, Inc.

and Anthony Kim dated as of November 27, 2018*

Consulting Agreement between Dr.

2 unchanged sentences

Form of Director and Officer Indemnification Agreement*

Amendment to Employment Agreement between Marker Therapeutics, Inc.

and Peter Hoang, dated March 14, 2019*

Employment Agreement between Marker Therapeutics, Inc.

and Mythili Koneru, dated February 6, 2019.*

Marker Therapeutics, Inc.

4 unchanged sentences

2020 Equity Incentive Plan.

Form of Common Stock Purchase Warrant

Incorporated by Reference

Exhibit description

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

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

Incorporated by Reference

Exhibit description

Services Agreement, between Wilson Wolf Manufacturing

Corporation and Marker Therapeutics, Inc., effective April 12,

Purchase Agreement, by and between Marker Therapeutics, Inc.

and Lincoln Park Capital Fund, LLC, dated December 12, 2022

Registration Rights Agreement, by and between Marker

Therapeutics, Inc.

and Lincoln Park Capital Fund, LLC dated

December 12, 2022

Master Services Agreement for Product Supply between Marker Therapeutics, Inc.

and Cell Ready LLC dated February 22, 2024**

Work Order #1 between Marker Therapeutics, Inc.

and Cell Ready LLC dated February 22, 2024**

Controlled Equity Offering Sales Agreement, dated as of August 10, 2021, by and among Marker Therapeutics, Inc.

and Cantor Fitzgerald & Co.

and RBC Capital Markets, LLC

List of Subsidiaries

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

Incentive Compensation Recoupment Policy

XBRL Instance Document

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Marker Therapeutics, Inc.

/s/ Peter Hoang

Chief Executive Officer (Principal Executive Officer)

/s/ Michael J.

Chief Accounting Officer (Principal Financial and Accounting Officer)

/s/ Juan Vera

Chief Executive Officer and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer)

POWER OF ATTORNEY

Each of the undersigned officers and directors of Marker Therapeutics, Inc., hereby constitutes and appoints Peter Hoang and Michael J.

Loiacono, their true and lawful attorney-in-fact and agent, for them and in their name, place and stead, in any and all capacities, to sign their name to any and all amendments to this Report on Form 10-K, and other related documents, and to cause the same to be filed with the Securities and Exchange Commission, granting unto said attorneys, full power and authority to do and perform any act and thing necessary and proper to be done in the premises, as fully to all intents and purposes as the undersigned could do if personally present, and the undersigned for himself hereby ratifies and confirms all that said attorney shall lawfully do or cause to be done by virtue hereof.

Each of the undersigned officers and directors of Marker Therapeutics, Inc., hereby constitutes and appoints Juan Vera their true and lawful attorney-in-fact and agent, for them and in their name, place and stead, in any and all capacities, to sign their name to any and all amendments to this Report on Form 10-K, and other related documents, and to cause the same to be filed with the Securities and Exchange Commission, granting unto said attorneys, full power and authority to do and perform any act and thing necessary and proper to be done in the premises, as fully to all intents and purposes as the undersigned could do if personally present, and the undersigned for himself hereby ratifies and confirms all that said attorney shall lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on March 25, 2024 on behalf of the registrant and in the capacities indicated.

/s/ Peter Hoang

President, Chief Executive Officer and Director (Principal Executive Officer)

March 22, 2023

/s/ Juan Vera

President, Chief Executive Officer and Treasurer, Director (Principal Executive Officer and Principal Financial and Accounting Officer)

March 25, 2024

/s/ David Laskow-Pooley

March 25, 2024

David Laskow-Pooley

/s/ John Wilson

March 25, 2024

/s/ Juan Vera

March 22, 2023

/s/ Katharine Knobil

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March 25, 2024

/s/ Michael J.

Chief Accounting Officer (Principal Financial and Accounting Officer)

March 22, 2023

MARKER THERAPEUTICS, INC.

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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

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 incurred significant losses and needs to raise additional funds to sustain its operations.

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

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

Critical Audit Matters

Critical Audit Matter Description

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Asset Impairment - Determination of Impairment Indicators on Long Lived Assets and Right-of-Use Assets - Refer to Note 3 to the Consolidated Financial Statements.

Discontinued Operations – Recognition and deconsolidation of assets sold to a related party.

Critical Audit Matter Description

Property, plant and equipment and right-of-use assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

As of December 31, 2022, the carrying value of the Company’s property plant and equipment was $12.3 million, and right-of-use assets $5.5 million.

We have identified the determination of impairment indicators for property, plant and equipment and right-of-use assets as a critical audit matter due to the significant judgments management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of an asset group may not be recoverable.

Auditing management’s judgments required a high degree of auditor judgment when performing audit procedures to evaluate whether management appropriately identified impairment indicators.

The Company evaluates the classification of assets and liabilities in connection with any disposition of significant assets to determine the appropriate financial statement recognition.

We identified the sale of a significant portion of the Company’s operations comprising a majority of its net assets in a sale to a related party as a critical audit matter due to the related party nature of the transaction and the significance of the disposition resulting in a strategic shift in the Company’s business activities.

The accounting for the disposition of net assets included in consolidated net assets requires auditor judgment when performing audit procedures to evaluate whether management appropriately recognized the classification of net assets sold and revenues and costs associated with discontinued operations and the calculation of gain or loss on sale to a related party.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the evaluation of indicators of impairment included the following, among others:

● We evaluated the reasonableness of management’s impairment indicator analysis by performing the following procedures:

● We inquired of management whether there are change of plans and circumstances affecting the use of property, plant and equipment or assets under lease;

● We inspected minutes of the board of directors to understand if there were factors that would represent potential impairment indicators for property, plant and equipment and right-of-use assets;

● We evaluated the assumptions and the mathematical accuracy of the undiscounted cash flows used by management, for the asset recovery test.

Our audit procedures related to the evaluation of the sale of certain operations to a related party, Cell Ready, LLC, included the following, among others:

● We evaluated management’s assessment of the transaction:

● As the sale of an asset or business;

● To determine gain or loss recognition;

● To determine classification of items between continuing and discontinued operations;

● To determine accounting for transaction costs;

● Testing of completeness and accuracy of deconsolidation of net assets.

● We inspected Board of Director’s minutes for authorization of the transaction.

● We evaluated management’s assessment of the business purpose of the transaction in connection with our review of related party transactions.

● We examined the transaction documents to ensure the Company recognized and disclosed all significant transaction terms.

● We examined key employee agreements, including modifications to employee stock options, in connection with the sale for recognition and disclosure.

/s/ Marcum LLP

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Cash and cash equivalents

Restricted cash

Prepaid expenses and deposits

Other receivables

Current assets of discontinued operations

Total current assets

Non-current assets:

Property, plant and equipment, net

Construction in progress

Right-of-use assets, net

Total non-current assets

Non-current assets of discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Accounts payable and accrued liabilities

Related party deferred revenue

Deferred revenue

Lease liability

Related party payable

Current liabilities of discontinued operations

Total current liabilities

Non-current liabilities:

Lease liability, net of current portion

Total non-current liabilities

Non-current liabilities of discontinued operations

Total liabilities

Stockholders’ equity:

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

Common stock, $ 0.001 par value, 30 million and 15 million shares authorized , 8.4 million and 8.3 million shares issued and outstanding as of December 31, 2022 and 2021, respectively

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

Common stock, $ 0.001 par value, 30 million shares authorized, 8.9 million and 8.4 million shares issued and outstanding as of December 31, 2023 and 2022, respectively (see Note 10)

Additional paid-in capital

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Total liabilities and stockholders’ equity

On January 26, 2023, the Company effected a one-for-ten ( 1-for-10 ) reverse stock split of its common stock and a corresponding reduction in the total number of authorized shares of its common stock from 300,000,000 to 30,000,000 .

All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

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

2 unchanged sentences

For the Years Ended

Related party service revenue

Total revenues

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Arbitration settlement

( 2,406,576 )

Interest income

Loss from continuing operations before income taxes

( 14,042,220 )

( 19,775,915 )

Income tax expense

Net loss from continuing operations

( 14,045,895 )

( 19,775,915 )

Discontinued operations:

Loss from discontinued operations

( 2,922,406 )

( 10,154,779 )

Gain on disposal of discontinued operations, net of $ 63,000 in tax

Income (loss) from discontinued operations

( 10,154,779 )

( 8,236,814 )

( 29,930,694 )

Net earnings (loss) per share:

Loss from continuing operations, basic and diluted

Income (loss) from discontinued operations, basic and diluted

Net loss per share, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

Weighted average number of common shares outstanding:

On January 26, 2023, the Company effected a one-for-ten ( 1-for-10 ) reverse stock split of its common stock.

All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Additional Paid-

Stockholders’

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( 398,118,355 )

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

Stock options exercised for cash

Issuance of common shares for cash, net

Stock-based compensation

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( 428,049,049 )

Issuance of common shares for cash

Shares issued pursuant to ATM and Lincoln Park agreements

Issuance of common stock as commitment fee

Issuance of common stock from exercise of stock options

Stock-based compensation

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( 8,236,814 )

Fractional shares adjustment due to reverse split

Balance at December 31, 2023

( 436,285,863 )

On January 26, 2023, the Company effected a one-for-ten ( 1-for-10 ) reverse stock split of its common stock.

All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

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

5 unchanged sentences

( 29,930,694 )

gain (loss) from discontinued operations, net of $ 63,000 in tax

( 10,154,779 )

Net loss from continuing operations

( 14,045,895 )

( 19,775,915 )

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

Depreciation and amortization

Stock-based compensation

Amortization on right-of-use assets

Loss on disposal of fixed assets

Gain on lease termination

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( 1,319,710 )

Related party deferred revenue

Deferred revenue

( 1,146,186 )

Lease liability

Net cash used in operating activities

Net cash used in operating activities - continuing operations

( 10,341,062 )

( 21,513,478 )

Cash Flows from Investing Activities:

Purchase of property and equipment

Net cash used in operating activities - discontinued operations

( 6,098,899 )

( 5,458,675 )

Purchase of construction in progress

Net cash used in operating activities

( 16,439,961 )

( 26,972,153 )

Net cash used in investing activities

Cash Flows from Investing Activities:

Net cash provided by (used in) investing activities - discontinued operations

( 4,945,136 )

Net cash provided by (used in) investing activities

( 4,945,136 )

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Proceeds from issuance of common stock, net

Proceeds from exercise of stock options

Proceeds from stock options exercise

Net cash provided by financing activities

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

Net increase (decrease) in cash and cash equivalents

( 31,715,159 )

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

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

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

For the Years Ended

Supplemental schedule of non-cash financing and investing activities:

Reclassifications between construction in progress and fixed assets

Capital expenditures included in accounts payable

Changes to right-of-use assets and lease liability due to close out of operating leases

Capital expenditures in accounts payable

Issuance of common stock as commitment fee for future financing

Changes to right of use assets and lease liability due to close out of operating lease

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

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The Company was incorporated in Nevada in 1992 and reincorporated in Delaware in October 2018.

Purchase Agreement with Cell Ready

On June 26, 2023, the Company completed the previously announced transaction with Cell Ready, LLC (“Cell Ready”) pursuant to a Purchase Agreement (the “Cell Ready Purchase Agreement), dated May 1, 2023, by and between the Company and Cell Ready.

John Wilson is a member of the Company’s board of directors and is serving as the CEO of Cell Ready, therefore Cell Ready is a related party.

Pursuant to the Cell Ready Purchase Agreement, effective as of the Closing Date, the Company (i) assigned to Cell Ready the leases for the Company’s two manufacturing facilities in Houston, Texas (the “Manufacturing Facilities”), (ii) sold to Cell Ready all of the equipment and leasehold improvements at the Manufacturing Facilities and (iii) assigned to Cell Ready its rights, title and interest in the Company’s Master Services Agreement for Product Supply (the “MSA”), dated April 7, 2023, by and between the Company, Cell Ready and Indapta Therapeutics, Inc., as well as its rights, title and interest in any contracts related to the equipment and Manufacturing Facilities (collectively, the “Purchased Assets”).

Cell Ready acquired the Purchased Assets for total consideration of $ 19.0 million.

In connection with the purchase of the Manufacturing Facilities, Cell Ready also extended offers of employment to approximately 50 of the Company’s former employees in its manufacturing, development, quality, and regulatory affairs functions.

The Purchased Assets constituted a significant disposition.

Based upon the magnitude of the disposition and because the Company is exiting certain manufacturing operations, the disposition represents a significant strategic shift that will have a material effect on the Company’s operations and financial results.

Accordingly, the assets sold meet the definition of a discontinued operation, as defined by Accounting Standards Codification (“ASC”) 205-20 - Discontinued Operations, and prior comparative periods have been retroactively adjusted to reflect the current presentation.

See additional discussion at Note 6.

On February 22, 2024, we entered into a Master Services Agreement for Product Supply (the “MSA”) with Cell Ready to provide outsourced services previously performed by the Company prior to its asset sale to Cell Ready.

Cell Ready, which is owned by one of our directors and shareholders, Mr.

John Wilson, is a contract development and manufacturing organization (CDMO).

Under the MSA, it is anticipated Cell Ready will perform a wide variety of services for us, including research and development, and manufacturing in support of our clinical trials.

Pursuant to the MSA, the Company may contract with Cell Ready for the provision of various products and services from time to time by entering into work orders with Cell Ready.

If the services involve the supply of product, Cell Ready is required to supply such product in conformance with the product requirements set forth in the applicable work order(s).

Under the MSA, Cell Ready is to use only personnel with sufficient qualifications and experience to supply the services contemplated by the MSA, provide its personnel with adequate training and assume full responsibility for its personnel’s compliance with the MSA.

Further, Cell Ready is required to provide the Company with assistance and cooperation in order for the Company to obtain and maintain all necessary regulatory approvals, at the Company’s expense.

Organizational Changes

In 2023, the Company implemented changes to its organizational structure due to the transaction with Cell Ready and to reduce operational costs.

In connection with these changes, the Company reduced headcount, including the separation of its former Chief Executive Officer, Peter Hoang, in May 2023 and its former Chief Accounting Officer, Michael Loiacono, in June 2023.

During the second quarter of 2023, the Company recorded $ 0.9 million of severance and termination-related costs.

The payments of these costs were completed in July of 2023.

Effective May 1, 2023, the Company’s board of directors appointed Dr.

Juan Vera as the Company’s President and Chief Executive Officer.

Effective June 30, 2023, the board of directors appointed Eliot M.

Lurier as the Company’s Interim Chief Financial Officer, whereby Mr.

Lurier provided consulting services to the Company pursuant to a consulting between the Company and Danforth Advisors, LLC (“Danforth”) and received no compensation directly from the Company.

On November 17, 2023, the Company terminated the consulting agreement between the Company and Danforth, effective January 16, 2024.

On November 17, 2023, Mr.

Lurier ceased serving as the Company’s Interim Chief Financial Officer and Dr.

Vera was appointed as the Company’s Principal Financial and Accounting Officer.

Reverse Stock Split

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All references to common stock, warrants to purchase common stock, options to purchase common stock, share data, per share data and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Payment for fractional shares resulting from the reverse stock split amounted to $ 394.80 .

FINANCIAL CONDITION, GOING CONCERN AND MANAGEMENT PLANS

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and develop strategic alliances and collaborations.

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 3,228,286 shares of its common stock, for net proceeds of $ 52.6 million.

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

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

1 unchanged sentence

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;

however, our use of the shelf registration statement on Form S-3 will be limited for so long as we are subject to General Instruction I.B.6 of Form S-3, which limits the amounts that we may sell under the registration statement and in accordance with the ATM agreement.

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

During the year ended December 31, 2022, the Company sold 60,651 shares of its common stock under the ATM Agreement for net proceeds of $ 0.2 million.

333-258687), which the SEC declared effective on August 19, 2021, however, our use of the shelf registration statement on Form S-3 will be limited for so long as we are subject to General Instruction I.B.6 of Form S-3, which limits the amounts that we may sell under the registration statement and in accordance with the ATM agreement.

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

During the year ended December 31, 2023, the Company sold 265,334 shares of its common stock under the ATM Agreement for proceeds of $ 1.0 million.

In August 2021, the Company received notice of a Product Development Research award totaling approximately $ 13.1 million from the Cancer Prevention and Research Institute of Texas (“CPRIT”) to support the Company’s Phase 2 clinical trial of MT-401.

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The Company recorded $ 2.7 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2023.

On April 21, 2022, the Company entered into a binding services agreement (the “Services Agreement”), dated April 12, 2022 (see Note 9), with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”).

John Wilson is a member of the Company’s board of directors and is serving as the CEO of Wilson Wolf, therefore Wilson Wolf is a related party.

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

For the year ending December 31, 2022, the Company recognized $ 5.5 million of revenue pursuant to this agreement and at December 31, 2022, the Company recorded $ 2.5 million of related party deferred revenue on its consolidated balance sheet.

On September 13, 2022, the Company received notice from the U.S.

The Company recorded $ 0.1 million of grant income related to the FDA grant as revenue for the year ended December 31, 2022 and at December 31, 2022, the Company recorded $ 0.1 million of grant income receivable.

On March 13, 2023, the Company received $ 0.1 million of funds from the FDA grant.

On December 12, 2022, the Company entered into a purchase agreement, or the Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, which provides that, upon the terms and subject to the conditions of the agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $ 25,000,000 of shares of its common stock, or the Purchase Shares, from time to time over a 24-month term.

For the year ended December 31, 2022, the Company did not sell any shares of its common stock under the Purchase Agreement.

In September 2022, the Company received notice from the U.S.

Food and Drug Administration (the “FDA”) that it had awarded the Company a $ 2.0 million grant from the FDA’s Orphan Products Grant program to support the Company’s Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML The Company recorded $ 0.4 million and $ 0.1 million of grant income related to the FDA grant as revenue for the year ended December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023, the Company recorded $ 0.3 million of grant income receivable.

In February 2024, the Company received $ 0.3 million of funds from the FDA grant.

In May 2023, the Company received notice of a $ 2.0 million grant from the National Institutes of Health Small Business Innovation Research program to support the development and investigation of MT-401 for the treatment of AML patients following standard-of-care therapy with hypomethylating agents.

The Company recorded $ 0.2 million of grant income related to the SBIR grant as revenue for the year ended December 31, 2023.

As of December 31, 2023, the Company recorded $ 0.2 million as other receivable, which represented grant income earned in advance of funds to be received from the SBIR.

In February 2024, the Company received $ 0.2 million of funds from the SBIR grant.

All funding agencies have agreed to continue their financial support and to shift funds to the MT-401-OTS program.

In December 2022, the Company entered into a purchase agreement, or the Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, which provides that, upon the terms and subject to the conditions of the agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $ 25,000,000 of shares of its common stock, or the Purchase Shares, from time to time over a 24-month term.

For the year ended December 31, 2023, the Company sold 12,500 shares of its common stock under the Purchase Agreement for proceeds of approximately $ 33,000 .

In January 2023, Lincoln Park was issued 180,410 shares of stock as a commitment fee at a value of $ 0.5 million.

On February 29, 2024, the Company terminated the Purchase Agreement with Lincoln Park effective March 1, 2024.

As described in Note 1, on June 26, 2023, the Company completed the transaction with Cell Ready pursuant to the Cell Ready Purchase Agreement for total consideration of $ 19.0 million.

On February 22, 2024, the Company entered into a Master Services Agreement for Product Supply (the “MSA”) with Cell Ready, a contract development and manufacturing organization (CDMO).

Under the MSA, it is anticipated Cell Ready will perform a wide variety of services for us, including research and development, and manufacturing in support of our clinical trials.

Pursuant to the MSA, the Company may contract with Cell Ready for the provision of various products and services from time to time by entering into work orders with Cell Ready.

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

To fully execute its business plan, the Company will need to complete certain research and development activities and clinical trials.

Further, the Company’s product candidates will require regulatory approval prior to commercialization.

These activities will span many years and require substantial expenditures to complete and may ultimately be unsuccessful.

Any delays in completing these activities could adversely impact the Company.

The Company plans to meet its capital requirements primarily through issuances of debt and equity securities and, in the longer term, revenue from sales of its product candidates, if approved.

Based on the Company’s clinical and research and development plans and its timing expectations related to the progress of its programs, the Company expects that its cash and cash equivalents as of December 31, 2022 will enable the Company to fund its operating expenses and capital expenditure requirements into the third quarter of 2023, as such these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

In an effort to further preserve the Company’s working capital, the Company’s employees took a portion of their 2022 earned bonus in the form of equity in lieu of cash.

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, 2023, including drawdowns of available grant funds, will enable the Company to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2025.

Prior to the Cell Ready transaction, there was substantial doubt regarding the Company’s ability to continue as a going concern, which was alleviated by the proceeds from the transaction.

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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● maintains and enforces intellectual property rights;

● enters into contract manufacturing arrangements with Cell Ready or other contract manufacturing organizations for clinical manufacturing supply;

● establishes sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize any product candidates that may receive regulatory approval;

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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.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

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

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

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

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

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

The Company does not have sufficient sources of revenue to provide incoming cash flows to sustain its future operations beyond the fourth quarter of 2025.

As outlined above, its ability to pursue its long-term planned business activities is dependent upon its successful efforts to raise additional capital and grant income.

The current macro-economic environment of decades-high inflation and concerns about an economic recession in the United States or other major markets has resulted in, among other things, volatility in the capital markets that may have the effect of reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity.

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

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Use of Estimates

Preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ materially from those estimates.

Significant areas requiring management’s estimates and assumptions include measurement of fair value and projections used in impairment testing, 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, Restricted Cash and Credit Risk

Preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Accordingly, actual results may differ materially from those estimates.

Management considers many factors in selecting appropriate financial accounting policies, controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements.

Management must apply significant judgment in this process.

In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends.

The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates.

Estimates are used in the following areas, among others:

stock-based compensation expense and income taxes.

Cash, Cash Equivalents and Credit Risk

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

Cash, cash equivalents and restricted cash at December 31, 2022 consisted of cash and certificates of deposit in institutions in the United States.

Cash and cash equivalents at December 31, 2023 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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The Company maintains cash in accounts which are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limits of $ 250,000 .

As of December 31, 2022, approximately $ 1.8 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 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 until they are earned and recorded to grant income.

Property and Equipment

Leasehold improvements, furniture, equipment and software are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three to five years.

Leasehold improvements are amortized over the shorter of the estimated useful life or the remaining lease term.

Property and equipment - Construction in Progress

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 install modular cleanrooms in a manufacturing facility.

The facility’s construction was completed during December 2020, and a certificate of occupancy was delivered to the Company in January 2021, and as such was placed into service in January 2021.

All costs associated with the buildout were 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.

The Company incurred another $ 1.9 million in related costs in 2022.

Upon completion and installation of the second modular cleanroom in 2022, all costs associated with the buildout were recorded as manufacturing equipment and leasehold improvements and are being amortized over the estimated useful life.

Impairment Testing of Long-Lived Assets and Right-Of-Use Assets

Management reviews long-lived assets (including property and equipment) and right-of-use assets for assets under operating leases for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Recoverability of assets is determined by first grouping the long-lived assets at the lowest level for which there are identifiable cash flows, and then comparing the carrying value of each asset group to its forecasted undiscounted cash flows.

If the evaluation of the forecasted cash flows indicates that the carrying value of the assets is not recoverable, an impairment charge is recognized for the amount in excess of the carrying amount over its fair value.

The Company performed a test for recoverability related to its manufacturing facility in Houston, Texas at December 31, 2022 and concluded that the carrying value of its long-lived assets was recoverable.

As of December 31, 2023 and December 31, 2022, the Company had approximately $ 1.4 .

million and $ 2.3 million, respectively in cash at financial institutions.

As of December 31, 2023, the Company had approximately $ 13.7 million in U.S.

government agency securities.

In the event cash is received from grants in advance of incurring qualifying costs, it is recorded as restricted cash until it is earned and recorded to grant income.

Discontinued Operations

The Purchased Assets sold to Cell Ready pursuant to the Cell Ready Purchase Agreement constituted a significant disposition and as such, the Company concluded that the disposition of its Purchased Assets represented a strategic shift that had a major effect on its operations and financial results.

Therefore, the Purchased Assets, related party revenue, service revenue and related expenses are classified as discontinued operations for all periods presented herein.

See Note 6 for further information.

Patents and Patent Application Costs

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Expected Volatility — The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate — The Company bases the risk-free interest rate on the implied yield available on U.

Risk-Free Interest Rate — The Company bases the risk-free interest rate on the implied yield available on U.S.

Treasury zero-coupon issues with an equivalent remaining term.

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Research and Development Costs

Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits for research and development employees and consultants, facilities expenses, overhead expenses, cost of laboratory supplies, manufacturing expenses, fees paid to third parties and other outside expenses.

Research and development costs are expensed as incurred.

Clinical trial and other development costs incurred by third parties are expensed as the contracted work is performed.

Research and development expenses consist of costs associated with clinical trial programs.

Costs incurred by third parties are expensed as the contracted work is performed.

The Company accrues for costs incurred as the services are being provided by monitoring the status of the clinical trial or project and the invoices received from its external service providers.

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For grant and awards outside the scope of ASC 808, the Company applies ASC 606 by analogy, and revenue is recognized when the Company incurs expenses related to the grants for the amount the Company is entitled to under the provisions of the contract.

In August 2021, the Company received notice of a Product Development Research award totaling approximately $ 13.1 million from CPRIT to support its Phase 2 clinical trial of MT-401.

In accordance with ASC 730-20-25-8, to 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.

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

Qualifying grant income earned in advance of cash received from grants is recognized as revenue and recorded as other receivable.

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

The Company recorded $ 3.4 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2022.

At December 31, 2022, the Company recorded $ 2.3 million of grant income receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

In January 2023, the Company received $ 2.4 million from CPRIT.

On September 13, 2022, the Company received notice from the FDA that it had awarded the Company a $ 2.0 million grant from the FDA’s Orphan Products Grant program to support the Company’s Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML.

On March 13, 2023, the Company received $ 0.1 million of funds from the FDA grant.

Loss per Common Share

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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.

Recently Issued Accounting Standards Not Yet Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker, among other provisions.

The ASU is effective for fiscal year periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the ASU requires retrospective application to all prior periods presented in the financial statements.

The Company is currently evaluating the standard to determine the impact of adoption to its consolidated financial statements and disclosures.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

This guidance will be effective for the annual periods beginning the year ended December 31, 2025.

Early adoption is permitted.

Upon adoption, the guidance can be applied prospectively or retrospectively.

We do not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

NET LOSS PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

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For the Years Ended

Loss from continuing operations

( 14,045,895 )

( 19,775,915 )

Weighted average common shares outstanding

Net loss per share:

Basic and diluted

Income (loss) from discontinued operations

( 10,154,779 )

( 8,236,814 )

( 29,930,694 )

Weighted average common shares outstanding, basic

Weighted average common shares outstanding, diluted

Net earnings (loss) per share:

Loss from continuing operations, basic and diluted

Income (loss) from discontinued operations, basic and diluted

Net loss per share, basic and diluted

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

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Qualifying grant income earned in advance of cash received from grants is recognized as revenue and recorded as other receivable.

The Company recorded $ 3.4 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2022.

At December 31, 2022, the Company recorded $ 2.3 million of grant income receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

The Company received $ 2.4 million of funds from CPRIT in January 2023.

The Company recorded $ 0.1 million of grant income related to the FDA grant as revenue for the year ended December 31, 2022.

Additionally, at December 31, 2022, the Company recorded $ 0.1 million of grant income receivable, which represented grant income earned in advance of funds to be received from the FDA.

The Company received $ 0.1 million of funds from the FDA in January 2023.

PROPERTY AND EQUIPMENT

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

Estimated Useful Lives

Lab and manufacturing equipment

Computers, equipment and software

Office furniture

Leasehold improvements

Lesser of lease term or estimated useful life

accumulated depreciation

The Company recorded $ 2.7 million of grant income related to the CPRIT grant for the year ended December 31, 2023.

At December 31, 2023, the Company recorded $ 0.5 million of grant income receivable related to the CPRIT grant.

Additionally, the Company recorded $ 0.4 million and $ 0.2 million of grant income related to the FDA and SBIR grants, respectively, for the year ended December 31, 2023.

At December 31, 2023, the Company recorded $ 0.3 million and $ 0.2 million of grant income receivable related to the FDA and SBIR grants, respectively.

The Company received $ 0.3 million and $ 0.2 million of funds from FDA and SBIR in February 2024, respectively.

DISCONTINUED OPERATIONS

As discussed in Note 1, on June 26, 2023, the Company completed the previously announced transaction with Cell Ready for cash consideration of $ 19.0 million, resulting in derecognition of the Purchased Assets and a gain on sale of approximately $ 8.7 million, net of $ 63,000 in tax.

The assets and liabilities classified in discontinued operations as of December 31, 2023 and 2022 are as follows:

Prepaid expenses and other current assets

Total current assets of discontinued operations

Right of use assets

Total non-current assets of discontinued operations

Total assets of discontinued operations

Accounts payable

Related party deferred revenue

Short-term lease liabilities

Total current liabilities of discontinued operations

Long-term lease liabilities

Total non-current liabilities of discontinued operations

Total liabilities of discontinued operations

Net loss from discontinued operations consists of the following for the years ended December 31, 2023 and 2022, respectively, excluding the gain on disposal:

For the Years Ended

Service revenue

Related party service revenue

Total revenues

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from discontinued operations

( 2,922,406 )

( 10,154,779 )

Construction in progress

Total fixed assets, net

Depreciation expense for the years ended December 31, 2022 and 2021 was approximately $ 2.8 million and $ 2.1 million, respectively.

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

The Company 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 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.

During January 2021, all costs associated with the buildout were 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 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 incurred another $ 1.9 million in related costs in 2022.

Upon completion and installation of the second modular cleanroom during the year ended December 31, 2022, all costs associated with the buildout were recorded as manufacturing equipment and leasehold improvements and amortized over the estimated useful life.

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 September 15, 2022, the Company and its landlord agreed to terminate the Company’s office lease at 3200 Southwest Freeway, Suite 2500, Houston, Texas.

As such the Company reduced its operating lease liabilities by $ 3.7 million and reduced its right-of-use

assets by $ 3.5 million.

A gain on lease termination was recorded in general and administrative expenses during the year ended December 31, 2022.

As of December 31, 2022, the Company had total operating lease liabilities of approximately $ 7.6 million and right-of-use assets of approximately $ 5.5 million, which were included in the consolidated balance sheet.

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.

Certain of the Company’s leases include renewal options and escalation clauses;

renewal options have not been included in the calculation of the lease liabilities and right-of-use assets as the Company is not reasonably certain to exercise the options.

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

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

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

For the Years Ended

Operating lease expense summary:

Operating lease expense

Short-term lease expense

Variable lease expense

The following table summarizes our cash flows for the years ended December 31, 2023 and 2022:

For the Years Ended

Other information:

Operating cash flows - operating leases

The weighted-average remaining lease term as of December 31, 2022 and December 31, 2021 was approximately 7.5 years and 8.4 years, respectively.

The weighted-average discount rate used to determine the operating lease liability as of December 31, 2022 and December 31, 2021 was approximately 5.5 % and 5.7 %, respectively.

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

Year ending December 31, 2023

Year ending December 31, 2024

Year ending December 31, 2025

Year ending December 31, 2026

Year ending December 31, 2027

Less present value discount

Continuing operations:

Net cash used in operating activities

( 10,341,000 )

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

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of December 31, 2022 and 2021, respectively:

( 21,513,000 )

Net cash provided by financing activities

Discontinued operations

Net cash used in operating activities

( 6,099,000 )

( 5,459,000 )

Net cash provided by (used in) investing activities

( 4,945,000 )

Net increase (decrease) in cash and cash equivalents

( 31,715,000 )

Related Party Service Revenue

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

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

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

Pursuant to the Wilson Wolf Agreement, Wilson Wolf made a cash payment to the Company in the amount of $ 8.0 million, as consideration for certain training and research services.

In March 2023, the Company recognized the final $ 2.5 million of revenue pursuant to this $ 8.0 million agreement and an additional $ 1.0 million because the Work Direction was completed within one year from the onset of the Wilson Wolf Agreement, achieving the agreed milestone.

The Wilson Wolf Agreement and related service obligations were completed upon achievement of this final milestone, and no obligations remain.

Service Revenue

In April 2023, the Company signed the Indapta Master Services Agreement, pursuant to which the Company provided services to Indapta.

Under an executed work order of that agreement, now complete, the Company recognized $ 0.8 million for the services during the period ended June 30, 2023.

Effective as of the closing date of the Purchase Agreement with Cell Ready, the rights and obligations to the Indapta Agreement were transferred to Cell Ready, and as such the revenues and expenses are reflected in discontinued operations.

PROPERTY AND EQUIPMENT

Substantially all of the previously reported property and equipment was disposed of as a result of the Cell Ready transaction.

Discontinued Operations for details.

Substantially all of the previously reported leases were disposed of as a result of the Cell Ready transaction.

Discontinued Operations for details.

ACCOUNTS PAYABLE, ACCRUED LIABILITIES, AND RELATED PARTY PAYABLE

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

Accounts payable

Compensation and benefits

Process development expenses

Professional fees

Technology license fees

Related party payable

Arbitration settlement fees

Total accounts payable and accrued liabilities

In August 2022, the Company implemented changes to the Company’s organizational structure as part of an operational cost reduction plan to conserve the Company’s available capital.

In connection with these changes, the Company reduced headcount in its general and administrative function by approximately 23.5 %, including the separation of the Company’s Chief Financial Officer.

For the year ended December 31, 2022, the Company recorded $ 0.3 million of accrued compensation and benefits for severance expenses related to the operational cost reduction plan.

RELATED PARTY DEFERRED REVENUE

On April 21, 2022, the Company entered into the Services Agreement, dated April 12, 2022, with Wilson Wolf.

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

Pursuant to the Services Agreement, Wilson Wolf made a cash payment to the Company in the amount of $ 8.0 million, as consideration for certain training and research services allocated as follows:

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

● $ 1.0 million for non-exclusive training of Wilson Wolf to replicate the Company’s quality management system inclusive of all underlying documents related thereto, none of which shall include unique information specific to the manufacture of the Company’s multiTAA product candidates such as direct peptide stimulation;

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

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

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

Pursuant to the Services Agreement, in the event that the Company 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 the Company’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 the Company with a third party that results in the outstanding voting securities of the Company 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 the Company’s business or assets.

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

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

The Company recognizes related party revenue over time in accordance with Accounting Standard Codification, or ASC, 606 Revenue from Contracts with Customers, as each of the training or and research services are provided to Wilson Wolf.

Revenue is recognized, using an output method based on progress toward satisfaction of the performance obligations.

Additionally, in accordance the spirit of the standard expressed in ASC 606-50-1, the timing of the revenue recognition is expected to be approximately 12 months.

For the year ending December 31, 2022, the Company recognized $ 5.5 million of revenue pursuant to the Services Agreement and at December 31, 2022, the Company recorded an $ 2.5 million related party deferred revenue on its consolidated balance sheet.

The $ 1.3 million related-party payable reflects amounts payable to Cell Ready for outsourced product development and manufacturing services.

This amount was paid during February 2024.

Related Party Transactions.

STOCKHOLDERS’ EQUITY

Increase in Authorized Shares

During the three months ended June 30, 2022, the Company’s board of directors and stockholders approved a Certificate of Amendment (the “Amendment”) to the Company’s Certificate of Incorporation to increase the authorized shares of common stock of the Company from 15,000,000 shares to 30,000,000 shares.

During June 2022, the Company’s board of directors and stockholders approved a Certificate of Amendment (the “Amendment”) to the Company’s Certificate of Incorporation to increase the authorized shares of common stock of the Company from 15,000,000 shares to 30,000,000 shares.

The Company filed the Amendment with the Secretary of State of Delaware on May 25, 2022.

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2023 Common Stock Transactions

Issuance of Restricted Stock Units to Executives

During the year ended December 31, 2022, upon the recommendation of the compensation committee of the Company’s board of directors, and pursuant to the Company’s 2020 Equity Incentive Plan, the Company’s board of directors approved the issuance of a total of 37,252 shares of common stock, valued at a total of approximately $ 180,200 , subject to restricted stock units, which were immediately vested upon grant, to certain executives as performance bonuses for performance during the year ended December 31, 2021.

Issuance of Stock Pursuant to ATM Agreement

During the year ended December 31, 2022, the Company issued and sold 60,651 shares of its common stock under the ATM Agreement for net proceeds of $ 202,100 .

Stock Purchase Agreement

On December 12, 2022, we entered into a purchase agreement, or the Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, which provides that, upon the terms and subject to the conditions of the agreement, we have the right, but not the obligation, to sell to Lincoln Park up to $ 25,000,000 of shares of our common stock, or the Purchase Shares, from time to time over a 24-month term , at a variable price with certain market-based terms as defined in the agreement.

During the year ended December 31, 2023, the Company sold 265,334 shares of its common stock under the ATM Agreement for net proceeds of $ 1.0 million.

Stock Purchase Agreement with Lincoln Park

In December 2022, the Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park which provides that, upon the terms and subject to the conditions of the agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $ 25,000,000 of shares of its common stock (the “Purchase Shares”) from time to time over a 24-month term, at a variable price with certain market-based terms as defined in the Purchase Agreement.

The Purchase Agreement does not exhibit any of the characteristics for liability classification under ASC Topic 480, Distinguishing Liabilities from Equity .

Instead, the purchase agreement is indexed to the Company’s own stock under ASC Subtopic 815-40, Contracts in Entity’s Own Equity , and classified as equity.

During the year ended December 31, 2022, we did not sell any shares of our stock under the Purchase Agreement.

In January 2023, Lincoln Park was issued 180,410 shares of stock as a commitment fee at a value of $ 0.5 million.

2021 Common Stock Transactions

During the year ended December 31, 2023, the Company sold 12,500 shares of its common stock under the Purchase Agreement for proceeds of approximately $ 33,000 .

The Company terminated the Purchase Agreement with Lincoln Park on February 29, 2024 effective March 1, 2024.

Exercise of Stock Options

During the year ended December 31, 2021, certain outstanding options were exercised for 146 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 6,329 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 2,857,200 shares of common stock of the Company in an underwritten public offering.

The offering price to the public was $ 17.50 per share.

In addition, the Company granted the underwriters an option to purchase, for a period of 30 days , up to an additional 428,580 shares of common stock, which such option was partially exercised with respect to 371,086 shares.

An aggregate of 3,228,286 shares of the Company’s common stock was issued for net proceeds of $ 52.6 million after offering costs of $ 3.9 million.

During the year ended December 31, 2023, certain outstanding options were exercised for 27,518 shares of common stock providing aggregate proceeds to the Company of approximately $ 0.1 million.

2022 Common Stock Transactions

Issuance of Restricted Stock Units to Executives

Issuance of Stock Pursuant to ATM Agreement

During the year ended December 31, 2022, the Company issued and sold 60,651 shares of its common stock under the ATM Agreement for net proceeds of $ 202,100 .

Stock Purchase Agreement with Lincoln Park

During the year ended December 31, 2022, the Company did not sell any shares of its common stock under the Purchase Agreement.

Share Purchase Warrants

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Expired or cancelled

( 1,848,000 )

Balance - December 31, 2023

STOCK OPTION PLANS

Options to Purchase Shares of Common Stock

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

All warrants outstanding at December 31, 2022 expired according to their terms on October 16, 2023.

As of December 31, 2023, the Company had no outstanding warrants.

STOCK BASED COMPENSATION

Stock Options

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

The 2020 Plan was further amended effective May 2022 to increase the number of shares of common stock authorized for issuance under the plan by 850,000 shares.

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2023 Equity Incentive Awards

On February 27, 2023, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 316,855 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers and management team.

Each option award was granted with an exercise price of $ 2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date.

Additionally, on February 27, 2023, the compensation committee of the Company’s board of directors approved a total of 87,677 options to purchase the Company’s common stock to non-executive employees and management team of the Company as equity-based incentive awards.

Each option award was granted with an exercise price of $ 2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.

The above awards were in addition to 7,000 stock option awards issued during the three months ended March 31, 2023 to new employees upon their commencement of employment with the Company.

Each option award was granted with an exercise price of $ 2.769 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 3, 2023, 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.

On May 10, 2023, the Company’s board of directors approved a one-time share option grant of 100,000 shares of common stock to Dr.

Vera for his appointment as the Company’s Chief Executive Officer.

The option has a term of ten years and will vest in equal annual

installments on May 10, 2024, May 10, 2025, May 10, 2026, and May 10, 2027, subject to Mr.

Vera’s continued service to the Company as of the applicable vesting date.

Each option award was granted with an exercise price of $ 1.42 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on May 10, 2023.

On June 6, 2023, pursuant to the Company’s Non-Employee Director Compensation Policy, which had previously been approved by the Company’s board of directors, a total of 32,000 stock option awards were issued to independent members of the board of directors of the Company.

Each option award was granted with an exercise price of $ 1.72 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on June 6, 2023.

Each Option award will vest in one year subject to the director’s continuance of service through June 6, 2024.

For the year ended December 31, 2023, the Company recorded incremental stock-based compensation expense of approximately $ 0.3 million pertaining to the modification of stock options in connection with the termination of certain employees that were hired by Cell Ready or transitioned as independent consultants.

The modification provided for an acceleration of unvested options, resulting in a change in compensation expense that was immediately recognized.

$ 0.2 million is reflected in loss from discontinued operations.

2022 Equity Incentive Awards

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 125,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers.

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Each option award was granted with an exercise price of $ 3.73 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on October 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, pursuant to the Company’s Non-Employee Director Compensation Policy, which had previously been approved by the Company’s board of directors, 40,000 stock option awards were issued during the year ended December 31, 2022 to independent members of the board of directors of the Company.

board of directors of the Company.

Each option award was granted on May 24, 2022 with an exercise price of $ 3.377 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on May 24, 2022.

Each option award will vest in one year subject to the director’s continuance of service through May 24, 2023.

As of December 31, 2022, approximately 989,000 shares of common stock are available to be issued under the 2020 Plan.

Each option award vested over one year subject to the director’s continuance of service through May 24, 2023.

As of December 31, 2023, approximately 1.1 million shares of common stock are available to be issued under the 2020 Plan.

Stock Options

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

A summary of the Company’s stock option activity for the years ended December 31, 2023 and December 31, 2022, is as follows:

Weighted Average

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General and administrative

Stock compensation in continuing operations

Stock compensation in discontinued operations

Total stock compensation expenses

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

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

Qualifying grant income earned in advance of cash received from grants is recognized as revenue and recorded as other receivable.

If restricted cash received from grants in advance of incurring qualifying costs, it is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred.

There was no restricted cash recorded as of December 31, 2023 and December 31, 2022.

If qualifying grant income is earned in advance of cash received from grants, it is recognized as revenue and recorded as other receivable.

The Company recorded $ 2.7 million and $ 3.4 million of grant income related to the CPRIT grant as revenue for the years ended December 31, 2023 and 2022, respectively.

At December 31, 2022, the Company recorded $ 2.3 million of grant income receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

In January 2023, the Company received $ 2.4 million from CPRIT.

On March 13, 2023, the Company received $ 0.1 million of funds from the FDA grant.

At December 31, 2023, the Company had recorded $ 0.5 million as other receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

In September 2022, the Company received notice from the FDA that it had awarded the Company a $ 2.0 million grant from the FDA’s Orphan Products Grant program to support the Company’s Phase 2 clinical trial of MT-401 for the treatment of post-transplant AML.

The Company recorded $ 0.4 million and $ 0.1 million of grant income related to the FDA grant as revenue for the years ended December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023, the Company recorded $ 0.3 million as other receivable, which represented grant income earned in advance of funds to be received from the FDA.

In February 2024, the Company received $ 0.3 million of funds from the FDA grant.

In May 2023, the Company announced it had received a $ 2.0 million grant from the National Institutes of Health Small Business Innovation Research program to support the development and investigation of MT-401 for the treatment of AML patients following standard-of-care therapy with hypomethylating agents.

The Company recorded $ 0.2 million of grant income related to the SBIR grant as revenue for the year ended December 31, 2023.

As of December 31, 2023, the Company recorded $ 0.2 million as other receivable, which represented grant income earned in advance of funds to be received from the SBIR.

In February 2024, the Company received $ 0.2 million of funds from the SBIR grant.

All funding agencies have agreed to continue their financial support and to shift funds to the MT-401-OTS program.

LEGAL PROCEEDINGS

From time to time, the Company may be party to ordinary, routine litigation incidental to their business.

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.

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 judgment was paid.

On March 24, 2022, the Company paid the broker $ 2.5 million, which amount included accrued interest.

On January 4, 2023, the Company was notified that the broker was awarded an additional $ 0.1 million in attorneys’ fees, which the Company recorded to other expenses during fiscal year ending December 31, 2022.

The Company paid the $ 0.1 million on January 9, 2023.

RELATED PARTY TRANSACTIONS

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Total Research and development

$8,600 of related party transactions are included in accounts payable and accrued liabilities as of December 31, 2022.

$1.3 million of related party transactions are included in accounts payable and accrued liabilities as of December 31, 2023.

See Note 9 for additional information.

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

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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.

BCM is also a shareholder of the Company’s common stock.

The Company has also entered into a Clinical Site Agreement with BCM, which provided for BCM to conduct clinical trials for the Company and is a part of continuing operations.

Purchases from Bio-Techne Corporation .

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

The Company has no income tax expense due to operating losses incurred for the years ended December 31, 2022 and 2021.

Purchases from Cell Ready, LLC.

The Company is currently utilizing Cell Ready, LLC for its clinical manufacturing supply and product development.

John Wilson is a member of the Company’s board of directors and is serving as the CEO of Cell Ready, LLC.

On February 22, 2024, we entered into a Master Services Agreement for Product Supply (the “MSA”) with Cell Ready.

Cell Ready, which is owned by one of our directors and shareholders, Mr.

John Wilson, is a contract development and manufacturing organization (CDMO).

Under the MSA, it is anticipated Cell Ready will perform a wide variety of services for us, including research and development, and manufacturing in support

of our clinical trials.

Pursuant to the MSA, the Company may contract with Cell Ready for the provision of various products and services from time to time by entering into work orders with Cell Ready.

If the services involve the supply of product, Cell Ready is required to supply such product in conformance with the product requirements set forth in the applicable work order(s).

Further, Cell Ready is required to provide the Company with assistance and cooperation in order for the Company to obtain and maintain all necessary regulatory approvals, at the Company’s expense.

Also on February 22, 2024, the Company entered into Work Order #1 under the MSA, pursuant to which Cell Ready will provide the Company with GMP drug product for Marker MT-401 and/or MT-601.

The services include the delivery of final drug product and quality control testing.

The Company also requested Cell Ready to provide general support services in connection therewith.

The total projected sum (inclusive of taxes) for the services under Work Order #1 are not anticipated to exceed $ 750,000 .

The services will cover the anticipated manufacturing costs for the first quarter of 2024.

Additional Work Orders are expected to be generated for the remainder of 2024.

The Company has no federal income tax expense due to operating losses incurred for the years ended December 31, 2023 and 2022.

The Company recognized $ 4,000 in state tax expense for the year ended December 31, 2023.

The effects of temporary differences that give rise to significant portions of the deferred tax assets as of December 31, 2023 and 2022 are as follows:

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Stock Compensation

Accrued Expenses

License Agreement

Capitalized R&E

Research and Development

Charitable Contributions

Operating Lease Liability

Valuation Allowance

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Total Deferred Tax Assets

Deferred Tax Liabilities

Right-of-Use Assets

( 1,159,000 )

( 2,083,000 )

Total Deferred Tax Liabilities

( 1,463,000 )

( 2,177,000 )

Net Deferred Tax Assets/(Liabilities)

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R&E activities are broader in scope than qualified research activities considered under IRC Section 41 (relating to the research tax credit).

For the year ended December 31, 2022, the Company performed an analysis based on available guidance and determined that it will continue to be in a loss position even after the required capitalization and amortization of its R&E expenses.

The Company will

continue to monitor this issue for future developments, but it does not expect R&E capitalization and amortization to require it to pay cash taxes now or in the near future.

For the year ended December 31, 2023 and 2022, the Company performed an analysis based on available guidance and determined that it will continue to be in a loss position even after the required capitalization and amortization of its R&E expenses.

The Company will continue to monitor this issue for future developments, but it does not expect R&E capitalization and amortization to require it to pay cash taxes now or in the near future.

The Company’s income tax returns for 2019 to 2023 are still open and subject to audit.

In addition, net operating losses arising from prior years are also subject to examination at the time they are utilized in future years.

For the years ended December 31, 2022 and 2021, the expected tax expense (benefit) based on the U.

For the years ended December 31, 2023 and 2022, the expected tax expense (benefit) from continuing operations based on the U.

federal statutory rate is reconciled with the actual tax provision (benefit) as follows:

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Change in valuation allowance

( 1,556,000 )

Deferred true-up

Income tax provision/(benefit)

The Company recognized approximately $ 4,000 in state tax expense for the year ended December 31, 2023.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

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SUBSEQUENT EVENTS

On March 13, 2023, Mythili Koneru, Chief Medical Officer of Marker Therapeutics, Inc., notified the Company of her intent to resign as Chief Medical Officer of the Company effective as of April 9, 2023.

On March 14, 2023, the Company signed an agreement with AlloVir, Inc.

in which Marker will collaborate with AlloVir to optimize certain aspects of AlloVir’s manufacturing process.

Under the terms of this agreement, Marker will conduct a number of process improvement studies and provide AlloVir with the results of its findings.

For its work with AlloVir, the Company will receive total compensation in the amount of $ 400,000 , estimated to be fully earned by the end of the third quarter in 2023.

On February 22, 2024, the Company entered into a Master Services Agreement for Product Supply (the “Agreement”) with Cell Ready, a contract development and manufacturing organization (CDMO).

Cell Ready is owned by one of the Company’s directors and shareholders, Mr.

See Note 1 and Note 14.

On February 29, 2024, Marker Therapeutics, Inc.

(the “Company”) delivered notice to Lincoln Park Capital Fund, LLC, an Illinois limited liability company (“LPC”), terminating the Purchase Agreement, dated December 12, 2022 (the “Purchase Agreement”), with LPC effective March 1, 2024 (the “Termination Date”).

The Company projects a financial runway through the fourth quarter of 2025 and does not anticipate an immediate need for capital acquisition.

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