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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-26 · 176 added, 159 removed, 190 unchanged (64% of the section changed)

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We are a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies for the treatment of hematological malignancies and solid tumor indications.

We developed our lead product candidates from our multiTAA-specific T cell technology, which is based on the manufacture of non-engineered, tumor-specific T cells that recognize multiple tumor-associated antigens, or TAAs.

MultiTAA-specific T cells are able to recognize multiple tumor targets to produce broad spectrum anti-tumor activity.

When infused into a patient with cancer, the multiTAA-specific T cells are designed to kill cancer cells expressing the TAA and potentially recruit the patient’s immune system to participate in the cancer killing process.

We licensed the underlying technology for multiTAA-specific T cell therapy from Baylor College of Medicine, or BCM, in March 2018.

Harnessing millions of years of immunologic evolution, Marker’s multi antigen recognizing (“MAR”)-T cell technology is designed to recognize and kill highly heterogeneous tumors without the need for genetic modifications.

This approach selectively expands natural tumor-specific T cells from a patient’s/donor’s blood that are capable of recognizing a broad range of tumor associated antigens, or TAAs.

Unlike other T cell therapies, MAR-T cells are able to recognize hundreds of different epitopes within up to six tumor-specific antigens to produce broad spectrum anti-tumor activity.

Targeting multiple antigens simultaneously exploits the natural capacity of T cells to recognize and kill tumor targets via native T cell receptors (“TCR”), while limiting tumor adaptation/escape by antigen-negative selection or antigen down-regulation.

When infused into a patient with cancer, the MAR-T cells are designed to kill cancer cells expressing the TAA and potentially recruit the patient’s immune system to participate in the cancer killing process.

We licensed the underlying technology for MAR-T cell therapy from Baylor College of Medicine, or BCM, in March 2018.

BCM had utilized the therapy in seven exploratory clinical trials.

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In those studies, BCM saw evidence of clinical benefit, expansion of infused cells, and decreased toxicity compared to other cellular therapies.

We are advancing two product candidates for 3 clinical indications as part of our multiTAA-specific T cell program for:

● Autologous multiTAA product for the treatment of lymphoma and pancreatic cancer (MT-601)

We are advancing two product candidates for 3 clinical indications as part of our MAR-T cell program for:

● Autologous MAR-T cell product for the treatment of lymphoma and pancreatic cancer (MT-601)

● Off-the-Shelf (OTS) product in various indications (e.g., MT-401-OTS)

We do not genetically engineer our multiTAA-specific T cell therapies and we believe that our product candidates are superior to T cells engineered with chimeric antigen receptors, or CAR-T, for several reasons including:

We do not genetically engineer our MAR-T cell therapies and we believe that our product candidates are superior to T cells engineered with chimeric antigen receptors, or CAR-T, for several reasons including:

● Multiple targets → enhanced tumoricidal effect→ minimized tumor immune escape

● Clinical safety → no treatment-related side effects, including cytokine release syndrome (CRS) or other severe adverse effects (SAEs), were attributed to the use of multiTAA-specific T cell therapies to date

● Non-genetically engineered T cell products → no risk of mutagenesis and reduced manufacturing complexity → lower cost

● Clinical safety → no treatment-related side effects, including immune effector cell-associated neurotoxicity syndrome (ICANS) or other severe adverse effects (SAEs), were attributed to the use of MAR-T cell therapies to date

● Non-genetically engineered T cell products → selective expansion of tumor-specific T cells from a patient’s or donor’s blood capable of recognizing a broad range of tumor antigens→ no risk of mutagenesis and reduced manufacturing complexity → lower cost

For these reasons, we believe our endogenous T cell receptor-based therapies may provide meaningful clinical benefit and safety to patients with both hematological and solid tumors.

We believe that the simplicity of our manufacturing process allows additional modifications to expand multiTAA-specific T cell recognition of cancer targets.

For example, we are assessing the potential of combining multiTAA-specific T cell products with other products.

Reverse Stock Split

On January 24, 2023, our board of directors approved the filing of a certificate of amendment to our amended and restated certificate of incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect the one-for-ten (1:10) Reverse Stock Split of our outstanding common stock and a reduction in the total number of authorized shares of our common stock from 300,000,000 to 30,000,000 (the “Shares Reduction”).

The Amendment became effective at 5:00 p.m.

Eastern Time on January 26, 2023.

Pursuant to the Amendment, at the effective time of the Amendment, every ten (10) shares of our issued and outstanding common stock was automatically combined into one (1) issued and outstanding share of common stock and the authorized shares of our common stock was reduced from 300,000,000 to 30,000,000, without any change in par value per share.

The Reverse Stock Split affected all shares of our common stock outstanding immediately prior to the effective time of the Amendment.

No fractional shares were issued as a result of the Reverse Stock Split.

Stockholders of record who would otherwise be entitled to receive a fractional share received a cash payment in lieu thereof.

As a result of the Reverse Stock Split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options and warrants issued by us and outstanding immediately prior to the effective time of the Amendment, which resulted in a proportionate decrease in the number of shares of our common stock reserved for issuance upon exercise or vesting of such stock options and warrants and a proportionate increase in the exercise price of all such stock options and warrants.

In addition, the number of shares reserved for issuance under our equity compensation plans immediately prior to the effective time of the Amendment were reduced proportionately.

All share and per share amounts of common stock presented in this Annual Report on Form 10-K have been retroactively adjusted to reflect the one-for-10 (1:10) Reverse Stock Split.

We believe that the simplicity of our manufacturing process allows additional modifications to expand MAR-T cell recognition of cancer targets.

For example, we are assessing the potential of combining MAR-T cell products with other products.

On December 19, 2024, we issued a press release providing an update on the progress and clinical observations from the Phase 1 APOLLO study, with a data cutoff date of September 10, 2024.

Our Phase 1 APOLLO study is investigating MT-601, a MAR-T cell product, in patients with lymphoma who have relapsed after anti-CD19 chimeric antigen receptor (CAR) T cell therapy or where anti-CD19 CAR-T cells are not an option.

A total of 10 patients have been treated in the study, for which clinical data is currently available for 9 patients from 5 clinical sites across the United States.

Study participants showed early objective responses with and without lymphodepletion.

However, immunomonitoring data confirmed that lymphodepletion enhanced the expansion and persistence of MAR-T cell clones in vivo.

Our clinical-stage pipeline is set forth below:

Manufacturing

Our manufacturing process was originally developed at Baylor College of Medicine, where we initially conducted our clinical trials.

We continue to contract and collaborate with BCM and others to perform a wide variety of services to ensure the continuation of our research and development efforts, with the goal of optimizing our manufacturing process, product quality and commercial scalability.

In July 2021, we opened an in-house cGMP manufacturing facility in Houston, Texas, where we manufactured the clinical supply of our product candidates.

Subsequently, on June 26, 2023, we completed a transaction with Cell Ready, LLC, or Cell Ready, pursuant to a Purchase Agreement, or the Cell Ready Purchase Agreement, dated May 1, 2023, by and between us and Cell Ready, pursuant to which we (i) assigned to Cell Ready the leases for our two manufacturing facilities in Houston, Texas, or 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 our rights, title and interest in any contracts related to the equipment and Manufacturing Facilities (collectively referred to as the “Purchased Assets”).

Following the closing of the Cell Ready Purchase Agreement, we no longer operate our own cGMP manufacturing facility and instead rely on third parties for the clinical and, once approved, commercial manufacture of our product candidates.

As such, on February 22, 2024, we entered into a Master Services Agreement for Product Supply (the “MSA”) with Cell Ready for the provision of various products and services by Cell Ready pursuant to work orders that may be entered into from time to time.

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

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

The MSA contains customary representations, warranties and indemnification provision.

The initial term of the MSA is three years and may be extended upon the mutual written agreement of the parties.

On March 27, 2025, we mutually agreed with Cell Ready to terminate the MSA.

In connection therewith, we and Cell Ready entered into a settlement and release agreement pursuant to which we paid Cell Ready approximately $453,000 and we and Cell Ready provided one another mutual releases of all claims associated with any and all agreements between Marker and Cell Ready.

Additionally, BCM continues to supply us with products, as we continue our clinical trials.

Furthermore, in anticipation of the commencement of our larger pivotal trial for Lymphoma in 2026, as well as the eventual need for commercial scale production, we intend to evaluate and qualify additional potential third-party manufacturing partners to provide potential multiple sources of clinical

and commercial supply.

We currently are in discussions with a number of CDMO candidates and anticipate that we will select a partner organization and commence the qualification and technology transfer process later this year.

However, there is no guarantee that we will or have properly estimated our required manufacturing capacities or that the third parties on which we rely to manufacture our products will be able or willing to perform on our proposed timelines or to meet our manufacturing demands, if at all.

If any of our third-party vendors experience disruptions, or otherwise cease or substantially reduce the amount of products they are willing to supply us, our business and operations could be adversely affected.

See “Risk Factors”.

During the years ended December 31, 2024 and 2023, the Company incurred $5.8 million and $1.3 million in expenses related to the Cell Ready services and manufacturing costs, respectively.

During the year ended December 31, 2024 the Company paid $5.5 million related to Cell Ready invoices received.

Recent Developments

On December 19, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company issued and sold in a private Placement the following securities:

(i) 1,783,805 shares of common stock, (ii) Series B Warrants, or Pre-Funded Warrants, to purchase an aggregate of 3,247,445 shares of common stock in lieu of shares of common stock and (iii) Series A Warrants, or Private Placement Warrants, to purchase an aggregate of 5,031,250 shares of common stock.

The purchase price per share of common stock and accompanying Private Placement Warrant to purchase a share of common stock was $3.20, and the purchase price per Pre-Funded Warrant and accompanying Private Placement Warrant to purchase a share of common stock was $3.199.

Total gross proceeds from the sale of securities in the Private Placement, before deducting commissions to the placement agent and estimated offering expenses, was approximately $16.1 million, which does not include any proceeds that may be received upon exercise of any warrants issued in the Private Placement.

Both the Pre-Funded Warrants and the Private Placement Warrants are not exercisable until the Company obtains shareholder approval.

On March 21, 2025, the Company obtained shareholder approval for the exercise of such warrants.

The transaction closed on December 23, 2024.

On March 21, 2025, the Company held a Special Meeting of Stockholders (the “Special Meeting”) at which the stockholders approved, in accordance with Nasdaq Listing Rule 5635(d), of the issuance of the shares issuable upon exercise of (i) Series A Warrants to acquire 5,031,250 shares of Common Stock and (ii) Series B Warrants to acquire 3,247,445 shares of Common Stock.

Financial Overview

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General and administrative expenses consist primarily of personnel costs, including share-based compensation, legal fees relating to patent and corporate matters, insurance costs, consulting and professional fees, audit and investor relations.

We recognized $4,000 in state tax expense for the year ended December 31, 2023 and none for the year ended December 31, 2022.

We recognized $50,000 and $4,000 in state tax expense for the years ended December 31, 2024 and 2023, respectively.

Other Income (Expense)

Other income (expense), net consists of interest income and arbitration settlement expenses.

Other income (expense), net consists of interest income.

Results of Operations for the Years Ended December 31, 2024 and 2023

The following table summarizes the results of our continuing operations (rounded to the thousand except for per share amounts) for the years ended December 31, 2023 and 2022, together with the changes to those items:

The following table summarizes the results of our continuing operations (rounded to the thousands except for per share amounts) for the years ended December 31, 2024 and 2023, together with the changes to those items:

For the Years Ended

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Other income (expenses):

Arbitration settlement

Interest income

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During the years ended December 31, 2024 and 2023, respectively, we recognized $4.4 million and $2.7 million of revenue associated with the CPRIT grant.

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

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

During the years ended December 31, 2024 and 2023, we recognized $0.5 million and $0.4 million of revenue associated with the FDA grant, respectively.

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

During the year ended December 31, 2023, we recognized $0.2 million of revenue associated with the SBIR grant.

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

During the years ended December 31, 2024 and 2023, we recognized $1.0 million and $0.2 million of revenue associated with the SBIR grant, respectively.

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

In June 2024, the Company received notice of a $2.0 million grant over a 2-year period from the National Institutes of Health – National Cancer Institute to support control over tumor immune escape in pancreatic cancer using a dual T cell product strategy.

During the year ended December 31, 2024, we recognized approximately $6,000 of revenue associated with this grant.

In August 2024, the Company received notice of an additional $2.0 million grant from the SBIR program to support the clinical investigation of MT-601 in patients with non-Hodgkin’s lymphoma (NHL) who have relapsed following anti-CD19 chimeric antigen receptor (CAR) T cell therapy.

The Company recorded $0.7 million of grant income related to this grant as revenue for the year ended December 31, 2024.

In August 2024, the Company received another $2.0 million grant from the National Institutes of Health SBIR Program to support the advancement of MT-601 in patients with pancreatic cancer.

During the year ended December 31, 2024, we recognized approximately $7,000 of revenue associated with this grant.

In December 2024, the Company received notice an additional $9.5 million grant from CPRIT to support the clinical investigation of MT-601 in patients with metastatic pancreatic cancer.

The Company did not record any grant income related to this grant for the year ended December 31, 2024.

This CPRIT grant and the August 2021 CPRIT grant are subject to certain revenue-sharing arrangements, see Note 11 to the accompanying financial statements for further information.

Operating Expenses

Operating expenses incurred during the fiscal year ended December 31, 2024 were $17.7 million compared to $17.9 million in the prior year.

Significant changes and expenditures in operating expenses are outlined as follows:

Significant changes in operating expenses are outlined as follows:

Research and Development Expense

Research and development expenses or clinical trial costs decreased by 13% to $10.4 million for the year ended December 31, 2023, compared to $12.0 million for the year ended December 31, 2022, mainly as a result of the Cell Ready transaction.

The decrease of $1.6 million in 2023 was primarily attributable to the following:

● decrease of $2.1 million in process development expenses,

● decrease of $0.8 million in AML Phase 2 clinical trial expenses, offset by

Research and development expenses or clinical trial costs increased by 29% to $13.5 million for the year ended December 31, 2024, compared to $10.4 million for the year ended December 31, 2023, mainly as a result of the Cell Ready transaction.

The increase of $3.1 million in 2024 was primarily attributable to the following:

● increase of $4.5 million in Cell Ready (outsourced) clinical manufacturing costs and process development expenses,

● increase of $1.8 million in clinical trial expenses, offset by

● decrease of $1.2 million in process development expenses,

● decrease of $1.5 million in headcount-related expenses, including stock-based compensation expense and

● decrease of $0.5 million in other expenses.

General and Administrative Expenses

General and administrative expenses decreased by 43% to $4.2 million for the year ended December 31, 2024 from $7.5 million during the prior period.

The decrease in general and administrative expenses of $3.8 million mainly comprised the following:

The decrease in general and administrative expenses of $3.2 million is mainly comprised of the following:

● decrease of $1.8 million in headcount-related expenses, including stock-based compensation expense and net of severance expense,

● decrease of $0.6 million in rent and utilities expense, primarily as a result of the Cell Ready transaction, including its assumption of facility leases,

● decrease of $0.6 million in legal and professional fees,

● decrease of $0.2 million in insurance expense, offset by

● increase of $0.8 million in consulting expenses.

● decrease of $0.8 million in legal and professional fees and insurance expense,

● decrease of $0.6 million in consulting and other expenses.

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

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Other Income (Expense)

Arbitration settlement

An arbitration proceeding was brought against us before the Financial Industry Regulatory Authority, Inc., or FINRA by a broker seeking to be paid compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement, each 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, we recorded an accrual of $2.4 million in accrued liabilities on our 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.

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

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

On March 9, 2022, we were notified that our 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.

We paid the $2.5 million judgment on March 24, 2022.

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

We paid the $0.1 million on January 9, 2023.

Interest Income

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Net Loss from continuing operations

The decrease in our net loss from continuing operations during the year ended December 31, 2023 compared to the year ended December 31, 2022 was due to higher grant income and related party service revenue, cost reductions in our research and development activities and moderate stabilization of our clinical trial activities.

We anticipate that we will continue to incur net losses in the future as we continue to invest in research and development activities, including clinical development of our multiTAA T cell product candidates.

The decrease in our net loss from continuing operations during the year ended December 31, 2024 compared to the year ended December 31, 2023 was due to cost reductions in our general and administrative expenses, as well as higher grant income.

We anticipate that we will continue to incur net losses in the future as we continue to invest in research and development activities, including clinical development of our MAR-T cell product candidates.

Liquidity and Capital Resources

We have not generated any revenues from the sales or licensing of our product candidates since inception and only have limited revenue associated with grants to fund research.

We have financed our operations primarily through public and private offerings of our stock and debt including warrants and the exercise thereof, grants, and more recently through the cash proceeds received from the Cell Ready transaction and additional grants to fund research.

We have financed our operations primarily through public and private offerings of our stock and debt including warrants and the exercise thereof, grants, and in 2023 through the cash proceeds received from the Cell Ready transaction.

Based on our lack of recurring revenues, anticipated uses of cash and historical recurring cash losses from operating activities, and cash and cash equivalents as of December 31, 2024, we anticipate that we will be able to fund our operating expenses and capital expenditure requirements into the first quarter of 2026, assuming no additional grant funds are received.

We currently plan to raise additional capital

through the issuance of common shares and receipt of additional grant funds, which could enable us to fund our operating expenses and capital expenditure requirements beyond the first quarter of 2026, although no assurance can be given that such capital or existing awarded grants will be earned or future grants will be awarded.

This estimate is subject to our ability to effectively manage our costs, raise additional capital, and receive additional grant funds.

Cash and Working Capital

The following table sets forth our cash and cash equivalents and working capital as of December 31, 2024 and 2023:

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Net cash used in operating activities from continuing operations during the year ended December 31, 2024 was $10.9 million.

The use of cash primarily related to our net loss from continuing operations of $14.0 million, partially offset by a $2.8 million increase from changes in assets and liabilities and $0.9 million of stock-based compensation.

The use of cash primarily related to our net loss from continuing operations of $10.7 million and a $0.5 million decrease from changes in assets and liabilities, offset by $0.2 million of stock-based compensation.

Net cash used in operating activities from continuing operations during the year ended December 31, 2023 was $10.3 million.

The use of cash primarily related to our net loss from continuing operations of $19.8 million and a $4.7 million decrease from changes in assets and liabilities.

This decrease was partially offset by $3.3 million of stock-based compensation.

Financing Activities

Net cash provided by financing activities was $1.1 million and $0.2 million during the years ended December 31, 2023 and 2022, respectively, primarily due to the net proceeds received from sale of common stock through the ATM Agreement as well as the exercise of stock options.

Net cash provided by financing activities was $15.0 million and $1.1 million during the years ended December 31, 2024 and 2023, respectively, primarily due to the net proceeds received from sale of common stock through the Private Placement in 2024 and ATM Agreement in 2023, as well as the exercise of stock options.

Discontinued Operations

Operating Activities

There was no cash flow activity related to discontinued operations during the year ended December 31, 2024.

Net cash used in operating activities from discontinued operations during the year ended December 31, 2023 was $6.1 million, which primarily related to our net loss from discontinued operations of $5.8 million, which is net of $2.5 million in revenue for which cash had been received in the prior period.

Net cash used in operating activities from discontinued operations during the year ended December 31, 2022 was $5.5 million, which primarily related to our net loss from discontinued operations of $10.2 million, partially offset by cash received in advance of related party revenue recorded.

Investing Activities

There was no cash flow activity related to discontinued operations investing activity during the year ended December 31, 2024.

Net cash provided by investing activities from discontinued operations for the year ended December 31, 2023 was $18.7 million primarily due to the proceeds from the Cell Ready transaction, net of transaction costs.

Net cash used in investing activities from discontinued operations was $4.9 million for the year ended December 31, 2022.

$1.3 million in purchases of property and equipment for the year ended December 31, 2022 were comprised of laboratory equipment along with $0.1 million of computers, software and equipment and $0.1 million of furniture and fixtures.

$3.5 million of purchases in construction in progress related to a second modular cleanroom and the continued buildout of our former manufacturing facility.

Future Capital Requirements

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If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

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

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

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

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

Through the date of this filing, the Company has received $9.7 million of funds from the CPRIT grant.

The Company recorded $2.7 million of grant income related to the CPRIT grant as revenue for the year ended December 31, 2023 and at December 31, 2023, the Company recorded $0.5 million of grant income receivable.

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.

The Company recorded $0.4 million of grant income related to the FDA grant as revenue for the year ended December 31, 2023 and at 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.

The Company recorded $4.4 million of grant income related to the CPRIT grant as revenue during the year ended December 31, 2024 and at December 31, 2024, the Company recorded $2.1 million of grant income receivable.

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 clinical investigation of MT-401 for the treatment of post-transplant AML.

Through the date of this filing, the Company has received $1.0 million from the FDA grant.

The Company recorded $0.5 million of grant income related to the FDA grant as revenue during the year ended December 31, 2024 and at December 31, 2024, the Company had no grant income receivable recorded.

In May 2023, the Company announced that it had received a $2.0 million grant from the National Institutes of Health Small Business Innovation Research (“SBIR”) 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 and at December 31, 2023, the Company recorded $0.2 million of grant income receivable.

Through the date of this filing, the Company has received $1.2 million from SBIR.

The Company recorded $1.0 million of grant income related to the SBIR grant as revenue during the year ended December 31, 2024 and at December 31, 2024, the Company recorded $0.2 million of grant income receivable.

In February 2025, 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.

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

In June 2024, the Company received notice of a $2.0 million grant over a 2-year period from the National Institutes of Health - National Cancer Institute (“NIH”) to support control over tumor immune escape in pancreatic cancer using a dual T cell product strategy.

Through the date of this filing, the Company has received approximately $6,000 from NIH for this grant.

The Company recorded approximately $6,000 of grant income related to the NIH grant as revenue during the year ended December 31, 2024 and at December 31, 2024, the Company recorded approximately $6,000 of grant income receivable.

In February 2025, the Company received approximately $6,000 of funds from the NIH grant.

In August 2024, the Company received notice of a $2.0 million grant from the SBIR program to support the clinical investigation of MT-601 in patients with non-Hodgkin’s lymphoma (NHL) who have relapsed following anti-CD19 chimeric antigen receptor (CAR) T cell therapy.

Through the date of this filing, the Company has received $0.7 million of funds from this grant.

The Company recorded $0.7 million of grant income related to this grant as revenue for the year ended December 31, 2024 and at December 31, 2024, the Company had no receivable of grant income related to this grant.

In August 2024, the Company received another $2.0 million grant from the National Institutes of Health SBIR Program to support the advancement of MT-601 in patients with pancreatic cancer.

Through the date of this filing, the Company has received approximately $7,000 of funds from this grant.

The Company recorded approximately $7,000 of grant income related to this grant as revenue for the year ended December 31, 2024 and at December 31, 2024, the Company recorded $7,000 of grant income receivable.

In February 2025, the Company received approximately $7,000 of funds from the NIH grant.

In December 2024, the Company received notice an additional $9.5 million grant from CPRIT to support the clinical investigation of MT-601 in patients with metastatic pancreatic cancer.

As of the date of this filing, the Company has not received any related to this grant.

This CPRIT grant and the August 2021 CPRIT grant are subject to certain revenue-sharing arrangements, see Note 11 to the accompanying financial statements for further information.

As of December 31, 2024, we had working capital of $18.6 million, compared to working capital of $14.1 million as of December 31, 2023.

Operating expenses incurred during the fiscal year ended December 31, 2024 were $17.7 million compared to $17.9 million in the prior year.

Based on our clinical plans and our timing expectations related to the progress of our programs, we expect that, together with drawdowns of available grant funds, our cash and cash equivalents as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Furthermore, our operating plan may change, and we may need additional funds sooner than planned in order to meet operational needs and capital requirements for

product development and commercialization.

We currently plan to raise additional capital through the issuance of common shares and receive additional grant funds, which could enable us to fund our operating expenses and capital expenditure requirements beyond the first quarter of 2026, although no assurance can be given that such capital or existing awarded grants will be earned or future grants will be awarded.

This estimate is subject to our ability to effectively manage our costs, raise additional capital, and receive additional grant funds.

Our assumptions may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Furthermore, our operating plan may change, and we may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.

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seek regulatory approvals for our product candidates if they successfully complete clinical trials;

● continue development of our manufacturing capabilities and our manufacturing facility;

● continue development of our manufacturing capabilities;

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

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our existing stockholders’ common stock.

The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

our ability to conduct our business.

If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms unfavorable to us.

We may also be required to pay damages or have liabilities associated with litigation or other legal proceedings involving our company.

In addition to the foregoing, based on our current assessment, we do not expect any material impact on our long-term liquidity due to the COVID-19 pandemic.

However, we will continue to assess the effect of the pandemic on our operations.

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 our ability to access capital, which could in the future negatively affect our liquidity.

In addition to the foregoing, high inflation and concerns about an economic recession in the United States or other major markets have resulted in, among other things, volatility in the capital markets that may have the effect of reducing our ability to access capital, which could in the future negatively affect our liquidity.

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

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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, we sold 265,334 shares of our common stock under the ATM Agreement for proceeds of $1.0 million.

During the year ended December 31, 2022, we sold 60,651 shares of our common stock under the ATM agreement for proceeds of $202,100.

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, 2024, the Company sold 8,178 shares of its common stock under the ATM Agreement resulting in net proceeds of approximately $37,000, after deducting agent commissions.

On June 10, 2024, the Company provided notice of its termination of the ATM Agreement with Cantor Fitzgerald & Co.

and RBC Capital Markets, LLC.

The Company is not subject to any termination penalties related to the termination of the ATM Agreement.

In November 2024, we entered into an At The Market Offering Agreement, or the Sales Agreement, with H.C.

Wainwright & Co.

LLC, relating to the sale of shares of our common stock having an agreement offering price of up to $11,431,713 from time to time through H.C.

Wainwright & Co.

Any shares of our common stock sold will be issued pursuant to our shelf registration statement on Form S-3 (File No.

333-283512), which the SEC declared effective on December 6, 2024.

Wainwright & Co.

LLC 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 H.C.

Wainwright & Co.

LLC with indemnification and contribution rights.

Stock Purchase Agreement

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

During the year ended December 31, 2023, we sold 12,500 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.

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

Private Placement

of any warrants issued in the Private Placement.

Both the Pre-Funded Warrants and the Private Placement Warrants are not exercisable until the Company obtains shareholder approval.

On March 21, 2025, the Company obtained shareholder approval for the exercise of such warrants.

The transaction closed on December 23, 2024.

Going Concern

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

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.

As outlined above, we expect that our cash and cash equivalents including drawdowns from available grant funds will enable us to fund our operations into the fourth quarter of 2025.

However, our ability to pursue our longer term planned business activities is dependent upon our successful efforts to raise additional capital and obtain grant funding.

We have no sources of revenue, other than grant income, to provide incoming cash flows to sustain our future operations.

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

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

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

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

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in conformity with U.S.

GAAP, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses in the periods presented.

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of expenses that are not readily apparent from other sources.

Actual results could differ from those estimates.

Discontinued Operations

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See Note 6 to the accompanying financial statements for further information.

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.

Stock-Based Compensation

The Company incurs stock-based compensation expense related to the issuance of common stock and stock options.

The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model.

The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable.

In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility and expected option life:

Expected Term — The expected life of stock options was estimated using the “simplified method,” as the Company has limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock options grants.

The simplified method is based on the average of the vesting tranches and the contractual life of each grant.

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.

Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend — The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

The Company amortizes the fair value of the awards expected to vest on a straight-line basis over the requisite service period of the awards.

The Company recognizes fair value of stock options granted to nonemployees as stock-based compensation expense over the period in which the related services are received as if the Company had paid cash for those services.

Forfeitures are accounted for as incurred.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in conformity with U.S.

The Company’s critical accounting policies include grant income, which is discussed further below.

The Company does not have any critical accounting estimates.

We believe that the accounting estimates employed are appropriate and resulting balances are reasonable;

however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

Grant Income represents funding under cost reimbursement programs from government agencies and non-profit foundations for qualified research and development activities performed by the Company.

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With respect to each grant or award, the Company determines if it has a collaboration in accordance with ASC Topic 808, Collaborative Arrangements (“ASC 808”).

To the extent the grant or award is within the scope of ASC 808, the Company recognizes the award upon achievement of certain milestones as credits to research and development expenses.

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.

For grant and awards outside the scope of ASC 808, the Company applies either ASC 606 or IAS 20 by analogy depending on if the arrangement is considered an exchange or non-exchange transaction, respectively.

Under both accounting frameworks, 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.

During the two years ended December 31, 2024, the Company did not participate in any collaboration agreements.

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

The Company determined that the CPRIT Contract is not in the scope of ASC 808 or ASC 606.

In accordance with ASC 730-20-25-8, 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 arrangement as a contract to perform research and development for others and applies ASC 606 by analogy.

The Company recognizes grant income when amounts eligible for reimbursement are determinable and have been incurred, the applicable conditions under the grant arrangements have been met, and collectability of amounts due is reasonably assured or already received.

In December 2024, we announced that the Company has been awarded a $9.5 million grant from CPRIT to support the clinical investigation of MT-601 in patients with metastatic pancreatic cancer.

The classification of costs incurred related to grants is based on the nature of the activities performed by the Company.

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

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.

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

New Accounting Standards

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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

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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.

Effective January 1, 2024, the Company adopted the new standard on a retrospective basis for annual periods, and interim periods beginning the first quarter of 2025.

The Company does not believe the impact of the new guidance and related codification improvements had a material impact to its financial position, results of operations and cash flows.

Recently Issued Accounting Standards Not Yet Adopted

Improvements to Income Tax Disclosures

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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.

The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, to improve transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income Statement.

The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

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

The Company is in the process of assessing the impact of ASU 2024-03 on its disclosures.

Off-Balance Sheet Arrangements

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

The state net operating loss carryforwards of $16.6 million generated in 2018 and thereafter are subject to an 80% limitation on taxable income, do not expire and will carry forward indefinitely.

The state net operating loss carryforwards of $16.9 million

generated in 2018 and thereafter are subject to an 80% limitation on taxable income, do not expire and will carry forward indefinitely.

Any change in ownership greater than 50% under Section 382 of the Internal Revenue Code places significant annual limitations on the use of such net operating loss carryforwards.

At December 31, 2024 and 2023, we recorded a 100% valuation allowance against our deferred tax assets of approximately $41.0 million and $39.7 million, respectively, as our management believes it is uncertain that they will be fully realized.

For the year ended December 31, 2023, we realized $3.6 million of federal net operating losses and $0.1 million of state net operating losses as a result of the gain on sale of assets and capitalization for Section 174 R&E expenditures.

If we determine in the future that we will be able to realize all or a portion of our net operating loss carryforwards, an adjustment to valuation allowance against our deferred tax assets would increase net income in the period in which we make such a determination.

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We do not believe that inflation has had a material impact on our results of operations for the periods presented, except with respect to payroll-related costs and other costs arising from or related to government-imposed regulations.

Recent Developments

On February 22, 2024, we entered into a Master Services Agreement for Product Supply (the “MSA”) with Cell Ready LLC (“Cell Ready”) to provide services previously performed by the company until the disposition of its contract development and manufacturing operations.

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

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

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).

The MSA contains customary representations, warranties and indemnification provision.

The initial term of the MSA is three years and may be extended upon the mutual written agreement of the parties.

Either party may terminate the MSA (a) for material breach by the other party if such breach has not been cured within 30 days following notice of termination or (b) if the other party is the subject of an insolvency event.

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.

With regard to intellectual property, the MSA provides that each party will solely and exclusively own all right, title and interest in and to their Background IP and all inventions derived from such background IP (such invention being referred to as Foreground IP).

Background IP means all intellectual property either (a) owned or controlled by a party prior to the effective date of the MSA or (b) developed or acquired by a party independently from performance under the MSA without the use of, reliance on, or access to the other parties confidential information.

Furthermore, pursuant to the MSA, Cell Ready grants to the Company a non-exclusive, perpetual, irrevocable, transferable, assignable, fully-paid up, royalty-free, worldwide license to and under any of Cell Ready’s Background IP and Foreground IP to the extent they are incorporated or embedded in any deliverables provided to the Company or in the process of generating or manufacturing such deliverables and reasonably necessary or useful for the Company to make, have made, manufacture, have manufactured, use, have used, offer for sale, sell, import, and otherwise exploit such deliverables.

The Company grants to Cell Ready until the termination or expiry of any applicable Work Order and for a period not exceeding the term of the MSA, a non-exclusive, fully paid-up, non-transferable, non-sublicensable limited license under and to the Company’s Background IP made available to Cell Ready pursuant to a Work Order solely to the extent required for Cell Ready to provide the services under such Work Order.

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 above description of the MSA and Work Order #1 do not purport to be complete and are qualified in their entirety by reference to the full text of the MSA and Work Oder #1, copies of which are attached hereto as Exhibits 10.8 and 10.9 and are incorporated herein by reference.

The MSA has been filed as an exhibit to this Annual Report on Form 10-K to provide investors with information regarding the terms of the MSA and is not intended to modify or supplement any factual disclosures about the Company in its public reports filed with the SEC.

In particular, the MSA is not intended to be, and should not be relied upon as, disclosure regarding any facts and circumstances relating to the Company.

The representations, warranties, and covenants contained in the MSA have been made solely for the purposes of the MSA and as of specific dates;

were solely for the benefit of the parties to the MSA;

are not intended as statements of fact to be relied upon by the parties’ shareholders;

may no longer be true as of a given date;

and may apply standards of materiality in a way that is different from what may be viewed as material by shareholders.

Security holders are not third-party beneficiaries under the MSA and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of any actual state of facts or of the condition of the Company.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

FINANCIAL STATEMENTS

The Financial Statements are incorporated herein by reference to pages beginning on page F-1 at the end of this report and the supplementary data is not applicable.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no changes in, or disagreements with our principal independent accountants.

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 7. Management’s Discussion and Analysis