UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2022

☐   Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____ to _____.

Commission File Number: 001-37939

MARKER THERAPEUTICS, INC.

(Name of registrant in its charter)

DELAWARE	45-4497941
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3200 Southwest Freeway, Suite 2500 Houston, Texas	77027
(Address of principal executive offices)	(Zip Code)

(713) 400-6400

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MRKR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “accelerated filer”, “large accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐ No ☒

As of August 1, 2022, the Company had 83,599,187 shares of common stock issued and outstanding.

		Page
PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	2
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	25
Item 4.	Controls and Procedures.	25
PART II – OTHER INFORMATION		26
Item 1.	Legal Proceedings.	26
Item 1A.	Risk Factors.	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	26
Item 3.	Defaults Upon Senior Securities.	26
Item 4.	Mine Safety Disclosure.	26
Item 5.	Other Information.	26
Item 6.	Exhibits.	28
Signatures		29

PART I.      FINANCIAL INFORMATION

Item 1.        Financial Statements

MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	25,821,708	$	42,351,145
Restricted cash		—		1,146,186
Prepaid expenses and deposits		2,826,699		2,484,634
Other receivables		627,629		237
Total current assets		29,276,036		45,982,202
Non-current assets:
Property, plant and equipment, net		13,740,158		10,096,861
Construction in progress		—		2,225,610
Right-of-use assets, net		9,303,544		9,830,461
Total non-current assets		23,043,702		22,152,932
Total assets	$	52,319,738	$	68,135,134
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	4,735,251	$	11,134,913
Related party deferred revenue		8,000,000		—
Lease liability		738,389		620,490
Deferred revenue		—		1,146,186
Total current liabilities		13,473,640		12,901,589
Non-current liabilities:
Lease liability, net of current portion		10,819,825		11,247,950
Total non-current liabilities		10,819,825		11,247,950
Total liabilities		24,293,465		24,149,539
Stockholders' equity:
Preferred stock - $0.001 par value, 5 million shares authorized and 0 shares issued and outstanding at June 30, 2022 and December 31,2021, respectively		—		—
Common stock, $0.001 par value, 300 million and 150 million shares authorized, 83.6 million and 83.1 million shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		83,599		83,079
Additional paid-in capital		445,215,725		442,020,871
Accumulated deficit		(417,273,051)		(398,118,355)
Total stockholders' equity		28,026,273		43,985,595
Total liabilities and stockholders' equity	$	52,319,738	$	68,135,134

See accompanying notes to these unaudited condensed consolidated financial statements.

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MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues:
Grant income	$	790,508	$	—	$	1,754,830	$	—
Total revenues		790,508		—		1,754,830		—
Operating expenses:
Research and development	$	6,555,299	$	7,350,035		13,581,365		12,993,064
General and administrative		3,515,183		3,559,150		7,248,184		6,697,108
Total operating expenses		10,070,482		10,909,185		20,829,549		19,690,172
Loss from operations		(9,279,974)		(10,909,185)		(19,074,719)		(19,690,172)
Other income (expenses):
Arbitration settlement		—		—		(118,880)		—
Interest income		35,786		2,403		38,903		3,940
Net loss	$	(9,244,188)	$	(10,906,782)	$	(19,154,696)	$	(19,686,232)
Net loss per share, basic and diluted	$	(0.11)	$	(0.13)	$	(0.23)	$	(0.28)
Weighted average number of common shares outstanding, basic and diluted		83,592,043		83,030,470		83,351,184		69,823,729

See accompanying notes to these unaudited condensed consolidated financial statements.

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MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	For the Three Months Ended June 30, 2022
								Total
	Common Stock			Additional Paid-		Accumulated		Stockholders’
	Shares	Par value		in Capital		Deficit		Equity
Balance at April 1, 2022	83,451,187	$	83,451	$	443,651,176	$	(408,028,863)	$	35,705,764
Issuance common shares for cash, net	148,000		148		63,425		—		63,573
Stock-based compensation	—		—		1,501,124		—		1,501,124
Net loss	—		—		—		(9,244,188)		(9,244,188)
Balance at June 30, 2022	83,599,187	$	83,599	$	445,215,725	$	(417,273,051)	$	28,026,273

	For the Six Months Ended June 30, 2022
								Total
	Common Stock			Additional Paid-		Accumulated		Stockholders’
	Shares	Par value		in Capital		Deficit		Equity
Balance at January 1, 2022	83,078,675	$	83,079	$	442,020,871	$	(398,118,355)	$	43,985,595
Issuance common shares for cash, net	148,000		148		63,425		—		63,573
Stock-based compensation	372,512		372		3,131,429		—		3,131,801
Net loss	—		—		—		(19,154,696)		(19,154,696)
Balance at June 30, 2022	83,599,187	$	83,599	$	445,215,725	$	(417,273,051)	$	28,026,273

	For the Three Months Ended June 30, 2021
								Total
	Common Stock			Additional Paid-		Accumulated		Stockholders’
	Shares	Par value		in Capital		Deficit		Equity
Balance at April 1, 2021	83,013,929	$	83,014	$	437,430,839	$	(365,018,934)	$	72,494,919
Stock options exercised for cash	1,456		2		3,085		—		3,087
Stock-based compensation	63,290		63		1,652,024		—		1,652,087
Net loss	—		—		—		(10,906,782)		(10,906,782)
Balance at June 30, 2021	83,078,675	$	83,079	$	439,085,948	$	(375,925,716)	$	63,243,311

	For the Six Months Ended June 30, 2021
								Total
	Common Stock			Additional Paid-		Accumulated		Stockholders’
	Shares	Par value		in Capital		Deficit		Equity
Balance at January 1, 2021	50,731,072	$	50,731	$	383,533,326	$	(356,239,484)	$	27,344,573
Issuance of common stock for cash (net of offering costs of $3.9 million)	32,282,857		32,283		52,520,475		—		52,552,758
Stock options exercised for cash	1,456		2		3,085		—		3,087
Stock-based compensation	63,290		63		3,029,062		—		3,029,125
Net loss	—		—		—		(19,686,232)		(19,686,232)
Balance at June 30, 2021	83,078,675	$	83,079	$	439,085,948	$	(375,925,716)	$	63,243,311

See accompanying notes to these unaudited condensed consolidated financial statements.

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MARKER THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended
	June 30,
	2022		2021
Cash Flows from Operating Activities:
Net loss	$	(19,154,696)	$	(19,686,232)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization		1,156,113		1,032,971
Stock-based compensation		3,131,801		3,029,125
Amortization on right-of-use assets		517,059		504,232
Changes in operating assets and liabilities:
Prepaid expenses and deposits		(342,065)		(743,876)
Other receivables		(627,392)		1,000,273
Accounts payable and accrued expenses		(4,255,034)		108,230
Related party deferred revenue		8,000,000		—
Deferred revenue		(1,146,186)		—
Lease liability		(300,368)		(130,503)
Net cash used in operating activities		(13,020,768)		(14,885,780)
Cash Flows from Investing Activities:
Purchase of property and equipment		(1,229,298)		(842,048)
Purchase of construction in progress		(3,489,130)		(958,965)
Net cash used in investing activities		(4,718,428)		(1,801,013)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net		63,573		52,552,758
Proceeds from exercise of stock options		—		3,087
Net cash provided by financing activities		63,573		52,555,845
Net (decrease) increase in cash, cash equivlants and restricted cash		(17,675,623)		35,869,052
Cash, cash equivalents and restricted cash at beginning of the period		43,497,331		21,352,382
Cash, cash equivalents and restricted cash at end of the period	$	25,821,708	$	57,221,434

	For the Six Months Ended
	June 30,
	2022		2021
Supplemental schedule of non-cash financing and investing activities:
Reclassifications between construction in progress and fixed assets	$	4,089,135	$	6,789,098
Capital expenditures included in accounts payable	$	16,128	$	159,978
Changes to right-of-use assets and lease liability due to close out of an operating lease	$	8,897	$	—

See accompanying notes to these unaudited condensed consolidated financial statements.

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MARKER THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(Unaudited)

NOTE 1: NATURE OF OPERATIONS

Marker Therapeutics, Inc., a Delaware corporation (the “Company” or “we”), is a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies and innovative peptide-based vaccines for the treatment of hematological malignancies and solid tumor indications. The Company’s MultiTAA T cell technology is based on the selective expansion of non-engineered, tumor-specific T cells that recognize tumor associated antigens, which are tumor targets, and kill tumor cells expressing those targets. These T cells are designed to recognize multiple tumor targets to produce broad spectrum anti-tumor activity. 

NOTE 2: BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results.

The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2022 or for any future interim period. The condensed consolidated balance sheet at June 30, 2022 has been derived from unaudited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s annual report on Form 10-K filed on March 17, 2022.

NOTE 3: LIQUIDITY, GOING CONCERN AND FINANCIAL CONDITION

As of June 30, 2022, the Company had cash and cash equivalents of approximately $25.8 million. The Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital, and performing research and development. Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent on future events, including, among other things, its ability to access potential markets; secure financing; successfully progress its product candidates through preclinical and clinical development; obtain regulatory approval of one or more of its product candidates; maintain and enforce intellectual property rights; develop a customer base; attract, retain and motivate qualified personnel; and develop strategic alliances and collaborations. From inception, the Company has been funded by a combination of equity and debt financings.

In August 2021, the Company entered into a Controlled Equity Offering^SM Sales Agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co. and RBC Capital Markets, LLC (the “Sales Agents”), pursuant to which the Company can offer and sell, from time to time at its sole discretion through the Sales Agents, shares of its common stock having an aggregate offering price of up to $75.0 million. Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-258687), which the SEC declared effective on August 19, 2021. The shelf registration statement on Form S-3 includes a prospectus supplement covering the offering up to $19.8 million of shares of common stock over the 12 months ending March 18, 2023 in accordance with the ATM agreement. The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0% of the gross sales price per share sold under the ATM Agreement, and the Company has provided each of the Sales Agents with indemnification and contribution rights. From April 1, 2022 to the date of this filing, the Company sold 148,000 shares of its common stock under the ATM Agreement for net proceeds of $63,600.

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In August 2021, the Company received notice of a Product Development Research award totaling approximately $13.1 million from the Cancer Prevention and Research Institute of Texas (“CPRIT”) to support the Company’s Phase 2 clinical trial of its lead MultiTAA-specific T cell product MT-401. The CPRIT award is intended to support the adjuvant arm of the Company’s Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with acute myeloid leukemia following a hematopoietic stem cell transplant. The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group. To date, the Company has received $2.4 million of funds from the CPRIT grant.

On April 21, 2022, the Company entered into a binding services agreement (the “Agreement”), effective April 12, 2022, with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”). Mr. 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. Wilson Wolf is in the business of creating products and services intended to simply and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society (the “Wilson Wolf Mission”). Pursuant to the Agreement, Wilson Wolf made a cash payment to the Company in the amount of $8.0 million.

The Company expects to continue to incur substantial losses over the next several years during its development phase. 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 June 30, 2022 will enable the Company to fund its operating expenses and capital expenditure requirements through the second quarter of 2023. The Company has based this estimate on assumptions that may prove to be wrong, and the Company could utilize its available capital resources sooner than it currently expects. Furthermore, the Company’s operating plan may change, and it may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization. Because of the numerous risks and uncertainties associated with the development and commercialization of the Company’s product candidates and the extent to which the Company may enter into additional collaborations with third parties to participate in their development and commercialization, the Company is unable to estimate the amounts of increased capital outlays and operating expenditures associated with its current and anticipated clinical trials. The Company’s future funding requirements will depend on many factors, as it:

● initiates or continues clinical trials of its product candidates;

● continues the research and development of its product candidates and seeks to discover additional product candidates;

● seeks regulatory approvals for any product candidates that successfully complete clinical trials;

● continues development of its manufacturing capabilities and manufacturing facility;

● maintains and enforces intellectual property rights;

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

● evaluates strategic transactions the Company may undertake; and

● enhances operational, financial and information management systems and hires additional personnel, including personnel to support development of product candidates and, if a product candidate is approved, commercialization efforts.

We have no sources of revenue to provide incoming cash flows to sustain our future operations. As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to raise additional capital.

These factors raise substantial doubt regarding our ability to continue as a going concern. Our condensed consolidated financial statements have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

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

6

operations, including its clinical programs. The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the geographic spread of the disease, the duration of the outbreak, the emergence of any new variant strains of COVID-19, the duration and effect of any future business disruptions in the United States and other countries to contain and treat the disease and the rate of public acceptance and efficacy of vaccines and other treatments. Further, disruption of global financial markets and a recession or market correction, including as a result of the COVID-19 pandemic, the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia, and other global macroeconomic factors such as inflation, could reduce the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity and could materially affect the Company’s business and the value of its common stock.

On February 16, 2022, the Company received a notice from The Nasdaq Stock Market that the Company was not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive business days. The Company has 180 calendar days, or until August 15, 2022, to regain compliance with the minimum bid price requirement. To regain compliance, the minimum bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period. In the event the Company does not regain compliance with the minimum bid price requirement by August 15, 2022, the Company may be eligible for an additional 180-calendar day compliance period if it elects to transfer to the Nasdaq Capital Market to take advantage of the additional compliance period offered on that market. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period. During the six months ended June 30, 2022, the Company’s board of directors and stockholders approved a series of alternate amendments to the Company’s Certificate of Incorporation to effect a reverse stock split of the Company’s common stock, where the board of directors will have the discretion to select the reverse stock split ratio from within a range between and including one-for-three and one-for-twelve. Such reverse stock split, and the reverse stock split ratio, will be at the sole discretion of the board of directors at any time prior to the Company’s 2023 Annual Meeting of Stockholders.

NOTE 4: SIGNIFICANT ACCOUNTING POLICIES

Prior Period Reclassification

Certain reclassifications have been made to reclass certain non-cash capital expenditures on the condensed consolidated statements of cash flows from a cash outflow from investing activity to a non-cash investing activity. The Company has evaluated the materiality of this adjustment and concluded it was not material to the previously issued consolidated financial statements and had no impact to the reported condensed consolidated balance sheets, consolidated statements of operations or net loss per share.

For the six months ended June 30, 2021, this immaterial adjustment had the effect of decreasing net cash used in operating activities and increasing net cash used in investing activities by $1.0 million from what was previously reported.

Grant Income

The Company recognizes grant income in accordance with the terms stipulated under the grant awarded to the Company’s collaborators at the Mayo Foundation from the U. S. Department of Defense. In various situations, the Company receives certain payments from the Mayo Foundation for reimbursement of clinical supplies. These payments are non-refundable and are not dependent on the Company’s ongoing future performance. The Company has adopted a policy of recognizing these payments when received and as revenue in accordance with Accounting Standards Update No. 2014 09, “Revenue from Contracts with Customers (Topic 606)” issued by FASB.

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

In accordance with ASC 730-20-25-8, 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. The funds received from CPRIT will initially be recorded as a deferred credit in the Company’s balance sheet.

7

Restricted cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred. The Company recorded $1.8 million of grant income related to the CPRIT grant as revenue for the six months ended June 30, 2022. At June 30, 2022, there were no restricted cash or deferred revenue amounts on the Company’s condensed consolidated financial statements. At June 30, 2022, the Company recorded $0.6 million of grant income receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

New Accounting Standards

From time to time, new accounting pronouncements are issued by FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its consolidated financial position or results of operations upon adoption.

NOTE 5: NET LOSS PER SHARE

Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per common share is computed similarly to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

The following table sets forth the computation of net loss per share for the three and six months ended June 30, 2022 and 2021, respectively:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net loss	$	(9,244,188)	$	(10,906,782)	$	(19,154,696)	$	(19,686,232)
Denominator:
Weighted average common shares outstanding		83,592,043		83,030,470		83,351,184		69,823,729
Net loss per share:
Basic and diluted	$	(0.11)	$	(0.13)	$	(0.23)	$	(0.28)

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

	For the Six Months Ended
	June 30,
	2022	2021
Common stock options	9,959,000	7,461,000
Common stock purchase warrants	18,482,000	20,830,000
Potentially dilutive securities	28,441,000	28,291,000

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NOTE 6: PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of June 30, 2022 and December 31, 2021, respectively:

		June 30,		December 31,
	Estimated Useful Lives	2022		2021
Lab and manufacturing equipment	5 Years	$	11,712,000	$	7,851,000
Computers, equipment and software	3-5 Years		1,108,000		1,020,000
Office furniture	5 Years		919,000		793,000
Leasehold improvements	Lesser of lease term or estimated useful life		3,897,000		3,173,000
Total			17,636,000		12,837,000
Less: accumulated depreciation			(3,896,000)		(2,740,000)
Construction in progress			—		2,226,000
Total fixed assets, net		$	13,740,000	$	12,323,000

In connection with the manufacturing facility, the Company has incurred costs pursuant to an agreement with a vendor to design, engineer, build and eventually install a second modular cleanrooms in a manufacturing facility. The completion of the facility’s construction occurred during April 2022 and the Company received its certificate of occupancy in May 2022, and as such was placed into service in June 2022. During the three months ended June 30, 2022, $3.1 million of the costs previously recorded as construction in progress were recorded to lab and manufacturing equipment and $0.9 million were recorded to leasehold improvements.

Depreciation expense for the three months ended June 30, 2022 and 2021 was approximately $0.6 million and $0.5 million, respectively.

Depreciation expense for the six months ended June 30, 2022 and 2021 was approximately $1.2 million and $1.0 million, respectively.

$16,000 of property and equipment transactions are included in accounts payable and accrued liabilities as of June 30, 2022.

NOTE 7: LEASES

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.

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 other assets on the Company’s condensed consolidated balance sheets. Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on its condensed 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 June 30, 2022, the Company had total operating lease liabilities of approximately $11.6 million and right-of-use assets of approximately $9.3 million, which were included in the condensed consolidated balance sheet.

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

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The following summarizes quantitative information about the Company’s operating leases for the three and six months ended June 30, 2022 and 2021, respectively:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating lease expense summary:
Operating lease expense	$	425,000	$	425,000	$	850,000	$	850,000
Short-term lease expense		8,000		—		11,000		—
Variable lease expense		226,000		129,000		405,000		262,000
Total	$	659,000	$	554,000	$	1,266,000	$	1,112,000

	For the Six Months Ended
	June 30,
	2022		2021
Other information:
Operating cash flows - operating leases	$	633,000	$	477,000

The weighted-average remaining lease term as of June 30, 2022 and December 31, 2021 was approximately 8.0 years and 8.4 years, respectively. The weighted-average discount rate used to determine the operating lease liability as of June 30, 2022 and December 31, 2021 was approximately 5.7%.

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

Six months ending December 31, 2022	$	634,000
Year ended December 31, 2023		1,542,000
Year ended December 31, 2024		1,826,000
Year ended December 31, 2025		1,874,000
Year ended December 31, 2026		1,775,000
Thereafter		6,997,000
Total		14,648,000
Less present value discount		(3,090,000)
Operating lease liabilities included in the Condensed Consolidated Balance Sheet at June 30, 2022	$	11,558,000

NOTE 8: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following as of June 30, 2022 and December 31, 2021, respectively:

	June 30,		December 31,
	2022		2021
Accounts payable	$	1,767,000	$	5,144,000
Compensation and benefits		1,565,000		2,055,000
Process development expenses		357,000		385,000
Professional fees		491,000		644,000
Technology license fees		250,000		250,000
Arbitration settlement fees		—		2,407,000
Other		305,000		250,000
Total accounts payable and accrued liabilities	$	4,735,000	$	11,135,000

NOTE 9: RELATED PARTY DEFERRED REVENUE

On April 21, 2022, the Company entered into a binding services agreement, effective April 12, 2022, with Wilson Wolf Manufacturing Corporation (“Wilson Wolf”). Wilson Wolf is in the business of creating products and services intended to simplify and expedite the transition of cell therapies and gene-modified cell therapies to mainstream society (the “Wilson Wolf Mission”). Pursuant to the

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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 Marker’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 Marker’s quality management system inclusive of all underlying documents related thereto, none of which shall include unique information specific to the manufacture of Marker’s MultiTAA product candidates such as direct peptide stimulation;

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

● $3.0 million for Marker to train Wilson Wolf on its expertise in the optimization of T-cell therapy manufacturing processes using G-Rex and to conduct CAR T and TCR G-Rex Optimization Work under the direction of Wilson Wolf (the “Work Direction”), whereunder all intellectual property provided by Wilson Wolf or created or derived by Marker will be solely owned by Wilson Wolf, and whereby Marker will make good faith efforts to complete the conduct of such work as soon as practicable within 18 months from the date of the agreement. Wilson Wolf has agreed to pay Marker an additional $1.0 million if the Work Direction is completed within one year from the onset of the Agreement.

Pursuant to the Agreement, in the event that Marker becomes insolvent, goes out of business, or an event other than force majeure occurs that cannot allow the Agreement to be fulfilled, Wilson Wolf will have right of first offer and right of first refusal for Marker’s manufacturing facility provided it is able and willing to meet whatever financial obligations are required to do so and provided further that such clause will not apply in the event of a merger, reorganization or consolidation of Marker with a third party that results in the outstanding voting securities of Marker immediately prior thereto ceasing to represent, or being converted into or exchanged for voting securities that do not represent, at least fifty percent (50)% of the combined voting power of the voting securities of the surviving entity or the parent corporation of the surviving entity immediately after such merger, reorganization or consolidation, or the sale or other transfer of all or substantially all of Marker’s business or assets. Marker agrees to assist as needed to the extent permitted under any applicable law (including bankruptcy or insolvency statutes). Further, prior to Marker undertaking any financing that would encumber any of Marker’s assets necessary for Marker’s performance under this Agreement, Wilson Wolf shall have the first right to provide such financing on equal terms to what Marker can obtain elsewhere.

The Company plans to recognize 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 will be 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 three-month period ending June 30, 2022, the Company did not recognize any revenues pursuant to this agreement and therefore at June 30, 2022, the Company recorded an $8.0 million related party deferred revenue on its condensed consolidated balance sheet.

NOTE 10: STOCKHOLDERS’ EQUITY

Increase in Authorized Shares

During the six 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 150,000,000 shares to 300,000,000 shares. The Company filed the Amendment with the Secretary of State of Delaware on May 25, 2022.

Approval of Reverse Stock Split to be Effected at the Discretion of the Board of Directors

During the six months ended June 30, 2022, the Company’s board of directors and stockholders approved a series of alternate amendments to the Company’s Certificate of Incorporation to effect a reverse stock split of the Company’s common stock, where the board of directors will have the discretion to select the reverse stock split ratio from within a range between and including one-for-three and one-for-twelve. Such reverse stock split, and the reverse stock split ratio, will be at the sole discretion of the board of directors at any time prior to the Company’s 2023 Annual Meeting of Stockholders. As of the date of this filing, the Company’s board of directors has not approved any reverse stock split.

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Common Stock Transactions

Issuance of Restricted Stock Units to Executives

During the six months ended June 30, 2022, upon the recommendation of the compensation committee and pursuant to the Company’s 2020 Equity Incentive Plan, the Company’s board of directors approved the issuance of a total of 372,512 shares of common stock subject to restricted stock units, which were immediately vested upon grant, to certain executives as performance bonuses for 2021 performance.

Issuance of Stock Pursuant to ATM Agreement

During the six months ended June 30, 2022, the Company sold 148,000 shares of its common stock under the ATM Agreement for net proceeds of $63,600.

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of June 30, 2022 and changes during the period is presented below:

				Weighted Average
	Number of	Weighted Average		Remaining Contractual	Total Intrinsic
	Warrants	Exercise Price		Life (in years)	Value
Balance - January 1, 2022	19,830,000	$	4.42	1.70	$	—
Warrants granted	—		—	—		—
Expired or cancelled	(1,348,000)		3.97	—		—
Balance - June 30, 2022	18,482,000	$	4.45	1.30	$	—

NOTE 11: STOCK-BASED COMPENSATION

Stock Options

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 1,250,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers. Each option award was granted with an exercise price of $0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date. Additionally, on February 17, 2022, the compensation committee of the Company’s board of directors approved a total of 395,000 options to purchase the Company’s common stock to non-executive employees of the Company as equity-based incentive awards. Each option award was granted with an exercise price of $0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.

The above awards were in addition to 175,000 stock option awards issued during the three months ended March 31, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $1.00 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 3, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.

Additionally, 210,000 stock option awards issued during the three months ended June 30, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $0.43 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on April 1, 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.

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Also, pursuant to the Company’s Non-Employee Director Compensation Policy, which had previously been approved by the Company’s board of directors, 400,000 stock option awards were issued during the three months ended June 30, 2022 to independent members of the board of directors of the Company. Each option award was granted with an exercise price of $0.3377 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.

A summary of the Company’s stock option activity for the six months ended June 30, 2022 is as follows:

						Weighted Average
						Remaining
		Weighted Average				Contractual
	Number of Shares	Exercise Price		Total Intrinsic Value		Life (in years)
Outstanding as of January 1, 2022	7,686,233	$	5.47	$	—	7.7
Granted	2,430,000		0.48		—	9.6
Canceled/Expired	(156,772)		2.62		—	—
Outstanding as of June 30, 2022	9,959,461	$	4.30	$	—	7.8
Options vested and exercisable	5,342,679	$	6.27	$	—	6.9

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans. The weighted average assumptions used in calculating the fair values of stock options that were granted during the six months ended June 30, 2022 was as follows:  

	For the Six Months Ended
	June 30, 2022
Exercise price	$	0.48
Expected term (years)		5.9
Expected stock price volatility		85	%
Risk-free rate of interest		2	%
Expected dividend rate		0	%

The following table sets forth stock-based compensation expenses recorded during the respective periods:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Stock Compensation expenses:
Research and development	$	732,000	$	709,000	$	1,485,000	$	1,405,000
General and administrative		769,000		943,000		1,647,000		1,624,000
Total stock compensation expenses	$	1,501,000	$	1,652,000	$	3,132,000	$	3,029,000

As of June 30, 2022, the total stock-based compensation cost related to unvested awards not yet recognized was $6.3 million. The expected weighted average period compensation costs to be recognized was approximately 1.9 years. Future option grants will impact the compensation expense recognized.

NOTE 12: GRANT INCOME

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

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During the fourth quarter of 2021, the Company received $2.4 million advancement of funds in relation to the CPRIT grant. The Company recorded $1.8 million of grant income related to the CPRIT grant as revenue for the six months ended June 30, 2022. At June 30, 2022, there were no restricted cash or deferred revenue amounts on the Company’s condensed consolidated financial statements. At June 30, 2022, the Company recorded $0.6 million of grant income receivable, which represented grant income earned in advance of the next tranche of funds to be received from CPRIT.

NOTE 13: LEGAL PROCEEDINGS

From time to time, the Company may be party to ordinary, routine litigation incidental to their business. The Company knows of no material, active or pending legal proceedings against the Company, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company’s interest.

An arbitration proceeding was brought against the Company before the Financial Industry Regulatory Authority, Inc. (“FINRA”) by a broker seeking to be paid compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement brokered by another broker. The broker’s claims were based on a placement agent agreement for a private placement it brokered in 2017, under which it alleged it was entitled to compensation for the 2018 transactions. The FINRA panel found in favor of the broker and awarded the broker $2.4 million for compensation, interest and attorney fees. As of December 31, 2021, the Company recorded an accrual of $2.4 million in accrued liabilities on its consolidated balance sheet and a $2.4 million charge to other expenses. On September 17, 2021, the broker filed a petition to confirm the FINRA arbitration award in the Supreme Court of New York for the County of New York. The Company removed the case to the United States District Court for the Southern District of New York on September 27, 2021. On October 22, 2021, the Company filed a motion in federal court to vacate the award. On March 9, 2022, the Company was notified that its motion to vacate the award was denied and the broker was awarded an additional $0.1 million in interest. Post judgment interest accrued at 1.02% until the judgement was paid. The Company paid the $2.5 million judgement on March 24, 2022.

NOTE 14: RELATED PARTY TRANSACTIONS

The following table sets forth related party transaction expenses recorded for the three and six months ended June 30, 2022 and 2021, respectively.

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Baylor College of Medicine	$	285,000	$	841,000	$	1,142,000	$	1,263,000
Bio-Techne Corporation		—		114,000		101,000		160,000
Wilson Wolf Manufacturing Corporation		46,000		—		101,000		34,000
Total Research and development	$	331,000	$	955,000	$	1,344,000	$	1,457,000

$0.1 million of related party transactions are included in accounts payable and accrued liabilities as of June 30, 2022.

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

In November 2018, January 2020 and February 2020, the Company entered in Sponsored Research Agreements with BCM, which provided for the conduct of research for the Company by credentialed personnel at BCM’s Center for Cell and Gene Therapy.

In September 2019, May 2020 and July 2021, the Company entered into Clinical Supply Agreements with BCM, which provided for BCM to provide to the Company multi tumor antigen specific products.

In October 2019, the Company entered in a Workforce Grant Agreement with BCM, which provided for BCM to provide to the Company manpower costs of projects for manufacturing, quality control testing and validation run activities.

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.

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

Purchases from Bio-Techne Corporation.

The Company is currently utilizing Bio-Techne Corporation and two of its brands for the purchases of reagents, primarily cytokines. Mr. David Eansor is a member of the Company’s board of directors and was serving as the President of the Protein Sciences Segment of Bio-Techne Corporation. Mr. Eansor resigned from Bio-Techne Corporation on March 1. 2022, and as such, two months of transactions in 2022 are included in the table above.

Purchases from Wilson Wolf Manufacturing Corporation.

The Company is currently utilizing Wilson Wolf Manufacturing Corporation for the purchases of cell culture devices called G-Rexes. Mr. John Wilson is a member of the Company’s board of directors and is serving as the CEO of Wilson Wolf Manufacturing Corporation. Wilson Wolf Manufacturing became a related party during fiscal year 2021 due to the amounts of the Company’s purchases and as such, $34,000 transactions for the period ended June 30, 2021 were included in the table above. Purchases from Wilson Wolf Manufacturing Corporation exclude amounts pertaining to the Related Party Deferred Revenue discussed in Note 9 above.

NOTE 15: SUBSEQUENT EVENTS

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.  The Company estimates that the severance and termination-related costs will total approximately $0.7 million and will be recorded in the third quarter of 2022. The Company expects that the payment of these costs will be substantially complete in September of 2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties. All statements other than statements relating to historical matters including statements to the effect that we “believe”, “expect”, “anticipate”, “plan”, “target”, “intend” and similar expressions should be considered forward-looking statements. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a number of important factors, including factors discussed in this section and elsewhere in this Quarterly Report on Form 10-Q, and the risks discussed in our other filings with the SEC. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as the date hereof. We assume no obligation to update these forward-looking statements to reflect events or circumstance that arise after the date hereof.

As used in this quarterly report: (i) the terms “we”, “us”, “our”, “Marker” and the “Company” mean Marker Therapeutics, Inc. and its wholly owned subsidiaries, Marker Cell Therapy, Inc. and GeneMax Pharmaceuticals Inc. which wholly owns GeneMax Pharmaceuticals Canada Inc., unless the context otherwise requires; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

The following should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q.

Company Overview

We are a clinical-stage immuno-oncology company specializing in the development and commercialization of novel T cell-based immunotherapies and innovative peptide-based vaccines for the treatment of hematological malignancies and solid tumor indications. 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 cancer patient, the MultiTAA-specific T cells are designed to kill cancer cells expressing the TAA targets 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 BCM in March 2018. BCM had utilized the therapy in seven exploratory clinical trials. In these studies, BCM treated over 150 patients suffering from a variety of cancers including lymphoma, multiple myeloma, acute myeloid leukemia, acute lymphoblastic leukemia, pancreatic cancer, breast cancer and various sarcomas. In those studies, BCM saw evidence of clinical benefit, expansion of infused cells, epitope spreading, and decreased toxicity compared to other cellular therapies.

We are advancing three product candidates as part of our MultiTAA-specific T cell program for:

1. autologous treatment of lymphoma, and selected solid tumors

2. allogeneic T cells for the treatment of acute myeloid leukemia, or AML

3. off-the-shelf products in various indications

Our current clinical development programs are:

● MT-401 for the treatment of post-transplant AML, currently in a Phase 2 clinical trial

● MT-401-OTS for the treatment of AML, for which we expect to dose the first patient in a Phase 1 clinical trial in 2023

● MT-601 for the treatment of pancreatic cancer, for which we plan to submit an IND to the FDA in 2022 to initiate a Phase 1 trial in 2023

● MT-601 for the treatment of lymphoma, for which we submitted an IND to the FDA to initiate a Phase 1 trial in 2023

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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 currently analyzing the potential for a 12-antigen MultiTAA-specific T cell therapy and assessing the potential for combination therapies for our MultiTAA-specific T cell products.

We have positioned ourselves to be in full control of our research and development and clinical manufacturing needs by establishing a fully validated, FDA registered, manufacturing facility. We believe that this has key advantages that distinguish us from our competitors, particularly because we are less reliant on contract manufacturing organizations, which are expensive and often have long lead times, shortages of skilled labor and a backlog of customers.

Pipeline

Our clinical-stage pipeline, including clinical trials being conducted by BCM and other partners, is set forth below:

Recent Developments

MT-601 for the Treatment of Lymphoma

In August 2022, we announced that the United States Food and Drug Administration had accepted our Investigational New Drug application for MT-601 for the treatment of patients with lymphoma. We intend to initiate a Phase 1 trial of MT-601 in patients with Hodgkin or non-Hodgkin lymphomas in 2023.

MT-401 for the Treatment of AML

In August 2022, we provided the following program update for MT-401:

● Marker has enrolled 13 evaluable patients in total, including 6 in the Safety Lead-in cohorts.

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● 5 patients have been treated with MT-401 manufactured by a revised process and have completed dose-limiting toxicity (DLT) periods with no DLTs reported.  

● One additional MRD+ patient was treated and became MRD- at 8 weeks after the first infusion.

MT-401-OTS

In August 2022, we announced that we remain on track to dose the first patient in 2023 with MT-401-OTS, a scalable, off-the-shelf product candidate with the potential to match patients to treatment in under three days. The Company is in the process of developing a patient cell bank inventory.

Results of Operations

In this discussion of our results of operations and financial condition, amounts in financial tables, other than per-share amounts, have been rounded to the nearest thousand.

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes the results of our operations for the three months ended June 30, 2022 and 2021:

	For the Three Months Ended
	June 30,
	2022		2021		Change
Revenues:
Grant income	$	791,000	$	—	$	791,000	100	%
Total revenues		791,000		—		791,000	100	%
Operating expenses: