Financial Position - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $61.0 million, with $35.0 million borrowed under the K2 Loan and Security Agreement[406] - The company has a stockholders' deficit of approximately $(15.1) million, which affects compliance with Nasdaq listing requirements[408] - The company reported an accumulated deficit of $444.8 million as of December 31, 2022[450] - Cash, cash equivalents, and marketable securities totaled $61.0 million as of December 31, 2022, with $35.0 million outstanding under the K2 Loan and Security Agreement[444][446] - Future funding requirements are uncertain, with the company needing to raise additional capital to maintain operations and comply with loan covenants[454] - The company may need to raise additional funds through collaborations, grants, or licensing, which could result in relinquishing valuable rights to technologies or revenue streams[455] Revenue and Expenses - The company has not generated any revenue from product sales and does not expect to until regulatory approval and commercialization of ETB candidates[424] - Total revenue for the year ended December 31, 2022, was $19.754 million, a decrease of 49% compared to $38.697 million in 2021[433] - Research and development revenue from related parties dropped to $0 in 2022 from $13.136 million in 2021, marking a 100% decrease[433][434] - Total operating expenses decreased by 9% to $108.625 million in 2022 from $118.771 million in 2021[436] - Research and development expenses slightly decreased by 3% to $82.425 million in 2022, with program costs down by $4.1 million[437][438] - General and administrative expenses decreased by $7.9 million, or 23%, to $26.200 million in 2022[441] - Revenue primarily consists of research and development revenue from collaboration partners and governmental grants, recognized as allowable costs are incurred[458] Strategic Changes - The company anticipates a reduction in workforce from approximately 222 employees to about 50% as part of a strategic reprioritization, focusing on clinical development programs for MT-6402, MT-8421, and MT-0169[407] - The strategic reprioritization is expected to incur approximately $0.4 million in costs related to severance pay and other termination benefits[407] - The company is working to regain compliance with Nasdaq listing requirements, potentially through a reverse stock split and raising capital[409] Research and Development - The company expects research and development expenses to increase as it advances the clinical development of its ETB candidates, with significant uncertainties regarding costs and timelines[429] - The company is subject to a Cancer Research Grant Contract with CPRIT, which awarded approximately $15.2 million for research on a CD38-targeting ETB[419] - The company assesses collaboration arrangements under ASC 808 to determine if they involve joint operating activities and significant risks and rewards[459] - Research and development expenses are estimated based on contracts and services performed, with adjustments made as necessary[468] Income and Taxation - Interest and other income increased by 128% to $988,000 in 2022, while interest expense rose by 42% to $4.782 million[442][443] - Deferred tax assets are recorded based on the likelihood of realization, with a valuation allowance provided due to historical net losses[471] - Stock-based compensation is recognized on a straight-line basis over the requisite service periods of the awards[473] Compliance and Reporting - The company has no off-balance sheet arrangements during the periods presented[475] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[476]
Molecular Templates(MTEM) - 2022 Q4 - Annual Report