Proposal No. 1 Dissolution Proposal
therefore, we are unable to estimate when we would be able to begin making any post-Dissolution
liquidating distributions to our stockholders, to the extent there was any amount to distribute. See the section entitled Risk Factors beginning on page 9 of this proxy statement.
The description of the Dissolution contained in this introductory section is general in nature and is subject to various other factors and requirements, as described in
greater detail below.
Background of the Proposed Dissolution
In the ordinary
course from time to time, our Board and management team have evaluated and considered a variety of financial and strategic opportunities for the Company as part of our long-term strategy to enhance value for our stockholders, such as a merger, asset
sale, strategic partnership, financing alternatives or other business combination transaction.
Historically, we were a clinical-stage biopharmaceutical company
focused on the discovery and development of targeted biologic therapeutics. Our proprietary biologic drug platform technology aimed to leverage the resident biology of a genetically engineered form of Shiga-like Toxin A subunit to create novel
therapies with potent and differentiated mechanisms of action for cancer and immune-mediated diseases.
On March 29, 2023, the Board of Directors approved a
strategic reprioritization and corresponding reduction in workforce, designed to focus on the clinical development programs for MT-6402 (PD-L1), MT-8421 (CTLA-4), and MT-0169 (CD38), and preclinical activities related to our collaboration with Bristol Myers Squibb. This
restructuring reduced our workforce by approximately 50%, resulted in the cessation of the MT-5111 (HER2) clinical development program, and focused the majority of our preclinical efforts around activities
related to the Bristol Myers Squibb collaboration. In June 2023, we began implementation of a Board-approved strategic restructuring plan to extend our resources and to support our ongoing clinical studies. We reduced our workforce by approximately
44%. In light of our financial condition, we also began exploration of strategic alternatives to maximize shareholder value, including but not limited to potential financing/recapitalization opportunities, the sale of all, or part, of the company,
or a merger, or other strategic transactions, and engaged financial advisors to assist in that process. In April 2024, we began implementation of another reduction in force to continue to extend our resources and to support our ongoing clinical
studies. We reduced our then workforce by approximately 30%. Since April of 2024, the Company has attempted a to complete various funding transactions and continued to evaluate and seek strategic alternatives. In connection with these efforts, our
Board and management also consulted with advisors relating to the pursuit of a sale or merger of the Company, including a reverse merger, and the sale or disposition of some or all of the Companys assets. Despite broad canvassing and
discussions with multiple potential strategic and financing parties, we were unsuccessful in identifying and entering into agreements for any viable transactions. In October 2024, we implemented another reduction in force of 60% of our then
workforce to continue to extend our resources and to support our ongoing clinical studies and our efforts to maximize the value of the business and its assets.
In
light of these circumstances and our available resources, on October 11, 2024, our Board adopted resolutions approving the Plan of Dissolution and the Dissolution and recommending that our stockholders approve the Plan of Dissolution and the
Dissolution.
On October 11, 2024, we announced the Plan of Dissolution and another reduction in workforce, which included the termination of substantially all
of our employees in October 2024, except for certain key members of management necessary to implement the wind-down and support the efforts to maximize the value of the business and its assets.
Reasons for the Proposed Dissolution
The Board believes that the Dissolution is in
our best interests and the best interests of our stockholders. As noted above, the Board considered and pursued at length potential strategic alternatives available to us such as a merger, asset sale, strategic partnership, financing alternatives or
other business combination transaction, and, following the results of such review, now believes that pursuing a wind-up of the Company in accordance with the Plan of Dissolution is in the best interest of the
Company and its stockholders.
In making its determination to approve the Dissolution, the Board considered, in addition to other pertinent factors, the fact that we
currently have no significant remaining business operations or business prospects; the fact that we will continue to incur substantial accounting, legal and other expenses associated with being a public company despite having no source of revenue or
financing alternatives; and the fact that we have conducted an evaluation to identify remaining strategic alternatives involving our assets or us as a whole, such as a merger, asset sale, strategic partnership, financing alternatives or other
business combination transaction, that would have a reasonable likelihood of providing value to our stockholders in excess of the amount the stockholders would receive in a liquidation. As a result of its evaluation, the Board concluded that the
Dissolution is the preferred strategy among the alternatives now available to us and is in our best interests and the best interests of our stockholders. Accordingly, the Board approved the Dissolution pursuant to the Plan of Dissolution and
recommends that our stockholders approve the Dissolution Proposal.
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Molecular Templates, Inc. | 2024 Proxy Statement |
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