Molecular Templates Announces Notice of Delisting and Failure to Satisfy Continued Listing Rules

Rhea-AI Summary

Molecular Templates (MTEM) has received notice from Nasdaq's Listing Qualifications Department regarding its imminent delisting. The notification, received on December 16, 2024, cites multiple compliance failures: the company has been deemed a 'public shell', failed to file its Q3 2024 10-Q report, and failed to maintain the required $1.00 minimum bid price.

Trading of MTEM's common stock will be suspended on December 26, 2024. The company has decided not to appeal the delisting decision through a Nasdaq Hearings Panel hearing. Nasdaq will proceed with filing Form 25-NSE with the SEC to formally delist MTEM's securities.

Positive

• None.

Negative

• Company classified as a 'public shell' by Nasdaq
• Failed to file Q3 2024 quarterly report
• Failed to maintain $1.00 minimum bid price requirement
• Imminent delisting from Nasdaq on December 26, 2024
• Company not pursuing appeal options to maintain listing

Insights

Financial Analyst

The delisting notice represents a severe financial setback for Molecular Templates, marking a critical deterioration in the company's market position. Multiple compliance failures - including becoming a "public shell," failing to file timely quarterly reports and inability to maintain the minimum $1.00 bid price - paint a picture of a company in significant distress. The suspension of trading on December 26 and subsequent delisting will likely result in the stock moving to over-the-counter (OTC) markets, which typically leads to reduced liquidity, wider bid-ask spreads and decreased institutional investor interest. The company's decision not to appeal the delisting suggests financial resources or strategic options. With a market cap of just $2.3 million, the company appears to have minimal operational assets and activities, validating Nasdaq's "public shell" determination. This development severely impacts the company's ability to raise capital and maintain market visibility, potentially threatening its long-term viability.

Legal Expert

The confluence of multiple regulatory violations signals profound governance and compliance issues. The failure to file the Q3 2024 Form 10-Q violates fundamental SEC reporting requirements, while the "public shell" determination under Nasdaq Rule 5101 indicates the company no longer maintains sufficient operating assets or business activities to warrant a listing. The company's decision to forgo the appeals process through a Nasdaq Hearings Panel is particularly telling, as it foregoes the standard 15-day stay of delisting. Shareholders should be aware that delisting often triggers defaults in debt covenants and can lead to forced liquidation of positions by institutional investors bound by investment grade requirements. The Form 25-NSE filing will formalize the removal from Nasdaq, potentially exposing the company to increased shareholder litigation risk given the material adverse impact on stock value and marketability.

AUSTIN, Texas, Dec. 19, 2024 (GLOBE NEWSWIRE) -- Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular Templates,” or “MTEM” or the “Company”), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, known as engineered toxin bodies, to create novel therapies with potent and differentiated mechanisms of action for cancer, was notified on December 16, 2024 by the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) of the Staff’s determination pursuant to Nasdaq Listing Rule 5101 that the Company is a “public shell,” and that, in the view of the Staff, the continued listing of the Company’s securities was no longer warranted. Further, Nasdaq indicated that the Company’s non-compliance with (i) Nasdaq Listing Rule 5250(c)(1) as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the period ended September 30, 2024 and (ii) Nasdaq Listing Rule 5550(a)(2) as a result of its failure to maintain a $1.00 bid price for the required period, each serving as an additional and separate basis for delisting. Trading of the Company’s common stock will be suspended at the opening of business on December 26, 2024, and Nasdaq will file a Form 25-NSE with the U.S. Securities and Exchange Commission to formally delist the Company’s securities from listing and registration, unless the Company timely requests a hearing before a Nasdaq Hearings Panel to appeal Nasdaq’s determination and address the deficiencies. The Company does not plan to request a hearing regarding these deficiencies and expects that trading in the Company’s common stock on the Nasdaq Stock Market will be suspended upon the opening of business on December 26, 2024.

About Molecular Templates

Molecular Templates is a clinical-stage biopharmaceutical company focused on the discovery and development of next-generation ADCs. Its drug platform technology, known as Engineered Toxin Bodies (ETBs), leverages the resident biology of a genetically engineered toxin payload to create novel therapies with potent and differentiated mechanisms of action for cancer and various disease indications.

Cautionary Information Regarding Trading in the Company’s Securities

The Company cautions that trading in the Company’s securities is highly speculative and poses substantial risks. Trading prices for the Company’s securities likely bear little or no relationship to the actual value realized, if any, by holders of the Company’s securities. The Company currently has extremely limited resources to continue or wind down operations. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the “Act”). Molecular Templates disclaims any intent or obligation to update these forward-looking statements and claims the protection of the Act’s Safe Harbor for forward-looking statements. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, future financial position, prospects and plans and objectives of management are forward-looking statements. In addition, when or if used in this press release, the words “may,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and similar expressions and their variants, as they relate to Molecular Templates may identify forward-looking statements.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to the following: the continued availability of financing on commercially reasonable terms of which there can be no assurance that any financing will be obtained; whether Molecular Templates’ cash resources will be sufficient to fund any future operations or winddown activities; the results of MTEM’s clinical studies which are currently unable to resume due to lack of resources; the ability to effectively operate MTEM and retain key employees and consultants post-MTEM’s previously announced restructuring and reductions in force; the ability of MTEM to resume its regular and required Exchange Act reporting obligations which the Company is currently unable to do; and those risks identified under the heading “Risk Factors” in Molecular Templates’ filings with the SEC, including its most recently filed Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and any subsequently filed reports. Any forward-looking statements contained in this press release speak only as of the date hereof, and Molecular Templates specifically disclaims any obligation to update any forward-looking statement, whether because of new information, future events or otherwise.

FAQ

When will MTEM be delisted from Nasdaq?

MTEM's common stock will be suspended from trading on Nasdaq at the opening of business on December 26, 2024.

What are the reasons for MTEM's delisting from Nasdaq?

MTEM is being delisted for three reasons: being classified as a 'public shell', failing to file its Q3 2024 10-Q report, and failing to maintain a minimum $1.00 bid price.

Will MTEM appeal the Nasdaq delisting decision?

No, MTEM has decided not to request a hearing before the Nasdaq Hearings Panel to appeal the delisting determination.

What happens to MTEM shares after December 26, 2024?

Trading of MTEM shares will be suspended on Nasdaq, and Nasdaq will file Form 25-NSE with the SEC to formally delist the securities.