Molecular Templates, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2012

Outstanding Warrants Valuation Assumption

The fair value of these warrants on September 30, 2012 and December 31, 2011 was determined using a Black-Scholes valuation model with the following level 3 inputs:


	September 30, 2012			December 31, 2011
Risk-free interest rate		0.17	%		0.25	%
Expected life (in years)		0.91			1.66
Dividend yield		—			—
Volatility		118	%		84	%
Exercise price	$	1.86		$	1.86
Stock price	$	7.24		$	1.22


	September 30, 2012			December 31, 2011
Risk-free interest rate		0.23	%		0.36	%
Expected life (in years)		2.01			2.76
Dividend yield		—			—
Volatility		105	%		88	%
Exercise price	$	2.05		$	2.05
Stock price	$	7.24		$	1.22


	September 30, 2012			December 31, 2011
Risk-free interest rate		0.62	%		0.60	%
Expected life (in years)		3.46			4.21
Dividend yield		—			—
Volatility		99	%		102	%
Exercise price	$	2.46		$	2.46
Stock price	$	7.24		$	1.22

Financial Liabilities Subject to Fair Value Measurements

The following table sets forth the Company’s financial liabilities, related to warrants issued in the August 2008, October 2009 and March 2011 offerings, subject to fair value measurements as of September 30, 2012 and December 31, 2011:


(in thousands)	Fair Value as of September 30, 2012		Basis of Fair Value Measurements
			Level 1		Level 2		Level 3
August 2008 warrants	$	17,099	$	—	$	—	$	17,099
October 2009 warrants		24,570		—		—		24,570
March 2011 warrants		25,704		—		—		25,704

Total common stock warrants	$	67,373	$	—	$	—	$	67,373


(in thousands)	Fair Value as of December 31, 2011		Basis of Fair Value Measurements
			Level 1		Level 2		Level 3
August 2008 warrants	$	1,292	$	—	$	—	$	1,292
October 2009 warrants		3,738		—		—		3,738
March 2011 warrants		4,179		—		—		4,179

Total common stock warrants	$	9,209	$	—	$	—	$	9,209

Reconciliation of Warrant Liability Measured at Fair Value

The following table is a reconciliation of the warrant liability measured at fair value using level 3 inputs (in thousands):


	Warrant Liability
Balance at December 31, 2011	$	9,209
Change in fair value of common stock warrants during nine months ended September 30, 2012		85,572
Exercise of warrants during nine months ended September 30, 2012		(27,408	)

Balance at September 30, 2012	$	67,373

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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