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

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity (Deficit) (Tables)

Stockholders' Equity (Deficit) (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Inputs Liabilities Quantitative Information [Line Items]

Financial Liabilities Subject to Fair Value Measurements

The following table sets forth the Company’s financial liabilities, related to warrants issued in the February 2015 and March 2011 offerings, subject to fair value measurements as of March 31, 2015 and December 31, 2014:

	Fair Value as of March 31, 2015		Basis of Fair Value Measurements
(in thousands)			Level 1		Level 2		Level 3
February 2015 warrants	$	13,493	$	—	$	—	$	13,493
March 2011 warrants		6,692		—		—		6,692
Total common stock warrants	$	20,185	$	—	$	—	$	20,185

	Fair Value as of December 31, 2014		Basis of Fair Value Measurements
(in thousands)			Level 1		Level 2		Level 3
March 2011 warrants		3,961		—		—		3,961
Total common stock warrants	$	3,961	$	—	$	—	$	3,961

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, 2014	$	3,961
Initial fair value of common stock warrants related to February 2015 offering		14,692
Change in fair value of common stock warrants during three months ended March 31, 2015		1,532
Exercise of warrants during three months ended March 31, 2015		—

Balance at March 31, 2015	$	20,185

February 2015 Offering

Fair Value Inputs Liabilities Quantitative Information [Line Items]

Outstanding Warrants Valuation Assumption

The fair value of these warrants on March 31, 2015 and February 18, 2015 was determined using a Monte-Carlo simulation model that accounted for the estimated changes to exercise price between the issuance date and the Adjustment Date along with the following key level 3 inputs:

	March 31, 2015			February 18, 2015
Risk-free interest rate		1.34	%		1.52	%
Expected life (in years)		4.89			5.00
Dividend yield		—			—
Volatility		50	%		50	%
Stock price	$	4.06		$	4.26

March 2011 Offering

Fair Value Inputs Liabilities Quantitative Information [Line Items]

Outstanding Warrants Valuation Assumption

The fair value of these warrants on March 31, 2015 and December 31, 2014 was determined using a Black Scholes valuation model with the following level 3 inputs:

	March 31, 2015			December 31, 2014
Risk-free interest rate		0.26	%		0.67	%
Expected life (in years)		0.96			1.21
Dividend yield		—			—
Volatility		52	%		49	%
Stock price	$	4.06		$	3.18

- 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 the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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