# Perspective Therapeutics, Inc.: Form 10-Q for the period ended Mar 31, 2024 - Company: [Perspective Therapeutics, Inc.](/companies/catx.md) (CIK 728387) - Form: 10-Q - Filed: 2024-05-15 - Accepted by EDGAR: May 15, 2024, 20:05 ET - Period: 2024-03-31 - Accession: 0000950170-24-060427 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/728387/000095017024060427/catx-20240331.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/728387/000095017024060427/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2024-03-31. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Research and development | 3 months, 2024-01-01 to 2024-03-31 | $7.5m | us-gaap:ResearchAndDevelopmentExpense | | Operating income | 3 months, 2024-01-01 to 2024-03-31 | −$13.0m | us-gaap:OperatingIncomeLoss | | Net income | 3 months, 2024-01-01 to 2024-03-31 | −$12.3m | us-gaap:NetIncomeLoss | | Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.02 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.02 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 495,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $13.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $9.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Cash and equivalents | at 2024-03-31 | $142.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2024-03-31 | $188.2m | us-gaap:AssetsCurrent | | Total assets | at 2024-03-31 | $278.3m | us-gaap:Assets | | Current liabilities | at 2024-03-31 | $14.5m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2024-03-31 | $48.4m | us-gaap:Liabilities | | Long-term debt | at 2024-03-31 | $1.7m | us-gaap:LongTermDebt | | Shareholders' equity | at 2024-03-31 | $229.9m | us-gaap:StockholdersEquity | ## Management's discussion and analysis As filed, 36,448 characters. You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (Form 10-Q), with our audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (SEC) on March 28, 2024 (2023 Form 10-K) and with other filings we have made with the SEC. As discussed under the heading “Cautionary Note Regarding Forward-Looking Statements,” this discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and involves numerous risks and uncertainties, including but not limited to those described under the heading “Risk Factors” in our 2023 Form 10-K that may cause actual results to differ materially from those described in or implied by any forward-looking statements. Unless the context otherwise requires, references in these notes to “the Company,” “Perspective,” “we,” “us,” and “our” except where the context requires otherwise, refer to Perspective Therapeutics, Inc. and its subsidiaries. References to “Viewpoint” refer to Viewpoint Molecular Targeting, Inc., a wholly owned subsidiary, and references to “Isoray” refer to Isoray Medical, Inc., a wholly owned subsidiary. ### Overview We are developing the next generation of precision-targeted alpha therapies (TAT) for oncology that have the potential to treat a large population of cancer patients across multiple tumor types, including those with metastatic disease. By leveraging our proprietary TAT platform, we aim to develop alpha-emitting radiopharmaceuticals that can be attached to targeting peptides to deliver the radioactive payload directly to difficult-to-treat tumors. The foundation of our TAT platform is our Pb-specific chelator (PSC) and peptide linker technology, which is designed to enable us to connect our alpha-emitting isotope of choice, Lead-212 (212Pb or Pb-212), to a desired targeting peptide to deliver radiation directly to cancer cells. Unlike commercially available chelators and linkers, our proprietary PSC and peptide linker have shown, in preclinical studies, the differentiated ability to promote enhanced clearance of the non-tumor localized 212Pb payload without sacrificing the uptake of the alpha particle into the tumor. Rapid clearance of the alpha-emitting isotope from normal tissues is important to enhance tolerability and widen the therapeutic window of our program candidates. We are also developing complementary diagnostics that utilize the same targeting peptide and imaging isotopes such as Lead-203 (203Pb or Pb-203), Gallium-68 (68Ga or Ga-68) or Copper-64 (64Cu or Cu-64) to provide the opportunity to understand which patients may respond to targeted therapy. Our platform generates TATs that are comprised of three components: (i) a targeting peptide that is designed to selectively target ligands that are unique to, or preferentially expressed on, cancer cells throughout the body; (ii) the alpha-emitting medical isotope 212Pb designed to kill cancer cells; and (iii) our proprietary linker that attaches the targeting molecule to the radioactive payload. We utilized our TAT platform to discover, design and develop our initial programs, VMT-α-NET and VMT01, which are currently in ongoing Phase 1 clinical trials, and we plan to continue to leverage our platform to assess the potential of and develop multiple additional pipeline programs. Using our proprietary platform technology, VMT-α-NET and VMT01 are engineered to target cancer-specific receptors on tumor cells. \[212Pb\]VMT-α-NET is a TAT in development for patients with unresectable or metastatic somatostatin receptor type 2 (SSTR2)-expressing tumors who have not previously received peptide-targeted radiopharmaceutical therapy, such as Lutathera. The Company has initiated dosing of nine patients in Cohorts 1 and 2 of its Phase 1/2a study of \[212Pb\]VMT-α-NET in patients with unresectable or metastatic SSTR2-expressing NETs. A total of seven patients received activities of 185 MBq (5mCi) of \[212Pb\]VMT-α-NET in Cohort 2. \[212Pb\]VMT01 is a TAT in development for second-line or later treatment of patients with progressive MC1R-positive metastatic melanoma. In January 2024, we announced that we began patient recruitment for the second dosing cohorts (Cohort 2) in clinical studies for both \[212Pb\]VMT-α-NET and \[212Pb\]VMT01, after the safety monitoring committees for each study unanimously recommended moving forward. In addition, the first patient in Cohort 2 of the \[212Pb\]VMT01 study was already dosed. In April 2024, we announced the selection of \[212Pb\]VMT-α-NET for the treatment of certain patients with neuroendocrine tumors by the U.S. Food and Drug Administration to participate in the Chemistry, Manufacturing, and Controls (CMC) Development and Readiness Pilot (CDRP) Program. As of May 15, 2024, we continue to dose patients in Cohort 1 and in Cohort 2 of the Phase 1/2a clinical study of \[212Pb\]VMT01 in patients with progressive MC1R-positive metastatic melanoma. As of March 31, 2024 \[212Pb\]VMT01 was well tolerated with no unexpected adverse events. Applicants for inclusion in the CDRP Program are required to submit planned CMC tasks and activities intended to yield complete CMC data and information to be included in a marketing application, such as plans for ensuring product availability for commercial launch. We were informed by the investigator that updated results from 12 patients have been accepted for presentation at the Society of Nuclear Medicine and Molecular Imaging meeting taking place during June 8 - 11, 2024 in Toronto. We have had recurring losses since inception. We expect our expenses to increase in connection with our ongoing activities, particularly as we advance and expand preclinical activities, clinical trials and potential commercialization of our product candidates. Our costs will also increase as we: - continue the development of our clinical-stage metastatic melanoma tumor and neuroendocrine tumor assets, including VMT01 and VMT-α-NET; - continue the development of our other program candidates; - continue to initiate and progress other supporting studies required for regulatory approval of our program candidates; - initiate preclinical studies and clinical trials for any additional indications for our current program candidates and any future program candidates that we may pursue; - continue to build our portfolio of program candidates through the acquisition or in-license of additional program candidates or technologies; - continue to develop, maintain, expand and protect our intellectual property portfolio; - pursue regulatory approvals for our current and future program candidates that successfully complete clinical trials; - continue to build our manufacturing capabilities through facility acquisitions; - support our marketing and distribution infrastructure to commercialize any future program candidates for which we may obtain marketing approval; and - hire additional clinical, medical and development personnel. As of March 31, 2024, we had cash, cash equivalents and short-term investments of $180.6 million. We believe our cash, cash equivalents and short-term investments will be sufficient to fund our current operations for at least the next 12 months from the date the consolidated financial statements in this report were issued and into the first quarter of 2026. On April 11, 2024, we sold 35,352,461 shares of our common stock under the ATM Agreement at an average price of approximately $1.40 per common share, resulting in gross proceeds of approximately $49.5 million. Monthly operating expenses are budgeted to increase for research and development and general and administrative expenses in 2024 as management works to implement its strategy to advance our two clinical assets, VMT01 and VMT-α-NET, in their clinical trials and to progress our preclinical assets towards clinical trials. Management anticipates a significant increase of expenses, particularly in research and development, as it undertakes these activities in 2024. ### Brachytherapy Divestiture On April 12, 2024 (GT Medical Closing Date), we completed the sale of substantially all of the assets (GT Medical Closing) of Isoray to GT Medical. As previously disclosed, on December 7, 2023, we entered into an Asset Purchase Agreement (the GT Medical APA) with Isoray and GT Medical Technologies, Inc. (GT Medical). Pursuant to the GT Medical APA, Isoray sold to GT Medical, and GT Medical purchased from Isoray, all of Isoray’s right, title and interest in and to substantially all of the assets of Isoray related to Isoray’s commercial Cesium-131 business including equipment, certain contracts and leases, inventory and intellectual property. Subject to limited exceptions set forth in the GT Medical APA, GT Medical did not assume the liabilities of Isoray. Pursuant to the terms of, and subject to the conditions specified in, the GT Medical APA, at the GT Medical Closing, (i) GT Medical issued to Isoray 279,516 shares of GT Medical’s common stock, par value $0.0001 per share, representing 0.5% of GT Medical’s issued and outstanding capital stock on a fully diluted basis (excluding Series C-1 warrants which, if exercised, will reduce Isoray's ownership to 0.44% of GT Medical's issued and outstanding capital stock on a fully diluted basis) as of the GT Medical Closing Date and (ii) Isoray has the right to receive, and GT Medical is obligated to pay, certain cash royalty payments during each of the first four years beginning upon the GT Medical Closing Date (each such year, a Measurement Period), as summarized below: - with respect to GT Medical’s net sales of Cesium 131 brachytherapy seeds for cases that do not utilize GT Medical’s GammaTile Therapy: (a) if such net sales for a Measurement Period are $10 million or less, 3.0% of such net sales; (b) if such net sales for a Measurement Period are greater than $10 million and less than $15 million, 4.0% of such net sales; and (c) if such net sales for a Measurement Period are $15 million or more, 5.0% of such net sales; and - with respect to GT Medical’s net sales of GT Medical’s GammaTile Therapy utilizing Cesium 131 brachytherapy seeds: 0.5% of such net sales for a Measurement Period. As a result of the transaction, we have effectively exited the brachytherapy segment and will now focus exclusively on our radiopharmaceutical development segment, our only operating segment and reporting segment. The sale of the brachytherapy segment represents a strategic shift that will have a major effect on our operations. We accounted for the transaction as discontinued operations on the date the divestiture was announced. Accordingly, we are reporting the results of the brachytherapy segment operations and cash flows, and balance sheet classifications for the current and comparative periods as discontinued operations. Prior to the consummation of the sale, we were neither actively marketing the brachytherapy business for sale nor had intentions to abandon it and, as a result, did not present the results as assets held for sale or discontinued operations in prior filings. For additional information regarding our brachytherapy divestiture, see our Forms 8-K filed with the SEC on December 12, 2023, April 3, 2024 and April 16, 2024. ### Recent Licensing and Clinical Trial Collaboration Agreements; Manufacturing Facility Acquisition In January 2024, we entered into an exclusive in-licensing of Stony Brook University’s Cuburbit\[7\]uril-admantane (CB7-Adma) pre-targeting platform which covers the global intellectual property rights. Pre-targeting using the CB7-Adma platform involves two steps. First, an antibody that binds with high specificity to a cancer-specific protein is administered via intravenous injection. This antibody is chemically modified to include the CB7 chemical entity and accumulates over time at the tumor site. Then, a radionuclide held tightly by our proprietary chelator attached to an Adma group is administered. The Adma group binds to the CB7 group that was previously attached to the cancerous cells with remarkable specificity, delivering radiation dose selectively to the tumor sites. Central to this innovation is CB7-Adma (host-guest) complex formation, driving the interaction between the antibody and radioligand. The chosen host-guest pair, CB7-Adma, demonstrates promising in vivo stability, modularity and low immunogenicity. The platform's potential was validated through in vivo profiling of ligands, employing a CB7-modified CEA targeting antibody. The agreement with Stony Brook University will expire on the later of the expiration date of the last to expire licensed patents or 20 years from the date of the first sale of a product utilizing the intellectual property. In March 2024, we announced a clinical trial collaboration agreement with Bristol Myers Squibb to evaluate the safety and tolerability of \[212Pb\]VMT01 in combination with Bristol Myers Squibb’s nivolumab in patients with histologically confirmed melanoma and positive MC1R imaging scans. This combination study is an amendment to our ongoing Phase1/2a study of \[212Pb\]VMT01 in patients with metastatic melanoma. In March 2024, we acquired the assets and associated lease of Lantheus’ radiopharmaceutical manufacturing facility in Somerset, New Jersey. We believe we will be able to convert the facility, which has three production suites, to manufacture finished radiopharmaceutical product. As a cGMP compliant facility, we intend to utilize the facility to manufacture clinical supply of high quality 203Pb-labeled tumor-specific peptides to visualize and diagnose tumors, and 212Pb-labeled radiopharmaceuticals to treat target tumors with TAT. Moreover, with its three cGMP suites at the facility, we expect to have the capacity to meet future clinical trial and commercial demands at major cancer treatment centers throughout the Northeastern U.S. We intend to continue to expand our manufacturing and supply network during 2024 as we anticipate increasing our clinical trial activities. ### Viewpoint Merger On February 3, 2023, we completed the merger of Isoray Acquisition Corp., a Delaware corporation and wholly owned subsidiary of ours, with Viewpoint Molecular Targeting, Inc. (Viewpoint) (such transaction being the Merger). Pursuant to the Merger, we issued 136,545,075 shares of common stock, representing approximately 49% of our fully diluted outstanding capital stock as of the closing of the Merger. Viewpoint is developing the next generation of precision-targeted alpha therapies (TAT) for oncology that have the potential to treat a large population of cancer patients across multiple tumor types, including those with metastatic disease. For additional information regarding the Merger, see our Forms 8-K filed with the SEC on September 28, 2022 and on February 6, 2023, and our Form 8-K/A filed with the SEC on April 21, 2023. ### Critical Accounting Policies and Estimates The discussion and analysis of the Company’s financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. Actual results may differ from these estimates under different assumptions or conditions and could, therefore, differ materially from those estimates if actual conditions differ from our assumptions. The accounting policies and related risks described in Part II, Item 7 and Note 2, *Accounting Policies*, to the consolidated financial statements included in Part II, Item 8 of the Company’s 2023 Form 10-K are those that depend most heavily on these judgments and estimates. As of March 31, 2024, there have been no material changes to any of the critical accounting policies and estimates contained therein. ### Results of Operations We previously presented our results in two segments: Drug Operations and Brachytherapy. Due to the divestiture of all of the brachytherapy segment to GT Medical and the classification of the assets and operations of the brachytherapy segment as discontinued operations in our condensed consolidated financial statements, we have now determined that we operate in only one segment. As a result, the following does not include a discussion of the results of our discontinued operations. For additional information regarding our discontinued operations, see Note 4, *Discontinued Operations*, to the condensed consolidated financial statements in this Form 10-Q. The following table sets forth our results of operations for the periods presented (in thousands): | | Three Months Ended March 31, 2024 | 2023 | Change | | --- | ---: | ---: | ---: | | Grant revenue | $325 | $233 | $92 | | Operating expenses: | | | | | Research and development expenses | 7,452 | 3,309 | 4,143 | | General and administrative expenses | 5,878 | 6,663 | (785) | | Loss on disposal of property and equipment | - | 22 | (22) | | Total operating expenses | 13,330 | 9,994 | 3,336 | | Operating loss | $(13,005) | $(9,761) | $(3,244) | #### Grant Revenue Our alpha-therapy business is pre-revenue and, accordingly, none of the revenues reflect sales of any of these products which are still under development. Grant revenues of $0.3 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively, are derived from our work for the National Institutes of Health. #### Operating Expenses #### Research and development Research and development expenses consisted primarily of the costs related to employee and third-party research and development activities. Contributing to the increase of $4.1 million from $3.3 million for the three months ended March 31, 2023 to $7.5 million for the three months ended March 31, 2024 were the increased costs related to the development of our TAT drug programs gained through the merger with Viewpoint. Management believes that research and development expenses will increase as we continue to invest in the development of new drugs and products in the alpha-emitter space and to expand our manufacturing capabilities through additional facility acquisitions. #### General and administrative expenses General and administrative expenses consist primarily of the costs related to the executive, finance, human resources and information technology functions of the Company. General and administrative expenses for the three months ended March 31, 2024 were $5.9 million, compared to $6.7 million for the three months ended March 31, 2023, a decrease of $0.8 million. The decrease of general and administrative expenses in the first quarter of 2024 relates to the Merger expenses incurred in the first quarter of 2023, offset by increased personnel costs and professional fees related to corporate legal and consulting services. Management believes that our general and administrative expenses will continue to increase as we increase our headcount to support the continued development of our program candidates. ### Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. We have historically financed our operations primarily through selling equity to investors. During the three months ended March 31, 2024, we entered into various agreements and raised approximately $177.2 million in gross proceeds. The following table summarizes our cash flows for the periods presented (in thousands): | | Three Months Ended March 31, 2024 | 2023 | | --- | ---: | ---: | | Net cash provided by (used in) operating activities | $13,848 | $(9,723) | | Net cash (used in) provided by investing activities | (47,297) | 25,262 | | Net cash provided by (used in) financing activities | 166,328 | (80) | | Net increase in cash and cash equivalents | $132,879 | $15,459 | ### Cash flows from operating activities Net cash provided by operating activities in the three months ended March 31, 2024 was primarily due to amounts received pursuant to the Option Agreement of $28.0 million, partially offset by a net loss of approximately $12.3 million, net of approximately $0.6 million for non-cash activities, such as share-based compensation, depreciation expense and accrued interest on short-term investments, and a decrease of $2.6 million in accrued expenses and accounts payable. Net cash used in operating activities in the three months ended March 31, 2023 was primarily due to a net loss of approximately $0.4 million, net of approximately $8.9 million in adjustments for non-cash activity such as share-based compensation, depreciation and amortization expense, accretion of asset retirement obligation, loss on property and equipment disposals and changes in deferred taxes. Changes in operating assets and liabilities contributed approximately $0.4 million to the cash used by operating activities; decreases in inventory and increases in accrued protocol and accrued vacation were offset by decreases in prepaid expenses and other current assets, accounts payable and accrued expenses, accrued payroll and related taxes and accrued radioactive waste disposal. ### Cash flows from investing activities Investing activities for the three months ended March 31, 2024 consisted of short-term investments in U.S. treasury bills and additions to property and equipment. Investing activities for the three months ended March 31, 2023 consisted of transactions related to the purchase of fixed assets and proceeds from the maturity of short-term investments in U.S. treasury bills and cash acquired as part of the merger with Viewpoint. ### Cash flows from financing activities Financing activities in the three months ended March 31, 2024 included cash provided by the various agreements we entered into on March 4, 2024, January 17, 2024 and January 8, 2024, in which we received aggregate gross proceeds of approximately $177.2 million. For additional information regarding the cash we raised, see *Sources of Liquidity* below. Financing activities in the three months ended March 31, 2023 included costs related to common stock issued in exchange for Viewpoint common stock and repayment of notes payable. ### Sources of Liquidity On April 11, 2024, we sold shares of our common stock that is currently available pursuant to that certain At Market Issuance Sales Agreement (ATM Agreement), dated as of November 17, 2023 and declared effective by the SEC on December 14, 2023 (File No. 333-275638), by and among us, Oppenheimer & Co. Inc., B. Riley Securities, Inc. and JonesTrading Institutional Services LLC. The sales resulted in gross proceeds to us of approximately $49.5 million. For additional information regarding the ATM Agreement, see our Form S-3 filed on November 17, 2023 and Form S-3/A filed on December 7, 2023. On March 4, 2024, we entered into an investment agreement with certain accredited institutional investors pursuant to which we agreed to issue and sell, in a private placement (March 2024 Private Placement), 92,009,981 shares of our common stock, par value $0.001 per share (Common Stock), for a purchase price of $0.95 per share, representing the closing price of the Common Stock on March 1, 2024. The closing of the March 2024 Private Placement occurred on March 6, 2024. The gross proceeds to us from the March 2024 Private Placement were approximately $87.4 million, before deducting fees and other estimated transaction expenses. We intend to use the net proceeds from the March 2024 Private Placement for general corporate and working capital purposes, which may include research and development expenditures, preclinical study and clinical trial expenditures, manufacturing expenditures, commercialization expenditures, capital expenditures, acquisitions of new technologies, products or businesses and investments. On January 8, 2024, we entered into an investment agreement (Lantheus Investment Agreement) with Lantheus Alpha Therapy, LLC, a Delaware limited liability company and wholly owned subsidiary of Lantheus Holdings, Inc. (Lantheus), pursuant to which we agreed to sell and issue to Lantheus in a private placement transaction certain shares (Lantheus Shares) of our Common Stock. The closing of the purchase and sale of the Lantheus Shares to Lantheus by us (Lantheus Closing) was subject to us raising at least $50.0 million of gross proceeds (excluding Lantheus’ investment) in a qualifying third-party financing transaction, which occurred on January 22, 2024. The number of Lantheus Shares sold was 56,342,355, representing 19.99% of the outstanding shares of Common Stock as of January 8, 2024. Pursuant to the Lantheus Investment Agreement, we agreed to cooperate in good faith to negotiate and enter into a registration rights agreement with Lantheus, obligating us to file a registration statement on Form S-3 with the SEC to register for resale the Lantheus Shares issued at the Lantheus Closing. We filed the Form S-3 on March 29, 2024, and the SEC declared it effective on April 9, 2024 (File No. 333-278362). The Lantheus Investment Agreement also contains agreements between us and Lantheus whereby Lantheus is provided certain board observer and information rights of us, as well as standstill provisions prohibiting Lantheus from taking certain actions for a specified period of time, subject to certain exceptions. On January 17, 2024, we entered into an underwriting agreement (Underwriting Agreement) with Oppenheimer & Co. Inc., as representative of the underwriters named therein (Underwriters), in connection with our previously announced underwritten public offering (Public Offering) of 132,075,218 shares (Public Shares) of our Common Stock and in lieu of Public Shares to certain investors, pre-funded warrants (Pre-funded Warrants) to purchase 30,086,944 shares of Common Stock. The price to the public for the Public Shares was $0.37 per Public Share, and the price to the public for the Pre-funded Warrants was $0.369 per Pre-funded Warrant, which represents the per share price for the Public Shares less the $0.001 per share exercise price for each such Pre-funded Warrant. Under the terms of the Underwriting Agreement, we granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 24,324,324 shares of Common Stock at the same price per share as the Public Shares, which such option was fully exercised by the Underwriters on January 18, 2024. The Public Offering closed on January 22, 2024. The gross proceeds to us from the Public Offering were approximately $69.0 million, before underwriting discounts and commissions and estimated expenses of the Public Offering. We intend to use the net proceeds from the Public Offering for general corporate purposes, which may include research and development expenditures, preclinical study and clinical trial expenditures, manufacturing expenditures, commercialization expenditures, working capital, capital expenditures, acquisitions of new technologies, products or businesses and investments. The Public Offering was made pursuant to our shelf registration statement on Form S-3 (File No. 333-275638), declared effective by the Securities and Exchange Commission on December 14, 2023, a base prospectus dated December 14, 2023, and the related prospectus supplement dated January 17, 2024. The Pre-funded Warrants are exercisable at any time after the date of issuance. The exercise price and the number of shares of Common Stock issuable upon exercise of each Pre-funded Warrant are subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock as well as upon any distribution of assets, including cash, stock or other property, to our stockholders. The Pre-funded Warrants will not expire and are exercisable in cash or by means of a cashless exercise. A holder of Pre-funded Warrants may not exercise such Pre-funded Warrants if the aggregate number of shares of Common Stock beneficially owned by such holder, together with its affiliates, would beneficially own more than 4.99% of the issued and outstanding shares of Common Stock following such exercise, as such percentage ownership is determined in accordance with the terms of the Pre-funded Warrants. A holder of Pre-funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to us. ### Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we advance and expand preclinical activities, clinical trials and potential commercialization of our program candidates. Our costs will also increase as we: - continue the development of our clinical-stage metastatic melanoma tumor and neuroendocrine tumor assets, including VMT01 and VMT-α-NET; - continue the development of our other program candidates; - continue to initiate and progress other supporting studies required for regulatory approval of our program candidates; - initiate preclinical studies and clinical trials for any additional indications for our current program candidates and any future program candidates that we may pursue; - continue to build our portfolio of program candidates through the acquisition or in-license of additional program candidates or technologies; - continue to develop, maintain, expand and protect our intellectual property portfolio; - pursue regulatory approvals for our current and future program candidates that successfully complete clinical trials; - continue to build our manufacturing capabilities through facility acquisitions; - support our marketing and distribution infrastructure to commercialize any future product candidates for which we may obtain marketing approval; and - hire additional clinical, medical and development personnel. At March 31, 2024, we had cash, cash equivalents and short-term investments of $180.6 million. We believe our cash, cash equivalents and short-term investments will be sufficient to fund our current operations and capital investments into the first quarter of 2026. On April 11, 2024, we sold 35,352,461 shares of our common stock under the ATM Agreement at an average price of approximately $1.40 per common share, resulting in gross proceeds of approximately $49.5 million. Monthly operating expenses are budgeted to increase for research and development and general and administrative expenses in 2024 as management works to implement our strategy to advance our two clinical assets, VMT-α-NET and VMT01, in our clinical trials and to progress our preclinical assets towards clinical trials. Management anticipates a significant increase of expenses, particularly in research and development, as we undertake these activities in 2024 and beyond. We expect we will need to raise additional capital until we are profitable, which may never occur. If no additional capital is raised through either additional public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, we may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund our operating costs and working capital needs. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We expect that we will require additional capital to pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approvals for our product candidates, we expect to incur commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize or whether we commercialize jointly or on our own. Because of the numerous risks and uncertainties associated with research, development and commercialization of our program candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including: - the scope, progress, results and costs of researching and developing our program candidates, and conducting preclinical studies and clinical trials; - the costs, timing and outcome of regulatory review of our program candidates; - the costs and timing of hiring new employees to support our continued growth; - the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; - the extent to which we acquire or in-license other program candidates and technologies; and - our ability to generate cash, and successfully obtain additional working capital, to fund our operating, investing and financing activities. Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of public and private equity offerings, debt financings, other third-party funding, strategic alliances, licensing arrangements or marketing and distribution arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing shareholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, strategic alliances, licensing arrangements, outright sales of product candidates or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we will be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. #### Capital expenditures Management is reviewing all aspects of research and development and general and administrative functions to evaluate the most efficient deployment of capital to ensure that the appropriate materials, systems and personnel are available to support and drive clinical trials and preclinical activities. #### Financing activities When we do require capital in the future, we expect to finance our cash needs through sales of equity, possible strategic collaborations, debt financing or through other sources that may be dilutive to existing stockholders. Management anticipates that if it raises additional financing that it will be at a discount to the market price and it will be dilutive to stockholders. ### Other Commitments and Contingencies We presented our other commitments and contingencies in our Form 10-K for the period ended December 31, 2023. There have been no material changes outside of the ordinary course of business in those obligations during the three months ended March 31, 2024, other than those disclosed in Note 10, *Commitments and Contingencies*, to the condensed consolidated financial statements in this Form 10-Q. ### Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements. ## Controls and procedures As filed, 1,489 characters. ### Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and co-principal financial officers, we conducted an evaluation of the design and operation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of March 31, 2024. Based on that evaluation, our principal executive officer and our co-principal financial officers concluded that the design and operation of our disclosure controls and procedures were effective. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. However, management believes that our system of disclosure controls and procedures are designed to provide a reasonable level of assurance that the objectives of the system will be met. ### Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ## Risk factors As filed, 311 characters. A description of the risk factors associated with our business is included under “Risk Factors” contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on March 28, 2024. There have been no material changes in our risk factors since such filing. Filed May 15, 2024. Source: SEC EDGAR, the filing index for accession 0000950170-24-060427. Last ingested by Listed: Oct 24, 2026, 14:55 ET. No prices; not investment advice.