# Monopar Therapeutics (MNPR) FY 2023 MD&A Verbatim Item 7 Management's Discussion and Analysis from Monopar Therapeutics's 10-K for fiscal year 2023. SEC filing source: https://www.sec.gov/Archives/edgar/data/1645469/000143774924009687/mnpr20231231_10k.htm Accession: 0001437749-24-009687 Filing date: 2024-03-28 Report date: 2023-12-31 Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Confidence: high Company profile: /company/MNPR/ All MD&A years: /company/MNPR/mda/ Previous year: /company/MNPR/mda/fy2022/ (FY 2022) Next year: /company/MNPR/mda/fy2024/ (FY 2024) Overview We are a clinical stage biopharmaceutical company focused on developing innovative treatments for cancer patients. We are building a drug development pipeline through the licensing and acquisition of therapeutics in late preclinical or in clinical development stages. We leverage our scientific and clinical experience to help reduce the risk of and accelerate the clinical development of our drug product candidates. Financial Status Our cash, cash equivalents and investments as of December 31, 2023, were $7.3 million. As discussed further below and elsewhere in this Annual Report, we expect that our current funds will be sufficient at least through June 30, 2025 for us to: (1) conduct and conclude our first-in-human clinical trial with our MNPR-101-Zr radiopharmaceutical program; (2) continue our ongoing open-label Phase 1b camsirubicin clinical trial; and (3) continue to research MNPR-202. We will require additional funding to further advance our clinical and preclinical programs and we anticipate that we will seek to raise additional capital within the next 12 months to fund our future operations. Our primary funding source over the past three years was sales of shares of our common stock under at-the-market sales programs through Capital on Demand™ Sales Agreements with JonesTrading Institutional Services LLC (“Jones Trading”). For the year ended December 31, 2023, we sold 1,793,441 shares of our common stock at an average gross price per share of $1.21 for net proceeds of $2,072,503 after fees, commissions and expenses of $98,230.  From January 1 to March 8, 2024, we sold 2,545,305 shares of our common stock at an average gross price per share of $1.29 for net proceeds of $3,194,310, after fees and commissions of $81,932.  MNPR-101 for Radiopharmaceutical Use, Development Update Our proprietary, novel MNPR-101 radiopharmaceutical program is a first-in-class urokinase plasminogen activator receptor ("uPAR") targeting radiopharmaceutical for advanced tumors. The Company's radiopharmaceutical development team has conjugated MNPR-101, its proprietary first-in-class humanized monoclonal antibody that is highly selective against uPAR, to imaging and therapeutic radioisotopes, to develop highly precise imaging and therapeutic radiopharmaceutical agents that have the potential to image and eradicate tumors expressing uPAR while sparing healthy tissues. In February 2024, the Company announced promising preclinical data and regulatory clearance in Australia to commence a first-in-human Phase 1 clinical trial of MNPR-101-Zr for imaging tumors in patients with advanced cancers. Monopar is moving aggressively towards opening enrollment to patients in this Phase 1.  Camsirubicin Clinical Update The Phase 1b open-label, dose-escalating clinical trial of camsirubicin in patients with advanced soft tissue sarcoma (“ASTS”) is currently ongoing and enrolling in the fifth dose-level cohort (650 mg/m2), which is nearly 2.5x the highest dose evaluated in any prior camsirubicin clinical trial (265 mg/m2).  MNPR-202 and Related Analogs Updates MNPR-202, an analog of camsirubicin designed to potentially treat doxorubicin- and camsirubicin-resistant cancers, is being tested in preclinical models by our collaborator, the Cancer Science Institute of Singapore at the National University of Singapore. Discontinuation of Validive Development On March 27, 2023, we announced that based on Validive not meeting the pre-specified efficacy threshold in our interim clinical trial data analysis, we terminated the study, discontinued the development of Validive and subsequently terminated the license with Onxeo, SA. 60 Table of Contents Our Strategy Our management team has extensive experience in developing therapeutics and medical technologies through global regulatory approval and commercialization. In aggregate, companies they co-founded have achieved four drug approvals and three diagnostic medical imaging device approvals in the U.S. and the EU, successfully sold an asset developed by management which subsequently had a positive Phase 3 clinical trial, sold two oncology-focused diagnostic imaging businesses to Fortune Global 1000 firms, and completed the clinical and commercial development and ultimately the sale of a commercial biopharmaceutical company for over $800 million in cash. In addition, the team has supported multiple regulatory submissions with the FDA and EMA and launched multiple drugs in the U.S and the EU. Understanding the preclinical, clinical, regulatory and commercial development processes and hurdles are key factors in successful drug development and the expertise demonstrated by our management team across all of these areas increases the probability of success in advancing the product candidates in our product pipeline. Our strategic goal is to acquire, develop and commercialize promising oncology product candidates that address important unmet medical needs of cancer patients. Five key elements of our strategy to achieve this goal are to: [[GREPCENT_TABLE]] [["","\u25cf","Continue the development of MNPR-101 for radiopharmaceutical use as a therapeutic as well as a diagnostic imaging agent. Based on promising preclinical results utilizing radiolabeled MNPR-101, we have been cleared to conduct a Phase 1 dosimetry clinical trial of MNPR-101-Zr in patients with advanced cancers in Australia."],["","\u25cf","Advance the clinical development of camsirubicin, by pursuing indications where doxorubicin has demonstrated efficacy. ASTS will be the first indication, which is anticipated to allow camsirubicin to go head-to-head against doxorubicin, the current first-line treatment. In this indication, camsirubicin previously demonstrated clinical benefit (stable disease or partial response) in 52.6% of patients evaluable for tumor progression in a single-arm Phase 2 study. Clinical benefit was proportional to dose and was consistently observed at higher cumulative doses of camsirubicin (1000 mg/m2). Camsirubicin was very well tolerated in this Phase 2 study and underscored the ability to potentially administer camsirubicin without restriction as to cumulative dose (doxorubicin is limited due to heart toxicity to 450 mg/m2 cumulative dose). Our current ongoing Phase 1b clinical trial continues towards establishing a new, higher recommended dose for the next Phase 2 ASTS clinical trial."],["","\u25cf","Continue the development of MNPR-202 and related analogs in multiple types of cancers. The 2-pyrrilino camsirubicin analog (MNPR-202) and related analogs represent proprietary compositions of matter designed to retain the non-cardiotoxic backbone of camsirubicin yet exhibit novel features in terms of antitumor activity and mechanism that distinguish these analogs from camsirubicin as well as from doxorubicin, potentially addressing camsirubicin- and doxorubicin-resistant cancers."],["","\u25cf","Expand our drug development pipeline through in-licensing and acquisition of product candidates. We plan to continue the expansion of our drug development pipeline through acquiring or in-licensing additional product candidates, particularly those that leverage existing scientific and clinical data that helps reduce the risks of the next steps in clinical development."],["","\u25cf","Utilize the expertise and prior experience of our team in the areas of asset acquisition, drug development and commercialization to establish ourselves as a leading biopharmaceutical company. Our senior executive team has relevant experience in biopharmaceutical in-licensing and acquisitions as well as developing product candidates through approval and commercialization. In aggregate, our team has co-founded BioMarin Pharmaceutical (Nasdaq: BMRN), Sensant Corp (acquired by Siemens), American BioOptics (assets acquired by Olympus), Raptor Pharmaceuticals ($800 million sale to Horizon Therapeutics), and Tactic Pharma, LLC (\u201cTactic Pharma\u201d) (sale of lead asset, choline tetrathiomolybdate, was ultimately acquired by Alexion in June 2018 for $764 million; Alexion was subsequently acquired by AstraZeneca)."]] [[/GREPCENT_TABLE]] 61 Table of Contents Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). An emerging growth company may take advantage of specified reduced reporting burdens that are otherwise applicable generally to public companies. These provisions include, but are not limited to: [[GREPCENT_TABLE]] [["","\u25cf","inclusion of only two years, as compared to three years, of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced \u201cManagement\u2019s discussion and analysis of financial condition and results of operations\u201d disclosures;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (\u201cSarbanes-Oxley Act\u201d);"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board (\u201cPCAOB\u201d) requiring mandatory audit firm rotation;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","reduced disclosure about executive compensation arrangements; and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","an exemption from the requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements."]] [[/GREPCENT_TABLE]] We expect to take advantage of these provisions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (1) the last day of the year (a) following the fifth anniversary of the completion of our initial public offering which is December 2024, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.  We expect to no longer qualify as an emerging growth company at the end of 2024. We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report on Form 10-K, and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be reduced and/or less detailed than what you might find from other public reporting companies. In addition, we are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act and have elected to take advantage of certain of the scaled back disclosure requirements available to smaller reporting companies such as avoiding the extensive narrative disclosure required of other reporting companies, particularly in the description of executive compensation. Our status as a smaller reporting company will not be impacted by the loss of emerging growth company status at the end of 2024, so we may continue to take advantage of these scaled disclosure requirements so long as we qualify.  In addition, the loss of emerging growth status will not impact our “non-accelerated filer” status, which also provides an exemption from the auditor attestation requirement with respect to internal control over financial reporting. 62 Table of Contents Revenues We are an emerging growth company. We have no approved drugs and have not generated any revenues. To date, we have engaged in acquiring or in-licensing drug product candidates, entering into collaboration agreements for testing and clinical development of our drug product candidates and providing the infrastructure to support the clinical development of our drug product candidates. We do not anticipate commercial revenues from operations until we complete testing and development of one of our drug product candidates and obtain marketing approval or we sell, enter into a collaborative marketing arrangement, or out-license one of our drug product candidates to another party. See “Liquidity and Capital Resources”. Recently Issued and Adopted Accounting Pronouncements During the year ended December 31, 2023, there were two recently issued accounting pronouncements that are described in more detail in Note 2 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Critical Accounting Policies and Use of Estimates While our significant accounting policies are described in more detail in Note 2 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements. Clinical Trials Accruals We accrue and expense the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations, service providers, and clinical trial sites. We estimate the amounts to accrue based upon discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as R&D expenses. Clinical trial site costs related to patient screening and enrollment are accrued as patients are screened/entered into the trial. Stock-Based Compensation We account for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based compensation grants, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs. Stock-based compensation costs for stock awards granted to our employees, non-employee directors and consultants are based on the fair value of the underlying instruments calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including selecting methods for estimating our future stock price volatility and expected holding term. For options granted in 2023, the expected volatility rates are estimated based on our actual historical volatility over the three-year period from our initial public offering on December 18, 2019, through December 31, 2022. The expected term for stock options granted during the years ended December 31, 2023 and 2022, was estimated using the simplified method. Forfeitures only include actual forfeitures to-date as the Company accounts for forfeitures as they occur due to a limited history of forfeitures. We have not paid dividends and do not anticipate paying a cash dividend in future vesting periods and, accordingly, use an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. 63 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023, and December 31, 2022 The following table summarizes the results of our operations for the years ended December 31, 2023, and 2022: [[GREPCENT_TABLE]] [["","","Year Ended December 31,"],["(in thousands)","","2023","","","2022","","","Variance"],["Research and development expenses","","$","5,600","","","$","7,592","","","$","(1,992",")"],["General and administrative expenses","","","3,231","","","","2,945","","","","286"],["Total operating expenses","","","8,831","","","","10,537","","","","(1,706",")"],["Operating loss","","","(8,831",")","","","(10,537",")","","","1,706"],["Interest income","","","429","","","","21","","","","408"],["Net loss","","$","(8,402",")","","$","(10,516",")","","$","2,114"]] [[/GREPCENT_TABLE]] Research and Development (“R&D”) Expenses R&D expenses for the year ended December 31, 2023 were $5,600,000, compared to $7,592,000 for the year ended December 31, 2022. This represents a decrease of $1,992,000 primarily attributed to (1) a $1,375,000 decrease for Validive clinical trial and manufacturing costs as a result of the termination of that program in March 2023, (2) a $904,000 decrease for a reduction in camsirubicin clinical trial and manufacturing costs, (3) a $126,000 decrease in R&D salaries, partially offset by (1) a $408,000 increase related to MNPR-101 radiopharma activity and  (2) a $5,000 net increase in other R&D expenses. General and Administrative ("G&A") Expenses G&A expenses for the year ended December 31, 2023, were $3,231,000, compared to $2,945,000 for the year ended December 31, 2022. This represents an increase of $286,000 primarily attributed to a $220,000 increase in G&A personnel salaries, bonuses, benefits and stock-based compensation for annual (non-cash) equity grants, and a $66,000 net increase in other G&A expenses. Interest Income Interest income for the year ended December 31, 2023, increased by $408,000 versus the year ended December 31, 2022. The increase is due to interest earned on treasury bills and money market accounts that yielded higher interest rates in 2023. Liquidity and Capital Resources Sources of Liquidity We have incurred losses and cumulative negative cash flows from operations since we commenced operations resulting in an accumulated deficit of approximately $60.2 million as of December 31, 2023. We anticipate that we will continue to incur losses for the foreseeable future. We expect that our R&D and G&A expenses will increase to enable the execution of our strategic plan. As a result, we anticipate that we will seek to raise additional capital within the next 12 months to fund our future operations. We will seek to obtain needed capital through a combination of equity offerings, including at-the-market sales programs, debt financings, strategic collaborations and grant funding. To date, we have funded our operations through net proceeds from the initial public offering of our common stock, net proceeds from sales of our common stock through at-the-market sales programs, private placements of our preferred and common stock, and the net receipt of funds related to the acquisition of camsirubicin. We anticipate that the currently available funds as of March 8, 2024, will fund our planned operations at least through June 30, 2025. We invest our cash equivalents in two money market accounts and U.S. Treasury Bills. 64 Table of Contents Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2023, and 2022. [[GREPCENT_TABLE]] [["","","Year Ended December 31,"],["(in thousands)","","2023","","","2022","","","Variance"],["Net cash used in operating activities","","$","(7,858",")","","$","(7,228",")","","$","(630",")"],["Net cash provided by (used in) investing activities","","","4,928","","","","(4,919",")","","","9,847"],["Net cash provided by financing activities","","","2,027","","","","33","","","","1,994"],["Effect of exchange rates","","","(17",")","","","(4",")","","","(13",")"],["Net decrease in cash and cash equivalents","","$","(920",")","","$","(12,118",")","","$","11,198"]] [[/GREPCENT_TABLE]] During the years ended December 31, 2023 and 2022, we had net cash outflows of $920,000 and $12,118,000, respectively, a decrease of $11,198,000. During 2022, we began investing our idle cash due to the rising interest rates, resulting in a significant increase in cash used in investing activities. During 2023, we had net cash provided by investing activities as some of our investments made in 2022 matured and were used in operating activities, as well as higher net cash provided by financing activities due to more funds raised from sales of our common stock under an at-the-market sales program compared to 2022. Cash Flow Used in Operating Activities The cash flow used in operating activities during the year ended December 31, 2023, compared to the year ended December 31, 2022 was essentially flat. Cash Flow Used in Investing Activities The increase to cash flow provided by investing activities during the year ended December 31, 2023, compared to cash used in investing activities during the year ended December 31, 2022, of $9,847,000 was related to the fact that our investment in U.S. Treasury Bills commenced in December 2022 with maturities reinvested or used as working capital throughout 2023.  Cash Flow Provided by Financing Activities The increase in cash flow provided by financing activities during the year ended December 31, 2023, compared to the year ended December 31, 2022, of $1,994,000 was primarily due to higher net proceeds from sales of our common stock through an at-the-market sales program. Future Funding Requirements To date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales or royalties unless and until we obtain regulatory approval of and commercialize any of our current or future drug product candidates or we out-license or sell a drug product candidate to another party. At the same time, we expect our expenses to increase in connection with our ongoing development activities, particularly as we continue the research, development, future preclinical studies and clinical trials of, and seek regulatory approval for, our current and future drug product candidates. If we obtain regulatory approval of any of our current or future drug product candidates, we will need substantial additional funding for commercialization requirements and our continuing drug product development operations. As a company, we have not completed development through marketing approvals of any therapeutic products. We expect to continue to incur significant increases in expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially as we: [[GREPCENT_TABLE]] [["","\u25cf","continue the clinical and preclinical activities of MNPR-101-Zr and MNPR-101-RIT to image and treat cancer;"],["","\u25cf","advance the clinical development for camsirubicin;"],["","\u25cf","continue the preclinical activities, and potentially later-on enter clinical development, of MNPR-202 (and related analogs) for various cancer indications;"]] [[/GREPCENT_TABLE]] 65 Table of Contents [[GREPCENT_TABLE]] [["","\u25cf","acquire and/or license additional pipeline drug product candidates and pursue the future preclinical and/or clinical development of such drug product candidates;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","seek regulatory approvals for any of our current and future drug product candidates that successfully complete registration clinical trials;"],["","\u25cf","establish or purchase the services of a sales, marketing and distribution infrastructure to commercialize any products for which we obtain marketing approval;"],["","\u25cf","develop or contract for manufacturing/quality capabilities or establish a reliable, high quality supply chain sufficient to support our clinical requirements and to provide sufficient capacity to launch and supply the market for any product for which we obtain marketing approval; and"],["","\u25cf","add or contract for required operational, financial and management information systems and capabilities and other specialized expert personnel to support our drug product candidate development and planned commercialization efforts."]] [[/GREPCENT_TABLE]] We anticipate that the funds available as of March 8, 2024, will fund our obligations at least through June 30, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our drug product candidates, and the extent to which we enter into collaborations with third parties to participate in the development and commercialization of our drug product candidates, we are unable to accurately estimate with high reliability the amounts and timing required for increased capital outlays and operating expenditures associated with our current and anticipated drug product candidate development programs. Our future capital requirements will depend on many factors, including: [[GREPCENT_TABLE]] [["","\u25cf","the progress of clinical development and regulatory interactions and approvals of our MNPR-101 radiopharma program;"],["","\u25cf","the progress of clinical development and regulatory interactions and approvals of camsirubicin;"],["","\u25cf","the costs, timing and outcomes of seeking, obtaining, and maintaining FDA, TGA and other international regulatory approvals;"],["","\u25cf","the progress of preclinical and potentially clinical development of MNPR-202 (and related analogs);"],["","\u25cf","the number and characteristics of other drug product candidates that we may license, acquire, invent or otherwise pursue;"],["","\u25cf","the scope, progress, timing, cost and results of research, preclinical development and clinical trials and regulatory requirements for future drug product candidates;"]] [[/GREPCENT_TABLE]] 66 Table of Contents [[GREPCENT_TABLE]] [["","\u25cf","the costs associated with manufacturing/quality requirements, establishing a reliable supply chain, and establishing or contracting for sales, marketing and distribution capabilities;"],["","\u25cf","our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights;"],["","\u25cf","our need and ability to hire or contract for additional management, administrative, scientific, medical, sales and marketing, and manufacturing/quality and other specialized personnel or external expertise;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","the effect and timing of entry of competing products or new therapies that may limit market penetration or prevent the introduction of our drug product candidates or reduce the commercial potential of our product portfolio;"],["","\u25cf","our need to implement additional required internal management, operational, record keeping and other systems and infrastructure; and"],["","\u25cf","the economic and other terms, timing and success of our existing collaboration and licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future, including the timing of receipt of or payment to or from others of any license, milestone or royalty payments under these arrangements."]] [[/GREPCENT_TABLE]] Expenditures are expected to increase in 2024 and onward for: [[GREPCENT_TABLE]] [["","\u25cf","development of our MNPR-101 radiopharma program to image and treat various advanced cancers;"],["","\u25cf","Development of our camsirubicin program if data support development beyond Phase 1b;"],["","\u25cf","development of potential new in-licensed product candidates;"],["","\u25cf","employee compensation and consulting fees to support the increased scope of activities required for the progress of our product candidate programs including MNPR-101 for radiopharmaceutical use, camsirubicin, and MNPR-202 (and related analogs)"]] [[/GREPCENT_TABLE]] We are working towards initiating enrollment for our MNPR-101-Zr Phase 1 dosimetry clinical trial. If the tumor uptake, biodistribution, and safety look encouraging in this Phase 1 dosimetry trial, we may proceed to evaluate the efficacy in humans of a therapeutically radio-labeled version of MNPR-101 bound to an isotope such as Ac-225, which will require additional funding or finding a suitable pharmaceutical partner. There can be no assurance that any such events will occur. We intend to continue evaluating drug product candidates for the purpose of growing our pipeline. Identifying and securing high-quality compounds usually takes time and related expenses; however, our spending could be significantly accelerated in 2024 and onward if additional drug product candidates are acquired and enter clinical development. In this event, we may be required to expand our management team, and pay higher contract manufacturing costs, contract research organization fees, other clinical development costs and insurance costs that are not currently projected. Additional long-term funding is needed to generally to support our current and future product candidates through clinical trials, approval processes and, if applicable, commercialization. 67 Table of Contents Until we can generate a sufficient amount of product revenue to finance our cash requirements, we expect to finance our future cash needs primarily through a combination of equity offerings, including at-the-market sales programs, debt financings, strategic collaborations and grant funding. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our current stockholders’ rights. Debt 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 marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with other parties, we likely will have to share or relinquish valuable rights to our technologies, future revenue streams, research programs or drug product candidates or grant licenses on terms that may not be favorable to us, which will reduce our future returns and affect our future operating flexibility. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our pipeline product development or commercialization efforts or grant rights to others to develop and market drug product candidates that we would otherwise prefer to develop and market ourselves. Contractual Obligations and Commitments License, Development and Collaboration Agreements XOMA Ltd. Pursuant to a non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101, we are obligated to pay XOMA Ltd. clinical, regulatory and sales milestones which could reach up to $14.925 million if we achieve all milestones for MNPR-101. The agreement does not require the payment of sales royalties. There can be no assurance that we will achieve any milestones. As of March 8, 2024, we had not reached any milestones and had not been required to pay XOMA Ltd. any funds under this license agreement. The first milestone payment is payable upon first dosing of a human patient in a Phase 2 clinical trial. Onxeo S.A.        In June 2016, we executed an agreement with Onxeo S.A., a French public company, which gave us the exclusive option to license (on a world-wide exclusive basis) Validive (clonidine hydrocholoride mucobuccal tablet; clonidine HCI MBT) a mucoadhesive tablet of clonidine based on the Lauriad mucoadhesive technology. In September 2017, we exercised the option to license Validive from Onxeo for $1 million. In March 2023, we discontinued our Validive Phase 2b/3 VOICE trial based upon ours Data Safety Monitoring Board’s determination that the trial did not meet the pre-defined threshold for efficacy of a 15% absolute difference in severe oral mucositis prevention between Validive and placebo. We have not incurred any license or royalty obligations and the license has been terminated effective January 2024. 68 Table of Contents Service Providers In the normal course of business, we contract with service providers to assist in the performance of R&D, including drug product manufacturing, process development, clinical and preclinical development, and G&A including financial strategy, audit, tax and legal support. We can elect to discontinue the work under these agreements at any time. We could also enter into collaborative research and development, contract research, manufacturing and supplier agreements in the future, which may require upfront payments and/or long-term commitments of cash. Office Lease We are currently leasing office space on a month-to-month basis for our executive headquarters at 1000 Skokie Blvd., in the Village of Wilmette, Illinois for $4,238 per month. Legal Contingencies We are currently not, and to date have never been, a party to any adverse material legal proceedings. Indemnification In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. Our exposure under these agreements is unknown because it involves claims that may be made against us in the future, but that have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations. In accordance with our Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the indemnification agreements entered into with each officer and non-employee director, we have indemnification obligations to our officers and non-employee directors for certain events or occurrences, subject to certain limits, while they are serving at our request in such capacity. There have been no claims to date. See Item 1A - “Risk Factors - We have limited the liability of and indemnified our directors and officers.”