Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
MiNK Therapeutics, Inc. (“we,” “us” and “our”) is a clinical-stage biopharmaceutical company pioneering a novel platform of living medicines based on a rare and potent class of immune cells called invariant natural killer T (“iNKT”) cell therapies to treat cancer and other immune-mediated diseases. iNKT cells are a distinct T cell population that combine durable memory responses with the rapid cytolytic features of natural killer (“NK”) cells. iNKT cells offer distinct therapeutic advantages as a platform for allogeneic therapy in that the cells naturally home to tissues, aid clearance of tumors and infected cells and suppress Graft versus Host Disease (“GvHD”). Our proprietary platform is designed to facilitate scalable and reproducible manufacturing for off-the-shelf delivery. As such, we believe that our approach represents a highly versatile application for therapeutic development in cancer and immune diseases. We are leveraging our platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline of both native and engineered iNKT cells.
Our business activities include product research and development, manufacturing, regulatory and clinical development, corporate finance, and support of our collaborations. To be successful, our product candidates require clinical trials and approvals from regulatory agencies, as well as acceptance in the marketplace. We are a party to an Amended and Restated Intercompany Services Agreement and an Intellectual Property Assignment and License Agreement with Agenus. Under the Amended and Restated Intercompany Services Agreement, Agenus provides us with certain general and administrative support, including, without limitation, financial, facilities management, human resources and information technology administrative support, and we and Agenus provide each other with certain research and development services and other support services, including legal and regulatory support. We are also entitled to use Agenus’ business offices and laboratory space and equipment in exchange for us contributing a proportionate payment for the use of such facilities and equipment, and we will be covered by certain Agenus insurance policies, subject to certain conditions, including us paying the cost of such coverage. Under the Intellectual Property Assignment and License Agreement, Agenus exclusively assigned patent rights and know-how related to our technology to us. We also have a field-limited exclusive license under certain Agenus patents and know-how; and we retain the rights to expand a proprietary pipeline of products and technologies.
Our most advanced product candidate, agenT-797, is an off-the-shelf, allogeneic, native iNKT cell therapy. iNKTs are a potent class of immune cells and serve as master regulators of immune response, possessing the killing power of NK cells and the memory of T-cells. Our proprietary manufacturing platform allows these cells to be infused in billion-fold numbers, arming the immune system against cancer and other life-threatening diseases. We have established and launched in-house iNKT cell manufacturing and product release capacity to supply more than 5,000 doses per year through a U.S. Food and Drug Administration (“FDA”)-cleared scalable, fully closed, and automatic process. Our Phase 1 clinical trial studying agenT-797 in solid tumor cancers, as a monotherapy and in combination with anti-PD-1 checkpoint inhibitors, pembrolizumab and nivolumab, is currently advancing as a priority program. Encouraging activity was seen with agenT-797 monotherapy and combination, with durable responses and disease stabilization in patients, which was presented at the American Association for Cancer Research and more recently at the Society of Immunotherapy for Cancer (“SITC”) conference in November 2023.
In our Phase 1 clinical trial, most recently presented at SITC 2023, agenT-797 demonstrated a durable clinical benefit and a tolerable safety profile across various heavily pre-treated solid tumors. This includes non-small cell lung cancer (“NSCLC”), testicular cancer, and gastric cancer. Notably, the median progression-free survival (“PFS”) exceeded six months. Approximately 30% of patients experienced durable disease stabilization, even in cancers that were refractory to all prior therapies, such as pembrolizumab and nivolumab. This was observed in multiple cancer types, including but not limited to NSCLC and testicular cancer. Significantly, a patient with metastatic gastric cancer, who had not responded to anti-PD-1 therapy and standard chemotherapy, achieved a partial response when treated with agenT-797 in combination with nivolumab. This response was ongoing at 10 months. The safety profile of agenT-797 was tolerable, both as a standalone treatment and in combination with PD-1 inhibitors. Treatment doses up to one billion cells showed no neurotoxicity, dose-limiting toxicities, or severe cytokine release syndrome (above grade 3).
Building on these encouraging results, we plan to conduct a randomized phase 1/2 expansion trial. This trial will assess the efficacy of agenT-797 in combination with standard-of-care chemotherapy and immune therapy (pembrolizumab/nivolumab), with or without Agenus’ multifunctional anti-CTLA-4 agent, botensilimab, in relapsed/refractory gastric cancer.
We reported updated data from our Phase 1 clinical trial of agenT-797 in viral acute respiratory distress syndrome (“ARDS”) at the 2023 American Thoracic Society International Conference. We reported an encouraging survival benefit of 75%, compared to ~10-22% in an in-hospital control and time-matched data from the Centers for Disease Control and Prevention. Notably, in addition to a survival benefit, we reported observations that agenT-797 improved lung function and significantly reduced inflammation and secondary infections in the population. There are currently no approved therapies for ARDS and secondary infections are a significant
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contributor to comorbidity and death in intensive care units; our data contribute favorably as a potential therapeutic and we plan to advance agenT-797 in viral ARDS through strategic collaborations and non-dilutive external financing.
In addition, we completed a Phase 1 clinical trial of agenT-797 for the treatment of multiple myeloma and reported at SITC in 2022 that agenT-797 was tolerable to a billion cells/dose and suppressed biomarkers associated with disease progression. This proof of concept Phase 1 underscores the potential application of INKT cells in multiple myeloma and we believe supports the advancement of our armored B cell maturation antigen (“BCMA”)-CAR-INKT program as a potential best in class next generation allogeneic BCMA cell therapy for these patients. Strategic discussions to advance this program are underway.
We are also advancing a pipeline of next-generation allogeneic, engineered iNKT programs. Our two most advanced engineered programs are (1) MiNK-215, an IL-15 armored tumor stromal targeting FAP-CAR-iNKT and (2) MiNK-413, an IL-15 armored CAR-iNKT program targeting BCMA program. MiNK-413 has demonstrated tumor clearance and improved persistence in preclinical models, as well as manufacturing and logistical improvements over current BCMA cell therapies. MiNK-215 has demonstrated efficacy in NSCLC and melanoma preclinical models, promoting curative responses, eliminating tumor burden in the lungs, and enhancing tumor specific CD8+ T cell infiltration through tumor stroma. These data and programs were presented at SITC in 2022 with more recent translational data presented at the American Society of Cell and Gene Therapy Conference in 2023. Investigational new drug (“IND”) enabling activities are underway we expect to submit an IND to the FDA in 2024.
Our research and development expenses for the years ended December 31, 2023 and 2022 were $15.5 million and $23.1 million, respectively. We have incurred losses since our inception. As of December 31, 2023, we had an accumulated deficit of $133.4 million.
Historical Results of Operations
For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022
Research and development (“R&D”) expense
R&D expense includes the costs associated with our internal research and development activities, including compensation and benefits, occupancy costs, manufacturing costs, costs of expert consultants, and administrative costs. R&D expense decreased 33% to $15.5 million for the year ended December 31, 2023 from $23.1 million for the year ended December 31, 2022. This decrease is primarily due to decreased costs associated with the timing of our clinical trials and decreased costs associated with allocated Agenus services. These decreases were partially offset by increased personnel costs associated with increased headcount.
General and administrative (“G&A”) expense
G&A expense consists primarily of personnel costs, facility expenses, and professional fees. G&A expense decreased 5% to $7.4 million for the year ended December 31, 2023 from $7.8 million for the year ended December 31, 2022. This decrease is primarily due to decreased professional fees, primarily attributable decreased legal and consulting fees, and decreased costs associated with allocated Agenus services. These decreases were partially offset by increased personnel costs, including stock-based compensation expense, associated with increased headcount.
Other income (expense), net
Other income decreased $2.7 million for the year ended December 31, 2022, from income of $2.7 million for the year ended December 31, 2022 to de minimis expense for the year ended December 31, 2023, due to the recognition of a $2.7 million gain on the partial forgiveness of the advance received under our research and development agreement with the Belgium Walloon Region Government (the “Walloon Region”), in the year ended December 31, 2022.
Interest income (expense), net
Interest income increased $210,000 for the year ended December 31, 2023, from income of $253,000 for the year ended December 31, 2022 to income of $463,000 for the year ended December 31, 2023, primarily due to increased interest earned on our money market funds.
Research and Development Programs
R&D program costs include compensation and other direct costs plus an allocation of indirect costs, based on certain assumptions.
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For the years ended December 31,
Our product candidates are in various stages of development and significant additional expenditures will be required if we start new clinical trials, encounter delays in our programs, apply for regulatory approvals, continue development of our technologies, expand our operations and/or bring our product candidates to market. The total cost of any particular clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, number of patients and trial sponsorship. The process of obtaining and maintaining regulatory approvals for new products is lengthy, expensive and uncertain. Because of the current stage of our product candidates, among other factors, we are unable to reliably estimate the cost of completing our research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.
Liquidity and Capital Resources
We have incurred annual operating losses since inception, and we had an accumulated deficit of $133.4 million as of December 31, 2023. We expect to incur losses over the next several years as we continue development of our technologies and product candidates, manage our regulatory processes, initiate and continue clinical trials, and prepare for potential commercialization of products.
In October 2021, we completed an initial public offering of 3,333,334 shares of our common stock, at a public offering price of $12.00 per share. The gross proceeds from the offering, before deducting underwriting discounts, commissions and other offering expenses, were approximately $46.0 million, which includes the exercise of the underwriters option to acquire an additional 500,000 shares at the public offering price, which shares were delivered in November 2021. Underwriting discounts, commissions and other offering expenses, were approximately $6.2 million, resulting in net proceeds of approximately $39.8 million.
In December 2018, we entered into an agreement with the Walloon Region in which the Walloon Region agreed to provide a grant of up to €1.3 million and an advance of up to €8.3 million for the development of one of our research programs. As of December 31, 2023, we had received $881,000 of the grant portion and $5.2 million of the advance. During 2020, we discontinued research efforts related to this program, and in 2021 we provided additional information as requested by the Walloon Region to terminate the agreement. We recognized the grant portion received as income during the years ended December 31, 2019 and 2020. We learned in the second quarter of 2022 that the Walloon Region had obtained a default judgment in the amount of €2,086,712 for repayment of the advance. In view of the default judgment, we reduced the recorded liability and recorded a gain of approximately $2.7 million in our consolidated statement of operations for the year ended December 31, 2022. We have included the remaining balance of $2.3 million in other current liabilities in our condensed consolidated balance sheet at December 31, 2023.
Our cash and cash equivalents balance as of December 31, 2023 was $3.4 million. We believe that our cash and cash equivalents balance along with the additional funding received subsequent to year end from our parent, Agenus, and funding planned from a third party will be sufficient to satisfy our liquidity requirements for more than one year from when these financial statements were issued. Because the additional funding is influenced by external uncertainties, in accordance with the relevant accounting guidance, we are required to disclose that substantial doubt exists about our ability to continue as a going concern for a period of one year after the date of filing of this Annual Report on Form 10-K. The financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management continually monitors our liquidity position and adjusts spending as needed in order to preserve liquidity. Potential sources of additional funding include: (1) seeking strategic partnerships and collaborations, as well as out-licensing opportunities, for our portfolio programs and product candidates, (2) exploring avenues for securing non-dilutive financing, such as grants and collaborations to strengthen our balance sheet, and (3) potential of equity or debt financing options. If additional funding is not obtained through these sources, Agenus has indicated a willingness to loan us additional funds to finance our operations.
Net cash used in operating activities for the years ended December 31, 2023 and 2022 was $15.8 million and $18.9 million, respectively. Our future ability to generate cash from operations will depend on achieving regulatory approval and market acceptance of our product candidates, and our ability to enter into collaborations. Please see the “Note Regarding Forward-Looking Statements”
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of this Annual Report on Form 10-K and the risks highlighted under Part I-Item 1A. “Risk Factors” of this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
The SEC defines “critical accounting policies” as those that require the application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base those estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Our significant accounting policies are described in Note 2 of the notes to our consolidated financial statements contained elsewhere in this Annual Report on Form 10-K. In many cases, the accounting treatment of a particular transaction is dictated by U.S. GAAP, with no need for our judgment in its application. There are also areas in which our judgment in selecting an available alternative would not produce a materially different result.
Recent Accounting Pronouncements
Refer to Note 2 to our consolidated financial statements included within Item 8 of this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our business.
JOBS Act
We qualify as an “emerging growth company” as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced disclosure about our executive compensation arrangements, exemption from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We may take advantage of these exemptions until the last day of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company earlier if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period. For so long as we remain an emerging growth company, we are permitted, and intend, to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. We may choose to take advantage of some, but not all, of the available exemptions.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Therefore, the reported results of operations contained in our consolidated financial statements may not be directly comparable to those of other public companies.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
This item is not required for smaller reporting companies.
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Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm 72
Consolidated Balance Sheet as of December 31, 2023 and 2022 73
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
MiNK Therapeutics, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of MiNK Therapeutics, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG LLP
We have served as the Company’s auditor since 2020.
Boston, Massachusetts
March 21, 2024
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MiNK THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31,
ASSETS
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Commitments and contingencies
Stockholders’ deficit
See accompanying notes to consolidated financial statements.
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MiNK THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
For the Year EndedDecember 31,
Operating expenses:
Other income (expense), net:
Per common share data:
Basic and diluted net loss per common share $ (0.65 ) $ (0.83 )
Other comprehensive gain (loss)
See accompanying notes to consolidated financial statements.
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MiNK THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
Common Stock Treasury Stock
Vesting of nonvested shares 60,595 1 (1 ) — — — — —
Forfeiture of restricted stock (20,872 ) — (75 ) — — — — (75 )
Recognition of parent stock options — — 96,013 — — — — 96,013
Vesting of nonvested shares 175,196 2 (2 ) — — — — —
Share retirement (192 ) — — — — — — —
Recognition of parent stock options — — 131,930 — — — — 131,930
See accompanying notes to consolidated financial statements.
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MiNK THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year EndedDecember 31,
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Cash flows from investing activities:
Net cash used in investing activities (73,561 ) (250,046 )
Cash flows from financing activities:
Purchase of treasury shares to satisfy tax withholdings (477,639 ) (157,194 )
Proceeds from employee stock purchases and option exercises 70,466 1,595
Effect of exchange rate changes on cash (25,250 ) 19,385
Supplemental cash flow information:
Supplemental disclosures - non-cash activities:
Purchases of plant and equipment in accounts payable $ — $ 177,680
See accompanying notes to consolidated financial statements.
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MiNK THERAPEUTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Description of Business
MiNK Therapeutics, Inc. (“MiNK” or the “Company”) is a clinical-stage biopharmaceutical company pioneering a novel platform of living medicines based on a rare and potent class of immune cells called invariant natural killer T (“iNKT”) cell therapies to treat cancer and other immune-mediated diseases. iNKT cells are a distinct T cell population that combine durable memory responses with the rapid cytolytic features of natural killer cells. iNKT cells offer distinct therapeutic advantages as a platform for allogeneic therapy in that the cells naturally home to tissues, aid clearance of tumors and infected cells and suppress Graft versus Host Disease. MiNK's proprietary platform is designed to facilitate scalable and reproducible manufacturing for off-the-shelf delivery. As such, MiNK believes that its approach represents a highly versatile application for therapeutic development in cancer and immune diseases. MiNK is leveraging its platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline of both native and engineered iNKT cells.
Since its inception in 2017, MiNK has incurred losses and expects to continue incurring operating losses and negative cash flows in the future until it is able to generate sales and profits. As of December 31, 2023, MiNK had an accumulated deficit of $133.4 million and cash and cash equivalents of $3.4 million.
MiNK believes that its cash and cash equivalents balance along with the additional funding received subsequent to year end from its parent, Agenus Inc. (“Agenus”), and funding planned from a third party will be sufficient to satisfy its liquidity requirements for more than one year from when these financial statements were issued. Because the additional funding is influenced by external uncertainties, in accordance with the relevant accounting guidance, the Company is required to disclose that substantial doubt exists about its ability to continue as a going concern for a period of one year after the date of filing of this Annual Report on Form 10-K. The financial statements have been prepared on a basis that assumes MiNK will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management continually monitors MiNK's liquidity position and adjusts spending as needed in order to preserve liquidity. Potential sources of additional funding for the Company include: (1) seeking strategic partnerships and collaborations, as well as out-licensing opportunities, for the Company's portfolio programs and product candidates, (2) exploring avenues for securing non-dilutive financing, such as grants and collaborations to strengthen the Company's balance sheet, and (3) potential of equity or debt financing options. If additional funding is not obtained through these sources, Agenus has indicated a willingness to loan MiNK additional funds to finance its operations.
MiNK’s product candidates are in various stages of development and additional expenditures will be required if the Company starts new trials, encounters delays in its programs, applies for regulatory approvals, continues development of its technologies, expands its operations, and/or brings its product candidates to market. The eventual total cost of each clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, and number of patients. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because all of the Company’s programs are at an early stage of clinical development, the Company is unable to reliably estimate the cost of completing its research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of MiNK and its subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation.
(b) Segment Information
MiNK is managed and operated as one business segment. The entire business is managed by a single executive operating committee that reports to the chief executive officer. The Company does not operate separate lines of business with respect to any of its product candidates or geographic locations. Accordingly, the Company does not prepare discrete financial information with respect to separate product areas or by location and does not have separately reportable segments as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting.
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(c) Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases those estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
(d) Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with maturities at acquisition of three months or less to be cash equivalents. Cash equivalents consist primarily of money market funds.
(e) Equipment
Equipment is carried at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, typically 4-10 years. Additions are capitalized, while repairs and maintenance are charged to expense as incurred. Depreciation expense was $205,000 and $122,000, for the years ended December 31, 2023 and 2022, respectively.
(f) Fair Value Measurements
Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
•
Level 1—Quoted prices in active markets for identical assets or liabilities.
•
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
The Company’s cash and cash equivalents are carried at fair value (a Level 1 measurement), determined according to the fair value hierarchy described above. The carrying values of the Company’s, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities.
(g) Foreign Currency Transactions
Gains and losses from the Company’s foreign currency-based accounts and transactions, such as those resulting from the remeasurement and settlement of receivables and payables denominated in foreign currencies, are included in the consolidated statements of operations within other income (expense). The Company recorded de minimis foreign currency losses for the years ended December 31, 2023 and 2022.
(h) Research and Development
Research and development expenses include the costs associated with the Company’s internal research and development activities, including salaries and benefits, share-based compensation, occupancy costs, clinical manufacturing costs, related administrative costs and research and development conducted for the Company by outside advisors. Research and development expenses also include the cost of clinical trial materials shipped to the Company’s research partners. Research and development costs are expensed as incurred.
(i) Share-Based Compensation
MiNK accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Share-based compensation expense is recognized based on the estimated grant date fair value. Compensation cost is recognized on a
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straight-line basis over the requisite service period of the award. Forfeitures are recognized as they occur. See Note 8 for further discussion on share-based compensation.
(j) Income Taxes
Income taxes are accounted for under the asset and liability method with deferred tax assets and liabilities recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which such items are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of operations in the period that includes the enactment date. Deferred tax assets are recognized when they are more likely than not expected to be realized.
(k) Net Loss Per Share
Basic income or loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is calculated by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding plus the dilutive effect of outstanding instruments such as stock options. Because the Company reported a net loss attributable to common stockholders for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. Therefore, the following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as of December 31, 2023 and 2022, as they would be anti-dilutive:
(l) Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires incremental annual and quarterly disclosures about segment measures of profit or loss as well as significant segment expenditures. It also requires public entities with a single reportable segment to provide all segment disclosures required by the amendments and all existing segment disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. As the Company has a single reportable segment, MiNK expects the adoption of this standard to result in increased disclosures in the notes to its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires incremental annual disclosures around income tax rate reconciliations, income taxes paid and other related disclosures. For the Company, ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for any annual periods for which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements.
No other new accounting pronouncement issued or effective during the year ended December 31, 2023 had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures.
(3) Cash and Cash Equivalents
Cash equivalents consisted of the following as of as of December 31, 2023 and 2022 (in thousands):
Cost Estimated Fair Value Cost Estimated Fair Value
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(4) Equipment
Equipment, net, consisted of the following as of December 31, 2023 and 2022 (in thousands):
December 31,
Less accumulated depreciation (496 ) (284 )
(5) Income Taxes
The Company is subject to taxation in the United States and in various state, local and foreign jurisdictions. The Company remains subject to examination by U.S. Federal, state, local and foreign tax authorities for tax years 2019 through 2022. With few exceptions, the Company is no longer subject to U.S. Federal state, and foreign examinations by tax authorities for the tax year 2019. However, net operating losses from the tax year 2017 would be subject to examination if and when used in a future tax return to offset taxable income. The Company’s policy is to recognize income tax related penalties and interest, if any, in its provision for income taxes and, to the extent applicable, in the corresponding income tax assets and liabilities, including any amounts for uncertain tax positions.
As of December 31, 2023, the Company had available net operating loss carryforwards of $52.3 million for Federal and state income tax purposes, which are available to offset future Federal and state taxable income, if any. $52.1 million of these Federal net operating loss carryforwards do not expire, while the remaining net operating loss carryforwards expire in 2037. The Company’s ability to use these net operating losses is limited by change of control provisions under Internal Revenue Code ("IRC") Section 382 and may expire unused. The Company also has foreign net operating loss carryforwards, which do not expire, available to offset future foreign taxable income of $20.5 million generated in the United Kingdom and $9.1 million in Belgium. The potential impacts of these provisions are among the items considered and reflected in the Company’s assessment of its valuation allowance requirements.
Beginning January 1, 2022, the Tax Cuts and Jobs Act (the "Tax Act") eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to IRC Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. We have included the impact of this provision, which results in additional deferred tax assets of approximately $6.5 and $4.2 million as of December 31, 2023 and 2022 respectively.
The tax effect of temporary differences and net operating loss carryforwards that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2023 and 2022 are presented below (in thousands).
December 31,
Deferred tax assets:
U.S. Federal and state net operating loss carryforwards $ 13,804 $ 11,411
Foreign net operating loss carryforwards 7,819 6,224
Research and development tax credits 341 —
Share-based compensation 269 441
Capitalized research expenses 6,515 4,154
Net deferred tax assets $ — $ —
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating loss and tax credit carryforwards can be utilized or the temporary differences become deductible. The Company considers projected future taxable income and tax planning strategies in making this assessment. To fully realize the deferred tax asset, the Company will need to generate future taxable income sufficient to utilize net operating losses prior to their expiration. Based upon the Company’s history of not generating taxable income, the Company believes that it is more likely than not that deferred tax assets will not be realized through future earnings. Accordingly, a valuation allowance has been established for the full value of the deferred tax assets. The valuation allowance on the deferred tax assets increased by $7.0 million and $4.0 million during the years ended December 31, 2023 and 2022, respectively.
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Income tax benefit was nil for the years ended December 31, 2023 and 2022. Income taxes recorded differed from the amounts computed by applying the U.S. Federal income tax rate of 21% in 2023 and 2022 to loss before income taxes as a result of the following (in thousands).
December 31,
Computed “expected” Federal tax benefit $ (4,716 ) $ (5,878 )
(Increase) reduction in income taxes benefit resulting from:
Change in valuation allowance 5,987 4,028
Foreign rate change — (842 )
Foreign income inclusion (21 ) 530
Return-to-provision adjustment — 1,393
Foreign rate differential — 286
Income tax benefit $ — $ —
(6) Accrued Liabilities
Accrued liabilities consist of the following as of December 31, 2023 and 2022 (in thousands):
December 31,
Contract manufacturing costs 2,430 261
(7) Equity
The Company’s authorized capital stock consists of 155,000,000 shares, all with a par value of $0.00001 per share, of which:
•
150,000,000 shares are designated as common stock; and
•
5,000,000 shares are designated as preferred stock.
(8) Share-based Compensation Plans
The Company’s 2018 Equity Incentive Plan (the “2018 Plan”) provided for the grant of incentive stock options intended to qualify under Section 422 of the IRC, nonstatutory stock options, restricted stock, unrestricted stock and other equity-based awards, such as stock appreciation rights, and stock units including restricted stock units for up to approximately 13.9 million shares of the Company’s common stock (subject to adjustment in the event of stock splits and other similar events). As of December 31, 2023, no shares remain available for issuance under the 2018 Plan.
In connection with the Company’s initial public offering (“IPO”), MiNK’s board of directors adopted the MiNK Therapeutics, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Code, nonstatutory stock options, restricted stock, unrestricted stock and other equity-based awards, for an initial share pool of approximately 6.1 million shares of the Company’s common stock (subject to adjustment in the event of stock splits and other similar events). The initial share pool will automatically increase on January 1st of each year from 2024 to 2031 by the lesser of (i) four percent of the number of shares of the Company’s common stock outstanding as of the close of business on the immediately preceding December 31st and (ii) the number of shares determined by the Company’s board of directors on or prior to such date for such year. In January 2022 and 2023, the 2021 Plan share pool increased by approximately 1.3 million shares and 1.4 million shares, respectively. As of December 31, 2023, there were approximately 8.8 million shares reserved for issuance under the 2021 Plan.
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In connection with the Company’s IPO, MiNK’s board of directors adopted the MiNK Therapeutics, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees the opportunity to acquire the Company’s common stock in a program designed to comply with Section 423 of the Code. There are approximately 1.0 million shares reserved for issuance under the ESPP, plus an automatic annual increase on January 1st of each year from 2024 to 2031 equal to the lesser of (i) one percent of the number of shares of the Company’s common stock outstanding as of the close of business on the immediately preceding December 31st and (ii) the number of shares determined by the Company’s board of directors on or prior to such date for such year, up to a maximum of approximately 3.5 million shares in the aggregate.
The Company primarily uses the Black-Scholes option pricing model to value options granted to employees and non-employees, as well as options granted to members of the Company’s Board of Directors. All stock option grants have 10-year terms, service conditions, and generally vest ratably over a 3 or 4-year period.
The fair value of each option granted during the period was estimated on the date of grant using the following weighted average assumptions:
Expected volatility 92 % 81 %
Expected term in years 6 6
Risk-free interest rate 3.6 % 1.7 %
Dividend yield 0 % 0 %
The expected term of stock options granted is based on historical data and other factors and represents the period of time that stock options are expected to be outstanding prior to exercise. The risk-free interest rate is based on U.S. Treasury strips with maturities that match the expected term on the date of grant.
A summary of option activity for 2023 is presented below:
The weighted average grant-date fair values of options granted during the years ended December 31, 2023 and 2022, was $1.78 and $2.20, respectively. During both 2023 and 2022, all options were granted with exercise prices equal to the market value of the underlying shares of common stock on the grant date.
The aggregate intrinsic value in the table above represents the difference between the Company's closing stock price on the last trading day of fiscal 2023 and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on December 31, 2023 (the intrinsic value is considered to be zero if the exercise price is greater than the closing stock price). This amount changes based on the fair market value of the Company's stock. The total intrinsic value of options exercised during the year ended December 31, 2023, determined on the dates of exercise, was approximately $0.2 million.
As of December 31, 2023, there was $3.6 million of unrecognized share-based compensation expense related to stock options granted to employees, consultants and directors which, if all milestones are achieved on outstanding performance based awards, will be recognized over a weighted average period of 1.9 years. For awards with performance conditions, expense is recognized if the achievement of underlying performance conditions is deemed probable.
A summary of non-vested stock activity for 2023 is presented below:
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NonvestedShares WeightedAverageGrant DateFair Value
As of December 31, 2023, there was $0.8 million of unrecognized share-based compensation expense related to these non-vested shares which will be recognized over a weighted average period of 4.7 years. The total intrinsic value of shares vested during the year ended December 31, 2023 was $1.7 million.
The Company issues new shares upon option exercises the vesting of non-vested stock and purchases under the ESPP. During the years ended December 31, 2023 and 2022, 105,187 shares and 258,648 shares, respectively, were issued as a result of stock option exercises. During the years ended December 31, 2023 and 2022, 175,196 shares and 60,595 shares, respectively, were issued as a result of the vesting of non-vested stock. During the year ended December 31, 2023, 39,340 shares were issued under the ESPP. Additionally, during the years ended December 31, 2023 and 2022, 603,830 shares and 125,199 shares were issued as payment for certain employee bonuses, with 205,879 shares and 43,665 of those shares being withheld to cover taxes, resulting in a net share issuance of 397,951 and 81,534, respectively.
Stock based compensation expense also includes expense related to awards granted to employees of the Company from the Agenus 2019 Equity Incentive Plan. The impact on the Company’s results of operations from share-based compensation for the year ended December 31, 2023 and 2022, was as follows (in thousands):
Research and development $ 541 $ 435
Total share-based compensation expense $ 3,830 $ 3,027
(9) Research and Development Agreement
In December 2018, the Company entered into an agreement with the Belgium Walloon Region Government ("Walloon Region") in which the Walloon Region agreed to provide a grant of €1.3 million and a repayable advance of €8.3 million for the development of one of the Company’s research programs. During 2020, the Company discontinued research efforts related to this program.
Other current liabilities of $2.3 million and $2.2 million as of December 31, 2023 and December 31, 2022, respectively, represent the remaining amount of the advance received.
In 2022, the Company received notice that the Walloon Region had obtained a default judgment seeking repayment of approximately $2.3 million of the advance based upon the Company allegedly not providing required notification that research and operations in the region were discontinued. In the year ended December 31, 2022, the Company reduced the recorded liability from the prior total of all amounts received under the advance from the Walloon Region, to the $2.3 million repayment that would be due based on the default judgment, and recorded a gain of approximately $2.7 million in “other income (expense), net” on its consolidated statement of operations.
(10) Related Party Transactions
Until the completion of its IPO, the Company relied on Agenus for all of its working capital requirements. For the periods presented, certain of the Company’s operations were fully integrated with Agenus, including, but not limited to, corporate functions such as finance, human resources, information technology and legal functions. The Company’s consolidated financial statements reflect all costs of doing business related to these operations.
In September 2021, the Company entered into an Intellectual Property Assignment and License Agreement with Agenus (the “New Assignment and License Agreement”), upon which the prior intercompany agreement between Agenus and MiNK was terminated. Pursuant to the New Assignment and License Agreement, Agenus assigned to the Company certain patent rights and know-how related to its iNKT cell platform, product candidates and other patents and know-how related to its business. In addition to the patent rights assigned to the Company by Agenus, the Company also received an exclusive, royalty-free, sublicensable license to research,
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develop, manufacture and commercialize certain licensed technology in the field. The New Assignment and License Agreement further provides for the Company to grant Agenus a field-limited, non-exclusive, royalty-free license under the assigned patent rights, subject to MiNK’s discretion and provided such access would not reasonably result in a disruption of planned MiNK activities. Agenus has also agreed to provide the Company with Agenus’ biological material upon written request in order for the Company to use such material in its development activities of a combination therapy. Agenus may withhold the transfer of biological material, including, but not limited to, checkpoint modulating antibodies, for various reasons, including if such transfer would reasonably result in a disruption of planned Agenus activities. For any materials Agenus does share with the Company, the parties have agreed to enter into a separate agreement governing the transfer and providing for joint ownership of the data. Agenus has agreed that during the full term of the New Assignment and License Agreement, and for three years thereafter, it will not develop, manufacture or commercialize an iNKT cell therapy, directly or indirectly by transferring such technology. The Company has the sole responsibility to develop, manufacture and commercialize products under this New Assignment and License Agreement. The Company may terminate the New Assignment and License Agreement without cause upon 90 days’ prior written notice to Agenus. Either party may terminate if they believe there has been a material breach which has not been cured within 90 days (or 45 days for breach of payment obligations) of receiving such notice.
Effective April 1, 2022, the Company entered into an Amended and Restated Intercompany Services Agreement (the “New Intercompany Agreement”) with Agenus, which amended and restated the Intercompany General & Administrative Agreement between the Company and Agenus dated September 10, 2021 (the “Prior Intercompany Agreement”). Under the New Intercompany Agreement, Agenus provides the Company with certain general and administrative support, including, without limitation, financial, facilities management, human resources and information technology administrative support (the “Agenus Services”), and the Company and Agenus provide each other with certain research and development services (the “R&D Services”) and other support services, including legal and regulatory support (the “Shared Services”). The Company is required to pay 10% of Agenus’ costs related to the Agenus Services, and the costs of R&D Services are based upon pass-through costs related to such services plus an allocation of the costs of the employees performing the services. No payment will be due from either party for the Shared Services, provided that the services provided by each party are proportional in scope and volume. The Company is also entitled to use Agenus’ business offices and laboratory space and equipment (inclusive of a cGMP site) in exchange for the Company contributing a proportionate payment for the use of such facilities and equipment, and the Company will be covered by certain Agenus insurance policies, subject to certain conditions, including the Company paying the cost of such coverage. Either party may terminate the New Intercompany Agreement upon 60 days’ prior written notice and individual services upon 30 days’ prior written notice.
Allocated Agenus services primarily include payroll related expenses, facility costs, insurance and stock-based compensation, and are included in the accompanying financial statements based on certain estimates and allocations described above. Under the Prior Intercompany Agreement, the allocation methods primarily included time devoted to activities and headcount-based allocations. Agenus business services and occupancy costs were allocated to the Company based on the Company’s headcount as a percentage of Agenus’ and the Company was required to pay 105% of Agenus’ costs for these business services and occupancy costs. Research services were charged between the entities based on hours recorded by Agenus employees as time spent on specific projects, applied to hourly wage rates, and the Company paid 110% of Agenus’ costs for these research services. As such, these allocations may not be indicative of the actual amounts that would have been recorded had the Company operated as an independent, publicly traded company for the periods presented.
Allocation of Agenus Services, net, of $1.0 and $2.0 million for the years ended December 31, 2023 and 2022, respectively, is included in Operating expenses in the Company’s statement of operations and comprehensive loss and Due to related parties, of $11.2 million as of December 31, 2023, in the Company’s consolidated balance sheet. Agenus has agreed to not require repayment of this balance prior to March 31, 2025.
In January 2023, the Company's CEO (“Dr. Buell”), became an employee of Agenus in the role of Chairman of the Executive Council. As an employee of Agenus, Dr. Buell is paid $150,000 annually and was granted an option to acquire 750,000 shares of Agenus common stock that vest over a period of four years.
Effective April 12, 2022, the Company entered into a Master Services Agreement with Atlant Clinical Ltd. (“Atlant”), a subsidiary of Agenus, to provide clinical trial support services to the Company, including an eTMF platform, medical monitoring and data manager services. The Company’s Audit and Finance Committee approved the engagement under its related-party transactions policy for up to $250,000 in services. As of December 31, 2023, the Company had entered into work orders with Atlant totaling approximately $167,000, plus out of pocket expenses which are to pass through to Company at cost. For the years ended December 31, 2023 and 2022, approximately $30,500 and $106,500 related to these services is included in “Research and development” expense in the Company’s consolidated statements of operations.
Dr. Buell's spouse is a partner in the law firm of Wolf, Greenfield & Sachs, P.C. (“Wolf Greenfield”), which provided legal services to the Company during the years ended December 31, 2023 and 2022, and continues to do so. In the years ended December 31, 2023 and
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2022, the Company expensed Wolf Greenfield fees totaling approximately $225,000 and $343,000, respectively. Dr. Buell’s spouse does not receive direct compensation from the fees paid to Wolf Greenfield by the Company and the fees paid by the Company to Wolf Greenfield in the period was an insignificant amount of Wolf Greenfield’s revenues. The Company’s Audit and Finance Committee approved these services under its related-party transactions policy.
(11) Contingencies
The Company may currently be, or may become, a party to legal proceedings. While the Company currently believes that the ultimate outcome of any of these proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity, litigation is subject to inherent uncertainty.
(12) Benefit Plans
The Company’s employees are eligible to participate in the Agenus Inc. 401(k) Savings Plan in the United States and a defined contribution Group Personal Pension Plan in the United Kingdom (the “Plans”) for all eligible employees, as defined in the Plans. Participants may contribute a portion of their compensation, subject to a maximum annual amount, as established by the applicable taxing authority. Each participant is fully vested in his or her contributions and related earnings and losses. For the years ended December 31, 2023 and 2022, the Company expensed $172,000 and $131,000, respectively, related to the discretionary contribution to the Plans.
(13) Subsequent Events
Convertible Note
On February 12, 2024, the Company and Agenus entered into a Convertible Promissory Note Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company issued to Agenus a Convertible Promissory Note in the principal amount of up to $5.0 million (the “Note”). The Purchase Agreement sets forth the terms and conditions, including representations and warranties, for the Company’s issuance and sale of the Note to Agenus.
The Company may draw down on the principal amount of the Note from time to time with Agenus’s consent in any increment, either in the form of advancements or payments made by Agenus on the Company’s behalf. The Note carries an annual rate of interest rate of 2% (the “Interest Rate”) that accrues from the date funds are paid or advanced by Agenus to the Company. Interest shall accrue and not be payable until converted or paid in connection with the repayment in full of the principal amount of the Note. The Note provides that the Company will pay Agenus on demand the principal amount outstanding, together with any unpaid interest, on or after January 1, 2026. In the event of a qualified financing event, as described in the Note, at Agenus’s election, the Company must pay the principal amount outstanding and any unpaid interest, either in full or in the form of equity securities. In March 2024 MiNK received $5.0 million from Agenus and the Note was fully drawn.
Nasdaq MVLS Notice
On February 23, 2024, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying it that for the previous 30 consecutive trading days the Company’s Minimum Value of Listed Securities (“MVLS”) was less than $35.0 million, as required by Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”). Nasdaq has provided the Company with 180 calendar days, or until August 21, 2024, to regain compliance. To regain compliance, the Company’s MVLS must meet or exceed $35.0 million for a minimum of ten consecutive trading days.
In the event the Company does not regain compliance with the MVLS Rule prior to the expiration of the compliance period, it will receive written notification that its securities are subject to delisting. At that time, the Company may appeal the delisting determination to a Hearings Panel. The Company will continue to monitor its MVLS and consider its available options to regain compliance with the MVLS Rule. However, there can be no assurance that the Company will be able to regain compliance with the MVLS Rule.
Nasdaq Minimum Bid Price Notice
On February 26, 2024, the Company received a letter (the “Minimum Bid Price Notice”) from Nasdaq notifying the Company that its common stock, $0.00001 par value per share (the “Common Stock”), failed to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) based upon the closing bid price of the Common Stock for the 30 consecutive trading days prior to the date of the Minimum Bid Price Notice from Nasdaq.
The Company has been provided an initial compliance period of 180 calendar days, or until August 26, 2024, to regain compliance with the Minimum Bid Price Rule which requires that the closing bid price of the Common Stock meet or exceed $1.00 per share for a minimum of ten consecutive trading days.
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If the Company is unable to regain compliance with the Minimum Bid Price Rule, the Company may be eligible for an additional 180-day compliance period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Rule, and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period. If the Company does not qualify for the second compliance period or fails to regain compliance during the second 180-day period, Nasdaq will notify the Company of its determination to delist the Common Stock, at which point the Company would have an opportunity to appeal the delisting determination to a Hearings Panel.
The Company will continue to monitor the bid price of the Common Stock and consider its available options to regain compliance with the Minimum Bid Price Rule. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Rule.
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Chief Executive Officer and our Principal Financial Officer concluded that our disclosure controls and procedures were functioning effectively as of the end of the period covered by this Annual Report on Form 10-K to provide reasonable assurance that the Company can meet its disclosure obligations.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
As a non-accelerated filer and an emerging growth company, management’s assessment of internal control over financial reporting was not subject to attestation by our independent registered public accounting firm.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Trading Plans of Our Directors and Officers
During the quarter ended December 31, 2023, none of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each item is defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2023.
Item 11. Executive Compensation.
The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2023.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2023.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2023.
Item 14. Principal Accounting Fees and Services.
The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2023.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(1)
The consolidated financial statements are listed under Item 8 of this Annual Report on Form 10-K.
(2)
The financial statement schedules required under this Item and Item 8 are omitted because they are not applicable, or the required information is shown in the consolidated financial statements or the footnotes thereto.
(3)
Exhibits:
ExhibitNumber Description
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21.1* Subsidiaries of MiNK Therapeutics, Inc.
23.1* Consent of KPMG LLP, independent registered public accounting firm.
101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
+ Indicates management contract or compensatory plan.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
MiNK Therapeutics, Inc.
Date: March 21, 2024 By: /s/ Jennifer S. Buell, Ph.D.
Jennifer S. Buell, Ph.D.
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name Title Date
Jennifer S. Buell, Ph.D. (Principal Executive Officer)
Christine M. Klaskin Accounting Officer)
/s/ Garo H. Armen, Ph.D. Chairman of the Board of Directors March 21, 2024
Garo H. Armen, Ph.D.
/s/ Peter Behner Director March 21, 2024
Peter Behner
/s/ Brian Corvese Director March 21, 2024
Brian Corvese
/s/ Barbara Ryan Director March 21, 2024
Barbara Ryan
/s/ Ulf Wiinberg Director March 21, 2024
Ulf Wiinberg
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