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STOCKHOLDERS' EQUITY
3 Months Ended
Mar. 31, 2017
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY

Preferred Stock

 

Our amended and restated certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, $0.001 par value, with rights senior to those of our common stock, issuable in one or more series. Upon issuance, we can determine the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock.

 

Common Stock

 

Our amended and restated certificate of incorporation authorizes the issuance of up to 150,000,000 shares of $0.001 par value common stock.

 

In December 2014, we filed a shelf registration statement on Form S-3 (the "2015 S-3"), which was declared effective in January 2015. Under the 2015 S-3, the Company may sell up to a total of $250 million of its securities. In connection with the 2015 S-3, we amended our 2013 At-the-Market Issuance Sales Agreement with MLV & Co. LLC (the "2015 ATM") such that we may issue and sell additional shares of our common stock, having an aggregate offering price of up to $175.0 million, from time to time through MLV & Co. LLC ("MLV") and FBR Capital Markets & Co. ("FBR", each of MLV and FBR individually an "Agent" and collectively the "Agents"), acting as the sales agents. Under the 2015 ATM we pay the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Agents.

 

During the three months ended March 31, 2017, we sold a total of 3,104,253 shares of common stock under the 2015 ATM for total gross proceeds of approximately $31.6 million at an average selling price of $10.18 per share, resulting in net proceeds of approximately $31.0 million after deducting commissions and other transaction costs.

 

On March 9, 2017, we announced the pricing of an underwritten public offering of 5,128,206 shares of our common stock (plus a 30-day underwriter option to purchase up to an additional 769,230 shares of common stock, which was exercised) at a price of $9.75 per share. Net proceeds from this offering, including the overallotment, were approximately $54 million, net of underwriting discounts and offering expenses of approximately $3.5 million. The offering closed on March 14, 2017.

 

The 2015 S-3 is currently our only active shelf registration statement. After deducting shares already sold, including under the 2015 ATM, there is approximately $88.2 million of common stock that remains available for sale under the 2015 S-3. We may offer the securities under the 2015 S-3 from time to time in response to market conditions or other circumstances if we believe such a plan of financing is in the best interests of our stockholders. We believe that the 2015 S-3 provides us with the flexibility to raise additional capital to finance our operations as needed.

 

Equity Incentive Plans

 

The TG Therapeutics, Inc. Amended and Restated 2012 Incentive Plan (“2012 Incentive Plan”) was approved by stockholders in June 2015. As of March 31, 2017, no options were outstanding and up to an additional 2,180,005 shares may be issued under the 2012 Incentive Plan.

 

Effective as of January 1, 2017, we entered into an amendment (the “Amendment”) to the employment agreement entered as of December 15, 2011 (together with the Amendment, the “Employment Agreement”) with Michael S. Weiss, our Executive Chairman and interim Chief Executive Officer and President of the Company. Under the Amendment, Mr. Weiss will remain as Chief Executive Officer and President, removing the interim status. Simultaneously, we entered into a Strategic Advisory Agreement (the “Advisory Agreement”) with Caribe BioAdvisors, LLC (the “Advisor”) owned by Mr. Weiss to provide the services of Mr. Weiss as Chairman of the Board and as Executive Chairman. As part of the Amendment, Mr. Weiss also agreed to forfeit 3,381,866 restricted shares previously granted under the Employment Agreement that were predominantly subject to time-based vesting over the next three years. Simultaneously, (i) Mr. Weiss was issued 418,371 restricted shares under the Employment Agreement that vest in 2018 and 2019 and (ii) the Advisor was issued 2,960,000 restricted shares under the Advisory Agreement that vest on market capitalization thresholds ranging from $375 million to $750 million. Collectively, Mr. Weiss and the Advisor were granted fewer shares than Mr. Weiss forfeited. In accordance with GAAP, there was no incremental stock compensation expense recognition as a result of the modification.

 

Restricted Stock

 

Certain employees, directors and consultants have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted share activity for the three months ended March 31, 2017:

 

    Number of Shares     Weighted Average Grant Date Fair Value  
Outstanding at December 31, 2016     8,642,055     $ 7.20  
Granted     111,254       4.80  
Vested     (3,629,798 )     5.10  
Forfeited     (4,495 )     4.65  
Outstanding at March 31, 2017     5,119,016     $ 6.21  

 

Total expense associated with restricted stock grants was approximately $6.0 million and $1.7 million during the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there was approximately $9.6 million of total unrecognized compensation cost related to unvested time-based restricted stock, which is expected to be recognized over a weighted average period of 1.4 years. This amount does not include, as of March 31, 2017, 305,000 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones; and 2,397,583 shares of restricted stock outstanding issued to non-employees, the expense for which is determined each reporting period at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached for milestone awards, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date.

 

Warrants

 

The following table summarizes warrant activity for the three months ended March 31, 2017:

 

    Warrants     Weighted average exercise price     Aggregate Intrinsic Value  
Outstanding at December 31, 2016     913,381     $ 2.41     $ 1,961,403  
Issued     --       --          
Exercised     (887,585 )     2.41          
Expired     (25,796 )     --          
Outstanding at March 31, 2017     --     $ --     $ --  

 

Stock-Based Compensation

 

We did not grant any stock options during the three months ended March 31, 2017 and 2016.

 

The following table summarizes stock-based compensation expense information about restricted stock and stock options for the three months ended March 31, 2017 and 2016:

 

    Three months ended March 31,  
    2017     2016  
Stock-based compensation expense associated with restricted stock   $ 5,995,455     $ 1,698,965  
    $ 5,995,455     $ 1,698,965