STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2019

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 May 2017, we filed a shelf registration statement on Form S-3 (the "2017 S-3"), which was declared effective in June 2017, replacing the 2015 S-3. Under the 2017 S-3, the Company may sell up to a total of $300 million of its securities. In connection with the 2017 S-3, we entered into an At-the-Market Issuance Sales Agreement (the "2017 ATM") with Jefferies LLC, Cantor Fitzgerald & Co., FBR Capital Markets & Co., SunTrust Robinson Humphrey, Inc., Raymond James & Associates, Inc., Ladenburg Thalmann & Co. Inc. and H.C. Wainwright & Co., LLC (each a "2017 Agent" and collectively, the "2017 Agents"), relating to the sale of shares of our common stock. Under the 2017 ATM we pay the 2017 Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.

In March 2019, we completed an underwritten public offering of 4,100,000 shares of our common stock (plus a 30-day underwriter overallotment option to purchase up to an additional 615,000 shares of common stock, which was exercised), at a price of $5.87 per share. Proceeds from this offering, including the overallotment, after underwriting discounts and offering expenses were approximately $27.7 million.

Subsequent to the first quarter, through May 10, 2019, we sold an aggregate of 3,030,611 shares of common stock pursuant to the 2017 ATM for total gross proceeds of approximately $24.6 million at an average selling price of $8.11 per share, resulting in net proceeds of approximately $24.2 million after deducting commissions and other transactions costs.

The 2017 S-3 is currently our only active shelf registration statement. After deducting shares already sold there is approximately $84.2 million of common stock that remains available for sale under the 2017 S-3. We may offer the securities under the 2017 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 2017 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 2018. As of March 31, 2019, 5,539,620 shares of restricted stock and 2,565,310 options were outstanding and up to an additional 2,612,431 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 into as of December 15, 2011 (together with the Amendment, the “Employment Agreement”) with Michael S. Weiss, our Executive Chairman and Chief Executive Officer and President. 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 vested on market capitalization thresholds ranging from $375 million to $750 million. In accordance with GAAP, there was no incremental stock compensation expense recognition as a result of the modification.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2019:

	Number of shares			Weighted-average exercise price		Weighted-average Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2018		1,916,900		$	6.50		9.75	$	--
Granted		715,000			6.90
Exercised		--			--
Forfeited		(66,590	)		6.80
Expired		--			--
Outstanding at March 31, 2019		2,565,310		$	6.61		9.63	$	5,800,421
Expected to vest at March 31, 2019		2,565,310		$	6.61		9.63	$	5,800,421
Exercisable at March 31, 2019		--		$	--		--	$	--

Total expense associated with the stock options was approximately $0.7 million and zero during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the stock options outstanding include options granted to both employees and non-employees which are both time-based and milestone-based. Stock-based compensation for milestone-based options will be recorded if and when a milestone occurs.

The fair value of the Company's option awards were estimated using the assumptions below:

	Three months ended March 31, 2019
Volatility		204.59-291.61
Expected term (in years)		5.0-6.25
Risk-free rate		2.40-2.49	%
Expected dividend yield		--	%

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, 2019:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018		6,095,692		$	8.07
Granted		23,000			12.95
Vested		(511,444	)		8.64
Forfeited		(67,628	)		7.54
Outstanding at March 31, 2019		5,539,620		$	7.95

Total expense associated with restricted stock grants was approximately $1.2 million and $7.3 million during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was approximately $5.6 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 1.43 years. This amount does not include, as of March 31, 2019, 3,003,011 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones. 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 grant date.

Warrants

The following table summarizes warrant activity for the three months ended March 31, 2019:

	Warrants		Weighted- average exercise price		Aggregate Intrinsic Value
Outstanding at December 31, 2018		--	$	--	$	--
Issued		147,058		4.08
Exercised		--		--
Expired		--		--
Outstanding at March 31, 2019		147,058	$	4.08	$	582,350

Stock-Based Compensation

The following table summarizes stock-based compensation expense information about restricted stock and stock options for the three months ended March 31, 2019 and 2018:

	Three months ended March 31,
(in thousands)	2019		2018
Stock-based compensation expense associated with restricted stock	$	1,177	$	7,337
Stock-based compensation expense associated with option grants		705		--
Total	$	1,882	$	7,337