STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2012

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 4 - 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, the Company 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.

In conjunction with the reverse split effected on April 30, 2012 (as discussed in Note 1), all outstanding Company Preferred Stock automatically converted to 9,857,596 shares of Common Stock as of that date.

Common Stock

Our amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of $0.001 par value common stock.

On December 30, 2011, we completed the first closing of the private placement of our securities, issuing 4,929,523 shares of Common Stock at a price per share of $2.25 for total gross proceeds, before placement commissions and expenses, of $11,091,425 (the “2011 Equity PIPE”). Investors also received warrants to purchase 1,232,381 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years.

In 2012, we completed two additional closings of the 2011 Equity PIPE. These closings were held on January 31, 2012, and February 24, 2012. In these closings, the Company issued 695,428 shares of our Company Preferred Stock at a price per share of $20.00 for total gross proceeds, before placement commissions and expenses, of $13,908,560. Each share of Company Preferred Stock was convertible into 8.89 shares of Common Stock; provided that such conversion rights were subject to sufficient available authorized shares of Common Stock. In connection with the reverse stock split effected by the Company on April 30, 2012, all shares of preferred stock issued in the 2011 Equity PIPE were converted to Common Stock. Investors also received warrants to purchase 1,545,396 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years. The shares of Company Preferred Stock and warrants sold in these closings were offered and sold to accredited investors, including members of management, without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(2) of the Securities Act, and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, the securities issued in the offering have not been registered under the Securities Act, and until so registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration. The placement agent received cash commissions equal to 10% of the gross proceeds of the offering, five-year warrants to purchase shares of the Company’s stock equal to 10% of shares sold in the offering, and a non-accountable expense allowance equal to two percent of the gross proceeds of the offering for their expenses.   

Equity Incentive Plans

The TG Therapeutics, Inc. Amended and Restated 2012 Incentive Plan (“2012 Incentive Plan”) was adopted in May 2012. Under the 2012 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to directors, consultants, employees and officers. The 2012 Incentive Plan authorizes grants to purchase up to 6,000,000 shares of authorized but unissued common stock. As of September 30, 2012, up to an additional 2,814,000 shares may be issued under the 2012 Incentive Plan.

A summary of the status of the Company’s stock options as of September 30, 2012 and changes during the period then ended is presented below:

Stock Options

The following table summarizes stock option activity for the nine months ended September 30, 2012:

	Number of shares			Weighted- average exercise price		Weighted- average Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2011		3,379		$	1,315.62		6.39
Granted		46,000			4.40
Exercised		—			—
Forfeited		(2,475	)		720.45
Expired		—			—
Outstanding at September 30, 2012		46,904		$	61.08		9.69	$	—
Vested and expected to vest at September 30, 2012		904		$	2,945.09		1.99	$	—
Exercisable at September 30, 2012		898		$	2,963.46		1.95	$	—

As of September 30, 2012, there was less than $1,000 of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over approximately six months. This amount does not include, as of September 30, 2012, 46,000 non-employee options outstanding which are milestone-based and vest upon certain corporate milestones. Stock-based compensation will be measured and recorded if and when a milestone occurs.

Restricted Stock - Preferred

Certain employees had been awarded restricted Company Preferred Stock. The restricted preferred stock vesting consisted of milestone and time-based vesting. The following table summarizes restricted preferred share activity for the nine months ended September 30, 2012:

	Number of Shares Restricted Series A Preferred Stock(1)			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2011		129,375		$	20.00
Granted		—			—
Vested		—			—
Forfeited
Conversion to restricted common stock		(129,375	)		20.00
Outstanding at September 30, 2012		—		$	—	$	—

⁽¹⁾ The restricted Company Preferred Stock listed in the table above was granted in connection with the Exchange Transaction to certain executives as discussed above. Each share of Company Preferred Stock was convertible into 8.89 shares of the Company’s Common Stock. In conjunction with the reverse split effected on April 30, 2012 (as discussed in Note 1), all outstanding restricted Preferred Stock automatically converted to 1,150,000 shares of restricted Common Stock as of that date.

Restricted Stock - Common

Certain employees, directors and consultants have been awarded restricted Company Common Stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted share activity for the nine months ended September 30, 2012:

	Number of Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2011		—	$	—
Converted preferred stock		1,150,000		2.25
Granted		5,140,000		4.95
Vested		—		—
Forfeited		—		—
Outstanding at September 30, 2012		6,290,000	$	4.46	$	14,152,500

Total expense associated with restricted stock grants (both common and preferred) was $818,090 and $2,178,590 during the three and nine months ended September 30, 2012, respectively. As of September 30, 2012, there was approximately $8,635,000 of total unrecognized compensation cost related to non-vested time based restricted stock, which is expected to be recognized over a weighted-average period of 3.0 years. This amount does not include, as of September 30, 2012, 1,505,000 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones; and 2,505,000 shares of restricted stock outstanding issued to non-employees (see Note 7 for additional information). Milestone based non-cash compensation expense will be measured and recorded if and when a milestone occurs.

Warrants

The following table summarizes warrant activity for the nine months ended September 30, 2012:

	Warrants			Weighted- average exercise price		Aggregate Intrinsic Value
Outstanding at December 31, 2011		2,118,768		$	4.62
Issued		2,163,555			2.31
Exercised		—			—
Expired		(1,503	)		2,739.75
Outstanding at September 30, 2012		4,280,820		$	2.49	$	—

During the nine months ended September 30, 2012, as part of the 2011 Equity PIPE, we issued warrants to purchase up to 1,545,396 shares of our Company Common Stock to investors in the 2011 Equity PIPE, none of which have been exercised as of September 30, 2012. The warrants have an exercise price of $2.25 per warrant share. In addition, we issued to the placement agent in the transaction warrants to purchase up to 618,159 shares of our Company Common Stock at an exercise price of $2.48 per warrant share, none of which have been exercised as of September 30, 2012.

Stock-Based Compensation

The fair value of stock options granted is estimated at the date of grant using the Black-Scholes pricing model. The expected term of options granted is derived from historical data and the expected vesting period. Expected volatility is based on the historical volatility of our common stock. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. We have assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future.

The following table summarizes stock-based compensation expense information about stock options and restricted stock for the three and nine months ended September 30, 2012:

	Three months ended September 30, 2012		Nine months ended September 30, 2012
Stock-based compensation expense associated with restricted stock	$	818,090	$	2,178,590
Stock-based compensation expense associated with option grants		—		—
	$	818,090	$	2,178,590