STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2018

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 July 2018, we filed a shelf registration statement on Form S-3 (the “2018 S-3”) pursuant to the Joint Venture and License Option Agreement, dated June 18, 2018, by and between TG Therapeutics, Inc. and Novimmune S.A. (“Novimmune”), pursuant to which we issued 216,294 common shares to Novimmune. The 2018 S-3 was declared effective in July 2018.

During the six months ended June 30, 2018, we sold a total of 7,733,949 shares of common stock under the 2017 ATM for aggregate total gross proceeds of approximately $106.3 million at an average selling price of $13.75 per share, resulting in net proceeds of approximately $104.5 million after deducting commissions and other transactions costs.

Subsequent to the second quarter, from July 1, 2018 through August 7, 2018, we sold an aggregate of 358,000 shares of common stock pursuant to the 2017 ATM for total gross proceeds of approximately $4.7 million at an average selling price of $13.00 per share, resulting in net proceeds of approximately $4.6 million after deducting commissions and other transactions costs.

The 2017 S-3 is currently our only active shelf registration statement, pursuant to which we can issue shares in an offering. After deducting shares already sold there is approximately $145.9 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. Pursuant to this amendment, 6,000,000 shares were added to the 2012 Incentive Plan. As of June 30, 2018, 560,000 options were outstanding and up to an additional 4,654,278 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 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 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 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. We granted 560,000 and zero stock options during the six months ended June 30, 2018 and 2017, respectively.

The following table summarizes stock option activity for the three months ended June 30, 2018:

	Number of shares		Weighted- average exercise price		Weighted- average Contractual Term		Aggregate Intrinsic Value
					(in years)
Outstanding at December 31, 2017		--	$	--		--	$	--
Granted		560,000		11.56
Exercised		--		--
Forfeited		--		--
Expired		--		--
Outstanding at June 30, 2018		560,000	$	11.56		9.65	$	897,250
Exercisable at June 30, 2018		--	$	11.56		--	$	--

As of June 30, 2018, the stock options outstanding include options granted to both employees and non-employees which are milestone-based and vest upon certain corporate milestones. Stock-based compensation will be recorded if and when a milestone occurs.

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 six months ended June 30, 2018:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017		6,321,643		$	7.17
Granted		1,420,511			13.32
Vested		(1,521,550	)		9.46
Forfeited		(130,661	)		8.30
Outstanding at June 30, 2018		6,089,943		$	8.01

Total expense associated with restricted stock grants was approximately $4.3 million and $1.5 million during the three months ended June 30, 2018 and 2017, respectively, and $11.6 million, and $7.5 million during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, there was approximately $11.0 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 1.2 years. The unrecognized compensation amount does not include, as of June 30, 2018, 1,128,011 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones; and 2,224,167 shares of restricted stock outstanding issued to non-employees, the expense for which is determined each reporting period at the measurement date. The expense for non-employee awards is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date.