Note 11 - Subsequent Events

9 Months Ended

Sep. 30, 2014

11.	Subsequent Events

Reverse stock split

On October 1, 2014, the Board of Directors and, on October 3, 2014, the stockholders approved a 1-for-15.87 reverse stock split of the Company's Common Stock and a proportional adjustment to the existing conversion ratios for each series of preferred stock. The effective date of the reverse stock split was October 6, 2014. Stockholders entitled to fractional shares as a result of the reverse stock split received a cash payment in lieu of receiving fractional shares upon the closing of the IPO. All share, share equivalent and per share amounts presented herein have been adjusted to reflect the reverse stock split. The ratios by which shares of preferred stock are convertible into shares of Common Stock have been adjusted to reflect the effects of the reverse stock split. Shares of Common Stock reserved for future issuance have been presented on an as converted basis and the consolidated financial statements disclose the adjusted conversion ratios.

Initial Public Offering

On October 21, 2014, the Company’s registration statement on Form S-1 (File No 333-198777) was declared effective for its IPO, pursuant to which the Company registered the offering and sale of 7,026,500 shares of common stock (including 916,500 shares upon exercise of an option by the underwriters) at a public offering price of $10 per share for an aggregate offering of $70.3 million. On October 27, 2014, we completed the sale of 6,110,000 shares of Common Stock and on November 21, 2014, we completed the sale of 916,500 shares of our Common Stock upon the exercise of an option by the Company’s underwriters to purchase additional shares.

As a result of the IPO, including the exercise of the underwriter’s over-allotment, the Company received net proceeds of approximately $62.5 million from the sale of 7,026,500 shares of common stock, after deducting approximately $7.7 million of underwriting discounts and commissions and estimated offering-related expenses payable by the Company.

Immediately prior to the closing of the Company’s IPO, 498,889 shares of Common Stock were issued upon the exercise of warrants with a weighted-average exercise price of $4.60 per share.

Upon the closing of the Company’s IPO, all outstanding shares of the Company’s preferred stock were automatically converted into an aggregate of 8,651,805 shares of its Common Stock and the Series D investors’ rights and obligations were either exercised or extinguished.

2014 Equity Incentive and Stock Purchase Plans

On August 21, 2014, the Board of Directors adopted the Proteon Therapeutics, Inc. 2014 Incentive Plan, the 2014 Employee Stock Purchase Plan and the 2006 Equity Incentive Plan, as amended and restated, and on October 3, 2014, the stockholders approved such plans.

The 2014 Equity Incentive Plan, which became effective immediately prior to effectiveness of the Company's IPO, provides for the grant of incentive stock option and nonstatutory stock options, stock appreciation rights, restricted stock and stock unit awards, performance units, stock grants and qualified performance-based awards. The number of shares initially reserved for issuance under the 2014 Equity Incentive Plan is 704,000 shares of Common Stock and will be increased each January 1 starting in 2015 by an amount equal to the lesser of (i) four percent (4%) of our outstanding Common Stock on a fully diluted basis as of the end of our immediately preceding fiscal year, and (ii) any lower amount determined by our Board of Directors prior to each such January 1.

The 2014 Employee Stock Purchase Plan authorizes the issuance of up to 140,500 shares of Common Stock. The number of shares will be increased each January 1, commencing on January 1, 2015 and ending on (and including) January 1, 2024, by an amount equal to the lesser of (i) one percent (1%) of outstanding shares as of the end of the immediately preceding fiscal year, (ii) 281,000, and (iii) any lower amount determined by our Board of Directors prior to each such January 1.