TG THERAPEUTICS, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS TG Therapeutics, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2020 2019 ​ ​ (Unaudited) ​ (Note 1) Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 254,154 ​ $ 112,637 ​ Short-term investment securities ​ — ​ 27,798 ​ Prepaid research and development ​ 5,540 ​ 8,105 ​ Other current assets ​ 641 ​ 611 ​ Total current assets ​ 260,335 ​ 149,151 ​ Restricted cash ​ 1,257 ​ 1,251 ​ Leasehold interest, net ​ 2,104 ​ 2,129 ​ Equipment, net ​ 378 ​ 282 ​ Right-of-use-assets ​ ​ 8,983 ​ ​ 9,402 ​ Goodwill ​ 799 ​ 799 ​ Total assets ​ $ 273,856 ​ $ 163,014 ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ ​ Current liabilities: ​ ​ ​ Accounts payable and accrued expenses ​ $ 34,659 ​ $ 30,041 ​ Other current liabilities ​ ​ 21,735 ​ ​ 48,994 ​ Loan payable – current portion ​ ​ 14,590 ​ ​ — ​ Lease liability – current portion ​ ​ 1,614 ​ ​ 1,616 ​ Accrued compensation ​ 5,072 ​ 3,798 ​ Total current liabilities ​ 77,670 ​ 84,449 ​ Deferred revenue, net of current portion ​ 648 ​ 762 ​ Long-term debt ​ ​ 15,074 ​ ​ 28,970 ​ Lease liability – non-current ​ ​ 9,806 ​ ​ 10,218 ​ Total liabilities ​ 103,198 ​ 124,399 ​ Commitments and contingencies ​ ​ ​ Stockholders’ equity: ​ ​ ​ Common stock, $ 0.001 par value per share ( 150,000,000 shares authorized, 128,959,861 and 109,425,243 shares issued, 128,918,552 and 109,383,934 shares outstanding at September 30, 2020 and December 31, 2019, respectively) ​ 129 ​ 109 ​ Additional paid-in capital ​ 1,063,142 ​ 739,956 ​ Treasury stock, at cost, 41,309 shares at September 30, 2020 and December 31, 2019 ​ ( 234 ) ​ ( 234 ) ​ Accumulated deficit ​ ( 892,379 ) ​ ( 701,216 ) ​ Total stockholders’ equity ​ 170,658 ​ 38,615 ​ Total liabilities and stockholders’ equity ​ $ 273,856 ​ $ 163,014 ​ ​ The accompanying notes are an integral part of the condensed consolidated financial statements. ​ 6 Table of Contents TG Therapeutics, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ 2020 2019 2020 2019 ​ ​ ​ ​ ​ License revenue ​ $ 38 ​ $ 38 ​ $ 114 ​ $ 114 ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ ​ Research and development: ​ ​ ​ ​ Noncash stock expense associated with in-licensing agreements ​ — ​ — ​ — ​ 100 Noncash compensation ​ 4,618 ​ 1,482 ​ 8,150 ​ 4,323 Other research and development ​ 45,846 ​ 56,503 ​ 114,785 ​ 118,814 Total research and development ​ 50,464 ​ 57,985 ​ 122,935 ​ 123,237 ​ ​ ​ ​ ​ ​ General and administrative: ​ ​ ​ ​ ​ Noncash compensation ​ 23,712 ​ 593 ​ 38,618 ​ 1,391 Other general and administrative ​ 11,584 ​ 2,321 ​ 25,373 ​ 6,580 Total general and administrative ​ 35,296 ​ 2,914 ​ 63,991 ​ 7,971 ​ ​ ​ ​ ​ ​ Total costs and expenses ​ 85,760 ​ 60,899 ​ 186,926 ​ 131,208 ​ ​ ​ ​ ​ Operating loss ​ ( 85,722 ) ​ ( 60,861 ) ​ ( 186,812 ) ​ ( 131,094 ) ​ ​ ​ ​ ​ Other expense (income): ​ ​ ​ ​ Interest expense ​ 1,610 ​ 1,537 ​ 5,038 ​ 3,388 Other income ​ ( 169 ) ​ ( 468 ) ​ ( 687 ) ​ ( 1,183 ) Total other expense, net ​ 1,441 ​ 1,069 ​ 4,351 ​ 2,205 ​ ​ ​ ​ ​ Net loss ​ $ ( 87,163 ) ​ $ ( 61,930 ) ​ $ ( 191,163 ) ​ $ ( 133,299 ) ​ ​ ​ ​ ​ Basic and diluted net loss per common share ​ $ ( 0.73 ) ​ $ ( 0.69 ) ​ $ ( 1.70 ) ​ $ ( 1.55 ) ​ ​ ​ ​ ​ Weighted average shares used in computing basic and diluted net loss per common share ​ 119,176,336 ​ 89,667,979 ​ 112,380,784 ​ 85,911,878 ​ The accompanying notes are an integral part of the condensed consolidated financial statements. ​ 7 Table of Contents TG Therapeutics, Inc. Condensed Consolidated Statements of Stockholders’ (Deficit) Equity (in thousands, except share and per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ paid-in ​ Treasury Stock ​ Accumulated ​ ​ ​ ​ ​ Shares ​ Amount ​ capital ​ Shares ​ Amount ​ Deficit ​ Total Balance at January 1, 2019 83,911,855 ​ $ 84 ​ $ 552,531 ​ 41,309 ​ $ ( 234 ) ​ $ ( 528,345 ) ​ $ 24,036 Issuance of restricted stock 23,000 ​ * ​ * ​ — ​ — ​ — ​ — Warrants issued with debt financing ​ — ​ ​ — ​ ​ 993 ​ — ​ ​ — ​ ​ — ​ ​ 993 Forfeiture of restricted stock ( 67,628 ) ​ * ​ * ​ — ​ — ​ — ​ — Issuance of common stock in At-the-Market offerings (net of offering costs of $ 0.2 million) 4,715,000 ​ 5 ​ 27,494 ​ — ​ — ​ — ​ 27,499 Compensation in respect of restricted stock granted to employees, directors and consultants — ​ — ​ 1,882 ​ — ​ — ​ — ​ 1,882 Net loss — ​ — ​ ​ — ​ — ​ ( 35,156 ) ​ ( 35,156 ) Balance at March 31, 2019 88,582,227 ​ ​ 89 ​ ​ 582,900 ​ 41,309 ​ ​ ( 234 ) ​ ​ ( 563,501 ) ​ ​ 19,254 Issuance of restricted stock 1,245,080 ​ 1 ​ ( 1 ) ​ — ​ — ​ — ​ — Forfeiture of restricted stock ( 38,418 ) ​ * ​ * ​ — ​ — ​ — ​ — Issuance of common stock in public offering ​ — ​ ​ — ​ ​ 11 ​ — ​ ​ — ​ ​ — ​ ​ 11 Issuance of common stock in At-the-Market offerings (net of offering costs of $ 0.5 million) 3,616,359 ​ 3 ​ 28,392 ​ — ​ — ​ — ​ 28,395 Compensation in respect of restricted stock granted to employees, directors and consultants — ​ — ​ 1,757 ​ — ​ — ​ — ​ 1,757 Shares issued in connection with in-licensing agreements — ​ — ​ — ​ — ​ — ​ — ​ — Net loss — ​ — ​ — ​ — ​ — ​ ( 36,212 ) ​ ( 36,212 ) Balance at June 30, 2019 93,405,248 ​ ​ 93 ​ ​ 613,059 ​ 41,309 ​ ​ ( 234 ) ​ ​ ( 599,713 ) ​ ​ 13,205 Issuance of restricted stock 318,440 ​ * ​ * ​ — ​ — ​ — ​ — Forfeiture of restricted stock ( 5,334 ) ​ — ​ — ​ — ​ — ​ — ​ — Issuance of common stock in At-the-Market offerings (net of offering costs of $ 0.4 million) 2,943,460 ​ 4 ​ 20,755 ​ — ​ — ​ — ​ 20,759 Compensation in respect of restricted stock granted to employees, directors and consultants — ​ — ​ 2,075 ​ — ​ — ​ — ​ 2,075 Shares issued in connection with in-licensing agreements ​ 8,383 ​ ​ — ​ ​ 100 ​ — ​ ​ — ​ ​ — ​ ​ 100 Net loss — ​ — ​ — ​ — ​ — ​ ( 61,930 ) ​ ( 61,930 ) Balance at September 30, 2019 96,670,197 ​ $ 97 ​ $ 635,989 ​ 41,309 ​ $ ( 234 ) ​ $ ( 661,643 ) ​ $ ( 25,791 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ paid-in ​ Treasury Stock ​ Accumulated ​ ​ ​ ​ ​ Shares ​ Amount ​ capital ​ Shares ​ Amount ​ Deficit ​ Total Balance at January 1, 2020 109,425,243 ​ $ 109 ​ $ 739,956 41,309 ​ $ ( 234 ) ​ $ ( 701,216 ) ​ $ 38,615 Issuance of common stock in connection with exercise of options ​ 19,750 ​ ​ * ​ ​ 80 ​ — ​ ​ — ​ ​ — ​ ​ 80 Issuance of restricted stock 774,300 ​ 1 ​ ( 1 ) — ​ — ​ — ​ — Forfeiture of restricted stock ( 10,000 ) ​ * ​ * — ​ — ​ — ​ — Compensation in respect of restricted stock granted to employees, directors and consultants — ​ — ​ 11,068 — ​ — ​ — ​ 11,068 Net loss — ​ — ​ — — ​ — ​ ( 51,116 ) ​ ( 51,116 ) Balance at March 31, 2020 110,209,293 ​ ​ 110 ​ ​ 751,103 41,309 ​ ​ ( 234 ) ​ ​ ( 752,332 ) ​ ​ ( 1,353 ) Issuance of common stock in connection with exercise of options ​ 3,750 ​ ​ — ​ ​ 16 ​ — ​ ​ — ​ ​ — ​ ​ 16 Issuance of restricted stock 2,208,529 ​ 2 ​ ( 2 ) — ​ — ​ — ​ — Forfeiture of restricted stock ( 41,666 ) ​ * ​ — — ​ — ​ — ​ — Issuance of common stock in public offering (net of offering costs of $ 10.9 million) 9,775,000 ​ 10 ​ 165,032 — ​ — ​ — ​ 165,042 Issuance of common stock in At-the-Market offerings (net of offering costs of $ 1.4 million) 4,535,608 ​ 5 ​ 76,031 — ​ — ​ — ​ 76,036 Compensation in respect of restricted stock granted to employees, directors and consultants — ​ — ​ 7,370 — ​ — ​ — ​ 7,370 Net loss — ​ — ​ — — ​ — ​ ( 52,884 ) ​ ( 52,884 ) Balance at June 30, 2020 126,690,514 ​ ​ 127 ​ ​ 999,550 41,309 ​ ​ ( 234 ) ​ ​ ( 805,216 ) ​ ​ 194,227 Issuance of common stock in connection with exercise of options ​ 9,347 ​ ​ — ​ ​ 38 ​ — ​ ​ — ​ ​ — ​ ​ 38 Issuance of restricted stock 915,000 ​ 1 ​ ( 1 ) — ​ — ​ — ​ — Forfeiture of restricted stock ( 65,000 ) ​ * ​ — — ​ — ​ — ​ — Issuance of common stock in offerings (net of offering costs of $ 10.9 million) — ​ — ​ ( 1 ) — ​ — ​ — ​ ( 1 ) Issuance of common stock in At the Market offering (net of offering costs of $ 2.0 million) 1,410,000 ​ 1 ​ 35,226 — ​ — ​ — ​ 35,227 Compensation in respect of restricted stock and options granted to employees, directors and consultants — ​ — ​ 28,330 — ​ — ​ — ​ 28,330 Net loss — ​ — ​ — — ​ — ​ ( 87,163 ) ​ ( 87,163 ) Balance at September 30, 2020 128,959,861 ​ $ 129 ​ $ 1,063,142 41,309 ​ $ ( 234 ) ​ $ ( 892,379 ) ​ $ 170,658 ​ *Amount less than one thousand dollars ​ The accompanying notes are an integral part of the condensed consolidated financial statements. 8 Table of Contents TG Therapeutics, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ ​ ​ September 30, ​ ​ 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ ​ ​ Net loss ​ $ ( 191,163 ) ​ $ ( 133,299 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ Noncash stock compensation expense ​ 46,768 ​ 5,714 ​ Noncash licensing expense ​ ​ — ​ ​ 100 ​ Depreciation and amortization ​ 105 ​ 72 ​ Amortization of premium on investment securities ​ ( 75 ) ​ ( 209 ) ​ Amortization of debt issuance costs ​ ​ 694 ​ ​ 539 ​ Amortization of leasehold interest ​ ​ 163 ​ ​ 137 ​ Noncash change in lease liability and right-of-use asset ​ ​ 1,364 ​ ​ 1,921 ​ Change in fair value of notes payable ​ 286 ​ 28 ​ Changes in assets and liabilities: ​ ​ ​ ​ Decrease in other current assets ​ ​ 2,398 ​ ​ 2,226 ​ Decrease in accrued interest receivable ​ 105 ​ — ​ Increase (decrease) in accounts payable and accrued expenses ​ 5,893 ​ ( 3,837 ) ​ Decrease in lease liabilities ​ ​ ( 1,360 ) ​ ​ ( 1,129 ) ​ Increase in interest payable ​ ​ 238 ​ ​ 787 ​ (Decrease) increase in other liabilities ​ ( 27,783 ) ​ 24,651 ​ Decrease in deferred revenue ​ ( 114 ) ​ ( 114 ) ​ Net cash used in operating activities ​ ( 162,481 ) ​ ( 102,413 ) ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ Proceeds from maturity of short-term securities ​ 35,250 ​ 22,500 ​ Investment in short-term securities ​ ​ — ​ ​ ( 23,125 ) ​ Investment in held-to-maturity securities ​ ( 7,482 ) ​ — ​ Purchases of equipment ​ ( 202 ) ​ ( 97 ) ​ Net cash provided by (used in) investing activities ​ 27,566 ​ ( 722 ) ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ Proceeds from sale of common stock, net ​ ​ 276,303 ​ ​ 76,664 ​ Proceeds from exercise of options ​ ​ 135 ​ ​ — ​ Proceeds from debt financings ​ ​ — ​ ​ 29,675 ​ Financing costs paid ​ — ​ ( 480 ) ​ Net cash provided by financing activities ​ 276,438 ​ 105,859 ​ ​ ​ ​ ​ NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ​ 141,523 ​ 2,724 ​ ​ ​ ​ ​ ​ CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD ​ 113,888 ​ 43,199 ​ ​ ​ ​ ​ CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD ​ $ 255,411 ​ $ 45,923 ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation to amounts on condensed consolidated balance sheets: ​ ​ ​ Cash and cash equivalents ​ $ 254,154 ​ $ 44,675 ​ Restricted cash ​ 1,257 ​ 1,248 ​ Total cash, cash equivalents and restricted cash ​ $ 255,411 ​ $ 45,923 ​ ​ ​ ​ ​ Cash paid for: ​ ​ ​ Interest ​ $ 3,447 ​ $ 1,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ NONCASH TRANSACTIONS ​ ​ ​ Deferred financing costs ​ $ — ​ $ 988 ​ Warrants issued with debt financing ​ $ — ​ $ 993 ​ Shares issued in connection with in-licensing ​ $ — ​ $ 100 ​ ​ The accompanying notes are an integral part of the condensed consolidated financial statements. 9 Table of Contents TG Therapeutics, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) Unless the context requires otherwise, references in this report to “TG,” “the Company”, “we”, “us” and “our” refer to TG Therapeutics, Inc. and our subsidiaries. NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business We are a biopharmaceutical company dedicated to developing and delivering medicines for patients with B-cell mediated diseases, including chronic lymphocytic leukemia (CLL), non-Hodgkin lymphoma (NHL) and multiple sclerosis (MS). We have developed a robust B-cell directed research and development (R&D) platform for identification of key B-cell pathways of interest and rapid clinical testing. Currently, we have five B-cell targeted drug candidates in clinical development, with the two lead therapies, ublituximab (TG-1101) and umbralisib (TGR-1202), in pivotal trials for CLL and NHL, with ublituximab also in pivotal trials for MS. Ublituximab is a novel anti-CD20 monoclonal antibody (mAb) that has been glycoengineered for enhanced potency. Umbralisib is an oral, once daily, dual inhibitor of PI3K-delta and CK1-epsilon. When used together in combination therapy, ublituximab and umbralisib are referred to as “U2”. Additionally, in early clinical development we have an anti-PD-L1 monoclonal antibody cosibelimab (TG-1501), an oral Bruton’s Tyrosine Kinase (BTK) inhibitor referred to as TG-1701, and an anti-CD47/CD19 bispecific antibody referred to as TG-1801. We also actively evaluate complementary products, technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities. To date, we have not received approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our drug candidates. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or “GAAP”, for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Exchange Act. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019. The accompanying condensed December 31, 2019 balance sheet has been derived from these statements. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. In December 2018, the Company created an Australian corporation, TG Therapeutics AUS Pty Ltd. (“TG AUS”), as a wholly-owned subsidiary. This corporation’s functional currency, the Australian dollar, is also its reporting currency, and its financial statements are translated to U.S. dollars, the Company’s reporting currency, prior to consolidation. The activities of TG AUS result in immaterial currency translation adjustments and, thus, are included in Other Income/Expense on the Company’s condensed consolidated statement of operations. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and all intercompany accounts and transactions have been eliminated in consolidation. Liquidity and Capital Resources We have incurred operating losses since our inception, expect to continue to incur operating losses for the foreseeable future, and may never become profitable. As of September 30, 2020, we have an accumulated deficit of approximately $ 892.4 million. 10 Table of Contents Our major sources of cash have been proceeds from the private placement and public offering of equity securities, as well as debt financings. We have not yet commercialized any of our drug candidates and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become profitable. Our ability to achieve profitability depends on many factors, including our ability to obtain regulatory approval for our drug candidates; successfully complete any post-approval regulatory obligations; and successfully commercialize our drug candidates alone or in partnership. We may continue to incur substantial operating losses even if we begin to generate revenues from our drug candidates. ​ As of September 30, 2020, we had $ 254.2 million in cash and cash equivalents. The Company believes its cash and cash equivalents on hand as of September 30, 2020, along with the additional capital raised in the fourth quarter of 2020 (see Note 5), will provide sufficient liquidity for more than a twelve-month period from the date of filing this Quarterly Report on Form 10-Q. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for our drug candidates. We are dependent upon significant future financing to provide the cash necessary to execute our current operations, including the commercialization of any of our drug candidates. Our common stock is listed on the Nasdaq Capital Market and trades under the symbol TGTX. Recently Issued Accounting Standards In July 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2018-11, “Leases - Targeted Improvements” (“ASU 2018-11”) as an update to ASU 2016-02, Leases (“ASU 2016-02” or “Topic 842”) issued on February 25, 2016. ASU 2016-02 is effective for public business entities for fiscal years beginning January 1, 2019. ASU 2016-02 required companies to adopt the new leases standard at the beginning of the earliest period presented in the financial statements, which is January 1, 2017, using a modified retrospective transition method where lessees must recognize lease assets and liabilities for all leases even though those leases may have expired before the effective date of January 1, 2017. Lessees must also provide the new and enhanced disclosures for each period presented, including the comparative periods. ASU 2018-11 provides an entity with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease standard will continue to be in accordance with Accounting Standard Codification (“ASC”) 840, Leases (“ASC 840”). An entity that elects this additional (and optional) transition method must provide the required ASC 840 disclosures for all periods that continue to be in accordance with ASC 840. The amendments do not change the existing disclosure requirements in ASC 840. ASU 2018-11 was effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with earlier adoption permitted. The Company adopted ASU 2018-11 on January 1, 2019 using a modified retrospective method and has not restated comparative periods. We elected the package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification and our assessment on whether a contract is or contains a lease. The adoption of this guidance resulted in the addition of material balances of right of use assets and lease liabilities to our consolidated balance sheets at January 1, 2019, primarily relating to our lease of office space (see Note 8). The impact to our consolidated statements of operations was not material as a result of this standard. 11 Table of Contents In June 2018, the FASB issued ASU No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 expands the scope of FASB Topic 718, “Compensation – Stock Compensation” (“Topic 718”) to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should only remeasure equity-classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these nonemployee awards at fair value as of the adoption date. The entity must not remeasure assets that are completed. Disclosures required at transition include the nature of and reason for the change in accounting principle and, if applicable, quantitative information about the cumulative effect of the change on retained earnings or other components of equity. ASU 2018-07 was effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption was permitted, but no earlier than an entity’s adoption date of ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company adopted ASU 2018-07 on January 1, 2019. The adoption of ASU 2018-07 did not have a material effect on our consolidated financial statements as of January 1, 2019. The adoption of ASU 2018-07 had no impact on nonemployee performance awards as they are measured based on the outcome that is probable. Other pronouncements issued by the FASB or other authoritative accounting standards with future effective dates are either not applicable or not significant to our condensed consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the applicable reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. Actual results could differ from those estimates. Such differences could be material to the financial statements. Cash and Cash Equivalents We treat liquid investments with original maturities of less than three months when purchased as cash and cash equivalents. Restricted Cash We record cash pledged or held in trust as restricted cash. As of both September 30, 2020 and December 31, 2019, we have approximately $ 1.3 million of restricted cash pledged to secure a line of credit as a security deposit for an Office Agreement (see Note 8). Investment Securities Investment securities at December 31, 2019 consisted of short-term government securities. We classify these securities as held-to-maturity. Held-to-maturity securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest method. A decline in the market value of any investment security below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to operations and a new cost basis for the security is established. Other-than-temporary impairment charges are included in interest and other income (expense), net. Unrealized gains, if determined to be temporary, are included in accumulated other comprehensive income in equity. Dividend and interest income are recognized when earned. 12 Table of Contents Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents and short-term investments with high-credit quality financial institutions. At times, such amounts may exceed federally-insured limits. Revenue Recognition The Company recognizes revenue under ASC 606. The core principle of this revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and ● The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. ​ 13 Table of Contents Research and Development Costs Generally, research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations, or “CROs,” and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. Prepaid research and development in our condensed consolidated balance sheets includes, among other things, certain costs to third party service providers related to development and manufacturing services as well as clinical development. These agreements often require payments in advance of services performed or goods received. Accordingly, as of September 30, 2020 and December 31, 2019, we recorded approximately $ 5.5 million and $ 8.1 million, respectively, in prepaid research and development related to such advance agreements. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation allowance is then created. We, and our subsidiaries, file income tax returns in the U.S. Federal jurisdiction and in various states, as well as in Australia. We have tax net operating loss carryforwards that are subject to examination for a number of years beyond the year in which they were generated for tax purposes. Since a portion of these net operating loss carryforwards may be utilized in the future, many of these net operating loss carryforwards will remain subject to examination. We recognize interest and penalties related to uncertain income tax positions in income tax expense. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. At this time, the Company does not believe that the CARES Act will have a material impact on the Company’s income tax provision for 2020. The Company will continue to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows. 14 Table of Contents Stock-Based Compensation We recognize all stock-based payments to employees and non-employee directors (as compensation for service) as noncash compensation expense in the condensed consolidated financial statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Forfeitures are recognized as they occur. In addition, because some of the options, restricted stock and warrants issued to employees, consultants and other third parties vest upon achievement of certain milestones, the total expense is uncertain. Compensation expense for such awards that vest upon the achievement of milestones is recognized when the achievement of such milestones becomes probable. Basic and Diluted Net Loss Per Common Share Basic net loss per share of our common stock is calculated by dividing net loss applicable to the common stock by the weighted-average number of our common stock outstanding for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either because we incurred a net loss during the period presented or because such potentially dilutive securities were out of the money and the Company realized net income during the period presented. The cumulative amounts of potentially dilutive securities excluded from the calculation were 11,103,701 securities and 8,060,758 securities for the three and nine month periods ended September 30, 2020 and 2019, respectively. The following outstanding shares of potentially dilutive securities were excluded from the computation of net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three and Nine Months Ended ​ ​ ​ September 30, ​ ​ 2020 2019 Unvested restricted stock 8,409,696 5,357,204 Options 2,529,133 2,539,540 Warrants 147,058 147,058 Shares issuable upon note conversion 17,814 16,956 Total 11,103,701 8,060,758 ​ Long-Lived Assets and Goodwill Long-lived assets are reviewed for potential impairment when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized. Goodwill is reviewed for impairment annually, or earlier when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit’s carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to perform impairment tests annually, at December 31, and whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. 15 Table of Contents NOTE 2 CASH AND CASH EQUIVALENTS The following tables summarize our cash and cash equivalents at September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, (in thousands) ​ 2020 ​ 2019 ​ ​ ​ Checking and bank deposits ​ $ 223,613 ​ $ 110,135 Money market funds ​ 30,541 ​ 2,502 Total ​ $ 254,154 ​ $ 112,637 ​ ​ NOTE 3 INVESTMENT SECURITIES Our investments as of December 31, 2019 are classified as held-to-maturity. We had no investment securities as of September 30, 2020. Held-to-maturity investments are recorded at amortized cost. The following table summarize our investment securities at December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ Amortized Gross Gross ​ ​ ​ ​ cost, as ​ unrealized ​ unrealized ​ Estimated fair ​ ​ adjusted ​ holding gains ​ holding losses ​ value Short-term investments: ​ ​ ​ ​ Obligations of domestic governmental agencies (maturing between January 2020 and September 2020) (held-to-maturity) ​ $ 27,798 ​ $ 28 ​ $ — ​ $ 27,826 Total short-term investment securities ​ $ 27,798 ​ $ 28 ​ $ — ​ $ 27,826 ​ ​ NOTE 4 FAIR VALUE MEASUREMENTS We measure certain financial assets and liabilities at fair value on a recurring basis in the condensed consolidated financial statements. The fair value hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: ● Level 1 quoted prices in active markets for identical assets and liabilities; ● Level 2 inputs other than Level 1 quoted prices that are directly or indirectly observable; and ● Level 3 unobservable inputs that are not corroborated by market data. As of September 30, 2020 and December 31, 2019, the fair values of cash and cash equivalents, restricted cash, and notes and interest payable, approximate their carrying values. At the time of our merger (we were then known as Manhattan Pharmaceuticals, Inc.) with Ariston Pharmaceuticals, Inc. (“Ariston”) in March 2010, Ariston issued $ 15.5 million of five-year 5 % notes payable (the “ 5 % Notes”) in satisfaction of several note payable issuances. The 5 % Notes and accrued and unpaid interest thereon are convertible at the option of the holder into common stock at the conversion price of $ 1,125 per share. Ariston agreed to make quarterly payments on the 5 % Notes equal to 50 % of the net product cash flow received from the exploitation or commercialization of Ariston’s product candidates, AST-726 and AST-915. We have no obligations under the 5 % Notes aside from (a) 50 % of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature, discussed above. The cumulative liability to the Ariston subsidiary including accrued and unpaid interest of the 5 % Notes was approximately $ 20.0 million at September 30, 2020 and $ 19.3 million at December 31, 2019. No payments have been made on the 5 % Notes since the merger and through September 30, 2020. 16 Table of Contents In December 2011, we elected the fair value option for valuing the 5 % Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments. As of December 31, 2013, as a result of expiring intellectual property rights and other factors, it was determined that net product cash flows from AST-726 were unlikely. As we have no other obligations under the 5 % Notes aside from the net product cash flows and the conversion feature, the conversion feature was used to estimate the 5 % Notes’ fair value as of September 30, 2020 and December 31, 2019. The assumptions, assessments and projections of future revenues are subject to uncertainties, difficult to predict, and require significant judgment. The use of different assumptions, applying different judgment to inherently subjective matters and changes in future market conditions could result in significantly different estimates of fair value and the differences could be material to our condensed consolidated financial statements. The following tables provide the fair value measurements of applicable financial liabilities as of September 30, 2020 and December 31, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities at fair value as of September 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 % Notes ​ $ — ​ $ — ​ $ 477 ​ $ 477 Total ​ $ — ​ $ — ​ $ 477 ​ $ 477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities at fair value as of December 31, 2019 ​ Level 1 Level 2 Level 3 Total ​ ​ ​ ​ ​ 5 % Notes ​ $ — ​ $ — ​ $ 190 ​ $ 190 Total ​ $ — ​ $ — ​ $ 190 ​ $ 190 ​ The Level 3 amounts above represent the fair value of the 5 % Notes and related accrued interest. The Company’s financial instruments include cash, cash equivalents consisting of money market funds, accounts payable and debt. Cash, cash equivalents, accounts payable and debt are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. The following table summarizes the changes in Level 3 instruments during the nine months ended September 30, 2020: ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ Balance at December 31, 2019 ​ $ 190 Interest accrued on face value of 5 % Notes ​ 730 Change in fair value of Level 3 liabilities ​ ( 443 ) Balance at September 30, 2020 ​ $ 477 ​ The change in the fair value of the Level 3 liabilities is reported in other (income) expense in the accompanying condensed consolidated statements of operations. NOTE 5 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. 17 Table of Contents 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. On September 5, 2019, we filed an automatic “shelf registration” statement on Form S-3 (the “2019 WKSI Shelf”) as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act, which registered an unlimited and indeterminate amount of debt or equity securities for future issuance and sale. The 2019 WKSI Shelf was declared effective in September 2019. In connection with the 2019 WKSI Shelf, we entered into an At-the-Market Issuance Sales Agreement (the “2020 ATM”) with Jefferies LLC, Cantor Fitzgerald & Co. and B. Riley FBR, Inc. (each a “2020 Agent” and collectively, the “2020 Agents”), relating to the sale of shares of our common stock. Under the 2020 ATM, we pay the 2020 Agents a commission rate of up to 3.0 % of the gross proceeds from the sale of any shares of common stock. During the nine months ended September 30, 2020, we sold an aggregate of 5,945,608 shares of common stock pursuant to the 2020 ATM for total gross proceeds of approximately $ 113.3 million at an average selling price of $ 19.06 per share, resulting in net proceeds of approximately $ 111.3 million after deducting commissions and other transactions costs. Subsequent to the end of the third quarter, from October 1, 2020 through November 5, 2020, we sold an aggregate of 2,582,678 shares of common stock pursuant to the 2020 ATM for aggregate total gross proceeds of approximately $ 74.2 million at an average selling price of $ 28.73 per share, resulting in net proceeds of approximately $ 72.9 million after deducting commissions and other transactions costs In May 2020, we completed an underwritten public offering of 8,500,000 shares of our common stock (plus an underwriter option to purchase up to an additional 1,275,000 shares of common stock, which was exercised) at a price of $ 18 per share. Net proceeds from this offering, including the overallotment, were approximately $ 165.1 million, net of underwriting discounts and offering expenses of approximately $ 10.8 million. ​ The 2019 WKSI Shelf is currently our only active shelf-registration statement. We may offer any combination of the securities registered under the 2019 WKSI Shelf 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 2019 WKSI Shelf 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 (the “2012 Incentive Plan”) was approved by stockholders in June 2020. As of September 30, 2020, 9,909,709 shares of restricted stock and 2,529,133 options were outstanding and up to an additional 5,054,913 shares may be issued under the 2012 Incentive Plan. 18 Table of Contents Stock Options The following table summarizes stock option activity for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Contractual ​ ​ ​ ​ ​ Number of ​ average ​ Term ​ Aggregate ​ ​ shares ​ exercise price ​ (in years) ​ intrinsic value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2019 ​ 2,605,730 ​ $ 6.73 ​ 8.92 ​ $ 11,706,110 Granted ​ 75,000 ​ ​ 8.21 ​ ​ ​ ​ ​ Exercised ​ ( 32,847 ) ​ ​ 4.10 ​ ​ ​ ​ ​ Forfeited ​ ( 118,750 ) ​ ​ 10.16 ​ ​ ​ ​ ​ Expired ​ — ​ ​ — ​ ​ ​ ​ ​ Outstanding at September 30, 2020 2,529,133 ​ $ 6.99 8.35 ​ $ 50,757,217 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total expense associated with the stock options was approximately $ 0.8 million during each of the three months ended September 30, 2020 and 2019, respectively, and $ 5.2 million and $ 2.3 million during the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, there was approximately $ 2.4 million of total unrecognized compensation cost related to unvested time-based stock options, which is expected to be recognized over a weighted-average period of 1.3 years. As of September 30, 2020, 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 granted during the nine months ended September 30, 2020 and 2019 were estimated on the grant date using the Black-Scholes option-pricing model using the assumptions below: ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ ​ September 30, 2020 September 30, 2019 Volatility 186.91 - 191.05 ​ 172.99 - 291.61 ​ Expected term (in years) 5.0 - 6.25 ​ 5.0 - 6.25 ​ Risk-free rate 0.34 - 0.54 % 1.96 - 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 nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date Fair ​ ​ Number of Shares ​ Value Outstanding at December 31, 2019 7,091,789 ​ $ 7.78 Granted 3,897,829 ​ 18.47 Vested ( 963,243 ) ​ 7.80 Forfeited ( 116,666 ) ​ 8.81 Outstanding at September 30, 2020 9,909,709 ​ $ 11.92 ​ ​ ​ ​ ​ ​ ​ 19 Table of Contents Total expense associated with restricted stock grants was approximately $ 27.5 million and $ 1.3 million during the three months ended September 30, 2020 and 2019, respectively, and $ 41.6 million and $ 3.4 million during the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, there was approximately $ 55.0 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 1.0 year. This amount does not include, as of September 30, 2020, 2,860,511 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. Stock-Based Compensation The following table summarizes stock-based compensation expense information about restricted stock and stock options for the three and nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ Three months and Nine months ended ​ September 30, September 30, (in thousands) 2020 2020 Stock-based compensation expense associated with restricted stock ​ $ 27,520 ​ $ 41,615 Stock-based compensation expense associated with option grants ​ 810 ​ 5,153 Total ​ $ 28,330 ​ $ 46,768 ​ Warrants The following table summarizes warrant activity for the nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ average exercise ​ Aggregate ​ ​ Warrants ​ price ​ intrinsic value Outstanding at December 31, 2019 147,058 ​ $ 4.08 ​ $ 1,032,347 Issued — ​ — ​ — Exercised — ​ — ​ — Expired — ​ — ​ — Outstanding at September 30, 2020 147,058 ​ $ 4.08 ​ $ 3,335,275 ​ There was no stock compensation expense related to warrants during the nine months ended September 30, 2020 and 2019. NOTE 6 OTHER LIABILITIES The following is a summary of notes payable included in other current liabilities on the Company’s condensed consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ September 30, 2020 ​ December 31, 2019 ​ ​ ​ ​ Non- ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ ​ Current ​ current ​ ​ ​ ​ Current ​ current ​ ​ ​ ​ ​ portion, ​ portion, ​ ​ ​ ​ portion, ​ portion, ​ ​ ​ ​ net net Total net net Total Convertible 5 % Notes Payable ​ $ 477 ​ $ — ​ $ 477 ​ $ 190 ​ $ — ​ $ 190 Totals ​ $ 477 ​ $ — ​ $ 477 ​ $ 190 ​ $ — ​ $ 190 ​ 20 Table of Contents Convertible 5% Notes Payable The 5 % Notes and accrued and unpaid interest thereon are convertible at the option of the holder into common stock at the conversion price of $ 1,125 per share. We have no obligation under the 5 % Notes aside from (a) 50 % of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature, discussed above. Interest accrues monthly, is added to principal on an annual basis, every March 8, and is payable at maturity, which was March 8, 2015 (see Note 4 for further details). The cumulative liability including accrued and unpaid interest of these notes was approximately $ 20.0 million at September 30, 2020 and $ 19.3 million at December 31, 2019. No payments have been made on the 5 % Notes as of September 30, 2020. In December 2011, we elected the fair value option for valuing the 5 % Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments (see Note 4 for further details). Other Current Liabilities In 2018, we entered into an agreement with a contract manufacturer for the clinical and potential commercial supply of one of our product candidates. As part of this agreement, the contract manufacturer agreed to defer payment of certain costs and expenses under the agreement in exchange for the payment of an administrative fee. We have incurred expenses related to this agreement of approximately $ 53.4 million as of September 30, 2020, which include service fees, raw material costs and administrative fees. Payments of $ 33.2 million have been made to the contract manufacturer as of September 30, 2020. Accordingly, as of September 30, 2020, $ 19.4 million is included in other current liabilities in the Company’s unaudited condensed consolidated balance sheet. As of September 30, 2020, there are no long-term liabilities in the Company’s unaudited condensed consolidated balance sheet related to this agreement. We will incur an administrative fee of six percent ( 6 %) per year starting from the date of invoice issuance. For the nine months ended September 30, 2020, we have accrued $ 2.6 million in administrative fees in connection with these costs, which has been included in interest expense in the Company’s unaudited condensed consolidated statements of operations. NOTE 7 LONG-TERM DEBT On February 28, 2019 (the “Closing Date”), we entered into a term loan facility of up to $ 60.0 million (“Term Loan”) with Hercules Capital, Inc. (“Hercules”), the proceeds of which were used for research and development programs and for general corporate purposes. The Term Loan is governed by a loan and security agreement, dated February 28, 2019 (the “Loan Agreement”), which provides for up to four separate advances. The first advance of $ 30.0 million was drawn on the Closing Date. Two additional advances of $ 10.0 million may be drawn at our option, but are subject to the clinical trial milestones identified in the Term Loan, and the fourth advance of $ 10.0 million, available in minimum increments of $ 5.0 million, is available through December 15, 2020 subject to the approval of Hercules’ investment committee. 21 Table of Contents The Term Loan will mature on March 1, 2022 (the “Loan Maturity Date”). Each advance accrues interest at a per annum rate of interest equal to the greater of either (i) the “prime rate” as reported in The Wall Street Journal plus 4.75 %, and (ii) 10.25 %. The Term Loan provides for interest-only payments until October 1, 2020. The interest-only period may be extended to April 1, 2021 if, on or before September 30, 2020, we achieve either the third milestone or we have raised at least $ 150.0 million in unrestricted net cash proceeds from one or more equity financings, subordinated indebtedness and/or upfront proceeds from business development transactions permitted under the Loan Agreement, in each case after February 7, 2019, and prior to September 30, 2020 (“Milestone IV”). Thereafter, amortization payments will be payable monthly in eighteen installments (or, if the period requiring interest-only payments has been extended to April 1, 2021, in twelve installments) of principal and interest (subject to recalculation upon a change in prime rates). As a result of the Company having raised in excess of $ 150 million before the required timeline in the Loan Agreement, the interest-only period has been extended to April 1, 2021. At our option upon seven business days’ prior written notice to Hercules, we may prepay all or any portion greater than or equal to $ 5.0 million of the outstanding advances by paying the entire principal balance (or portion thereof), all accrued and unpaid interest, subject to a prepayment charge of 3.0 %, if such advance is prepaid in any of the first twelve months following the Closing Date; 1.5 %, if such advance is prepaid after twelve months following the Closing Date but on or prior to twenty-four months following the Closing Date; and 0 % thereafter. In addition, a final payment equal to 3.5 % of the aggregate principal amount of the loan extended by Hercules is due on the maturity date. Amounts outstanding during an event of default shall be payable on demand and accrue interest at an additional rate of 4.0 % per annum of the past due amount outstanding. The Term Loan is secured by a lien on substantially all of our assets, other than intellectual property, and contains customary covenants and representations, including a liquidity covenant, financial reporting covenant and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. As of September 30, 2020 and through the filing date of this report, the Company has been in compliance with all covenants. The events of default under the Loan Agreement include, without limitation, and subject to customary grace periods, (1) our failure to make any payments of principal or interest under the Loan Agreement, promissory notes or other loan documents, (2) our breach or default in the performance of any covenant under the Loan Agreement, (3) the occurrence of a material adverse effect, (4) a false or misleading representation or warranty in any material respect, (5) our insolvency or bankruptcy, (6) certain attachments or judgments on our assets, or (7) the occurrence of any material default under certain agreements or obligations involving indebtedness in excess of $ 750,000 . If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. The Loan Agreement also contains warrant coverage of 2 % of the total amount funded. A warrant (the “Hercules Warrant”) was issued to Hercules to purchase 147,058 shares of common stock with an exercise price of $ 4.08 . The Hercules Warrant is exercisable for seven years from the date of issuance. Hercules may exercise the Hercules Warrant either by (a) cash or check or (b) through a net issuance conversion. The shares will be registered and freely tradeable within six months of issuance. We accounted for the Hercules Warrant as an equity instrument since it was indexed to our common shares and met the criteria for classification in shareholders’ (deficit) equity. The relative fair value of the Hercules Warrant on the date of issuance was approximately $ 1.0 million and was treated as debt issuance costs and as an offset to the Term Loan. This amount will be amortized to interest expense using the straight-line method, which approximates the effective interest method, over the life of the Term Loan. The Company estimated the fair value of the Warrant using the Black-Scholes model based on the following key assumptions: ​ ​ ​ ​ ​ Exercise Price $ 4.08 Common share price on date of issuance ​ $ 6.80 ​ Volatility ​ 195.9 % Risk-free interest rate ​ 2.63 % Expected dividend yield ​ -- % Contractual term (in years) ​ 7.00 years ​ ​ 22 Table of Contents The Company incurred financing expenses of $ 2.8 million (including the fair value of the Hercules Warrant) related to the Hercules Loan Agreement which are recorded as debt issuance costs and as an offset to long-term debt on the Company’s unaudited condensed consolidated balance sheet. The debt issuance costs are being amortized over the term of the debt using the straight-line method, which approximates the effective interest method, and are included in interest expense in the Company’s unaudited condensed consolidated statements of operations. Amortization of debt issuance costs was $ 0.2 million and $ 0.7 million for the three and nine months ended September 30, 2020, respectively. At September 30, 2020, the remaining unamortized balance of debt issuance costs was $ 1.3 million. Long-term debt as of September 30, 2020 is as follows: ​ ​ ​ ​ ​ September 30, (in thousands) 2020 Long-term debt ​ $ 30,000 End of term fee ​ 975 ​ ​ 30,975 Less: unamortized debt issuance costs ​ ( 1,311 ) ​ ​ 29,664 Less: current portion ​ ( 14,590 ) Long-term debt non-current ​ $ 15,074 ​ ​ NOTE 8 LEASES In October 2014, we entered into an agreement (the “Office Agreement”) with Fortress Biotech, Inc. (“FBIO”) to occupy approximately 45 % of the 24,000 square feet of New York City office space leased by FBIO. The Office Agreement requires us to pay our respective share of the average annual rent and other costs of the 15-year lease. We approximate an average annual rental obligation of $ 1.4 million under the Office Agreement. We began to occupy this new space in April 2016, with rental payments beginning in the third quarter of 2016. At January 1, 2019, we recognized a lease liability and corresponding Right-of-Use (“ROU”) asset of $ 9.5 million and $ 8.1 million, respectively, based on the present value of the remaining lease payments for all of our leased office spaces, the majority of which is comprised of our New York City office space. The initial commitment period of the 45 % rate was for a period of three ( 3 ) years. We and FBIO currently determine actual office space utilization annually and if our utilization differs from the amount we have been billed, we will either receive credits or be assessed incremental utilization charges. As of September 30, 2020, the allocation rate is 65 % and will be evaluated again in August 2021 for the following rent year. Also in connection with this lease, in October 2014, we pledged $ 0.6 million to secure a line of credit as a security deposit for the Office Agreement, which has been recorded as restricted cash in the accompanying consolidated balance sheets. Additional collateral of $ 0.6 million was pledged in April 2018 to increase the letter of credit for the office space. In October 2019, we finalized a five-year lease for office space in New Jersey (the “NJ Lease”). We approximate an average annual rental obligation of $ 0.3 million under the NJ Lease. We took possession of this space in October 2019, with rental payments beginning in November 2019. We incurred rent expense of $ 0.2 million for the nine months ended September 30, 2020. The present values of our lease liability and corresponding ROU asset are $ 11.4 million and $ 9.0 million, respectively, as of September 30, 2020. Our leases have remaining lease terms of less than 1 year to 11 years. One lease has a renewal option to extend the lease for an additional term of 1 year. The following components of lease expense are included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months Nine months ​ ended, ended, ​ September 30, September 30, (in thousands) 2020 2020 Operating lease cost ​ $ 534 ​ $ 1,611 23 Table of Contents Net lease cost ​ $ 534 ​ $ 1,611 ​ As of September 30, 2020, the weighted-average remaining operating lease term was 7.8 years and the weighted-average discount rate for operating leases was 10.25 %. Cash paid for amounts included in the measurement of operating lease liabilities during the nine months ended September 30, 2020 was $ 1.4 million. The balance sheet classification of lease liabilities was as follows: ​ ​ ​ ​ ​ September 30, (in thousands) 2020 Liabilities ​ Lease liability current portion ​ $ 1,614 Lease liability non-current ​ 9,806 Total lease liability ​ $ 11,420 ​ As of September 30, 2020, the maturities of lease liabilities were as follows: ​ ​ ​ ​ ​ Operating (in thousands) ​ leases Remainder of 2020 ​ $ 475 2021 ​ 1,889 2022 ​ 1,911 2023 ​ 1,914 2024 ​ 1,797 After 2024 ​ 10,618 Total lease payments ​ 18,604 Less: interest ​ ( 7,184 ) Present value of lease liabilities(*) ​ $ 11,420 (*) As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date and considering the term of the lease to determine the present value of lease payments. We used the incremental borrowing rate of 10.25 % on February 28, 2019, for operating leases that commenced prior to that date. NOTE 9 LICENSE AGREEMENTS TG-1101 (Ublituximab) In November 2012, we entered into an exclusive (within the territory) sublicense agreement with Ildong Pharmaceutical Co. Ltd. (“Ildong”) relating to the development and commercialization of ublituximab in South Korea and Southeast Asia. Under the terms of the sublicense agreement, Ildong has been granted a royalty bearing, exclusive right, including the right to grant sublicenses, to develop and commercialize ublituximab in South Korea, Taiwan, Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, and Myanmar. An upfront payment of $ 2.0 million, which was received in December 2012, net of $ 0.3 million of income tax withholdings, is being recognized as license revenue on a straight-line basis over the life of the agreement, which is through the expiration of the last licensed patent right or 15 years after the first commercial sale of a product in such country, unless the agreement is earlier terminated, and represents the estimated period over which we will have certain ongoing responsibilities under the sublicense agreement. We recorded license revenue of approximately $ 38,000 for each of the three months ended September 30, 2020 and 2019, and approximately $ 114,000 for each of the nine months ended September 30, 2020 and 2019, and at September 30, 2020 and December 31, 2019, have deferred revenue of approximately $ 0.8 million and $ 0.9 million, respectively, associated with this $ 2 million payment (approximately $ 152,000 of which has been classified in current liabilities at September 30, 2020 and December 31, 2019). We may receive up to an additional $ 5.0 million in payments upon the achievement of pre-specified milestones. In addition, upon commercialization, Ildong will make royalty payments to us on net sales of ublituximab in the sublicense territory. 24 Table of Contents TGR-1202 (Umbralisib) In September 2014, we exercised our option to license the global rights to umbralisib, thereby entering into an exclusive licensing agreement (the “Umbralisib License”) with Rhizen Pharmaceuticals, SA (“Rhizen”) for the development and commercialization of umbralisib. Prior to this, we had been jointly developing umbralisib in a 50:50 joint venture with Rhizen. During the three months ended September 30, 2020, we paid Rhizen $ 12.0 million as part of a milestone in accordance with the terms of the Umbralisib License. Rhizen will be eligible to receive additional approval and sales-based milestone payments in the aggregate of approximately $ 165 million payable upon approval in multiple jurisdictions for up to two oncology indications and one non-oncology indication and attaining certain sales milestones. In addition, if umbralisib is co-formulated with another drug to create a new product (a "New Product"), Rhizen will be eligible to receive similar regulatory approval and sales-based milestone payments for such New Product. Additionally, Rhizen will be entitled to tiered royalties that escalate from high single digits to low double digits on our future net sales of umbralisib and any New Product. Rhizen will also be eligible to participate in sublicensing revenue, if any, based on a percentage that decreases as a function of the number of patients treated in clinical trials following the exercise of the license option. Rhizen will retain global manufacturing rights to umbralisib, provided that they are price competitive with alternative manufacturers. The license will terminate on a country by country basis upon the expiration of the last licensed patent right or any other exclusivity right in such country, unless the agreement is earlier terminated (i) by us for any reason, (ii) by either party due to a breach of the agreement. TG-1501: PDL1 (Cosibelimab) ​ In March 2015, we entered into a Global Collaboration Agreement (“Collaboration Agreement”) with Checkpoint Therapeutics, Inc. (“Checkpoint”) for the development and commercialization of anti-PD-L1 and anti-GITR antibody research programs in the field of hematological malignancies. The Collaboration Agreement was amended in June 2019 and in March of 2020 achieved the first Milestone event for which we incurred expenses of zero and approximately $ 0.9 million for the three and nine months ended September 30, 2020. ​ TG-1601: BET In May 2016, as part of a broader agreement with Jubilant Biosys (“Jubilant”), we entered into a sub-license agreement (“JBET Agreement”) with Checkpoint (see Note 10), for the development and commercialization of Jubilant’s novel BET inhibitor program in the field of hematological malignancies. Under the terms of the agreement, we paid Checkpoint an up-front licensing fee of $ 1.0 million and will make additional payments contingent on certain preclinical, clinical, and regulatory milestones, including commercial milestones totaling up to approximately $ 177 million and a single-digit royalty on net sales. TG will also provide funding to support certain targeted research efforts at Jubilant. TG-1701: BTK In January 2018, we entered into a global exclusive license agreement with Jiangsu Hengrui Medicine Co. (“Hengrui”), to acquire worldwide intellectual property rights, excluding Asia but including Japan, and for the research, development, manufacturing, and commercialization of products containing or comprising of any of Hengrui’s Brutons Tyrosine Kinase inhibitors containing the compounds of either TG-1701 (SHR1459 or EBI1459) or TG-1702 (SHR1266 or EBI1266). Pursuant to the agreement, in April 2018, we paid Hengrui an upfront fee of $ 1.0 million in our common stock recorded to noncash stock expense associated with in-licensing agreements in our condensed consolidated statement of operations. In July 2019, we paid Hengrui the first milestone of $ 0.1 million in our common stock recorded to noncash stock expense associated with in-licensing agreements in our consolidated statement of operations. During the three months ended September 30, 2020, we paid Hengrui $ 2.0 million as part of a milestone in accordance with the license agreement. Hengrui is eligible to receive milestone payments totaling approximately $ 350 million upon and subject to the achievement of certain milestones. Various provisions allow for payments in conjunction with the agreement to be made in cash or our common stock, while others limit the form of payment. Royalty payments in the low double digits are due on net sales of licensed products and revenue from sublicenses. We incurred expenses of approximately $ 0.3 million and $ 0.6 million for the three months ended September 30, 2020 and 2019, respectively, and $ 2.1 million and $ 0.6 million for 25 Table of Contents the nine months ended September 30, 2020 and 2019, respectively, the majority of which relates to manufacturing expenses of BTK. The relevant expenses are recorded in other research and development in the accompanying unaudited condensed consolidated statement of operations. TG-1801: anti-CD47/anti-CD19 In June 2018, we entered into a Joint Venture and License Option Agreement with Novimmune SA (“Novimmune”) to collaborate on the development and commercialization of Novimmune’s novel first-in-class anti-CD47/anti-CD19 bispecific antibody known as TG-1801 (previously NI-1701). The companies will jointly develop the product on a worldwide basis, focusing on indications in the area of hematologic B-cell malignancies. We serve as the primary responsible party for the development, manufacturing and commercialization of the product. Pursuant to the agreement, in June 2018 we paid Novimmune an upfront payment of $ 3.0 million in our common stock recorded to noncash stock expense associated with in-licensing agreements in our consolidated statement of operations. Further milestone payments will be paid based on early clinical development, and the Company will be responsible for the costs of clinical development of the product through the end of the Phase 2 clinical trials, after which the Company and Novimmune will be jointly responsible for all development and commercialization costs. The Company and Novimmune will each maintain an exclusive option, exercisable at specific times during development, for the Company to license the rights to TG-1801, in which case Novimmune is eligible to receive additional milestone payments totaling approximately $ 185 million as well as tiered royalties on net sales in the high single to low double digits upon and subject to the achievement of certain milestones. NOTE 10 RELATED PARTY TRANSACTIONS In October 2014, we entered into the Office Agreement with FBIO, to occupy approximately 45 % of the 24,000 square feet of New York City office space leased by FBIO. The Office Agreement requires us to pay our respective share of the average annual rent and other costs of the 15-year lease. We approximate an average annual rental obligation of $ 1.1 million under the Office Agreement. We began to occupy this new space in April 2016, with rental payments beginning in the third quarter of 2016. At January 1, 2019, we recognized a lease liability of $ 9.3 million, with a corresponding ROU asset of $ 7.7 million based on the present value of the remaining lease payments for all of our leased office spaces, the majority of which is comprised of our New York City office space. Mr. Weiss, our Executive Chairman and CEO, is also Executive Vice Chairman of FBIO. Under the Office Agreement, we agreed to pay FBIO our portion of the build out costs, which have been allocated to us at the 45 % rate mentioned above. The allocated build-out costs have been recorded in Leasehold Interest, net on the Company's condensed consolidated balance sheets and will be amortized over the 15-year term of the Office Agreement. The initial commitment period of the 45 % rate was for a period of three ( 3 ) years. We and FBIO currently determine actual office space utilization annually and if our utilization differs from the amount we have been billed, we will either receive credits or be assessed incremental utilization charges. As of September 30, 2020, the allocation rate is 65 % and will be evaluated again in August 2021 for the following rent year. Also, in connection with this lease, in October 2014 we pledged $ 0.6 million to secure a line of credit as a security deposit for the Office Agreement, which has been recorded as restricted cash in the accompanying consolidated balance sheets. Additional collateral of $ 0.6 million was pledged in April 2018 to increase the letter of credit for the office space. In July 2015, we entered into a Shared Services Agreement (the “Shared Services Agreement”) with FBIO to share the cost of certain services such as facilities use, personnel costs and other overhead and administrative costs. This Shared Services Agreement requires us to pay our respective share of services utilized. In connection with the Shared Services Agreement, we incurred expenses of approximately $ 0.6 million for shared services for each of the nine months ended September 30, 2020 and 2019, and expenses of approximately $ 0.2 million for each of the three months ended September 30, 2020 and 2019, primarily related to shared personnel. In March 2015, we entered into a Global Collaboration Agreement (“Collaboration Agreement”) with Checkpoint for the development and commercialization of anti-PD-L1 and anti-GITR antibody research programs in the field of hematological malignancies. The Collaboration Agreement was amended in June 2019 and upon execution of the amendment we incurred an upfront fee of $ 1.0 million. We incurred expenses of approximately $ 1.0 million and $ 4.0 million for the nine months ended September 30, 2020 and 2019, respectively, and expenses of approximately $ 30,000 and $ 2.7 million for the three months ended September 30, 2020 and 2019, respectively. 26 Table of Contents