What changed in this filing

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Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-02 · 189 added, 215 removed, 779 unchanged (34% of the section changed)

22 unchanged sentences

We have audited TG Therapeutics, Inc.

(the Company’s) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

and subsidiaries (the “Company’s”) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United Stated) (PCAOB), the consolidated balance sheets and the related consolidated statements of operations, stockholders’ equity and cash flows of the Company as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019 and our report dated March 2, 2020, expressed an unqualified opinion.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets and the related consolidated statements of operations, stockholders’ equity and cash flows of the Company as of December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020 and our report dated March 1, 2021, expressed an unqualified opinion.

Basis for Opinion

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Amended and Restated 2012 Incentive Plan, filed with the Registrant’s Definitive Proxy Statement for the Annual Meeting of Stockholders on June 4, 2015, filed on April 24, 2015, and incorporated herein by reference.

Second Amendment to TG Therapeutics, Inc.

Amended and Restated 2012 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 24, 2020).

Sublicense Agreement between TG Therapeutics, Inc.

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and Ligand Pharmaceuticals Incorporated, dated June 23, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2014).*

Licensing Agreement between TG Therapeutics, Inc.

License Agreement between TG Therapeutics, Inc.

and Rhizen Pharmaceuticals SA, dated September 22, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 20, 2015).

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We have audited the accompanying consolidated balance sheets of TG Therapeutics, Inc.

(the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the consolidated financial statements).

and subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Change in Accounting Principle

As discussed in Notes 1 and 8 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standard Codification Topic 842, Leases .

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liquidity and Capital Resources

As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses since inception, and expects to continue to incur losses for the foreseeable future.

At December 31, 2019, the Company believes its cash and cash equivalents and short-term investment securities will be sufficient to fund the Company’s planned operations for at least a year beyond the date of the issuance of the consolidated financial statements.

We identified Liquidity and Capital Resources as a critical audit matter due to the subjective judgments required of management to conclude the Company would have sufficient liquidity to sustain itself for at least a year beyond the date of the issuance of the consolidated financial statements.

This in turn led to a high degree of auditor subjectivity and judgment to evaluate the audit evidence supporting the liquidity conclusions.

Additionally, the relevance of management’s liquidity conclusions to the users of the consolidated financial statements also impacted our assessment of these circumstances as a critical audit matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with our overall opinion on the consolidated financial statements.

The procedures we performed to address this critical audit matter included:

● Testing the reasonableness of the total liquid assets at December 31, 2019.

● Evaluating the amount and timing of forecasted clinical trial expenses and related payments, including negotiated vendor payment terms (see Note 6 to the consolidated financial statements).

● Evaluating the fluctuations in forecasted clinical trial expenses and payments thereof as compared to historic amounts and the underlying management assumptions.

● Evaluating the reasonableness of the amounts and timing of payments of forecasted general and administrative expenses and other income, net.

● Reconsidering certain prior management forecasted amounts to evaluate whether those forecasted amounts approximated the ultimate actual results.

This was performed in consideration of management’s ability to put forth reasonable estimates.

● Evaluating the adequacy of the Company’s disclosure of these circumstances in the consolidated financial statements.

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ CohnReznick LLP

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Equipment, net

Right of use asset

Right of use assets

Liabilities and stockholders’ equity

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Other current liabilities

Loan payable – current portion

Lease liability – current portion

1 unchanged sentence

Total current liabilities

Deferred rent

Deferred revenue, net of current portion

1 unchanged sentence

Lease liability – non-current

Long-term liabilities

Total liabilities

1 unchanged sentence

Stockholders’ equity:

Preferred stock, $ 0.001 par value per share ( 10,000,000 shares authorized, none issued and outstanding as of December 31, 2019 and 2018)

Common stock, $ 0.001 par value per share ( 150,000,000 shares authorized, 109,425,243 and 83,911,855 shares issued, 109,383,934 and 83,870,546 shares outstanding at December 31, 2019 and 2018, respectively)

Preferred stock, $ 0.001 par value per share ( 10,000,000 shares authorized, none issued and outstanding as of December 31, 2020 and December 31, 2019)

Common stock, $ 0.001 par value per share ( 150,000,000 shares authorized, 140,617,606 and 109,425,243 shares issued, 140,576,297 and 109,383,934 shares outstanding at December 31, 2020 and December 31, 2019, respectively)

Additional paid-in capital

Treasury stock, at cost, 41,309 shares at December 31, 2019 and 2018

Treasury stock, at cost, 41,309 shares at December 31, 2020 and December 31, 2019

Accumulated deficit

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Research and development:

Non-cash stock expense associated with in-licensing agreements

Noncash stock expense associated with in-licensing agreements

Noncash compensation

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Operating loss

Other (income) expense:

Other expense (income):

Interest expense

Total other (income) expense, net

Total other expense (income), net

Basic and diluted net loss per common share

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and Subsidiaries

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31

(in thousands, except share amounts)

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Balance at January 1, 2018

Issuance of common stock in connection with exercise of warrants

Issuance of restricted stock

Forfeiture of restricted stock

Issuance of common stock in public offering (net of offering costs of $ 3.6 million)

Issuance of common stock in At-the-Market offering (net of offering costs of $ 1.1 million)

Issuance of common stock in At-the-Market offerings (net of offering costs of $ 2.0 million)

Compensation in respect of restricted stock granted to employees, directors and consultants

Shares issued in connection with in-licensing agreements

Balance at December 31, 2018

Issuance of restricted stock

Warrants issued with debt financing

Forfeiture of restricted stock

Issuance of common stock in offerings (net of offering costs of $ 0.2 million)

Issuance of common stock in At-the-Market offerings (net of offering costs of $ 2.0 million)

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Balance at December 31, 2019

Issuance of common stock in connection with exercise of options

Issuance of restricted stock

Warrants issued with debt financing

Forfeiture of restricted stock

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Compensation in respect of restricted stock granted to employees, directors and consultants

Shares issued in connection with in-licensing agreements

Balance at December 31, 2020

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CASH FLOWS FROM OPERATING ACTIVITIES

Consolidated net loss

Adjustments to reconcile consolidated net loss to net cash used in operating activities:

Non-cash stock compensation expense

Adjustments to reconcile net loss to net cash used in operating activities:

Noncash stock compensation expense

Shares issued in connection with in-licensing agreement

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Amortization of leasehold interest

Non-cash change in lease liability and right-of-use asset

Change in fair value of notes payable and accrued interest

Noncash change in lease liability and right of use asset

Change in fair value of notes payable

Changes in assets and liabilities:

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(Increase) decrease in accrued interest receivable

Decrease in other assets

(Decrease) increase in accounts payable and accrued expenses

Decrease in lease liabilities

Increase in interest payable

Increase in other liabilities

Increase in deferred rent

Increase (decrease) in accounts payable and accrued expenses

(Decrease) increase in lease liabilities

(Decrease) increase in interest payable

(Decrease) increase in other liabilities

Decrease in deferred revenue

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Proceeds from sale of common stock, net

Proceeds from exercise of options

Proceeds from debt financings

Proceeds from the exercise of warrants

Financing costs paid

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Total cash, cash equivalents and restricted cash

Cash paid for:

NONCASH TRANSACTIONS

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Shares issued in connection with in-licensing

Reclassification of deferred financing costs to additional paid-in capital

The accompanying notes are an integral part of the consolidated financial statements.

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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 lead two therapies, ublituximab (TG-1101) and umbralisib (TGR-1202), in pivotal trials for CLL, NHL and MS.

Ublituximab is a novel anti-CD20 monoclonal antibody (mAb) that has been glycoengineered for enhanced potency over first generation antibodies.

Umbralisib is an oral, once daily, dual inhibitor of PI3K-delta and CK1-epsilon, which may lead to a differentiated safety profile.

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 referred to as 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.

TG Therapeutics is a fully-integrated, commercial stage biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases.

In addition to an active research pipeline including five investigational medicines across these therapeutic areas, we have received accelerated approval from the U.S.

Food and Drug Administration (FDA) for UKONIQ (umbralisib), for the treatment of adult patients with relapsed or refractory marginal zone lymphoma who have received at least one prior anti-CD20-based regimen and relapsed or refractory follicular lymphoma who have received at least three prior lines of systemic therapies.

Currently, we have two programs in Phase 3 development for the treatment of patients with relapsing forms of multiple sclerosis (RMS) and patients with chronic lymphocytic leukemia (CLL) and several investigational medicines in Phase 1 clinical development.

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.

LIQUIDITY AND CAPITAL RESOURCES

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(“Hercules”) (see Note 7 for more information).

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;

As of December 31, 2020 we had not yet generated revenue from drug sales of UKONIQ.

UKONIQ first became commercially available in the United States in February of 2021.

Even with the commercialization of UKONIQ and the future commercialization of our other drug candidates, we may not become profitable.

Our ability to achieve profitability depends on our ability to generate revenue and many other factors, including our ability to obtain regulatory approval for our drug candidates;

successfully complete any post-approval regulatory obligations;

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As of December 31, 2020, we had $ 605.4 million in cash and cash equivalents, and investment securities.

We anticipate that our cash and cash equivalents, and investment securities as of December 31, 2019 will provide sufficient liquidity for more than a twelve-month period from the date of filing this Annual Report on Form 10-K.

We anticipate that our cash and cash equivalents, and investment securities as of December 31, 2020 will provide sufficient liquidity for more than a twelve-month period from the date of filing this Annual Report on Form 10-K , during which time the Company plans to continue to commercialize UKONIQ in the United States, which commenced in February 2021.

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.

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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 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.

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The Company adopted ASU 2018-11 on January 1, 2019 using a modified retrospective method and will not restate 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).

We elected the package of practical expedients permitted under the transition guidance, which allows us to carry forward 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 ROU 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.

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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.

Other pronouncements issued by the FASB or other authoritative accounting standards with future effective dates are either not applicable or not significant to our consolidated financial statements.

USE OF ESTIMATES

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generally accepted accounting principles (“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.

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued clinical trial expenses and stock-based compensation.

Actual results could differ from those estimates.

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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 make estimates of certain 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.

Judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period for expenses that are not explicitly defined by contractual rates and terms.

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.

1 unchanged sentence

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.

With respect to clinical site costs, the financial terms of these agreements are subject to an initial 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 consolidated balance sheets includes, among other things, costs related to agreements with CRO’s, certain costs to third party service providers related to development and manufacturing services as well as clinical development.

As such, certain expense accruals related to clinical site costs are recognized based on our estimate of the degree of performance of the event or events specified in the specific clinical study or trial contract.

Prepaid research and development in our consolidated balance sheets includes, among other things, costs related to agreements with CROs, 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.

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Refer to Note 9 for further information on impact of tax reform.

The Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”) was enacted on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic in the United States.

There are several provisions of the CARES Act that were considered in the December 31, 2020 year-end tax provision.

However, the Company chose not to utilize any provisions or participate in certain programs due to lack of a benefit to the Company.

STOCK-BASED COMPENSATION

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The amounts of potentially dilutive securities excluded from the calculation were 11,976,276 , 8,361,739 and 6,528,932 at December 31, 2020, 2019 and 2018, respectively.

During the years ended December 31, 2019, 2018 and 2017, the Company incurred a net loss, therefore, all of the securities are antidilutive and excluded from the computation of diluted loss per share.

During the years ended December 31, 2020, 2019 and 2018, the Company incurred a net loss;

therefore, all of the securities are antidilutive and excluded from the computation of diluted loss per share.

Unvested restricted stock

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Money market funds

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 3 – INVESTMENT SECURITIES

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December 31, 2020

(in thousands)

Estimated fair

holding gains

1 unchanged sentence

Short-term investments:

Obligations of domestic governmental agencies (maturing between January 2020 and September 2020) (held-to-maturity)

Obligations of domestic governmental agencies (maturing between January 2021 and December 2021) (held-to-maturity)

Total short-term investment securities

December 31, 2019

Estimated fair

holding gains

1 unchanged sentence

Short-term investments:

Obligations of domestic governmental agencies (maturing between January 2019 and November 2019) (held-to-maturity)

Obligations of domestic governmental agencies (maturing between January 2020 and September 2020) (held-to-maturity)

Total short-term investment securities

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 – FAIR VALUE MEASUREMENTS

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and b) the conversion feature, discussed above.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The cumulative liability including accrued and unpaid interest of the 5 % Notes was approximately $ 20.3 million at December 31, 2020 and $ 19.3 million at December 31, 2019.

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The Level 3 amounts above represent the fair value of the 5 % Notes and related accrued interest.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The following table summarizes the changes in Level 3 instruments for the years ended December 31, 2019 and 2020:

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The change in the fair value of the Level 3 liabilities is reported in other (income) expense in the accompanying consolidated statements of operations.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 5 – STOCKHOLDERS’ EQUITY

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Our amended and restated certificate of incorporation authorizes the issuance of up to 150,000,000 shares of $ 0.001 par value common stock.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

In December 2014, we filed a shelf registration statement on Form S-3 (the "2015 S-3"), which was declared effective in January 2015.

Under the 2015 S-3, the Company may sell up to a total of $ 250 million of its securities.

In connection with the 2015 S-3, we amended our 2013 At-the-Market Issuance Sales Agreement with MLV & Co, LLC (“MLV”) (the "2015 ATM") such that we may issue and sell additional shares of our common stock, having an aggregate offering price of up to $ 175.0 million, from time to time through MLV and FBR Capital Markets & Co.

("FBR", each of MLV and FBR individually an "Agent"

and collectively the "Agents"), acting as the sales agents.

Under the 2015 ATM we pay the Agents a commission rate of up to 3.0 % of the gross proceeds from the sale of any shares of common stock sold through the Agents.

During the year ended December 31, 2017, we sold a total of 3,104,253 shares of common stock under the 2015 ATM for aggregate total gross proceeds of approximately $ 31.6 million at an average selling price of $ 10.18 per share, resulting in net proceeds of approximately $ 31.0 million after deducting commissions and other transaction costs.

In March 2017, we completed an underwritten public offering of 5,128,206 shares of our common stock (plus a 30-day underwriter overallotment option to purchase up to an additional 769,230 shares of common stock, which was exercised) at a price of $ 9.75 per share.

Net proceeds from this offering, including the overallotment option, were approximately $ 54 million, net of underwriting discounts and offering expenses of approximately $ 3.6 million.

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.

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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.

Wainwright & Co., LLC (each an "Agent"

Wainwright & Co., LLC (each a "2017 Agent"

and collectively, the "2017 Agents"), relating to the sale of shares of our common stock.

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During the year ended December 31, 2019, we sold a total of 13,620,165 shares of common stock under the 2017 ATM for aggregate total gross proceeds of approximately $ 99.3 million at an average selling price of $ 7.29 per share, resulting in net proceeds of approximately $ 97.5 million after deducting commissions and other transactions costs.

On March 1, 2019, we completed a public offering of 4,100,000 shares of our common stock (plus a 30-day underwriter overallotment option to purchase up to an additional 615,000 shares of common stock, which was exercised) at a price of $ 5.87 .

Net proceeds from this offering, including the overallotment, were approximately $ 27.5 million after underwriting discounts and offering expenses of approximately $ 0.2 million.

On September 5, 2019, we filed an automatic "shelf registration"

statement on Form S-3 (the "2019 WKSI") as a "well-known seasoned issuer"

as defined in Rule 405 under the Securities Act of 1933, as amended.

The 2019 WKSI was declared effective in September 2019.

Under this shelf process, we may sell any combination of the securities described in the related prospectus in one or more offerings.

On December 22, 2019, we completed a securities purchase agreement with an institutional investor in which we agreed to sell 5,434,783 shares of our common stock at a price of $ 9.20 .

Net proceeds from this offering were approximately $ 50.0 million.

The 2017 S-3 and the 2019 WKSI are currently our only active shelf registration statements.

After deducting shares already sold, there is approximately $ 9.5 million of common stock that remains available for sale under the 2017 S-3, and unlimited capacity under the 2019 WKSI, at December 31, 2019.

We may offer the securities under the 2017 S-3 and 2019 WKSI 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 provides us with the flexibility to raise additional capital to finance our operations as needed.

TG Therapeutics, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements

Net proceeds from this offering, including the overallotment, were approximately $ 27.5 million after underwriting discounts and offering expenses of approximately $ 0.2 million.

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.

Riley Securities, 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.

In November 2020, we entered into an At-the-Market Issuance Sales Agreement (the “2021 ATM”) with the same terms and agents (each a “2021 Agent” and collectively, the “2021 Agents”) as the 2020 ATM.

During the year ended December 31, 2020, we sold a total of 8,528,286 shares of common stock under the 2020 ATM for aggregate total gross proceeds of approximately $ 187.5 million at an average selling price of $ 21.99 per share, resulting in net proceeds of approximately $ 184.2 million after deducting commissions and other transactions costs.

During the year ended December 31, 2020, we sold a total of 804,100 shares of common stock under the 2021 ATM for aggregate total gross proceeds of approximately $ 33.9 million at an average selling price of $ 42.18 per share, resulting in net proceeds of approximately $ 33.3 million after deducting commissions and other transactions costs.

On December 22, 2019, we completed a securities purchase agreement with an institutional investor in which we agreed to sell 5,434,783 shares of our common stock at a price of $ 9.20 per share.

Net proceeds from this offering were approximately $ 50.0 million.

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.

On December 17, 2020, we completed a public offering of 6,320,000 shares of our common stock (plus a 30-day underwriter overallotment option to purchase up to an additional 948,000 shares of common stock, which was exercised) at a price of $ 43.50 per share.

Net proceeds from this offering, including the overallotment, were approximately $ 297.2 million after underwriting discounts and offering expenses of approximately $ 19.0 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.

Treasury Stock

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As of December 31, 2020 and 2019, 2,526,166 and 2,605,730 options, respectively, were outstanding and up to an additional 4,054,913 shares may be issued under the 2012 Incentive Plan.

Effective as of January 1, 2017, we entered into an amendment (the “Amendment”) to the employment agreement entered into as of December 15, 2011 (together with the Amendment, the “Employment Agreement”) with Michael S.

Weiss, our Executive Chairman and Chief Executive Officer and President.

Under the Amendment, Mr.

Weiss will remain as Chief Executive Officer and President, removing the interim status.

Simultaneously, we entered into a Strategic Advisory Agreement (the “Advisory Agreement”) with Caribe BioAdvisors, LLC (the “Advisor”) owned by Mr.

Weiss to provide the services of Mr.

Weiss as Chairman of the Board and as Executive Chairman.

As part of the Amendment, Mr.

Weiss also agreed to forfeit 3,381,866 restricted shares previously granted under the Employment Agreement that were predominantly subject to time-based vesting over the next three years .

Simultaneously, (i) Mr.

Weiss was issued 418,371 restricted shares under the Employment Agreement that vest in 2018 and 2019 and (ii) the Advisor was issued 2,960,000 restricted shares under the Advisory Agreement that vested on market capitalization thresholds ranging from $ 375 million to $ 750 million.

In accordance with GAAP, there was no incremental stock compensation expense recognition as a result of the modification.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Stock Options

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Vested and expected to vest at December 31, 2020

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Total expense associated with the stock options was approximately $ 3.5 million, zero and zero during the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, there was approximately $ 2.6 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 1.5 years.

Outstanding at December 31, 2020

Expected to vest at December 31, 2020

Exercisable at December 31, 2020

Total expense associated with the stock options was approximately $ 6.0 million, $ 3.5 million and zero during the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020, there was approximately $ 1.7 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 1.0 year.

As of December 31, 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.

We recognized stock compensation expense of $ 0.3 million during the year ended December 31, 2019 for these stock options.

We recognized stock-based compensation expense of $ 3.8 million during the year ended December 31, 2020 for these stock options.

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

December 31, 2020

December 31, 2019

186.91 - 191.05

3 unchanged sentences

Expected dividend yield

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Restricted Stock

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Outstanding at December 31, 2018

( 1,596,966 )

Outstanding at December 31, 2019

( 1,087,918 )

Outstanding at December 31, 2020

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and 1,866,250 shares of restricted stock outstanding issued to non-employees.

Milestone-based non-cash compensation expense will be measured and recorded if and when a milestone becomes probable.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The following table summarizes warrant activity for the years ended December 31, 2019, 2018 and 2017:

average exercise

intrinsic value

Outstanding at January 1, 2017

Outstanding at December 31, 2017

Outstanding at December 31, 2018

Outstanding at December 31, 2019

Milestone-based noncash compensation expense will be measured and recorded if and when a milestone becomes probable.

The Company’s only outstanding warrant is the warrant issued to Hercules as part of our debt agreement to purchase 147,058 shares of common stock with an exercise price of $ 4.08 .

See Note 7 for further details.

There was no expense related to warrants during the years ended December 31, 2020, 2019 and 2018.

NOTE 6 – OTHER LIABILITIES

The following is a summary of notes payable included in other current liabilities on the Company's consolidated balance sheet:

The following is a summary of notes payable included in other current liabilities on the Company's consolidated balance sheets:

(in thousands)

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Convertible 5 % Notes Payable

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Convertible 5% Notes Payable

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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).

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Current Liabilities

2 unchanged sentences

To date we have incurred expenses related to this agreement of approximately $ 53.7 million as of December 31, 2020, which include service fees, raw material costs and administrative fees.

No payments have been made to the contract manufacturer as of December 31, 2019.

Accordingly, as of December 31, 2019, $ 47.2 million is included in current liabilities in the Company’s consolidated balance sheet, of which $ 19.6 million is due in the first quarter of 2020.

As of December 31, 2018, $ 18.4 million is included in long-term liabilities in the Company’s condensed consolidated balance sheet.

We have made payments of $ 37.4 million to the contract manufacturer as of December 31, 2020.

Accordingly, as of December 31, 2020 and 2019, $ 15.7 million and $ 47.2 million is included in current liabilities in the Company’s consolidated balance sheets.

Of the remaining $ 15.7 million, $ 4.2 million is due in the first quarter of 2021.

We will incur an administrative fee of six percent ( 6 %) per year starting from the date of invoice issuance.

For the year ended December 31, 2019, we have accrued $ 1.2 million in administrative fees in connection with these costs, which has been included in interest expense in the Company’s consolidated statements of operations.

For the years ended December 31, 2020, 2019 and 2018, we have accrued $ 1.2 million, $ 1.2 million and zero , respectively, in administrative fees in connection with these costs, which has been included in interest expense in the Company’s consolidated statements of operations.

NOTE 7 – LONG-TERM DEBT

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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 %.

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 %, or (ii) 10.25 %.

The Term Loan provides for interest-only payments until October 1, 2020.

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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.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

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.

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If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The Loan Agreement also contains warrant coverage of 2 % of the total amount funded.

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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 consolidated statements of operations.

Amortization of debt issuance costs was $ 0.8 million for the year ended December 31, 2019.

At December 31, 2019, the remaining unamortized balance of debt issuance costs was $ 2.0 million.

Long-term debt as of December 31, 2019, is as follows (in thousands):

Amortization of debt issuance costs was $ 0.9 million and $ 0.8 million for the years ended December 31, 2020 and 2019.

At December 31, 2020 and 2019, the remaining unamortized balance of debt issuance costs was approximately $ 1.1 million and $ 2.0 million, respectively.

Long-term debt as of December 31, 2020 and 2019, is as follows (in thousands):

(in thousands)

Long-term debt

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Long-term debt non-current

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 8 – LEASES

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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.

At January 1, 2019, we recognized a lease liability and corresponding 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 present values of our lease liability and corresponding ROU asset are $ 12.1 million and $ 9.3 million, respectively, as of December 31, 2020.

Our leases have remaining lease terms of 4 months to 11 years .

One lease has a renewal option to extend the lease for an additional term of 2 years .

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

One lease has a renewal option to extend the lease for an additional term of two years .

The initial commitment period of the 45 % rate was for a period of three ( 3 ) years.

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We took possession of this space in October 2019, with rental payments beginning in November 2019.

The following components of lease expense are included in the Company’s consolidated statements of operations for the year ended December 31, 2019 and 2018:

The following components of lease expense are included in the Company’s consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018:

(in thousands)

8 unchanged sentences

Total lease liability

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2020, the maturities of lease liabilities were as follows:

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We used the incremental borrowing rate of 10.25 % on February 28, 2019, for operating leases that commenced prior to that date.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 9 – INCOME TAXES

We account for income taxes under the asset and liability method.

Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

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Based upon management's assessment of all available evidence, we believe that it is more-likely-than-not that the deferred tax assets will not be realizable, and therefore, a valuation allowance has been established.

The valuation allowance for deferred tax assets was approximately $ 186,711,000 and $ 142,947,000 as of December 31, 2019 and 2018, respectively.

On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Act”) was signed into law.

Among other things, the Act reduced our corporate federal tax rate from 34 % to 21 % effective January 1, 2018.

As a result, we were required to re-measure, through income tax expense, our deferred tax assets and liabilities using the enacted rate at which we expect them to be recovered or settled.

The re-measurement of our net deferred tax asset would have resulted in additional income tax expense of $ 51,767,584 as of December 31, 2017;

however, with full valuation allowance in place, the expense was reversed through a corresponding adjustment to the valuation allowance, resulting in no impact on income tax expense.

The valuation allowance for deferred tax assets was approximately $ 276.7 million and $ 186.7 million as of December 31, 2020 and 2019, respectively.

The CARES Act was enacted on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic in the United States.

There are several provisions of the CARES Act that were considered in the December 31, 2020 year-end tax provision as follows.

Under the CARES Act, a net operating loss carryforward (“NOL”) arising in tax years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss.

The Company has incurred taxable losses in prior years;

therefore, there is no carry-back opportunity to the Company.

Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), deductible interest expense was limited to 30% of adjusted taxable income.

The CARES Act increased the limit to 50% of adjusted taxable income for 2019 and 2020 and allowed companies to elect to use 2019 adjusted taxable income for the 2020 limitation, if it resulted in more interest expense allowed.

Due to the significant amount of taxable losses, this provision did not provide any benefit to the Company as all interest expense is disallowed (except as offset by interest income), even under the 50% limitation and using 2019 adjusted taxable income.

The CARES Act allows employers to defer the deposit and payment of the employer’s share of Social Security taxes during the payroll tax deferral period of March 27, 2020 through December 31, 2020.

The CARES Act provides for half of the deferred payroll taxes to be paid by December 31, 2021 and the second half to be paid by December 31, 2022.

The Company did not participate in this deferral program.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2020, we have U.S.

net operating loss carryforwards (“NOLs”) of approximately $ 709,949,000 , research and development credit carryforwards (“R&D credits”) of approximately $ 22,483,000 and business interest expense carryforward of $ 3,189,000 .

NOLs of approximately $ 956.3 million, research and development credit carryforwards (“R&D credits”) of approximately $ 27.6 million and business interest expense carryforwards of $ 7.5 million.

For income tax purposes, these NOLs and R&D credits will expire in various amounts through 2037.

NOLs generated after 2017 and the business interest expense carryforwards do not expire.

The Tax Reform Act of 1986 contains provisions which limit the ability to utilize net operating loss carryforwards and R&D credit carryforwards in the case of certain events including significant changes in ownership interests.

The Tax Reform Act of 1986 contains provisions which limit the ability to utilize NOL carryforwards and R&D credit carryforwards in the case of certain events including significant changes in ownership interests.

The Exchange Transaction with TG Bio may have resulted in a “change in ownership” as defined by IRC Section 382 of the Internal Revenue Code of 1986, as amended.

11 unchanged sentences

Net deferred tax assets

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

There was no current or deferred income tax expense for the year ended December 31, 2020.

Income tax expense differed from amounts computed by applying the US Federal income tax rate of 21 % for the years ended December 31, 2019 and 2018, and 34 % for the year ended December 31, 2017 to pretax loss as follows:

Income tax expense differed from amounts computed by applying the U.S.

federal income tax rate of 21 % for the years ended December 31, 2020, 2019 and 2018, to pretax loss as follows:

For the year ended December 31,

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Change in the balance of the valuation allowance for deferred tax assets

We file income tax returns in the U.S Federal and various state and local jurisdictions.

We file income tax returns in the U.S.

federal and various state and local jurisdictions.

With certain exceptions, the Company is no longer subject to U.S.

1 unchanged sentence

However, NOLs and tax credits generated from those prior years could still be adjusted upon audit.

The Company would recognize interest and penalties, if any, to uncertain tax position in income tax expense in the statement of operations.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The Company would recognize interest and penalties, if any, to uncertain tax positions in income tax expense in the statement of operations.

There was no accrual for interest and penalties related to uncertain tax positions for 2020.

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In addition, upon commercialization, Ildong will make royalty payments to us on net sales of ublituximab in the sublicense territory.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

TGR-1202 (Umbralisib)

2 unchanged sentences

Under the terms of the TGR-1202 License, Rhizen received a $4.0 million cash payment and 371,530 shares of our common stock as an upfront license fee.

With respect to umbralisib, Rhizen will be eligible to receive regulatory filing, approval and sales-based milestone payments in the aggregate of approximately $ 175 million, a small portion of which will be payable on the first New Drug Application (NDA) filing and the remainder on approval in multiple jurisdictions for up to two oncology indications and one non-oncology indication and attaining certain sales milestones.

With respect to umbralisib, Rhizen is eligible to receive an aggregate of approximately $175 million in milestone payments, a small portion of which is attributable to the milestone paid upon the NDA filing for umbralisib and that will be payable based on the February 2021 FDA approval of umbralisib.

The remainder of the milestone payments are payable on 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.

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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 $ 4.1 million and $ 0.6 million for the years ended December 31, 2019 and 2018, the majority of which relates to manufacturing expenses of PD-L1.

The relevant expenses are recorded in other research and development in the accompanying consolidated statement of operations.

We incurred expenses of approximately $ 1.1 million, $ 4.1 million and $ 0.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, the majority of which relates to manufacturing expenses and milestone payments of PD-L1.

The relevant expenses are recorded in other research and development in the accompanying consolidated statements of operations.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

In May 2016, as part of a broader agreement with Jubilant Biosys (“Jubilant”), we entered into a sub-license agreement (“JBET Agreement”) with Checkpoint Therapeutics, Inc.

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(“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 Bruton’s Tyrosine Kinase inhibitors containing the compounds of either TG-1701 (SHR1459 or EBI1459) or TG1702 (SHR1266 or EBI1266).

Pursuant to the agreement, in April 2018, we paid Jiangsu 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 addition, in July 2019, we paid Jiangsu 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.

Jiangsu is eligible to receive milestone payments totaling approximately $ 350 million upon and subject to the achievement of certain milestones.

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 consolidated statement of operations.

In addition, 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.

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.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

anti-CD47/anti-CD19

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NOTE 11 – RELATED PARTY TRANSACTIONS

LFB Biotechnologies

On January 30, 2012, we entered into an exclusive license agreement with LFB Biotechnologies, GTC Biotherapeutics and LFB/GTC LLC, all wholly-owned subsidiaries of LFB Group, relating to the development of ublituximab (the “LFB License Agreement”).

In connection with the LFB License Agreement, LFB Group was issued 5,000,000 shares of common stock, and a warrant to purchase 2,500,000 shares of common stock at a purchase price of $ 0.001 per share.

Under the terms of the LFB License Agreement, we utilize LFB Group for certain development and manufacturing services.

As of December 31, 2020 we accrued approximately $ 6.0 million in expense related to the achievement of certain milestones of the LFB License Agreement.

These expenses are included in other research and development expenses in the accompanying consolidated statements of operations.

As of December 31, 2020, we had approximately zero recorded in accounts payable related to the LFB License Agreement.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Other Parties

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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 Right of Use (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.

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.

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 allocated build-out costs have been recorded in Leasehold Interest, net on the Company's 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.

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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 $ 0.9 million, $ 1.6 million and $ 1.2 million for shared services for the years ended December 31, 2019, 2018 and 2017, primarily related to shared personnel.

In connection with the Shared Services Agreement, we incurred expenses of approximately $ 0.8 million, $ 0.9 million and $ 1.6 million for shared services for the years ended December 31, 2020, 2019 and 2018, respectively, primarily related to shared personnel.

In May 2016, as part of a broader agreement with Jubilant, we entered into a sublicense agreement with Checkpoint, a subsidiary of FBIO, for the development and commercialization of Jubilant’s novel BET inhibitor program in the field of hematological malignancies.

We paid Checkpoint an up-front licensing fee of $ 1.0 million in July 2016 and incurred expenses of $ 0.2 million in March 2017 for the first milestone achievement as part of the JBET Agreement which is recorded in other research and development in the accompanying consolidated statement of operations.

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.

In March 2015, we entered into the 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.

The relevant expenses are recorded in other research and development in the accompanying consolidated statements of operations.

TG Therapeutics, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements

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 $ 4.1 million and $ 0.6 million for the years ended December 31, 2019 and 2018 , the majority of which relates to manufacturing expenses of PD-L1.

The relevant expenses are recorded in other research and development in the accompanying consolidated statement of operations.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

As of December 31, 2020, we have known contractual obligations;

commitments and contingencies of $ 97.6 million related to our long term liabilities and operating lease obligations.

commitments and contingencies of $ 65.2 million related to our short- and long-term liabilities and operating lease obligations.

Payment due by period (in thousands)

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The preceding table shows future minimum lease commitments, which include our office leases in New York, New Jersey, North Carolina and Tennessee by year as of December 31, 2020.

TG Therapeutics, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 13 – QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

3 Months Ended

September 30,

(in thousands)

License revenue

Total costs and expenses

Basic and diluted net loss per common share

3 Months Ended

September 30,

(in thousands)

License revenue

Total costs and expenses

Basic and diluted net loss per common share

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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/s/ William J.

/s/ Sagar Lonial

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures