What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-06 compared with 2021-05-10 · 114 added, 116 removed, 382 unchanged (38% of the section changed)

11 unchanged sentences

Restricted cash

Long-term investment securities

Right of use assets

Leasehold interest, net

Equipment, net

Right of use assets

Liabilities and stockholders’ equity

12 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.001 par value per share ( 10,000,000 shares authorized, no ne issued and outstanding as of March 31, 2021 and December 31, 2020)

Common stock, $ 0.001 par value per share ( 150,000,000 shares authorized, 141,520,696 and 140,617,606 shares issued, 141,479,387 and 140,576,297 shares outstanding at March 31, 2021 and December 31, 2020, respectively)

Common stock, $ 0.001 par value per share ( 175,000,000 shares authorized, 142,873,795 and 140,617,606 shares issued, 142,832,486 and 140,576,297 shares outstanding at June 30, 2021 and December 31, 2020, respectively)

Additional paid-in capital

Treasury stock, at cost, 41,309 shares at March 31, 2021 and December 31, 2020

Treasury stock, at cost, 41,309 shares at June 30, 2021 and December 31, 2020

Accumulated deficit

7 unchanged sentences

Three months ended

Six months ended

Product revenue, net

29 unchanged sentences

Balance at March 31, 2020

Issuance of common stock in connection with exercise of options

Issuance of restricted stock

Forfeiture of restricted stock

Issuance of common stock in public offering

Issuance of common stock in At-the-Market offerings (net of offering costs of $ 0.5 million)

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

Balance at June 30, 2020

Treasury Stock

7 unchanged sentences

( 1,071,225 )

Issuance of common stock in connection with exercise of options

Issuance of restricted stock

Forfeiture of restricted stock

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

Balance at June 30, 2021

( 1,149,722 )

*Amount less than one thousand dollars

3 unchanged sentences

(in thousands)

Three months ended

Six months ended

CASH FLOWS FROM OPERATING ACTIVITIES

8 unchanged sentences

Changes in assets and liabilities:

Increase in other current assets

(Increase) decrease in other current assets

Increase in accounts receivable

10 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of loan payable

Proceeds from sale of common stock, net

Proceeds from exercise of options

1 unchanged sentence

Net cash (used in) provided by financing activities

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

9 unchanged sentences

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.

and our subsidiaries on a consolidated basis.

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

In addition to an active research pipeline including five investigational medicines across these therapeutic areas, UKONIQ received accelerated approval from the FDA for the treatment of adult patients with relapsed or refractory marginal zone lymphoma (MZL) who have received at least one prior anti-CD20-based regimen and relapsed or refractory follicular lymphoma (FL) 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.

Currently, we have three 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

1 unchanged sentence

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.

generally accepted accounting principles (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.

2 unchanged sentences

The accompanying condensed December 31, 2020 balance sheet has been derived from these statements.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.

The results of operations for the three and six months ended June 30, 2021 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.

6 unchanged sentences

We have incurred operating losses since our inception and expect to continue to incur operating losses for the foreseeable future and may never become profitable.

As of March 31, 2021, we have an accumulated deficit of $ 1.1 billion.

As of June 30, 2021, we have an accumulated deficit of $ 1.1 billion.

Our major sources of cash have been proceeds from private placements and public offerings of equity securities.

During the first quarter of 2021, umbralisib, now referred to as UKONIQ, was granted accelerated approval in the United States for the treatment of adult patients with relapsed or refractory MZL who have received at least one prior anti-CD20 based regimen and adult patients with relapsed or refractory FL who have received at least three prior lines of systemic therapy.

In February of 2021, umbralisib, now referred to as UKONIQ, was granted accelerated approval in the United States for the treatment of adult patients with relapsed or refractory MZL who have received at least one prior anti-CD20 based regimen and adult patients with relapsed or refractory FL who have received at least three prior lines of systemic therapy.

Commercial sales of UKONIQ commenced in the first quarter of 2021.

We have generated limited revenues to date from product sales.

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

Our ability to achieve profitability depends on many factors,

including our ability to generate revenue, our ability to obtain regulatory approvals for our drug candidates, our ability to successfully complete any post-approval regulatory obligations and our ability to successfully commercialize our drug candidates.

Even with the commercialization of UKONIQ and the potential future commercialization of our other drug candidates, we may not meet revenue guidance or become profitable.

Our ability to achieve profitability depends on many factors, including our ability to generate revenue, our ability to obtain regulatory approvals for our drug candidates, our ability to successfully complete any post-approval regulatory obligations and our ability to successfully commercialize

our drug candidates.

We may continue to incur substantial operating losses even as we begin to generate revenues from our drug candidates.

As of March 31, 2021, we had $ 523.8 million in cash and cash equivalents, and investment securities.

We anticipate that our cash and cash equivalents, and investment securities as of March 31, 2021 will provide sufficient liquidity for more than a twelve-month period from the date of filing this Quarterly Report on Form 10-Q.

As of June 30, 2021, we had $ 456.2 million in cash and cash equivalents, and investment securities.

We anticipate that our cash and cash equivalents, and investment securities as of June 30, 2021 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, our UKONIQ commercialization efforts, preparations for the potential commercialization of our other drug candidates, and the timing, design and conduct of clinical trials for our drug candidates.

2 unchanged sentences

Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included in our 2020 Annual Report on Form 10-K, except as it relates to revenue recognition, accounts receivable, inventory, cost of product revenue, and the adoption of new accounting standards during the three months ended March 31, 2021, as discussed below.

Our significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included in our 2020 Annual Report on Form 10-K, except as it relates to revenue recognition, accounts receivable, inventory, cost of product revenue, and the adoption of new accounting standards during the six months ended June 30, 2021, as discussed below.

Revenue Recognition

35 unchanged sentences

● product that the Company, at its sole discretion, has specified can be returned for credit.

As of March 31, 2021, the Company has not received any returns.

As of June 30, 2021, the Company has not received any returns.

Co-Payment Assistance Programs:

5 unchanged sentences

We analyze accounts that are past due for collectability, and regularly evaluate the creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles.

As of March 31, 2021, we determined an allowance for expected credit losses related to outstanding accounts receivable was currently not required based upon our review of contractual payment terms and individual customer circumstances.

As of June 30, 2021, we determined an allowance for expected credit losses related to outstanding accounts receivable was currently not required based upon our review of contractual payment terms and individual customer circumstances.

Cost of Product Revenue

Cost of product revenue consists primarily of materials, third-party manufacturing costs, as well as freight and royalties owed to our licensing partner for UKONIQ sales.

Based on our policy to expense costs associated with the

manufacture of our products prior to regulatory approval, the manufacturing costs of UKONIQ units recognized as revenue during the three months ended March 31, 2021 were expensed prior to receipt of FDA approval on February 5, 2021, and therefore are not included in costs of product revenue during the current period.

Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, the manufacturing costs of UKONIQ units recognized as revenue during the three and six months ended June 30, 2021 were expensed prior to receipt of FDA approval on February 5, 2021, and therefore are not included in costs of product revenue during the current period.

Prior to regulatory approval, we expense costs relating to the production of inventory as research and development expense in the period incurred.

6 unchanged sentences

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 should the Company realize net income during the period presented.

The cumulative amounts of potentially dilutive securities excluded from the calculation were 12,129,734 securities and 8,579,266 securities for the three month period ended March 31, 2021 and 2020, respectively.

The cumulative amounts of potentially dilutive securities excluded from the calculation were 13,255,355 securities and 10,535,748 securities for the six months ended June 30, 2021 and 2020, 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 Months Ended

Six Months Ended

Unvested restricted stock

12 unchanged sentences

The standard has tiered effective dates, starting in 2020 for calendar-year public business entities PBEs that meet the definition of an SEC filer, excluding smaller reporting companies.

Early adoption is permitted for annual and interim

goodwill impairment testing dates after 1 January 2017.

Early adoption is permitted for annual and interim goodwill impairment testing dates after 1 January 2017.

Adoption of ASU 2017-04 did not have any impact to our condensed consolidated financial statements.

5 unchanged sentences

We record our best estimate of sales discounts and allowances to which customers are likely to be entitled.

The reconciliation of gross product sales to net product sales by each significant category of gross-to-net adjustments was as follows for the three months ended March 31, 2021:

The reconciliation of gross product sales to net product sales by each significant category of gross-to-net adjustments was as follows for the three and six months ended June 30, 2021:

(in thousands)

Three months ended

Six months ended

June 30, 2021

Gross product revenue

1 unchanged sentence

Chargebacks and administrative fees

Government rebates and co-payment assistance

Trade discounts and allowances

Government rebates and co-payment assistance

Sales returns and allowances

1 unchanged sentence

Net product revenue

(1) As of March 31, 2021 approximately $ 0.1 million of estimated gross-net-accruals have been recorded as a reduction of accounts receivable, net and within accounts payable and accrued expenses on the condensed consolidated balance sheets.

(1) As of June 30, 2021 approximately $ 0.2 million of estimated gross-net-accruals have been recorded as a reduction of accounts receivable, net and within accounts payable and accrued expenses on the condensed consolidated balance sheets.

NOTE 3 INVESTMENT SECURITIES

Our investments as of March 31, 2021 and December 31, 2020 are classified as held-to-maturity.

Our investments as of June 30, 2021 and December 31, 2020 are classified as held-to-maturity.

Held-to-maturity investments are recorded at amortized cost.

The following table summarize our investment securities at March 31, 2021 and December 31, 2020:

March 31, 2021

The following table summarize our investment securities at June 30, 2021 and December 31, 2020:

June 30, 2021

(in thousands)

2 unchanged sentences

Short-term investments:

Obligations of domestic governmental agencies (maturing between April 2021 and March 2022) (held-to-maturity)

Total short-term investment securities

Obligations of domestic governmental agencies (maturing between July 2021 and April 2022) (held-to-maturity)

Long-term investments:

Obligations of domestic governmental agencies (maturing between February 2023 and June 2023) (held-to-maturity)

Total short-term and long-term investment securities

December 31, 2020

11 unchanged sentences

● Level 3 unobservable inputs that are not corroborated by market data.

As of March 31, 2021 and December 31, 2020, 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 $ 20.5 million at March 31, 2021 and $ 20.3 million at December 31, 2020.

No payments have been made on the 5 % Notes since the merger and through March 31, 2021.

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 March 31, 2021 and December 31, 2020.

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 March 31, 2021 and December 31, 2020:

Financial liabilities at fair value as of March 31, 2021

As of June 30, 2021 and December 31, 2020, the fair values of cash and cash equivalents, restricted cash, and notes and interest payable, approximate their carrying values.

The following tables provide the fair value measurements of applicable financial liabilities as of June 30, 2021 and December 31, 2020:

Financial liabilities at fair value as of June 30, 2021

(in thousands)

3 unchanged sentences

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 three months ended March 31, 2021:

The following table summarizes the changes in Level 3 instruments during the six months ended June 30, 2021:

(in thousands)

2 unchanged sentences

Change in fair value of Level 3 liabilities

Balance at March 31, 2021

Balance at June 30, 2021

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.

8 unchanged sentences

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 FBR, Inc.

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.

Under the 2020 ATM, we paid 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.

The 2021 ATM has replaced the 2020 ATM as the only active ATM program.

We had no activity on the 2021 ATM during the six months ended June 30, 2021.

The 2019 WKSI Shelf is currently our only active shelf-registration statement.

4 unchanged sentences

Amended and Restated 2012 Incentive Plan (the 2012 Incentive Plan) was approved by stockholders in June 2020.

As of March 31, 2021, 10,974,039 shares of restricted stock and 2,490,396 options were outstanding and up to an additional 3,187,593 shares may be issued under the 2012 Incentive Plan.

As of June 30, 2021, 12,110,206 shares of restricted stock and 2,479,622 options were outstanding and up to an additional 1,845,268 shares may be issued under the 2012 Incentive Plan.

Stock-based compensation expense included in the condensed consolidated statements of operations was $ 16.3 million and $ 7.4 million for the three months ended June 30, 2021 and 2020, respectively, and $ 32.9 million and $ 18.4 million for the six months ended June 30, 2021 and 2020, respectively.

The following table summarizes the activity for stock options and restricted stock for the six months ended June 30, 2021:

(in thousands)

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2021:

exercise price

intrinsic value

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Total expense associated with the stock options was approximately $ 0.6 million and $ 3.9 million during the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, there was approximately $ 1.2 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 March 31, 2021, 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.

There were no option awards granted during the three months ended March 31, 2021 and 2020.

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 three months ended March 31, 2021:

Weighted-average

grant date fair

Number of shares

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Total expense associated with restricted stock grants was approximately $ 16.0 million and $ 7.1 million during the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, there was approximately $ 79.5 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 March 31, 2021, 2,910,511 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 months ended March 31, 2021 and 2020:

Three months ended

Equity awards outstanding, beginning of year

Changes during the year:

Exercised/ vested

Expired or Forfeited

Equity awards outstanding, end of period

As of June 30, 2021, total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized were as follows:

(in thousands)

Stock-based compensation expense associated with restricted stock

Stock-based compensation expense associated with option grants

Stock Options

Restricted Stock

Unrecognized compensation cost

Expected weighted-average period in years of compensation cost to be recognized

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 .

10 unchanged sentences

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 %.

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) and all accrued and unpaid interest, subject to a prepayment charges of:

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 was extended to April 1, 2021.

At our option, 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) and all accrued and unpaid interest, subject to a prepayment charges of:

3.0 % if such advance is prepaid in any of the first twelve months following the Closing Date;

2 unchanged sentences

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 March 31, 2021 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 .

As of June 30, 2021, we have paid approximately $ 7.2 million of the principal loan balance due to Hercules.

The Term Loan repayment schedule continues with monthly principal payments ranging from approximately $ 2.4 to $ 2.7 million per month through March 1, 2022.

The Term Loan is secured by a lien on substantially all of our assets, other than intellectual property, and contains customary covenants and representations.

As of June 30, 2021 and through the filing date of this report, the Company has been in compliance with all covenants.

The Loan Agreement contains several events of default, which we are in compliance with all terms.

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

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

11 unchanged sentences

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 $ 0.2 million for the three months ended March 31, 2021 and 2020.

At March 31, 2021, the remaining unamortized balance of debt issuance costs was $ 0.8 million.

The loan payable as of March 31, 2021 and December 31, 2020 is as follows:

Amortization of debt issuance costs was $ 0.2 million for each of the three months ended June 30, 2021 and 2020, respectively, and $ 0.5 million for each of the six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021, the remaining unamortized balance of debt issuance costs was $ 0.6 million.

The loan payable as of June 30, 2021 and December 31, 2020 is as follows:

(in thousands)

1 unchanged sentence

unamortized debt issuance costs

principal payments

Total loan payable

current portion

7 unchanged sentences

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 present values of our lease liability and corresponding ROU asset are $ 11.9 million and $ 9.1 million, respectively, as of March 31, 2021.

The present values of our lease liability and corresponding ROU asset are $ 11.7 million and $ 9.0 million, respectively, as of June 30, 2021.

Our leases have remaining lease terms of 2 years to 10 years .

2 unchanged sentences

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 March 31, 2021, 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 condensed consolidated balance sheets.

Additional collateral of $ 0.6 million was pledged in April 2018 to increase the letter of credit for the office space.

As of June 30, 2021, the allocation rate is 65 % and will be evaluated again in August 2021 for the following rent year.

Also in connection with this lease, we have pledged $ 1.2 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 condensed consolidated balance sheets.

In October 2019, we finalized a five-year lease for office space in New Jersey (the NJ Lease).

1 unchanged sentence

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

We incurred rent expense of $ 0.1 million for the three months ended March 31, 2021.

The following components of lease expense are included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020:

We incurred rent expense of $ 0.1 million for the six months ended June 30, 2021.

The following components of lease expense are included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020:

Three months ended

Six months ended

(in thousands)

1 unchanged sentence

Net lease cost

As of March 31, 2021, the weighted-average remaining operating lease term was 7.6 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 three months ended March 31, 2021 was $ 0.5 million.

As of June 30, 2021, the weighted-average remaining operating lease term was 7.5 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 six months ended June 30, 2021 was $ 1.0 million.

The balance sheet classification of lease liabilities was as follows:

3 unchanged sentences

Total lease liability

As of March 31, 2021, the maturities of lease liabilities were as follows:

As of June 30, 2021, the maturities of lease liabilities were as follows:

(in thousands)

Remainder of 2021

Total lease payments

8 unchanged sentences

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 March 31, 2021 and 2020, and at March 31, 2021 and December 31, 2020, have deferred revenue of approximately $ 0.7 million and $ 0.8 million, respectively, associated with this $ 2 million payment (approximately $ 0.1 million of which has been classified in current liabilities at March 31, 2021 and December 31, 2020).

We recorded license revenue of approximately $ 38,000 for each of the three months ended June 30, 2021 and 2020, and approximately $ 76,000 for each of the six months ended June 30, 2021 and 2020, and at June 30, 2021 and December 31, 2020, have deferred revenue of approximately $ 0.7 million and $ 0.8 million, respectively, associated with this $ 2 million payment (approximately $ 0.2 million of which has been classified in current liabilities at June 30, 2021 and December 31, 2020).

We may receive up to an additional $ 5.0 million in payments upon the achievement of pre-specified milestones.

2 unchanged sentences

Under the license agreement, we have acquired the exclusive worldwide rights (exclusive of France/Belgium) for the development and commercialization of ublituximab.

As of March 31, 2021 we have incurred approximately $ 3.0 million and accrued approximately $ 3.0 million related to milestones.

As of June 30, 2021 we have incurred approximately $ 7.0 million and accrued approximately $ 3.0 million related to milestones.

LFB Group is eligible to receive payments of up to an aggregate of approximately $ 31.0 million upon our successful achievement of certain clinical development, regulatory, and sales milestones, in addition to royalty payments on net sales of ublituximab at a royalty rate that escalates from mid-single digits to high-single digits.

3 unchanged sentences

Prior to this, we had been jointly developing umbralisib in a 50:50 joint venture with Rhizen.

During the three months ended March 31, 2021, we paid Rhizen $ 12.0 million as part of a primary indication approval milestone for launch of product in the US in accordance with the terms of the Umbralisib License.

During the six months ended June 30, 2021, we paid Rhizen $ 12.0 million as part of a primary indication approval milestone for launch of product in the US 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 $ 175 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.

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 receives tiered royalties that escalate from high single digits to low double digits on any net sales of umbralisib and any New Product.

During the three months ended March 31, 2021, the Company recorded $ 0.1 million related to the worldwide royalty due under the Umbralisib License in cost of product revenue based on U.S.

sales of UKONIQ and as of March 31, 2021, $ 0.1 million in royalties were payable under the Umbralisib License Agreement.

During the three and six months ended June 30, 2021, the Company recorded $ 0.1 million and $ 0.2 million, respectively, related to the worldwide royalty due under the Umbralisib License in cost of product revenue based on U.S.

sales of UKONIQ and as of June 30, 2021, $ 0.1 million in royalties were payable under the Umbralisib License.

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, or (ii) by either party due to a breach of the agreement.

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, or (ii) by either party due to a breach of the agreement.

PDL1 (Cosibelimab)

1 unchanged sentence

(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 months ended March 31, 2021 and 2020, respectively.

The Collaboration Agreement was amended in June 2019 and in March of 2020 we achieved the first milestone event for which we incurred expenses of zero for each of the three months ended June 30, 2021 and 2020, respectively, and zero and approximately $ 0.9 million for the six months ended June 30, 2021 and 2020, respectively.

In January 2018, we entered into a global exclusive license agreement with Jiangsu Hengrui Medicine Co.

6 unchanged sentences

Royalty payments in the low double digits are due on net sales of licensed products and revenue from sublicenses.

We incurred expenses of approximately $ 0.5 million and $ 0.8 million for the three months ended March 31, 2021 and 2020, respectively, the majority of which relates to manufacturing expenses of BTK.

We incurred expenses of approximately $ 4.1 million and $ 0.9 million for the three months ended June 30, 2021 and 2020, respectively, and $ 4.9 million and $ 1.8 million for the six months ended June 30, 2021 and 2020, 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.

4 unchanged sentences

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.

As of March 31, 2021 we accrued $ 2.0 million in milestone expense related to patient enrollment.

As of June 30, 2021, we have incurred approximately $ 2.0 million in milestone expense related to patient enrollment.

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.

3 unchanged sentences

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 $ 0.2 million for shared services for each of the three months ended March 31, 2021 and 2020, primarily related to shared personnel.

In connection with the Shared Services Agreement, we incurred expenses of approximately $ 0.2 million for each of the three months ended June 30, 2021 and 2020, and expenses of approximately $ 0.4 million for each of the six months ended June 30, 2021 and 2020, primarily related to shared personnel.

Please refer to Note 7 - Leases for details regarding the Office Agreement with FBIO, as well as Note 8 - License Agreements for details regarding the Collaboration Agreement with Checkpoint.

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-Q

Item 1. Financial Statements