SEC Filing | TG Therapeutics, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-32639

TG THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware	36-3898269
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3020 Carrington Mill Blvd, Suite 475

Morrisville, North Carolina 27560

(Address including zip code of principal executive offices)

(212) 554-4484

(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbol(s)	Exchange Name
Common Stock, par value $0.001	TGTX	Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer ☐

Non-accelerated filer ☐	Smaller reporting company ☐

	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 150,977,564 shares of the registrant’s common stock, $0.001 par value, outstanding as of August 2, 2023.

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TG THERAPEUTICS, INC.

FORM 10-Q

FOR THE QUARTER ENDED June 30, 2023

TABLE OF CONTENTS


SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS		3

SUMMARY RISK FACTORS		4

PART I	FINANCIAL INFORMATION	6

Item 1	Financial Statements:	6

	Condensed Consolidated Balance Sheets	6

	Condensed Consolidated Statements of Operations (unaudited)	7

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)	8

	Condensed Consolidated Statements of Cash Flows (unaudited)	9

	Notes to Condensed Consolidated Financial Statements (unaudited)	10

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4	Controls and Procedures	31

PART II	OTHER INFORMATION	31

Item 1	Legal Proceedings	31

Item 1A	Risk Factors	32

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	82

Item 3	Defaults of Senior Securities	82

Item 4	Mine Safety Disclosures	82

Item 5	Other Information	82

Item 6	Exhibits	83

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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report, including matters discussed under the captions “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or the negative of these words or other comparable terminology, although not all forward-looking statements contain these identifying words.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about:

●our ability to obtain and maintain regulatory approvals for our product candidates, including TG-1701 and TG-1801, as well as any other product candidates, and our ability to maintain regulatory approval of BRIUMVI^® (ublituximab) in relapsing forms of multiple sclerosis (RMS) in the United States (U.S.) and in the European Union (EU);

●our ability to adapt and expand our commercial infrastructure to successfully launch, market and sell BRIUMVI and our other product candidates;

●our ability to maintain a reliable supply of our products that meets market demand;

●the success of the ongoing commercialization of BRIUMVI or any future products or combinations of products, including the anticipated rate and degree of market acceptance and pricing and reimbursement;

●the initiation, timing, progress and results of our pre-clinical studies and clinical trials;

●our ability to advance drug candidates into, and successfully complete, clinical trials;

●our ability to develop, formulate, manufacture and commercialize our product candidates;

●our ability to establish and maintain contractual relationships and partnerships, on commercially reasonable terms, with third parties for manufacturing, distribution, marketing and supply, and a range of other support functions for our clinical development and commercialization efforts;

●the implementation of our business model and, strategic plans for our business and drug candidates;

●the scope of protection we are able to establish and maintain for intellectual property rights covering our product and product candidates;

●estimates of our expenses, future revenues, capital requirements and our needs for additional financing;

●our ability to maintain and establish collaborations and enter into strategic arrangements, if desired;

●our ability to meet any of our financial projections or guidance, including without limitation short and long-term revenue projections or guidance and changes to the assumptions underlying those projections or guidance;

●our ability to obtain sufficient capital to fund our planned operations;

●our financial performance and cash burn management;

●our ability to maintain or obtain adequate product liability and other insurance coverage; and

●developments relating to our competitors and our industry.

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SUMMARY RISK FACTORS

Our business is subject to a number of risks of which you should be aware before making an investment decision. The risks described below are a summary of the principal risks associated with an investment in us and are not the only risks we face. You should carefully consider these risks, the risk factors in Item IA, and the other reports and documents that we have filed with the Securities and Exchange Commission (SEC).

Risks Related to Commercialization

●	If we are unable to maintain current approval of BRIUMVI our business will be materially harmed.

●	We cannot predict when or if we will obtain regulatory approval to commercialize our product candidates, including TG-1701 and TG-1801 in B-cell disorders.

●	We have limited experience operating as a commercial company, and, as a result, the marketing and sale of BRIUMVI in RMS may be less successful than anticipated.

●	If BRIUMVI or any of our future product candidates (if approved) do not achieve broad market acceptance among physicians, patients, payors, or the medical community, the revenues that we generate from product sales will be limited.

●

If the market opportunities for BRIUMVI and any future products for which we may receive approval, including TG-1701 or TG-1801 in B-cell disorders, are smaller than we estimate or if any approval we obtain is based on a narrower patient population or the labeling includes warnings or limitations that are not acceptable to patients or healthcare providers, our revenue will be adversely affected.

●

We face substantial competition for treatments for our target indications, including from companies with greater resources than we have, which may result in others commercializing drugs before or more successfully than we do, which could result in the reduction or elimination of our commercial opportunity.

●	If we are unable to generate sufficient revenue, we may need to raise substantial additional capital to sustain our business.

●	Product liability lawsuits could cause us to incur substantial liabilities and limit product commercialization.

Risks Related to Drug Development and Regulatory Approval

●	If we are unable to obtain or maintain regulatory approval for our product or product candidates and ultimately cannot commercialize one or more of them, or if we experience significant delays in doing so, our business will be materially harmed.

●	Our product and product candidates may cause undesirable side effects that could delay or prevent their regulatory approval or significantly limit their commercial profile following marketing approval, if any, or result in withdrawal from the market if approved.

●

Because results of preclinical studies and early clinical trials are not necessarily predictive of future results, any product candidate we advance may not have favorable results in later clinical trials. Moreover, interim, “top-line,” and preliminary data from our clinical trials that we announce or publish may change, or the perceived product profile may be impacted, as more patient data or additional endpoints are analyzed.

●	Any products or product candidates we may advance through clinical development are subject to extensive regulation, which can be costly and time consuming, cause unanticipated delays, or prevent the receipt of the required approvals.

Risks Related to Governmental Regulation of the Pharmaceutical Industry

●	We are subject to extensive regulation, including new legislative and regulatory proposals, including efforts to control, set or cap pricing for approved drugs, which may increase our compliance costs and adversely affect our ability to market our products, obtain collaborators and raise capital.

●	If we fail to comply with various healthcare laws and regulations, we may incur losses or be subject to civil or criminal liability.

●	If we fail to comply with regulatory requirements, any product candidate may fail to receive regulatory approval and any product for which we obtain marketing approval could be subject to restrictions or withdrawal from the market and we may be subject to penalties.

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Risks Related to our Dependence on Third Parties

●

Our reliance on third parties for commercial and clinical supply of our product and product candidates increases the risk that we will not have sufficient quantities of our product or product candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

●

If the third parties on which we rely to conduct our clinical trials and generate clinical, preclinical, and other data necessary to support our regulatory applications do not perform their services as required, we may not be able to obtain regulatory approval for or commercialize our product or product candidates when expected or at all.

●	Because we have in-licensed our product and product candidates from third parties, any dispute with, or non-performance by our licensors will adversely affect our ability to develop and commercialize the applicable product.

Risks Related to Intellectual Property

●

Our success depends upon our ability to obtain and protect our intellectual property, and if the scope of our patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.

●	Our patent protection could be reduced or eliminated for non-compliance with various procedural and other requirements imposed by governmental patent agencies.

●	We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

●	If we or our partners are sued for infringing intellectual property rights of third parties, it will be costly and time consuming to defend against such lawsuits, and an unfavorable outcome in any such lawsuit would have a material adverse effect on our business.

●	If we are unable to protect the confidentiality of our trade secrets, our business may be significantly harmed.

Risks Related to our Financial Position and Need for Additional Capital

●	We have incurred significant operating losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.

●	We may need to raise substantial additional funding. If we are unable to raise capital, if needed, we may be required to delay, limit, reduce, or eliminate some of our drug development programs or commercialization efforts.

●	Our level of indebtedness and debt service obligations could adversely affect our financial condition and may make it more difficult for us to fund our operations.

General Risk Factors

●	Public health issues including an epidemic or global pandemic, and specifically the pandemic caused by COVID-19, could have an adverse impact on our financial condition and results of operations and other aspects of our business.

●

Patients and healthcare providers have raised concerns that immunosuppressive products, like anti-CD20 antibodies and other B-cell targeted agents, may increase the risk of acquiring COVID-19 or lead to more severe complications upon infection. These concerns may impact the commercial potential for BRIUMVI and other immunosuppressive products that we have in development.

●	We will need to develop and expand our business, and we may encounter difficulties in managing this development and expansion.

●	Our ability to continue our clinical development and commercialization activities will depend on our ability to attract and maintain key management and other personnel.

●	Certain of our executive officers, directors and other stockholders own more than 5% of our outstanding common stock and may be able to influence our management and the outcome of matters submitted to shareholders for approval.

●	Certain anti-takeover provisions in our charter documents and Delaware law could make a third-party acquisition more difficult, which could limit the price investors might be willing to pay for our common stock.

●	Our stock price is, and we expect it to remain, volatile, which could limit investors’ ability to sell stock at a profit and could subject us to securities and shareholder derivative litigation.

●	Significant disruptions of information technology systems, breaches of data security, or unauthorized disclosures of sensitive data could harm our business and subject us to liability or reputational damage.

The foregoing is only a summary of some of our risks. These and other risks are discussed more fully in the section entitled “Risk Factors” in Part II, Item IA and elsewhere in this Quarterly Report on Form 10-Q (our Risk Factors).

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TG Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	June 30,		December 31,
	2023		2022
	(Unaudited)		(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	97,009	$	102,304
Short-term investment securities		47,896		59,374
Accounts receivable, net		17,484		—
Inventories		30,234		—
Prepaid research and development		4,863		4,237
Other current assets		11,088		2,359
Total current assets		208,574		168,274
Restricted cash		1,279		1,273
Long-term investment securities		—		12,404
Right of use assets		8,475		8,888
Leasehold interest, net		1,521		1,627
Equipment, net		206		307
Goodwill		799		799
Total assets	$	220,854	$	193,572

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	62,945	$	42,019
Other current liabilities		1,569		1,169
Lease liability – current portion		1,512		1,581
Accrued compensation		6,641		8,432
Total current liabilities		72,667		53,201
Deferred revenue, net of current portion		229		305
Loan payable – non-current		97,700		71,135
Lease liability – non-current		9,805		10,344
Total liabilities		180,401		134,985
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share (175,000,000 shares authorized, 150,969,323 and 146,426,697 shares issued, 150,928,014 and 146,385,388 shares outstanding at June 30, 2023 and December 31, 2022, respectively)		151		146
Additional paid-in capital		1,654,411		1,585,708
Treasury stock, at cost, 41,309 shares at June 30, 2023 and December 31, 2022		(234)		(234)
Accumulated deficit		(1,613,875)		(1,527,033)
Total stockholders’ equity		40,453		58,587
Total liabilities and stockholders’ equity	$	220,854	$	193,572

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

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TG Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three months ended				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue:
Product revenue, net	$	16,036	$	556	$	23,801	$	2,534
License revenue		38		38		76		76
Total revenue	$	16,074	$	594	$	23,877	$	2,610

Costs and expenses:
Cost of product revenue		1,911		23		2,768		260
Research and development:
Noncash compensation		5,664		2,328		7,247		4,223
Other research and development		22,458		24,546		36,744		70,693
Total research and development		28,122		26,874		43,991		74,916

Selling, general and administrative:
Noncash compensation		6,877		(3,304)		12,117		(3,077)
Other selling, general and administrative		23,838		15,942		46,666		36,324
Total selling, general and administrative		30,715		12,638		58,783		33,247

Total costs and expenses		60,748		39,535		105,542		108,423

Operating loss		(44,674)		(38,941)		(81,665)		(105,813)

Other expense (income):
Interest expense		3,627		3,017		6,471		5,681
Other income		(691)		(1,448)		(1,295)		(1,971)
Total other expense (income), net		2,936		1,569		5,176		3,710

Net loss	$	(47,610)	$	(40,510)	$	(86,841)	$	(109,523)

Basic and diluted net loss per common share	$	(0.34)	$	(0.30)	$	(0.62)	$	(0.81)

Weighted-average shares used in computing basic and diluted net loss per common share		141,503,738		134,779,904		140,911,295		134,591,250

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

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TG Therapeutics, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except share and per share amounts)

(Unaudited)



				Additional
	Common Stock			paid-in		Treasury Stock			Accumulated
	Shares	Amount		capital		Shares	Amount		Deficit		Total
Balance at January 1, 2022	143,292,043	$	143	$	1,565,942	41,309	$	(234)	$	(1,328,698)	$	237,153
Issuance of common stock in connection with exercise of options	30,411		*		125	—		—		—		125
Issuance of restricted stock	1,852,626		2		(2)	—		—		—		—
Forfeiture of restricted stock	(591,746)		*		*	—		—		—		—
Compensation in respect of restricted stock granted to employees, directors and consultants	—		—		2,121	—		—		—		2,121
Net loss	—		—		—	—		—		(69,013)		(69,013)
Balance at March 31, 2022	144,583,334		145		1,568,186	41,309		(234)		(1,397,711)		170,386
Issuance of common stock in connection with exercise of options	33,044		*		135	—		—		—		135
Issuance of restricted stock	1,830,320		2		(2)	—		—		—		—
Forfeiture of restricted stock	(1,248,640)		(2)		1	—		—		—		(1)
Compensation in respect of restricted stock granted to employees, directors and consultants	—		—		(975)	—		—		—		(975)
Net loss	—		—		—	—		—		(40,510)		(40,510)
Balance at June 30, 2022	145,198,058		145		1,567,345	41,309		(234)		(1,438,221)		129,035



				Additional
	Common Stock			paid-in		Treasury Stock			Accumulated
	Shares	Amount		capital		Shares	Amount		Deficit		Total
Balance at January 1, 2023	146,426,697	$	146	$	1,585,708	41,309	$	(234)	$	(1,527,033)	$	58,587
Issuance of common stock in connection with exercise of options	66,701		*		363	—		—		—		363
Issuance of restricted stock	3,017,736		3		(3)	—		—		—		—
Warrants issued with debt financing	—		—		595	—		—		—		595
Forfeiture of restricted stock	(73,787)		*		—	—		—		—		—
Compensation in respect of restricted stock granted to employees, directors and consultants	—		—		7,120	—		—		—		7,120
Net loss	—		—		—	—		—		(39,232)		(39,232)
Balance at March 31, 2023	149,437,347		149		1,593,783	41,309		(234)		(1,566,265)		27,433
Issuance of common stock in connection with exercise of options	76,955		*		751	—		—		—		751
Issuance of restricted stock	95,000		*		*	—		—		—		—
Forfeiture of restricted stock	(25,679)		*			—		—		—		—
Issuance of common stock in public offering (net of offering costs of $0.8 million)	1,385,700		2		46,295	—		—		—		46,297
Compensation in respect of restricted stock granted to employees, directors and consultants	—		—		13,582	—		—		—		13,582
Net loss	—		—		—	—		—		(47,610)		(47,610)
Balance at June 30, 2023	150,969,323		151		1,654,411	41,309		(234)		(1,613,875)		40,453

*Amount less than one thousand dollars

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

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TG Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six months ended
	June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$	(86,841)	$	(109,523)
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash stock compensation expense		19,364		1,146
Depreciation and amortization		100		154
Amortization of premium (discount) on investment securities		(487)		(17)
Amortization of debt issuance costs		1,100		922
Amortization of leasehold interest		106		106
Noncash change in lease liability and right of use asset		990		1,014
Change in fair value of notes payable		261		(276)
Changes in assets and liabilities:
Increase in inventory		(28,896)		—
(Increase) decrease in other current assets		(9,316)		8,054
(Increase) decrease in accounts receivable		(17,484)		1,301
Increase (decrease) in accounts payable and accrued expenses		19,136		(21,355)
Decrease in lease liabilities		(1,187)		(995)
Increase in other current liabilities		1,323		1,740
Decrease in deferred revenue		(76)		(76)
Net cash used in operating activities		(101,907)		(117,805)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturity of short-term securities		46,501		38,525
Investment in held-to-maturity securities		(22,168)		(71,810)
Purchases of PPE		—		(7)
Net cash provided by (used in) investing activities		24,333		(33,292)

CASH FLOWS FROM FINANCING ACTIVITIES
Payment of loan payable		—		(975)
Issuance of common stock, net		46,296		—
Proceeds from exercise of options		1,114		260
Proceeds from debt financings		25,000		—
Financing costs paid		(125)		—
Net cash provided by (used in) financing activities		72,285		(715)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(5,289)		(151,812)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		103,577		300,151

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	98,288	$	148,339


Reconciliation to amounts on condensed consolidated balance sheets:
Cash and cash equivalents	$	97,009	$	147,073
Restricted cash		1,279		1,266
Total cash, cash equivalents and restricted cash	$	98,288	$	148,339

Cash paid for:
Interest	$	3,929	$	2,622

NONCASH TRANSACTIONS
Deferred financing costs	$	1,238	$	—
Warrants issued with debt financing	$	595	$	—

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

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TG Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Unless the context requires otherwise, references in this report to “TG,” “Company,” “we,” “us” and “our” refer to TG Therapeutics, Inc. and our subsidiaries.

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

TG Therapeutics is a fully-integrated, commercial stage, biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell diseases. In addition to a research pipeline including several investigational medicines, TG has received approval from the United States Food and Drug Administration (FDA) for BRIUMVI (ublituximab-xiiy) for the treatment of adult patients with relapsing forms of multiple sclerosis (RMS), to include clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease, in adults. TG has also received approval for BRIUMVI by the European Commission (EC) for the treatment of adult patients with RMS who have active disease defined by clinical or imaging features. TG continues to actively evaluate complementary products, technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. 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. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022. The accompanying condensed December 31, 2022 balance sheet has been derived from these statements. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.

In December 2018, the Company created an Australian corporation, TG Therapeutics AUS Pty Ltd. (TG AUS), as a wholly-owned subsidiary. This corporation’s functional currency, the Australian dollar, is also its reporting currency, and its financial statements are translated to U.S. dollars, the Company’s reporting currency, prior to consolidation. The activities of TG AUS result in immaterial currency translation adjustments and, thus, are included in Other Income/Expense on the Company’s condensed consolidated statement of operations. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and all intercompany accounts and transactions have been eliminated in consolidation.

Liquidity and Capital Resources

We have incurred operating losses since our inception and expect to continue to incur operating losses for the foreseeable future and may never become profitable. As of June 30, 2023, we have an accumulated deficit of $1.6 billion.

Our major sources of cash have been proceeds from private placement and public offering of equity securities, from our loan and security agreements executed with Hercules Capital, Inc. (Hercules) (see Note 7 for more information), and from our commercialization agreement executed with Neuraxpharm Pharmaceuticals, S.L. (Neuraxpharm) (see Note 11 for more information). Since inception, we have incurred significant operating losses. Substantially all our operating losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations, including our commercialization activities. As of June 30, 2023, we had generated $23.8 million in revenue from drug sales of BRIUMVI. BRIUMVI first became commercially available in the United States in January of 2023. Even with the commercialization of BRIUMVI and the possible 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 successfully commercialize our drug candidates alone or in partnership; successfully complete any post-approval regulatory obligations; and our ability to

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maintain or obtain regulatory approval for our drug candidates. We may continue to incur substantial operating losses even if we begin to generate revenues from our drug candidates.

As of June 30, 2023, we had $144.9 million in cash and cash equivalents, and investment securities. We anticipate that our cash, cash equivalents, and investment securities as of June 30, 2023, combined with the upfront payment of $140.0 million in July 2023 as part of our commercialization agreement with Neuraxpharm and projected revenues associated with the sale of BRIUMVI in the U.S. and ex-U.S., will provide sufficient liquidity for more than a twelve-month period from the date of filing of 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 commercialization efforts for BRIUMVI, preparations for the potential commercialization of our other drug candidates, and the timing, design and conduct of clinical trials for our drug candidates. We may be dependent upon significant future financing to provide the cash necessary to execute our ongoing and future operations, including the commercialization of any of our drug candidates.

Our common stock is quoted on the Nasdaq Capital Market and trades under the symbol “TGTX.”

Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included in our 2022 Annual Report on Form 10-K, except updated herein or 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, 2023. Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

Revenue Recognition

Pursuant to Topic 606, we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To achieve this core principle, Topic 606 includes provisions within a five-step model that includes i) identifying the contract with a customer, ii) identifying the performance obligations in the contract, iii) determining the transaction price, iv) allocating the transaction price to the performance obligations, and v) recognizing revenue when, or as, an entity satisfies a performance obligation.

At contract inception, we assess the goods or services promised within each contract and assess whether each promised good or service is distinct and determine those that are performance obligations. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

Product Revenue, Net - The Company recognizes product revenues, net of variable consideration related to certain allowances and accruals, when the customer takes control of the product, which is typically upon delivery to the customer. Product revenue is recorded at the net sales price, or transaction price. The Company records product revenue reserves, which are classified as a reduction in product revenues, to account for the components of variable consideration. Variable consideration includes the following components, which are described below: chargebacks, government rebates, trade discounts and allowances, product returns, and co-payment assistance.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is expected to be settled with a credit against the Company’s customer account) or a liability (if the amount is expected to be settled with a cash payment). The Company’s estimates of reserves established for variable consideration are calculated based upon a consistent application of the expected value method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. These estimates reflect the Company’s current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be subject to constraint and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual

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amounts of consideration received may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment.

Chargebacks: Chargebacks for discounts represent the Company’s estimated obligations resulting from contractual commitments to sell product to qualified healthcare providers and government agencies at prices lower than the list prices charged to the customers who directly purchase the product from the Company. The customers charge the Company for the difference between what the customers pay the Company for the product and the customers’ ultimate contractually committed or government required lower selling price to the qualified healthcare providers.

Government Rebates: Government rebates consist of Medicare, Tricare, and Medicaid rebates. These reserves are recorded in the same period the related revenue is recognized. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom it will owe a rebate under the Medicare Part D program.

Trade Discounts and Allowances: The Company provides its customers with discounts that are explicitly stated in the contracts and are recorded in the period the related product revenue is recognized. In addition, the Company also receives sales order management, inventory management, and data services from its customers in exchange for certain fees.

Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate in the period the related product revenue is recognized. The Company currently estimates product return liabilities based on data from similar products and other qualitative considerations, such as visibility into the inventory remaining in the distribution channel.

Subject to certain limitations, the Company’s return policy allows for eligible returns of BRIUMVI for credit under the following circumstances:

●receipt of damaged product;

●shipment errors that were a result of an error by the Company;

●expired product that is returned during the period beginning three months prior to the product’s expiration and ending six months after the expiration date;

●product subject to a recall; and

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

As of June 30, 2023, the Company has not received any returns related to sales of BRIUMVI.

Co-Payment Assistance Programs: Co-payment assistance is provided to qualified patients with commercial insurance, whereby the Company may provide financial assistance to patients with prescription drug co-payments required by the patient's insurance provider. Reserves for co-payment assistance are recorded in the same period the related revenue is recognized.

Accounts Receivable

In general, accounts receivable consists of amounts due from customers, net of customer allowances for cash discounts, product returns and chargebacks. Our contracts with customers have standard payment terms. 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 June 30, 2023, 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.

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Cost of Product Revenue

Cost of product revenue consists primarily of third-party manufacturing costs, distribution, overhead and royalties owed to our licensing partner for BRIUMVI sales. Cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, a portion of the costs of producing BRIUMVI sold to date was expensed as research and development prior to the FDA approval of BRIUMVI and therefore it is not reflected in the cost of product revenue.

Inventory

Prior to regulatory approval, we expense costs relating to the production of inventory as research and development expense in the period incurred. Following regulatory approval, costs to manufacture those approved products will be capitalized. Inventories are stated at the lower of cost or estimated net realizable value with cost based on the first-in-first-out method (FIFO). Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in clinical trials.

Prior to the approval of BRIUMVI, all manufacturing and other potential costs related to the commercial launch of BRIUMVI were expensed to research and development expense in the period incurred.

Net Loss Per Common Share

Basic net loss per share of our common stock is calculated by dividing net loss applicable to the common stock by the weighted-average number of our common stock outstanding for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially dilutive securities from stock options, restricted stock, stock warrants and convertible preferred stock would have an antidilutive effect either because we incurred a net loss during the period presented or because such potentially dilutive securities were out of the money and the Company realized net income during the period presented. The cumulative amounts of potentially dilutive securities excluded from the calculation were 13,456,358 and 13,512,092 for the six months ended June 30, 2023 and 2022, respectively.

The following table summarizes our potentially dilutive securities at June 30, 2023 and 2022:


	Six Months Ended
	June 30,
	2023	2022
Unvested restricted stock	8,324,240	10,004,825
Options	4,799,523	3,225,515
Warrants	312,272	262,100
Shares issuable upon note conversion	20,323	19,652
Total	13,456,358	13,512,092

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NOTE 2 NET PRODUCT REVENUE

For the three and six months ended June 30, 2023 our only source of product revenue has been from U.S. sales of BRIUMVI which we began shipping to our customers in January 2023. For the three and six months ended June 30, 2022 our only source of product revenue was from the U.S. sales of UKONIQ, which we began shipping to our customers in February 2021. The voluntary withdrawal of UKONIQ from the U.S. market was announced on April 15, 2022. Effective May 31, 2022, UKONIQ was officially withdrawn from the market.

As of June 30, 2023, approximately $3.8 million of estimated gross-to-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 June 30, 2023 and December 31, 2022 are classified as held-to-maturity. Held-to-maturity investments are recorded at amortized cost.

The following tables summarize our investment securities at June 30, 2023 and December 31, 2022:


	June 30, 2023
	Amortized		Gross		Gross
	cost, as		unrealized		unrealized		Estimated
(in thousands)	adjusted		holding gains		holding losses		fair value
Short-term investments:
Obligations of domestic governmental agencies (maturing between July 2023 and February 2024) (held-to-maturity)	$	47,896	$	—	$	579	$	47,317
Total short-term investment securities	$	47,896	$	—	$	579	$	47,317

	December 31, 2022
	Amortized		Gross		Gross
	cost, as		unrealized		unrealized		Estimated fair
	adjusted		holding gains		holding losses		value
Short-term investments:
Obligations of domestic governmental agencies (maturing between January 2023 and December 2023) (held-to-maturity)	$	59,374	$	—	$	1,053	$	58,321

Long-term investments:
Obligations of domestic governmental agencies (maturing between January 2024 and February 2024) (held-to-maturity)		12,404		—		429		11,975
Total short-term and long-term investment securities	$	71,778	$	—	$	1,482	$	70,296

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NOTE 4 INVENTORY

The following table presents our inventory as of June 30, 2023 (in thousands):



	June 30, 2023
Raw Materials	$	24
Work in Process		29,551
Finished Goods		659
Total Inventory	$	30,234

Inventory is stated at the lower of cost or net realizable value and consists of raw materials, work-in-process and finished goods. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. At June 30, 2023, all of our inventory was related to BRIUMVI, which was approved by the FDA on December 28, 2022, at which time we began to capitalize costs to manufacture BRIUMVI. The Company has not recorded any inventory write downs since that time. Prior to the FDA approval of BRIUMVI, all costs related to the manufacturing of BRIUMVI and related material were charged to research and development expense in the period incurred. No costs related to the manufacturing of BRIUMVI and the related material were incurred between the approval date and year end 2022, therefore, inventory is not included in the December 31, 2022 condensed consolidated balance sheets. Inventory that is used for clinical development purposes is expensed to research and development expense when consumed. At June 30, 2023, we determined that a reserve related to BRIUMVI inventory is not required. We currently use a limited number of third-party contract manufacturing organizations (CMOs) to produce our inventory.

NOTE 5 FAIR VALUE MEASUREMENTS

We measure certain financial assets and liabilities at fair value on a recurring basis in the condensed consolidated financial statements. The fair value hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

●

Level 1 quoted prices in active markets for identical assets and liabilities;

●

Level 2 inputs other than Level 1 quoted prices that are directly or indirectly observable; and

●

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

At the time of our merger (we were then known as Manhattan Pharmaceuticals, Inc. (Manhattan)) 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. We have no obligations under the 5% Notes aside from the conversion feature.

The Company’s financial instruments include cash, cash equivalents consisting of money market funds, accounts receivable, accounts payable and loan payable. As of June 30, 2023 and December 31, 2022, the fair values of cash and cash equivalents, restricted cash, accounts receivable, and loan and interest payable approximate their carrying value. The carrying value of loan payable on the Company’s balance sheet is estimated to approximate its fair value as the interest rate approximates the market rate for loans with similar terms and risk characteristics.

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We have no Level 1 or Level 2 instruments. Our Level 3 instrument amounts represent the fair value of the 5% Notes and related accrued interest. The following table summarizes the changes in Level 3 instruments during the six months ended June 30, 2023:


(in thousands)
Balance at December 31, 2022		243
Interest accrued on face value of 5% Notes		286
Change in fair value of Level 3 liabilities		(24)
Balance at June 30, 2023	$	505

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

NOTE 6 STOCKHOLDERS’ EQUITY

Preferred Stock

Our amended and restated certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, $0.001 par value, with rights senior to those of our common stock, issuable in one or more series. Upon issuance, we can determine the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock.

Common Stock

Our amended and restated certificate of incorporation authorizes the issuance of up to 175,000,000 shares of $0.001 par value common stock.

On September 2, 2022, we filed an automatic “shelf registration” statement on Form S-3 (the 2022 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 2022 WKSI Shelf was declared effective in September 2022. In connection with the 2022 WKSI Shelf, we entered into an At-the-Market Issuance Sales Agreement (the 2022 ATM) with Cantor Fitzgerald & Co. and B. Riley Securities, Inc. (each a 2022 Agent and collectively, the 2022 Agents), relating to the sale of shares of our common stock. Under the 2022 ATM, we will pay the 2022 Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.

During the six months ended June 30, 2023, we sold a total of 1,385,700 shares of common stock under the 2022 ATM for aggregate total gross proceeds of approximately $47.1 million at an average selling price of $34.01 per share, resulting in net proceeds of approximately $46.3 million after deducting commissions and other transactions costs. The 2022 WKSI Shelf is currently our only active shelf-registration statement. We may offer any combination of the securities registered under the 2022 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 may need to file additional shelf-registration statements in the future to provide us with the flexibility to raise additional capital to finance our operations as needed.

Equity Incentive Plans

The TG Therapeutics, Inc. 2022 Incentive Plan (the 2022 Incentive Plan) was approved by stockholders in June 2022 with 17 million shares available to be issued, of which not more than 10 million shares may be issued pursuant to “full-value awards.” Full-value awards include any award other than an option or stock appreciation right and which is settled by the issuance of stock. As of June 30, 2023, 4,611,910 shares of restricted stock and 2,272,500 options were outstanding and up to an additional 9,175,825 shares were available to be issued under the 2022 Incentive Plan.

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The TG Therapeutics, Inc. Amended and Restated 2012 Incentive Plan (the 2012 Incentive Plan) was approved by stockholders in June 2020. As of June 30, 2023, 5,212,361 shares of restricted stock and 2,527,029 options were outstanding, and no additional shares were available to be issued under the 2012 Incentive Plan as the 2022 Incentive Plan is now the only active incentive plan.

Stock-based compensation expense included in the condensed consolidated statements of operations was $19.4 million and $1.1 million for the six months ended June 30, 2023 and 2022, respectively. The $19.4 million for the six months ended June 30, 2023, is net of $1.3 million of stock-based compensation expense that was capitalized into inventory.

Stock Options and Restricted Stock

The following table summarizes the activity for stock options and restricted stock for the six months ended June 30, 2023:


	Stock Options	Restricted Stock
Equity awards outstanding, beginning of year	5,135,685	8,732,286
Changes during the year:
Granted	—	3,112,736
Exercised or vested	(143,656)	(1,921,285)
Expired or Forfeited	(192,500)	(99,466)
Equity awards outstanding, end of period	4,799,529	9,824,271

As of June 30, 2023, 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 Options	Restricted Stock
Unrecognized compensation cost	$	6,021	$	42,500
Expected weighted-average period in years of compensation cost to be recognized		2.9		3.0

Warrants

The Company’s only outstanding warrants are the warrants issued to Hercules as part of the Loan Agreement, the Amended Loan Agreement and the First Amendment (as such terms are defined below) to purchase 147,058, 115,042 and 50,172 shares of our common stock with exercise prices of $4.08, $17.95 and $14.70, respectively. See Note 7 for further details. There will not be any ongoing stock compensation expense volatility associated with these warrants.

NOTE 7 LOAN PAYABLE

On February 28, 2019 (the Closing Date), we entered into a term loan facility with Hercules Capital, Inc. (Hercules or Lender), which provided us with the capacity to borrow up to an aggregate principal amount of $60.0 million (Term Loan). The Term Loan is governed by a loan and security agreement, dated February 28, 2019 (the Loan Agreement), which provides for up to four separate advances. The first advance of $30.0 million was drawn on the Closing Date. An additional $30.0 million under the Term Loan was previously available upon the completion of different milestones and time points that have now lapsed.

On December 30, 2021 (the Amended Loan Agreement Closing Date), the Company entered into an Amended and Restated Loan and Security Agreement (the Amended Loan Agreement) with Hercules Capital, Inc. The Amended Loan Agreement amended the terms of the Loan Agreement to, among other things, (i) increase the aggregate principal amount of the loan, available at the Company’s option, from $60.0 million to $200.0 million (the Amended Term Loan), (ii) issue a first advance of $70.0 million drawn at the Amended Loan Agreement Closing Date, a portion of which was used to refinance the current outstanding loan balance of approximately $7.8 million and pay for expenses incurred by the Lender in executing the agreements, (iii) change the draw amounts and dates available in subsequent tranches, (iv) extend the maturity date of the facility from the original March 1, 2022 to January 1, 2026, (v) reset and extend the interest only

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period from April 1, 2021 to February 1, 2025 and extendable to August 1, 2025 subject to the achievement of certain performance milestones, and (vi) modify the cash interest rate to be the greater of either (a) the “prime rate” as reported in The Wall Street Journal plus 2.15%, and (b) 5.40%. In addition to the cash interest rate, the principal balance accrues paid-in-kind interest at a rate of 3.45%, which amount will be capitalized and added to the outstanding principal balance of the Amended Term Loan and payable at the maturity date of the Amended Loan Agreement.

On March 31, 2023 (the First Amendment Effective Date), the Company entered into a First Amendment to the Amended and Restated Loan and Security Agreement (the First Amendment) with Hercules. The First Amendment amended the terms of the Amended Loan Agreement to, among other things, (i) issue an advance of $25.0 million drawn at the First Amendment Effective Date (the Tranche 3A Advance), (ii) formal expiration of Tranche 2, (iii) change the draw amounts and dates available under subsequent tranches, including splitting the remaining balance of Tranche 3 into two additional advances in an aggregate principal amount of up to $20.0 million, in increments of $10.0 million (each a Tranche 3B Advance and Tranche 3C Advance), decreasing the amount available under Tranche 4 from $65.0 million to $60.0 million, and adding a Tranche 5 of $25.0 million, subject to the achievement of revenue related performance milestones, (iv) extend the interest only period from February 1, 2025 to August 1, 2025, and (v) modify the cash interest rate to be the greater of either (a) the “prime rate” as reported in The Wall Street Journal plus 1.20%, and (b) 8.95%. In addition to the cash interest rate, the principal balance will accrue paid-in-kind interest at a rate of 2.25%, which amount will be capitalized and added to the outstanding principal balance of the Amended Term Loan and payable at the maturity date of the Amended Loan Agreement. The First Amendment requires that the additional financial covenants referenced above apply at all times commencing on July 1, 2023.

The First Amendment also contains warrant coverage of 2.95% of each advance amount funded. A warrant was issued by the Company to Hercules to purchase 50,172 shares of common stock with an exercise price of $14.70 for the amount funded pertaining to the Tranche 3A Advance (the First Amendment Warrant). The First Amendment Warrant shall be exercisable for seven years from the date of issuance. Hercules may exercise the First Amendment Warrant either by (a) cash or check or (b) through a net issuance conversion.

In addition, the Company is required to pay a final payment fee equal to 5.95% of the aggregate principal amount of the Term Loan Advances (as defined in the Loan Agreement) plus 4.95% of the aggregate principal amount of all other advances.

The Company may, at its option, prepay the Amended Term Loan in full or in part, subject to a prepayment penalty equal to (i) 1.5% of the principal amount prepaid if the prepayment occurs prior to the first anniversary of the First Amendment Effective Date, and (ii) 1.0% of the principal amount prepaid if the prepayment occurs on or after the first anniversary of the First Amendment Effective Date.

The Company evaluated whether the First Amendment represented a debt modification or extinguishment of the Term Loan in accordance with ASC 470-50, Debt – Modifications and Extinguishments. As a result of the modification of terms and no repayment or retirement of the Term Loan, the Term Loan was accounted for by the Company under the modification accounting model. The Company capitalized the facility charge from the First Amendment advance to debt issuance costs and expensed third party fees in the Company’s statement of operations for the six months ended June 30, 2023.

The Company estimated the fair value of the First Amendment Warrant using the Black-Scholes model based on the following key assumptions:


	Amended Term Loan
Exercise price	$	14.70
Common share price on date of issuance	$	15.04
Volatility		0.88	%
Risk-free interest rate		3.6	%
Expected dividend yield		—	%
Contractual term (in years)		7.00 years

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The Company incurred financing expenses of $2.0 million (including the fair value of the First Amendment Warrant) related to the First Amendment which are recorded as debt issuance costs and as an offset to loan payable on the Company’s consolidated balance sheet. The debt issuance costs are being amortized over the term of the debt using the straight-line method, which approximates the effective interest method, and will be included in interest expense in the Company’s consolidated statements of operations. Amortization of debt issuance costs was $1.1 million and $0.9 million for the six months ended June 30, 2023, and 2022, respectively. At June 30, 2023, the remaining unamortized balance of debt issuance costs was $6.4 million.

The loan payable as of June 30, 2023 and December 31, 2022, is as follows:


	June 30,		December 31,
(in thousands)	2023		2022
Loan payable	$	95,000	$	70,000
Add: Accreted Liability of final payment fee		9,090		6,667
		104,090		76,667
Less: unamortized debt issuance costs		(6,390)		(5,532)
		97,700		71,135
Less: principal payments		—		—
Total loan payable		97,700		71,135
Less: current portion		—		—
Loan payable non-current	$	97,700	$	71,135