UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
_____________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of
1934
Date of report
(Date of earliest event reported): February 28, 2019
TG Therapeutics, Inc.
(Exact Name of
Registrant as Specified in Charter)
Delaware
(State or Other
Jurisdiction
of
Incorporation)
|
001-32639
(Commission File
Number)
|
36-3898269
(IRS Employer
Identification No.)
|
2 Gansevoort Street, 9th
Floor
New York, New York 10014
(Address of
Principal Executive Offices)
(212) 554-4484
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities
Act.
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act.
☐
Pre-commencement
communications pursuant to Rule 14d-2b under the Exchange
Act.
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act.
Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2). 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. ☐
Item 1.01. Entry into a Material
Definitive Agreement
Equity Financing
On
March 1, 2019, TG Therapeutics, Inc. (“TG” or the
“Company”) entered into an underwriting agreement (the
“Underwriting Agreement”) with Cantor Fitzgerald &
Co. (the “Underwriter”). Pursuant to the Underwriting
Agreement, the Company agreed to sell to the Underwriter, in a firm
commitment underwritten public offering, 4,100,000 shares (the
“Firm Shares”) of the Company’s common stock,
$0.001 par value per share (“Common Stock”) and 615,000
shares of the Company's common stock, par value $0.001 per share
(the "Option Shares" and together with the Firm Shares, the
"Shares"), less underwriting discounts and commissions. The
transactions contemplated by the Underwriting Agreement are
expected to close on March 5, 2019, subject to the satisfaction of
customary closing conditions. A copy of the Underwriting Agreement
is attached hereto as Exhibit 1.1 and is incorporated by
reference herein.
Cantor
Fitzgerald & Co. is acting as sole book-running manager for the
offering.
The
gross proceeds to the Company are expected to be approximately
$27.7 million before deducting estimated expenses payable by the
Company associated with the offering.
The
Underwriting Agreement contains customary representations,
warranties and agreements by the Company, customary conditions to
closing, indemnification obligations of the Company and the
Underwriters, including for liabilities under the Securities Act of
1933, as amended (the “Securities Act”), other
obligations of the parties and termination provisions.
The
offering is being made pursuant to the Company’s effective
“shelf” registration statement on Form S-3 (File
No. 333-218293) (the “Registration Statement”)
filed with the Securities and Exchange Commission (the
“SEC”) on May 26, 2017, which was declared effective by
the SEC on June 13, 2017, as supplemented by a preliminary
prospectus supplement filed with the SEC on February 28, 2019 and a
final prospectus supplement filed with the SEC on March 5, 2019,
pursuant to Rule 424(b) under the Securities
Act.
Alston &
Bird LLP, counsel to the Company, delivered an opinion as to the
validity of the Shares, a copy of which is attached hereto as
Exhibit 5.1 and is incorporated by reference
herein.
This
Current Report on Form 8-K is being filed to incorporate the
Underwriting Agreement and opinion by reference into such
Registration Statement. The foregoing summary description of the
offering and the documentation related thereto, including without
limitation, the Underwriting Agreement, does not purport to be
complete and is qualified in its entirety by reference to such
Exhibits.
The
Underwriting Agreement has been included to provide investors and
security holders with information regarding its terms. It is not
intended to provide any other factual information about the
Company. The representations, warranties and covenants contained in
the Underwriting Agreement were made only for purposes of such
agreement and as of specific dates, were solely for the benefit of
the parties to such agreement, and may be subject to limitations
agreed upon by the contracting parties, including being qualified
by confidential disclosures exchanged between the parties in
connection with the execution of the Underwriting Agreement. The
representations and warranties may have been made for the purposes
of allocating contractual risk between the parties to the agreement
instead of establishing these matters as facts, and may be subject
to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Investors are not
third-party beneficiaries under the Underwriting Agreement and
should not rely on the representations, warranties and covenants or
any descriptions thereof as characterizations of the actual state
of facts or condition of the Company or any of its subsidiaries or
affiliates. Moreover, information concerning the subject matter of
the representations and warranties may change after the date of the
Underwriting Agreement, and this subsequent information may or may
not be fully reflected in the Company’s public
disclosures.
Debt
Financing
On
February 28, 2019 (the “Closing Date”), the Company (“Borrower”) entered into a term loan facility
of up to $60.0 million (“Term Loan”) with Hercules Capital, Inc.,
(“Hercules”), the proceeds of which will be
used for its ongoing research and development programs and for
general corporate purposes. The Term Loan is governed by a loan and
security agreement, dated February 28, 2019 (the “Loan Agreement”), which provides for up to four
separate advances. The first advance of $30.0 million was drawn on
the Closing Date. Two additional advances of $10.0 million may be
drawn at the Borrower’s
option but subject to the clinical trial milestones, and the fourth
advance of $10.0 million, available in minimum increments of $5.0
million, is available through December 15, 2020 subject to the
approval of Hercules’
investment committee.
The
Term Loan will mature on March 1, 2022 (the “Loan Maturity Date”). Each advance accrues interest at
a per annum rate of interest equal to the greater of either (i) the
“prime rate” as reported in The Wall Street
Journal plus 4.75%, and (ii) 10.25%. The Term Loan provides for
interest-only payments until October 1, 2020. The interest-only
period may be extended to April 1, 2021 if the Borrower, on or
before September 30, 2020, achieves either the third milestone or
the Company has raised at least an amount equal to $150.0 million
in unrestricted net cash proceeds from one or more equity
financings, subordinated indebtedness and/or upfront proceeds from
business development transactions permitted under the Loan
Agreement, in each case after February 7, 2019, and prior to
September 30, 2020. Thereafter, amortization payments will be
payable monthly in eighteen installments (or, if the period
requiring interest-only payments has been extended to April 1,
2021, in twelve installments) of principal and interest (subject to
recalculation upon a change in prime rates). At its option upon
seven business days’
prior written notice to Hercules, the Company may prepay all or any
portion greater than or equal to $5.0 million of the outstanding
advances by paying the entire principal balance (or portion
thereof), all accrued and unpaid interest, subject to a prepayment
charge of 3.0%, if such advance is prepaid in any of the first
twelve months following the Closing Date, 1.5%, if such advance is
prepaid after twelve months following the Closing Date but on or
prior to twenty-four months following the Closing Date, and 0%
thereafter. In addition, a final payment equal to 3.5% of the
aggregate principal amount of the loan extended by Hercules is due
on the maturity date. Amounts outstanding during an event of
default shall be payable on demand and shall 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 the assets
of the Borrower, 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.
The
events of default under the Loan Agreement include, without
limitation, and subject to customary grace periods, (1) the
Borrower’s failure to
make any payments of principal or interest under the Loan
Agreement, promissory notes or other loan documents, (2) the
Borrower’s breach or
default in the performance of any covenant under the Loan
Agreement, (3) the occurrence of a material adverse effect, (4) the
Borrower making a false or misleading representation or warranty in
any material respect, (5) the Borrower’s insolvency or bankruptcy, (6)
certain attachments or judgments on the Borrower’s assets, or (7) the occurrence of
any material default under certain agreements or obligations of the
Borrower involving indebtedness in excess of $750,000. If an event
of default occurs, Hercules is entitled to take enforcement action,
including acceleration of amounts due under the Loan
Agreement.
The
Loan Agreement also contains warrant coverage of 2% of the total
amount funded. A warrant (the “Warrant") was issued by Borrower to
Hercules to purchase 147,058 shares of common stock with an
exercise price of $4.08. The Warrant shall be exercisable for seven
years from the date of issuance. Hercules may exercise the Warrant
either by (a) cash or check or (b) through a net issuance
conversion. The shares will be registered and freely tradeable
within six months of issuance.
Item 8.01. Other
Events.
On
March 1, 2019, the Company entered into an underwriting agreement
with the Underwriter. Pursuant to the Underwriting Agreement, the
Company agreed to sell to the Underwriter, and the Underwriter
agreed to purchase for resale to the public, 4,100,000 shares of
the Company’s Common Stock, along with an option to purchase
up to an additional 615,000 shares, which was exercised. This
Current Report on Form 8-K is being filed in part to incorporate
the Expense Table set forth below and the opinion by reference into
such Registration Statement.
Securities and
Exchange Commission Registration Fee
|
$*
|
Legal Fees and
Expenses
|
$100,000
|
Accountants’
Fees and Expenses
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$50,000
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Transfer
Agent’s Fees and Expenses
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$5,000
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Miscellaneous
Expenses
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$15,000
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Total
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$170,000
|
*Previously
paid
Item 9.01 Financial Statements And
Exhibits.
(d)
Exhibits.
The
following exhibits are filed as part of this report:
Exhibit Number
|
Description
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Underwriting
Agreement, dated March 1, 2019, by and between TG Therapeutics,
Inc. and Cantor Fitzgerald & Co.
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Loan
and Security Agreement, dated February 28, 2019, by and among TG
Therapeutics, Inc., TG Biologics, Inc. and Hercules Capital,
Inc.
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Warrant
Agreement, dated February 28, 2019, by and between TG Therapeutics,
Inc. and Hercules Capital, Inc.
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|
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Warrant
Agreement, dated February 28, 2019, by and between TG Therapeutics,
Inc. and Hercules Technology III, L.P.
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Opinion
of Alston & Bird LLP.
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23.1
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Consent
of Alston & Bird LLP (included in the opinion filed as Exhibit
5.1).
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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TG Therapeutics, Inc.
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(Registrant)
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Date: March 5,
2019
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By: /s/
Sean A.
Power
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Sean A.
Power
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Chief Financial
Officer
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