ARGOS THERAPEUTICS INC - 10-K filing on 2015-03-31

Note 10 - Common Stock, Redeemable Convertible Preferred Stock and Preferred Stock

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

10. Common Stock, Redeemable Convertible Preferred Stock and Preferred Stock

As of December 31, 2013 and 2014, the Company was authorized to issue 120,000,000 and 200,000,000 shares of common stock, 160,700,000 and 0 shares of redeemable convertible preferred stock, 0 and 5,000,000 shares of preferred stock, respectively.

In February 2014, the Company issued and sold 6,228,725 shares of its common stock, including 603,725 shares of common stock sold pursuant to the underwriters’ exercise of their option to purchase additional shares, in the Company’s initial public offering, at a public offering price of $8.00 per share, for aggregate gross proceeds of $49.8 million. The net offering proceeds to the Company, after deducting underwriting discounts and commissions of approximately $3.5 million and offering expenses of approximately $2.9 million, were approximately $43.4 million. Upon the closing of the initial public offering, all of the then-outstanding shares of the Company’s redeemable convertible preferred stock automatically converted into 13,188,251 shares of common stock. Accordingly, as of December 31, 2014, the Company has no redeemable convertible preferred stock outstanding and no shares of preferred stock have been issued since their authorization in 2014.

Redeemable Convertible Preferred Stock

In April 2012, the Company sold shares of its series D preferred stock in a private placement to certain of its existing holders of preferred stock and additional accredited investors for an aggregate purchase price of $19.7 million. Included in this amount was $10.7 million of outstanding principal and interest on various convertible notes which converted to series D preferred stock in this financing.

In August 2012, the Company sold 3,716,935 shares of its series D-1 preferred stock in a private placement to certain of its existing holders of preferred stock and other accredited investors for $4.298725 per share for an aggregate purchase price of $16.0 million.

In July 2013, all 7,433,870 shares of series D-1 preferred stock outstanding were exchanged for 16,151,212 shares of series D preferred stock. In addition, in connection with the exchange, the liquidation preference and the redemption price of the series D preferred stock were reduced to $1.978565 per share. As a result of the reduction in the liquidation preference of the series D preferred stock, the Company issued an aggregate of 6,373,782 additional shares of series D preferred stock to the holders that had purchased shares of series D preferred stock prior to such reduction for no additional consideration.

The Company recorded the reduction to liquidation preference as a reversal to prior accretion taken on each series of preferred stock impacted, which reduced net loss attributable to common stockholders in the earnings per share calculation (see Note 19). The Company recorded any remaining reduction in liquidation preference as an increase to additional paid-in capital. In addition, the Company recorded the fair value of the incremental series D preferred stock shares issued in these exchanges in additional paid-in capital as a preferred stock dividend, which increased net loss attributable to common stockholders in the earnings per share calculation (see Note 19).

In August 2013, the Company sold 16,898,436 shares of series E preferred stock for an aggregate purchase price of $22,007,404.

In October 2013 and November 2013, the Company sold 921,423 shares of its series E preferred stock for an aggregate purchase price of $1,200,000 and 19,037,063 shares of its series E preferred stock for an aggregate purchase price of $24,792,595, respectively.

In connection with the issuance and sale of series E preferred stock, in December 2013, the Company issued a warrant to purchase 9,598 shares of its common stock, at an exercise price of $6.60 per share, to a placement agent.

Upon the closing of the Company’s initial public offering, all of the outstanding shares of redeemable convertible preferred stock automatically converted into 13,188,251 shares of the Company’s common stock.

The table below represents a rollforward of the redeemable convertible preferred stock:

	Series A Preferred						Series B Preferred						Series B-1 Preferred						Series C Preferred						Series D Preferred						Series D-1 Preferred						Series E Preferred
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount

Balance as of December 31, 2011		1,276,103		$	1,276,103			24,326,574		$	42,814,762			917,771		$	1,615,276			112,165,271		$	32,016,165			—		$	—			—		$	—			—		$	—
Issuance of shares		—			—			—			—			—			—			—			—			2,549,897			4,793,806			3,713,333			7,842,733			—			—
Conversion of bridge note		—			—			—			—			—			—			—			—			3,023,661			5,684,483			—			—			—			—
Conversion of accrued services		—			—			—			—			—			—			—			—			7,142			25,200			3,602			15,485			—			—
Pull through of existing preferred		—			—			(3,652,680	)		(6,428,717	)		—			—			(64,256,463	)		(18,571,283	)		2,557,039			4,807,233			3,716,935			7,835,133			—			—
Stock issuance costs		—			—			—			—			—			—			—			—			—			(128,275	)		—			(80,659	)		—			—
Shares converted to common		(124,050	)		(124,050	)		(2,182,576	)		(3,841,332	)		(917,771	)		(1,615,276	)		(8,605,955	)		(2,487,276	)		—			—			—			—			—			—
Accretion		—			—			—			—			—			—			—			327,465			—			18,529			—			5,377			—			—

Balance as of December 31, 2012		1,152,053			1,152,053			18,491,318			32,544,713			—			—			39,302,853			11,285,071			8,137,739			15,200,976			7,433,870			15,618,069			—			—
Exchange of Series D-1		—			—			—			—			—			—			—			—			16,151,212			26,887,407			(7,433,870	)		(15,628,821	)		—			—
Issuance of shares		—			—			—			—			—			—			—			—			6,373,782			11,446,143			—			—			36,856,922			47,409,867
Exchange of Series D		—			—			—			—			—			—			—			—			(12,607,779	)		(24,945,326	)		—			—			19,154,336			24,945,326
Pull through of existing preferred		(111,837	)		(35,788	)		(8,687,630	)		(4,892,873	)		—			—			(10,586,174	)		(979,070	)		2,985,863			4,030,920			—			—			—			—
Reduction of liquidation value		—			(783,396	)		—			(18,001,661	)		—			—			—			(6,195,373	)		—			—			—			—			—			—
Stock issuance costs		—			—			—			—			—			—			—			—			—			(64,530	)		—			—			—			(556,247	)
Reversal of prior accretion		—			—			—			(4,128,742	)		—			—			—			(1,528,896	)		—			—			—			—			—			—
Accretion		—			—			—			—			—			—			—			74,152			—			706,902			—			10,752			—			92,841

Balance as of December 31, 2013		1,040,216			332,869			9,803,688			5,521,437			—			—			28,716,679			2,655,884			21,040,817			33,262,492			—			—			56,011,258			71,891,787
Accretion		—			—			—			—			—			—			—			—			—			336,350			—			—			—			526,876
Shares converted to common stock		(1,040,216	)		(332,869	)		(9,803,688	)		(5,521,437	)		—			—			(28,716,679	)		(2,655,884	)		(21,040,817	)		(33,598,842	)		—			—			(56,011,258	)		(72,418,423	)
Stock issuance costs		—			—			—			—			—			—			—			—			—			—			—			—			—			(240	)
Balance as of December 31, 2014		—		$	—			—		$	—			—		$	—			—		$	—			—		$	—			—		$	—			—		$	—