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SEC Filings

PROTEON THERAPEUTICS INC filed this Form 10-Q on 11/07/2017
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The Company evaluated the Series A Preferred for liability or equity classification in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, and determined that equity treatment was appropriate because the Series A Preferred did not meet the definition of the liability instruments defined thereunder for convertible instruments. Specifically, the Series A Preferred are not mandatorily redeemable and do not embody an obligation to buy back the shares outside of the Company’s control in a manner that could require the transfer of assets. Additionally, the Company determined that the Series A Preferred would be recorded as permanent equity, not temporary equity, based on the guidance of ASC 480 given that there is no scenario where the holders of equally and more subordinated equity of the entity would not be entitled to also receive the same form of consideration upon the occurrence of the event that gives rise to the redemption.


7. Stock-based Compensation


Stock Options


The following table summarizes stock option activity for employees and non-employees:


   Options  Weighted-
Term (years)
Outstanding at December 31, 2016   2,166,254   $8.55    7.1   $124 
Granted   719,337                
Exercised   (74,001)               
Forfeited   (30,272)               
Expired   (97,406)               
Outstanding at September 30, 2017   2,683,912   $7.18    7.4   $140 
Exercisable at September 30, 2017   1,384,925   $8.00    6.2   $98 
Vested or expected to vest at September 30, 2017 (1)   2,683,912   $7.18    7.4   $140 


(1) Represents the number of vested options at September 30, 2017 plus the number of unvested options expected to vest based on the unvested options outstanding at September 30, 2017.


Employee Stock Purchase Plan


The 2014 Employee Stock Purchase Plan (ESPP) initially authorized the issuance of up to 140,500 shares of Common Stock. The number of shares increases each January 1, commencing on January 1, 2015 and ending on (and including) January 1, 2024, by an amount equal to the lesser of one percent of the outstanding shares as of the end of the immediately preceding fiscal year, 281,000 shares, or any lower amount determined by the Company’s Board of Directors prior to each such January 1st. The Company’s Board of Directors has determined there was to be no increase on January 1, 2017. As of September 30, 2017, the 2014 ESPP authorized the issuance of up to 304,991 shares of Common Stock. The sixth offering under the 2014 ESPP began on July 1, 2017 and ends on December 31, 2017. No shares and 45,047 shares were issued during the three and nine months ended September 30, 2017 under the 2014 ESPP. The Company incurred $18,000 and $0.1 million in stock-based compensation expense related to the 2014 ESPP for the three and nine months ended September 30, 2017, respectively. The Company incurred $30,000 and $62,000 in stock-based compensation expense related to the 2014 ESPP for the three and nine months ended September 30, 2016, respectively.


Common Stock


The Company has the following shares reserved for future issuance:


   September 30,
  December 31,
Stock-based compensation awards   3,587,144    2,982,470 
Employee Stock Purchase Plan   247,774    292,821 
Total   3,834,918    3,275,291