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SEC Filings

S-1
PROTEON THERAPEUTICS INC filed this Form S-1 on 09/16/2014
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Proteon Therapeutics, Inc.

Notes to Financial Statements (Continued)

9. Redeemable Convertible Preferred Stock (Continued)

Series D Preferred Stock. The remaining $77,000 of issuance costs have been allocated to the tranche right liability.

Conversion

        Shares of Series D Preferred Stock, Series C Preferred Stock, Series B Preferred Stock, Series A-1 Preferred Stock and Series A Preferred Stock are convertible into Common stock at 1.00, 1.23, 1.23, 1.22 and 1.19, respectively, shares of common stock for each share of preferred stock. All outstanding shares of Preferred Stock are automatically convertible based on either: (i) stockholder approval, as defined in the Certificate of Incorporation, or (ii) the closing of a firm-commitment, underwritten IPO, in which the aggregate proceeds are at least $40 million with an offering price of at least $3.45 per share of Common Stock. The Preferred Stock conversion prices are subject to adjustment in the event additional shares of Common Stock or certain securities convertible into Common Stock, are issued for consideration per share less than the respective Preferred Stock conversion price.

Dividends

        Holders of Preferred Stock are entitled to two types of dividends:

Accruing Dividends

        Holders of the Series D Preferred Stock Series C Preferred Stock, Series B Preferred Stock, Series A-1 Preferred Stock and Series A Preferred Stock are entitled to receive, when and if declared by the Board of Directors, dividends at the annual rate of $0.0412 $0.0805, $0.0805, $0.077 and $0.07 per share, subject to adjustment for stock dividends, stock splits, combinations, recapitalizations, or the like, with respect to such shares. The Preferred Stock Accruing Dividends are cumulative and non-compounding.

        An aggregate of $22.5 million, $27.6 million, and $30.5 million of accruing dividends have been recorded for the Preferred Stock as of December 31, 2012 and 2013, and June 30, 2014 (unaudited), respectively.

Non-Cumulative Dividends

        Holders of the Series D Preferred Stock Series C Preferred Stock, Series B Preferred Stock, Series A-1 Preferred Stock and Series A Preferred Stock are entitled to receive, when and if declared by the Board of Directors, dividends at the annual rate of 7% of the issue price per share, subject to adjustment for stock dividends, stock splits, combinations, recapitalizations, or the like, with respect to such shares. These dividends are non-cumulative and non-compounding.

        The Company shall not declare, pay, or set aside any dividends on Common stock (other than those payable in shares of Common stock) unless the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock in an amount at least equal to or greater than the product of (i) the dividend payable on each share of Common stock and (ii) the number of shares of Common stock issuable upon conversion of a share of Preferred Stock calculated on the record date for determination of holders entitled to receive such a dividend.

F-24