Fortress Biotech, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders’ Equity

15. Stockholders’ Equity

Stock-based Compensation

The following table summarizes the stock-based compensation expense from stock option, employee stock purchase programs and restricted Common Stock awards and warrants for the three months ended March 31, 2018 and 2017:

	For the Three Months Ended March 31,
($ in thousands)	2018		2017
Employee awards	$	828	$	367
Executive awards of Fortress Companies’ stock		632		1,463
Fortress Companies:
Avenue		349		5
Checkpoint		1,137		979
Mustang		1,995		-
Other		112		115
Total stock-based compensation	$	5,053	$	2,929

For the three months ended March 31, 2018 and 2017, approximately $2.3 million and $0.8 million, respectively, of stock-based compensation expense was included in research and development expenses in connection with equity grants made to employees and consultants and approximately $2.7 million and $2.1 million, respectively, was included in general and administrative expenses in connection with grants made to employees, members of the board of directors and consultants.

Stock Options

The following table summarizes Fortress stock option activities excluding activity related to Fortress Companies:

	Number of shares		Weighted average exercise price		Total weighted average intrinsic value		Weighted average remaining contractual life (years)
Options vested and expected to vest at December 31, 2017		1,110,501	$	3.78	$	1,351,080		3.95
Exercised		-		-		-		-
Options vested and expected to vest at March 31, 2018		1,110,501	$	3.78	$	1,701,361		3.71
Options vested and exercisable		1,085,501	$	3.75	$	1,701,361		3.68

As of March 31, 2018, Fortress had no unrecognized stock-based compensation expense related to options.

Restricted Stock and Restricted Stock Units

The following table summarizes Fortress restricted stock awards and restricted stock units activities, excluding activities related to Fortress Companies:

	Number of shares		Weighted average grant price
Unvested balance at December 31, 2017		11,874,034	$	2.63
Restricted stock granted		1,392,856		3.99
Restricted stock vested		(213,334)		2.76
Restricted stock units granted		230,000		4.98
Restricted stock units forfeited		(42,417)		3.52
Restricted stock units vested		(64,750)		3.49
Unvested balance at March 31, 2018		13,176,389	$	2.81

As of March 31, 2018, and 2017, the Company had unrecognized stock-based compensation expense related to restricted stock and restricted stock unit awards of approximately $8.4 million and $3.4 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 3.1 years and 2.8 years, respectively.

Warrants

The following table summarizes Fortress warrant activities, excluding activities related to Fortress Companies:

	Number of shares		Weighted average exercise price		Total weighted average intrinsic value		Weighted average remaining contractual life (years)
Outstanding as of December 31, 2017		2,774,189	$	3.30	$	2,204,530		4.47
Granted		-		-		-		-
Forfeited		-		-		-		-
Outstanding as of March 31, 2018		2,774,189	$	3.30	$	3,586,975		4.22
Exercisable as of March 31, 2018		869,189	$	3.96	$	634,225		3.81

Employee Stock Purchase Plan

Eligible employees can purchase the Company’s Common Stock at the end of a predetermined offering period at 85% of the lower of the fair market value at the beginning or end of the offering period. The ESPP is compensatory and results in stock-based compensation expense.

As of March 31, 2018, 245,652 shares have been purchased and 154,348 shares are available for future sale under the Company’s ESPP. Share-based compensation expense recorded was approximately $38,000 and $35,000, respectively for the three months ended March 31, 2018 and 2017.

Capital Raises

Fortress

At the Market Offering

Pursuant to the terms of the Company’s Amended and Restated At Market Issuance Sales Agreement, or Sales Agreement, with MLV & Co. LLC, or MLV, and FBR Capital Markets & Co., or FBR (the “ATM”), for the period ended March 31, 2018, the Company issued 64,797 shares of common stock at an average price of $4.92 per share for gross proceeds of $0.3 million. In connection with these sales the Company paid a fee of approximately $5,700 to FBR.

Fortress Companies

Checkpoint Therapeutics, Inc.

Checkpoint Public Offering of Common Stock

On March 12, 2018, Checkpoint closed on underwritten public offering, whereby it sold 5,290,000 shares of its common stock at a price of $4.35 per share for gross proceeds of approximately $23.0 million. Total net proceeds from this offering were approximately $20.8 million, net of underwriting discounts and estimated offering expenses of approximately $2.2 million. The shares were sold under a Registration Statement (No. 333-221493) on Form S-3, filed by Checkpoint with the Securities and Exchange Commission.