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 September 30, 2021 and 2020:

​

​

For the three months ended September 30, 2021 and 2020, approximately $1.1 million and $0.7 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 $3.2 million and $2.5 million, respectively, was included in general and administrative expenses in connection with grants made to employees, members of the board of directors and consultants.

For the nine months ended September 30, 2021 and 2020, approximately $3.1 million and $2.5 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 $9.4 million and $7.8 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 partner companies:

​

​

As of September 30, 2021, 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:

​

​

As of September 30, 2021 and 2020, the Company had unrecognized stock-based compensation expense related to restricted stock and restricted stock unit awards of approximately $21.1 million and $17.5 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 3.1 years and 3.9 years, respectively.

Warrants

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

​

​

In connection with the Oaktree Note (see Note 10), the Company issued warrants to Oaktree and certain of its affiliates to purchase up to 1,749,450 shares of common stock at a purchase price of $3.20 per share (the “Oaktree Warrants”). Oaktree is entitled to additional warrants if at any time prior to the expiration of the Oaktree Warrants in event the Company issues equity, warrants or convertible notes (collectively known as “Security Instruments”) at a price that is less than 95% of the market price of the Company’s Common Stock on the trading day prior to the issuance of the Security Instruments.

​

The Oaktree Warrants expire on August 27, 2030 and may be net exercised at the holder’s election. The Company also agreed to file a registration statement on Form S-3 to register for resale the shares of common stock issuable upon exercise of the Warrants.

​

The Company evaluated the accounting treatment of the Oaktree Warrants and determined that the Oaktree Warrants met the scope exception of ASC 815-10-15-74(a) Derivatives and Hedging and therefore should be classified in stockholders’ equity. As such the Company used a Black-Scholes model to value the Oaktree Warrants, utilizing the following inputs: term of 10 years, volatility of 86.8%, and risk-free rate of return of 0.74%, yielding a value of $4.8 million. ASC 470-20-25-2 Debt – Debt with Conversion and Other Options dictates that debt or stock issued with detachable warrants requires the proceeds to be allocated to the two instruments based on their relative fair values. The relative fair value of the warrants was determined to be $4.4 million and was recorded as a component of Stockholders’ Equity in the Company’s unaudited condensed consolidated balance sheet.

​

Employee Stock Purchase Plan (“ESPP”)

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 September 30, 2021, 636,408 shares have been purchased and 363,592 shares are available for future sale under the Company’s ESPP. Share-based compensation expense recorded was approximately $31,000 and $38,000, respectively, for the three months ended September 30, 2021 and 2020 and approximately $0.1 million and $0.1 million, respectively, for the nine months ended September 30, 2021 and 2020.

Capital Raises

Journey 8% Cumulative Convertible Class A Preferred Offering

​

See Note 11.

​

At-the-Market Offering

For the nine-month period ended September 30, 2021, the Company issued 786,300 shares pursuant to the terms of the Company’s Amended and Restated At Market Issuance Sales Agreement, or Sales Agreement (the “ATM”), with B. Riley FBR, Inc.  at an average price of  $3.60 for gross proceeds of $2.8 million, before fees of approximately $0.1 million. For the nine month period ended September 30, 2020, the Company issued approximately 16.4 million shares of common stock under the ATM at an average price of $2.74 per share for gross proceeds of $44.8 million. In connection with these sales, the Company paid aggregate fees of approximately $1.6 million.

Mustang At-the-Market Offering

During the nine months ended September 30, 2021, Mustang issued approximately 17.3 million shares of common stock at an average price of $3.87 per share for gross proceeds of $66.9 million under the Mustang ATM. In connection with these sales, Mustang paid aggregate fees of approximately $1.3 million. During the nine months ended September 30, 2020, Mustang issued approximately 7.2 million shares of common stock at an average price of $3.56 per share for gross proceeds of $25.6 million under the Mustang ATM. In connection with these sales, Mustang paid aggregate fees of approximately $0.5 million.

Pursuant to the Founders Agreement, Mustang issued 517,304 shares of common stock to Fortress at a weighted average price of $3.84 per share  and recorded 52,019 shares issuable to Fortress for the nine months ended September 30, 2021 in connection with the shares issued under the Mustang ATM. During the nine months ended September 30, 2020, Mustang issued 117,405 shares of common stock to Fortress at a weighted average price of $3.56 per share in connection with the Mustang ATM.

On October 23, 2020, Mustang filed a shelf registration statement No. 333-249657 on Form S-3 (the “Mustang 2020 S-3”), which was declared effective on December 4, 2020. Under the Mustang 2020 S-3, Mustang may sell up to a total of $100.0 million of its securities. As of September 30, 2021, approximately $19.3 million of the Mustang 2020 S-3 remains available for sales of securities.

On April 23, 2021, Mustang filed a shelf registration statement on Form S-3 (the “Mustang 2021 S-3”), which was declared effective on May 24, 2021. Under the Mustang 2021 S-3, Mustang may sell up to a total of $200.0 million of its securities upon being declared effective. As of September 30, 2021, there have been no sales of securities under the Mustang 2021 S-3.

Checkpoint At-the-Market Offering

During the nine months ended September 30, 2021, Checkpoint issued a total of 10,860,983 shares of common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $37.2 million at an average selling price of $3.42 per share, resulting in net proceeds of approximately $36.3 million after deducting commissions and other transaction costs. Pursuant to the Founders Agreement, Checkpoint issued 271,515 shares of common stock to Fortress at a weighted average price of $3.41 per share.

During the nine months ended September 30, 2020, Checkpoint sold a total of 3,614,344 shares of common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $8.7 million at an average selling price of $2.40 per share, resulting in net proceeds of approximately $8.4 million after deducting commissions and other transaction costs.

Checkpoint Underwritten Offering

In September 2020, Checkpoint completed an underwritten public offering in which it sold 7,321,429 shares of its common stock at a price of $2.80 per share for gross proceeds of approximately $20.5 million. Total net proceeds from the offering were approximately $18.9 million, net of underwriting discounts and offering expenses of approximately $1.6 million. The shares were sold under a shelf registration statement on Form S-3 that Checkpoint filed in November 2017 and was declared effective in December 2017 (“the Checkpoint S-3”).

Pursuant to the Founders Agreement, Checkpoint issued 273,379 shares of common stock to Fortress at a weighted average price of $2.92 per share for the Checkpoint ATM offerings and the Checkpoint Underwritten offering.

At September 30, 2021, approximately $58.7 million of the Checkpoint shelf remains available for sale under the Checkpoint S-3.