11. 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, 2022 and 2021:

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For the three months ended March 31, 2022 and 2021, approximately $1.4 million and $1.2 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 $4.1 million and $2.6 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:

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As of March 31, 2022, 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:

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As of March 31, 2022 and 2021, the Company had unrecognized stock-based compensation expense related to restricted stock and restricted stock unit awards of approximately $25.2 million and $21.8 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 2.5 years and 3.6 years, respectively.

Warrants

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

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In connection with the Oaktree Note (see Note 7), 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 the resale of the shares of Common Stock issuable upon exercise of the Oaktree Warrants.

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Long-Term Incentive Program (“LTIP”)

On July 15, 2015, the Company’s stockholders approved the LTIP for the Company’s Chairman, President and Chief Executive Officer, Dr. Rosenwald, and Executive Vice Chairman, Strategic Development, Mr. Weiss. The LTIP consists of a program to grant equity interests in the Company and in the Company’s subsidiaries, and a performance-based bonus program that is designed to result in performance-based compensation that is deductible without limit under Section 162(m) of the Internal Revenue Code of 1986, as amended.

On January 1, 2022 and 2021, the Compensation Committee granted 1,102,986 and 1,030,339 shares each to Dr. Rosenwald and Mr. Weiss, respectively. These equity grants, made in accordance with the LTIP, represent 1% of total outstanding shares of the Company as of the dates of such grants and were granted in recognition of their performance in 2021 and 2020. The shares will vest in full once both of the following conditions are met: (i) the Company’s market capitalization has increased by a minimum of

$100.0 million from the date of grant, and (ii) the employee is either in the service of the Company as an employee or as a Board member (or both) on the tenth anniversary of the LTIP, or the eligible employee has had an involuntary separation from service (as defined in the LTIP). The Company’s repurchase option on such shares will also lapse upon the occurrence of a corporate transaction (as defined in the LTIP) if the eligible employee is in service on the date of the corporate transaction. The fair value of each grant on the grant date was approximately $2.8 million for the 2022 grant and $3.3 million for the 2021 grant. For the three months ended March 31, 2022 and 2021, the Company recorded stock compensation expense of approximately $1.3 million and $1.0 million, respectively related to the LTIP grants on the Condensed Consolidated Statements of Operations.

Capital Raises

2021 Shelf

On July 23, 2021, the Company filed a shelf registration statement 333-255185  on Form S-3, which was declared effective on July 30, 2021 (the "2021 Shelf"). No securities have been taken down under the 2021 Shelf as of March 31, 2022.

Common Stock At-the-Market Offering and 2020 Shelf

On May 18, 2020, the Company filed a shelf registration statement on Form S-3, which was declared effective on May 26, 2020 (the "2020 Shelf"). In connection with the 2020 Shelf, the Company entered into an At Market Issuance Sales Agreement ("2020 Common ATM"), governing potential sales of the Company's Common Stock.

For the three month period ended March 31, 2022, the Company issued approximately 2.4 million shares of common stock at an average price of $1.80 per share for gross proceeds of $4.4 million. In connection with these sales, the Company paid aggregate fees of approximately $0.1 million. Approximately $13.0 million of securities remain available for sale under the 2020 Shelf at March 31, 2022.  No shares were sold under the ATM for the three month period ended March 31, 2022.

Mustang At-the-Market Offering (the “Mustang ATM”)

During the three months ended March 31, 2022, Mustang issued approximately 2.8 million shares of common stock at an average price of $1.00 per share for gross proceeds of $2.8 million under the Mustang ATM. In connection with these sales, Mustang paid aggregate fees of approximately $49,000. During the three months ended March 31, 2021, Mustang issued approximately 11.6 million shares of common stock at an average price of $4.17 per share for gross proceeds of $48.4 million under the Mustang ATM. In connection with these sales, Mustang paid aggregate fees of approximately $0.9 million for net proceeds of approximately $47.5 million.

Pursuant to the terms of the Founder’s Agreement between the Company and Mustang (see Note 13), Mustang issued to Fortress 2.5% of the aggregate number of shares of Mustang common stock issued in connection with the shares issued under the Mustang ATM.  Additionally, Mustang issued shares to Fortress equal to 2.5% of the $30 million proceeds from the Runway Note (see Note 7). Accordingly, Mustang issued 1,049,302 shares of common stock to Fortress for the three months ended March 31, 2022 and issued 325,221 shares of common stock and recorded 63,688 shares issuable for the three months ended March 31, 2021.

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 March 31, 2022, approximately $11.7 million of the Mustang 2020 S-3 remains available for sales of securities.

On April 23, 2021, Mustang filed a shelf registration statement No. 333-255476 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 million of its securities. As of March 31, 2022, $200 million of the Mustang 2021 S-3 remains available for sales of securities.

Checkpoint At-the-Market Offering (the “Checkpoint ATM”)

During the three months ended March 31, 2022, Checkpoint sold a total of 3,741,939 shares of common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $8.2 million at an average selling price of $2.19 per share, resulting in net proceeds of approximately $8.0 million after deducting commissions and other transaction costs.

During the three months ended March 31, 2021, Checkpoint sold a total of 7,025,309 shares of common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $24.6 million at an average selling price of $3.50 per share, resulting in net proceeds of approximately $23.9 million after deducting commissions and other transaction costs.

Pursuant to the Founders Agreement between the Company and Checkpoint (see Note 13), Checkpoint issued to Fortress 2.5% of the aggregate number of shares of Checkpoint common stock issued under the Checkpoint ATM. Accordingly, Checkpoint issued 93,542 shares of common stock to Fortress for the three months ended March 31, 2022 and issued 175,625 shares of common stock for the three months ended March 31, 2021.

The Checkpoint S-3 is a shelf registration statement filed by Checkpoint in November 2020 that was declared effective in December 2020, under which Checkpoint may sell up to $100 million of its securities. At March 31, 2022, approximately $46.4 million of the Checkpoint shelf remains available for sale under the Checkpoint S-3.