UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ____ to _____.

Commission File No. 001-35366

FORTRESS BIOTECH, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		20-5157386
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2 Gansevoort Street, 9th Floor
New York, New York 10014		10014
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (781) 652-4500

Securities registered pursuant to Section 12(b) of the Act:


Title of Class	Trading Symbol(s)	Exchange Name
Common Stock	FBIO	Nasdaq Capital Market
9.375% Series A Cumulative Redeemable Perpetual Preferred Stock	FBIOP	Nasdaq Capital Market

Securities registered pursuant to section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ⌧	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ⌧

The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter: $173,878,853 based upon the closing sale price of our common stock of $2.68 on that date. Common stock held by each officer and director and by each person known to own in excess of 5% of outstanding shares of our common stock has been excluded in that such persons may be deemed to be affiliates. The determination of affiliate status in not necessarily a conclusive determination for other purposes.


Class of Stock		Outstanding Shares as of March 18, 2021
Common Stock, $0.001 par value		94,907,448
9.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value		3,427,138

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Fortress Biotech, Inc. and subsidiaries

New York, New York

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Fortress Biotech, Inc. and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Oaktree Note

As described in Note 2 and Note 10 to the consolidated financial statements, in August 2020, the Company entered into a $60.0 million senior secured credit agreement with Oaktree (“Note”). In connection with the Oaktree Note, the Company issued warrants to Oaktree and certain of its affiliates to purchase up to 1,749,450 shares of common stock (see Note 14)

F-2

FORTRESS BIOTECH, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

($ in thousands except for share and per share amounts)


	December 31,
	2020		2019
ASSETS
Current assets
Cash and cash equivalents	$	233,351	$	136,858
Accounts receivable, net		19,349		13,539
Inventory		1,404		857
Other receivables - related party		744		865
Prepaid expenses and other current assets		6,723		4,133
Total current assets		261,571		156,252

Property and equipment, net		11,923		12,433
Operating lease right-of-use asset, net		20,487		21,480
Restricted cash		1,645		16,574
Long-term investment, at fair value		17,566		11,148
Intangible asset, net		14,629		7,377
Other assets		1,013		1,158
Total assets	$	328,834	$	226,422

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	40,674	$	35,451
Interest payable		—		1,042
Interest payable - related party		—		92
Income taxes payable		136		—
Notes payable, short-term		—		7,220
Operating lease liabilities, short-term		1,849		1,784
Derivative warrant liability		—		27
Partner company note payable, short-term		5,300		—
Total current liabilities		47,959		45,616

Notes payable, long-term (net of debt discount of $8,323 and $5,086 at December 31, 2020 and December 31, 2019, respectively)		51,677		77,436
Operating lease liabilities, long-term		22,891		23,712
Partner company note payable, long-term		7,359		4,990
Other long-term liabilities		1,949		2,136
Total liabilities		131,835		153,890


Commitments and contingencies

Stockholders’ equity
Cumulative redeemable perpetual preferred stock, $.001 par value, 15,000,000 authorized, 5,000,000 designated Series A shares, 3,427,138 and 1,341,167 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively; liquidation value of $25.00 per share		3		1
Common stock, $.001 par value, 150,000,000 and 100,000,000 shares authorized, 94,877,492 and 74,027,425 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively		95		74
Common stock issuable, 0 and 251,337 shares as of December 31, 2020 and December 31, 2019, respectively		—		500
Additional paid-in-capital		583,000		461,874
Accumulated deficit		(482,760)		(436,234)
Total stockholders' equity attributed to the Company		100,338		26,215

Non-controlling interests		96,661		46,317
Total stockholders' equity		196,999		72,532
Total liabilities and stockholders' equity	$	328,834	$	226,422

The accompanying notes are an integral part of these consolidated financial statements.

F-4

FORTRESS BIOTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

($ in thousands except for share and per share amounts)


	Year Ended December 31,
	2020		2019
Revenue
Product revenue, net	$	44,531	$	34,921
Revenue - related party		1,068		1,708
Net revenue		45,599		36,629

Operating expenses
Cost of goods sold - product revenue		14,594		10,532
Research and development		61,275		75,236
Research and development - licenses acquired		2,834		6,090
Selling, general and administrative		61,166		55,590
Total operating expenses		139,869		147,448
Loss from operations		(94,270)		(110,819)

Other income (expense)
Interest income		1,518		2,559
Interest expense and financing fee		(15,326)		(11,849)
Change in fair value of derivative liability		(1,189)		(27)
Change in fair value of investments		6,418		—
Gain on deconsolidation of Caelum		—		18,476
Total other income (expense)		(8,579)		9,159
Loss before income tax expense		(102,849)		(101,660)

Income tax expense		136		—
Net loss		(102,985)		(101,660)

Less: net loss attributable to non-controlling interests		56,459		61,700
Net loss attributable to common stockholders	$	(46,526)	$	(39,960)

Net loss per common share - basic and diluted	$	(1.43)	$	(1.86)
Net loss per common share attributable to non - controlling interests - basic and diluted	$	(0.78)	$	(1.13)
Net loss per common share attributable to common stockholders - basic and diluted	$	(0.65)	$	(0.73)

Weighted average common shares outstanding - basic and diluted		72,005,181		54,711,838

The accompanying notes are an integral part of these consolidated financial statements.

F-5

FORTRESS BIOTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

($ in thousands except for share amounts)


							Common				Additional						Total
	Series A Preferred Stock			Common Stock			Shares		Treasury		Paid-In		Accumulated		Non-Controlling		Stockholders'
	Shares			Shares	Amount		Issuable		Stock		Capital		Deficit		Interests		Equity
Balance at December 31, 2018	1,000,000	$	1	57,845,447	$	58	$	659	$	—	$	397,408	$	(396,274)	$	17,891	$	19,743
Stock-based compensation expense	—		—	—		—		—		—		13,188		—		—		13,188
Settlement of restricted stock units into common stock	—		—	1,905,367		2		—		—		(2)		—		—		—
Issuance of common stock under ESPP	—		—	98,007		—		—		—		123		—		—		123
Issuance of common stock for at-the-market offering, net	—		—	11,798,468		12		—		—		20,235		—		—		20,247
Issuance of Series A preferred stock for at-the-market offering, net	39,292		—	—		—		—		—		788		—		—		788
Issuance of Series A preferred stock for cash, net	301,875		—	—		—		—		—		5,307		—		—		5,307
Preferred A dividends declared and paid	—		—	—		—		—		—		(2,559)		—		—		(2,559)
Partner company’s offering, net	—		—

Reports of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-4

Consolidated Statements of Operations	F-5

Consolidated Statements of Changes in Stockholders’ Equity	F-6

Consolidated Statements of Cash Flows	F-8

Notes to the Consolidated Financial Statements	F-11 – F-77