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 and nine months ended September 30, 2019 and 2018:

 

 

For the three months ended September 30, 2019 and 2018, approximately $1.2 million and $1.8 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 $2.5 million and $2.3 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, 2019 and 2018, approximately $2.6 million and $4.9 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 $7.8 million and $7.1 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 partner companies:

 

 

As of September 30, 2019, 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, 2019, the Company had unrecognized stock-based compensation expense related to restricted stock and restricted stock unit awards of approximately $12.7 million and $1.8 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 5.0 years and 2.0 years, respectively.

Warrants

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

 

 

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 September 30, 2019, 410,728 shares have been purchased and 589,272 shares are available for future sale under the Company’s ESPP. Share-based compensation expense recorded was approximately $18,000 and $52,000, respectively for the three months ended September 30, 2019 and 2018, and was approximately $0.1 million and $0.1 million, respectively, for the nine months ended September 30, 2019 and 2018.

Capital Raises

2016 Common Stock At-the-Market Offering

On August 17, 2016, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (the "2016 Common ATM"), with B. Riley FBR, Inc. (“B. Riley,” f/k/a MLV & Co. LLC and FBR Capital Markets & Co.) as selling agents, governing potential sales of the Company's common stock. For the three and nine months ended September 30, 2019, the Company issued approximately 0.6 million and 8.0 million shares of common stock at an average price of $1.48 and $1.88 per share for gross proceeds of $0.9 million and $15.1 million, respectively. Under the 2016 Common ATM, the Company pays the agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock, and in connection with these sales, with respect to the nine months ended September 30, 2019, the Company paid aggregate fees of approximately $0.3 million. The 2016 Common ATM expired on August 17, 2019.

The above-mentioned shares of common stock were sold under the Company's shelf registration statement on Form S-3 originally filed on August 8, 2016 and declared effective December 1, 2016 (the "2016 Shelf"). The 2016 Shelf expires on December 1, 2019, and approximately $5.1 million of securities remain available for sale under the 2016 Shelf at September 30, 2019.

2018 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock At Market Offering

On April 5, 2018, the Company entered into an At Market Sales Agreement (the "2018 Preferred ATM"), with B. Riley, National Securities Corporation, LifeSci Capital LLC, Maxim Group LLC and Noble Capital Markets, Inc. as selling agents, governing the issuance of the Company's 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock ("Perpetual Preferred Stock"). For the three and nine months ended September 30, 2019, the Company issued approximately 26,000 shares of Perpetual Preferred Stock for gross proceeds $0.5 million at an average selling price of $20.66. No shares of Perpetual Preferred Stock were issued in 2018. Under the 2018 Preferred ATM, the Company pays the agents a commission rate of up to 7.0% of the gross proceeds from the sale of any shares of Perpetual Preferred Stock, and in connection with these sales, with respect to the nine months ended September 30, 2019, the Company paid aggregate fees of approximately $16,000. 

The above-mentioned shares of Perpetual Preferred Stock were sold under the 2016 Shelf. The 2016 Shelf expires on December 1, 2019, and approximately $5.1 million of securities remain available for sale under the 2016 Shelf at September 30, 2019.

2019 Common Stock At-the-Market Offering

On June 28, 2019, the Company entered into an At Market Issuance Sales Agreement (“2019 Common ATM”), with Cantor Fitzgerald & Co., Oppenheimer & Co., Inc., H.C. Wainwright & Co. Inc., Jones Trading Institutional Services LLC and B. Riley, as selling agents, governing potential sales of the Company's common stock. For the three and nine months ended September 30, 2019, the Company issued approximately 0.6 million shares of common stock for gross proceeds of $1.0 million at an average selling price of $1.79.

Under the 2019 Common ATM, the Company pays the agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock, and in connection with these sales, with respect to the nine months ended September 30, 2019, the Company paid aggregate fees of approximately $32,000.

The above-mentioned shares of common stock were sold under the Company's shelf registration statement on Form S-3 originally filed on July 6, 2019 and declared effective July 23, 2019 (the "2019 Shelf"). Approximately $48.9 million of securities remain available for sale under the 2019 Shelf at September 30, 2019.

Checkpoint Therapeutics, Inc.

Checkpoint At-the-Market Offering

In November 2017, Checkpoint filed a shelf registration statement on Form S‑3 (the "Checkpoint S‑3"), which was declared effective in December 2017. Under the Checkpoint S‑3, Checkpoint may sell up to a total of $100 million of its securities. In connection with the Checkpoint S‑3, Checkpoint entered into an At-the-Market Issuance Sales Agreement (the "Checkpoint ATM") with Cantor Fitzgerald & Co., Ladenburg Thalmann & Co. Inc. and H.C. Wainwright & Co., LLC (each an "Agent" and collectively, the "Agents"), relating to the sale of shares of common stock. Under the Checkpoint ATM, Checkpoint pays the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.

During the three and nine months ended September 30, 2019, Checkpoint sold a total of 1.1 million and 2.2 million of its common stock, respectively, under the Checkpoint ATM for aggregate total gross proceeds of approximately $3.4 million and $7.9 million at an average selling price of $3.00 and $3.54 per share, respectively. Pursuant to the Founders Agreement, Checkpoint issued 28,555 and 55,750 shares of common stock to Fortress during the three and nine months ended September 30, 2019, respectively, for the ATM offering noted above.  During the three and nine months ended September 30, 2018, Checkpoint sold a total of 1,841,774 shares of its common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $8.0 million at an average selling price of $4.33 per share, resulting in net proceeds of approximately $7.7 million after deducting commissions and other transactions costs. Pursuant to the Founders Agreement, Checkpoint issued 178,292 shares of common stock to Fortress during the three and nine months ended September 30, 2018, respectively.

Approximately $61.1 million of the shelf remains available for sale under the Checkpoint S‑3, following the offerings noted above. Checkpoint may offer the securities under the Checkpoint S‑3 from time to time in response to market conditions or other circumstances if it believes such a plan of financing is in the best interests of its stockholders.

Mustang Bio, Inc.

Mustang At-the-Market Offering

On July 13, 2018, Mustang filed a shelf registration statement No. 333-226175 on Form S-3, as amended on July 20, 2018 (the "2018 Mustang S-3"), which was declared effective in August 2018. Under the 2018 Mustang S-3, Mustang may sell up to a total of $75.0 million of its securities. In connection with the 2018 Mustang S-3, Mustang entered into an At-the-Market Issuance Sales Agreement (the "Mustang ATM") with B. Riley FBR, Inc., Cantor Fitzgerald & Co., National Securities Corporation, and Oppenheimer & Co. Inc. (each an "Agent" and collectively, the "Agents"), relating to the sale of shares of common stock. Under the Mustang ATM, Mustang pays the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.

During the three months and nine months ended September 30, 2019, Mustang issued approximately 3.5 million shares of common stock at an average price of $6.42 per share for gross proceeds of $22.5 million. In connection with these sales, Mustang paid aggregate fees of approximately $0.5 million, for net proceeds of approximately $22.0 million. No sales were made under the Mustang ATM in 2018.

Mustang Public Offering of Common Stock

On April 30, 2019, Mustang announced the pricing of an underwritten public offering, whereby it sold 6,875,000 shares of its common stock, (plus a 30-day option to purchase up to an additional 1,031,250 shares of common stock, which was exercised in May 2019) at a price of $4.00 per share for gross proceeds of approximately $31.6 million, before deducting underwriting discounts and commissions and offering expenses. The shares were sold under the 2018 Mustang S-3. Mustang paid aggregate fees of approximately $2.1 million and received approximately $29.5 million of net proceeds.

On August 16, 2019, Mustang filed a shelf registration statement No. 333-233350 on Form S-3 (the "2019 Mustang S-3"), which was declared effective on September 30, 2019. Under the 2019 Mustang S-3, Mustang may sell up to a total of $75.0 million of its securities. As of September 30, 2019, no sales were made under Mustang's 2019 S-3 and approximately $20.9 million of the 2018 Mustang S-3 remains available for sale.