|3 Months Ended|
Mar. 31, 2020
14. Stockholders’ Equity
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, 2020 and 2019:
For the three months ended March 31, 2020 and 2019, approximately $0.9 million and $0.6 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 $2.7 million, respectively, was included in general and administrative expenses in connection with grants made to employees, members of the board of directors and consultants.
The following table summarizes Fortress stock option activities excluding activity related to Fortress partner companies:
As of March 31, 2020, 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 March 31, 2020 and 2019, the Company had unrecognized stock-based compensation expense related to restricted stock and restricted stock unit awards of approximately $17.9 million and $14.8 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 4.2 years and 5.4 years, respectively.
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 March 31, 2020, 454,515 shares have been purchased and 545,485 shares are available for future sale under the Company’s ESPP. Share-based compensation expense recorded was approximately $18,000 and $20,000, respectively, for the three months ended March 31, 2020 and 2019.
Pursuant to the terms of the Company’s Amended and Restated At Market Issuance Sales Agreement, or Sales Agreement, with B. Riley FBR, Inc. (“B. Riley,” f/k/a MLV & Co. LLC, and FBR Capital Markets & Co.) (the “ATM”), for the three-month period ended March 31, 2020, the Company issued approximately 2.3 million shares of common stock at an average price of $2.59 per share for gross proceeds of $6.1 million. In connection with these sales, the Company paid aggregate fees of approximately $0.2 million.
These shares were sold pursuant to the current shelf registration statement on Form S-3; approximately $17.9 million of the shelf remains available for sale at March 31, 2020.
9.375% Series A Cumulative Redeemable Perpetual Preferred Stock Offering
On February 14, 2020, the Company announced the closing of an underwritten public offering, whereby it sold 625,000 shares of its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (Nasdaq: FBIOP) (the “Preferred Stock”), (plus a 45-day option to purchase up to an additional 93,750 shares, which was exercised in February 2020) at a price of $20.00 per share for gross proceeds of approximately $14.4million, before deducting underwriting discounts and commissions and offering expenses of approximately $1.3 million.
The shares of Preferred Stock were sold under the Company’s shelf registration statement on Form S-3 originally filed on July 6, 2018 and declared effective July 23, 2019 (the “2019 Shelf”). Approximately $17.9 million of securities remain available for sale under the 2019 Shelf at March 31, 2020.
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 ended March 31, 2020, Mustang issued approximately 1.2 million shares of common stock at an average price of $3.93 per share for gross proceeds of $5.0 million under the Mustang ATM. In connection with these sales, Mustang paid aggregate fees of approximately $0.1 million for net proceeds of approximately $4.9 million. No sales were made under the 2018 Mustang ATM during the three months ended March 31, 2019. Pursuant to the Founders Agreement, Mustang issued 31,220 shares of common stock to Fortress at a weighted average price of $4.00 per share for the ATM offering noted above.
Approximately $15.9 million of the shelf remains available for sale under the 2018 Mustang S-3, following the offerings noted above. Mustang may offer the securities under the 2018 Mustang 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.
Share Repurchase Program
On March 23, 2020, the Company announced that its Board of Directors had approved a share repurchase program of the Company's outstanding Preferred Stock in an aggregate amount of up to $5 million. Repurchases under the program may be made in the open market or through privately-negotiated transactions from time to time up until the earlier to occur of the repurchase of $5 million of the Company's Preferred Stock or the close of trading on May 31, 2020, subject to applicable laws and regulations. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of Preferred Stock. As of March 31, 2020, 5,000 Preferred Stock shares have been repurchased under this program for total consideration of $0.1 million, net of fees of approximately $2,000, and are recorded as Treasury stock on the consolidated balance sheet.
The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef