Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions (Tables)

v3.20.1
Related Party Transactions (Tables)
3 Months Ended
Mar. 31, 2020
Related Party Transactions  
Schedule of effective date and PIK dividend or equity fee payable

The Company has entered into Founders Agreements and, in some cases, Exchange Agreements with certain of its subsidiaries as described in the Company's Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. The following table summarizes, by subsidiary, the effective date of the Founders Agreements and PIK dividend or equity fee payable to the Company in accordance with the terms of the Founders Agreements, Exchange Agreements, and the subsidiaries' certificates of incorporation.

 

 

 

 

 

 

 

 

 

 

 

 

PIK Dividend as

 

 

 

 

 

 

a % of fully

 

 

 

 

 

 

diluted

 

 

 

 

 

 

outstanding

 

Class of Stock

Fortress Partner Company

    

Effective Date 1

    

capitalization

    

Issued

Helocyte

 

March 20, 2015

 

2.5

%  

Common Stock

Avenue

 

February 17, 2015

 

0.0

%2  

Common Stock

Mustang

 

March 13, 2015

 

2.5

%  

Common Stock

Checkpoint

 

March 17, 2015

 

0.0

%3  

Common Stock

Cellvation

 

October 31, 2016

 

2.5

%  

Common Stock

Caelum

 

January 1, 2017

 

0.0

%4  

Common Stock

Baergic

 

December 17, 20195

 

2.5

%  

Common Stock

Cyprium

 

March 13, 2017

 

2.5

%  

Common Stock

Aevitas

 

July 28, 2017

 

2.5

%  

Common Stock

Tamid

 

November 30, 2017 5

 

2.5

%  

Common Stock

 

Note 1: Represents the effective date of each subsidiary’s Founders Agreement. Each PIK dividend and equity fee is payable on the annual anniversary of the effective date of the original Founders Agreement or has since been amended to January 1 of each calendar year.

Note 2: Concurrently with the execution and delivery of the Stock Purchase and Merger Agreement (“SPMA”) entered into between, Avenue, the Company and InvaGen Pharmaceuticals Inc. (“InvaGen”) (together, the “SPMA Parties”), the SPMA Parties entered into a waiver agreement (the “Waiver Agreement”), pursuant to which the Company irrevocably waived its right to receive the annual dividend of Avenue’s common shares under the terms of the Class A preferred stock and any fees, payments, reimbursements or other distributions under the management services agreement between the Company and Avenue and the Founders Agreement, for the period from the effective date of the Waiver Agreement to the termination of InvaGen’s rights under the SPMA. Pursuant to the Waiver Agreement, immediately prior to the closing of the Merger Transaction contemplated under the SPMA, the Company will convert all of its preferred shares into common shares pursuant to the terms of the certificate of incorporation of Avenue, as amended from time to time.

Note 3: Instead of a PIK dividend, Checkpoint pays the Company an annual equity fee in shares of Checkpoint’s common stock equal to 2.5% of Checkpoint’s fully diluted outstanding capitalization.

Note 4: Effective January 31, 2019 the Caelum Founders Agreement and MSA with Fortress were terminated in conjunction with the execution of a Development Option and Share Purchase Agreement (“DOSPA”) between Caelum and Alexion Therapeutics, Inc. (See Note 4).

Note 5: Represents the Trigger Date, the date that the Fortress partner company first acquires, whether by license or otherwise, ownership rights in a product.

Schedule of effective date and annual consulting fee payable by the subsidiary to the Company

The Company has entered in Management Services Agreements (the “MSAs”) with certain of its subsidiaries as described in the Company’s Form 10‑K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. The following table summarizes, by subsidiary, the effective date of the MSA and the annual consulting fee payable by the subsidiary to the Company in quarterly installments:

 

 

 

 

 

 

 

 

 

 

 

Annual MSA Fee

Fortress partner company

    

Effective Date

    

(Income)/Expense

Helocyte

 

March 20, 2015

 

$

500

Avenue 1

 

February 17, 2015

 

 

 —

Mustang

 

March 13, 2015

 

 

500

Checkpoint

 

March 17, 2015

 

 

500

Cellvation

 

October 31, 2016

 

 

500

Baergic

 

March 9, 2017

 

 

500

Cyprium

 

March 13, 2017

 

 

500

Aevitas

 

July 28, 2017

 

 

500

Tamid2

 

November 30, 2017

 

 

 —

Fortress

 

 

 

 

(3,500)

Consolidated (Income)/Expense

 

 

 

$

 —

 

Note 1: Concurrently with the execution and delivery of the SPMA entered into between, Avenue, the Company and InvaGen Pharmaceuticals Inc. (“InvaGen”) (together, the “SPMA Parties”), the SPMA Parties entered into a waiver agreement (the “Waiver Agreement”), pursuant to which the Company irrevocably waived its right to receive the annual dividend of Avenue’s common shares under the terms of the Class A preferred stock and any fees, payments, reimbursements or other distributions under the management services agreement between the Company and Avenue and the Founders Agreement, for the period from the effective date of the Waiver Agreement to the termination of InvaGen’s rights under the SPMA. Pursuant to the Waiver Agreement, immediately prior to the closing of the Merger Transaction contemplated under the SPMA, the Company will convert all of its preferred shares into common shares pursuant to the terms of the certificate of incorporation of Avenue, as amended from time to time. (See Note 4).

Note 2: In December 2019, Tamid discontinued development and terminated the related licenses and clinical trial agreements with the University of North Carolina at Chapel Hill for all three of its preclinical product candidates , effectively terminating their MSA with the Company.