Fortress Biotech, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Common Stock

Common Stock

3 Months Ended

Mar. 31, 2015

Stockholders' Equity Note [Abstract]

Shareholders' Equity and Share-based Payments

12. Common Stock

Stock-based Compensation

As of March 31, 2015, the Company had three equity compensation plans: the Fortress Biotech, Inc. 2007 Stock Incentive Plan, the Fortress Biotech, Inc. 2013 Stock Incentive Plan, and the Fortress Biotech, Inc. 2012 Employee Stock Purchase Plan.

The following table summarizes the stock-based compensation expense from stock option awards, restricted common stock awards, employee stock purchase programs and warrants for the three months ended March 31, 2015 and 2014:

	For the three months ended March 31,
($ in thousands)	2015		2014
Employee awards	$	1,463	$	1,122
Non-employee awards		7		13
Total stock-based compensation expense	$	1,470	$	1,135

For the three months ended March 31, 2015 and 2014, $0.3 million was included in research and development expenses and $1.2 million was included in general and administrative expenses and $0.3 million was included in research and development expenses and $0.8 million was included in general and administrative expenses, respectively.

The following table summarizes stock option activity:

	Outstanding Options						Weighted
($ in thousands except per share amounts)	Number of Shares		Weighted Average Exercise Price		Total Weighted Average Intrinsic Value		Average Remaining Contractual Life (in years)
Options vested and expected to vest at December 31, 2014		2,164,365	$	4.69	$			7.38
Options granted
Options exercised		(100,000)		2.15		170
Options cancelled
Options vested and expected to vest at March 31, 2015		2,064,365	$	4.82	$			7.20
Options vested and exercisable		1,681,032	$	4.58	$			7.00

The following table summarizes restricted stock award and restricted stock unit activity:

	Restricted Stock
	Number of Shares		Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2014		8,287,384	$	2.33
Restricted stock granted		200,000		3.04
Restricted stock vested		(783,115)		2.43
Restricted stock units granted		61,000		2.34
Restricted stock units vested		(25,000)		2.19
Unvested balance at March 31, 2015		7,740,269	$	2.34

As of March 31, 2015, the Company had unrecognized stock-based compensation expense related to unvested stock options and restricted stock awards and restricted stock units of $0.9 million and $15.6 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 0.5 years and 2.76 years, respectively.

Warrants

As of March 31, 2015 and December 31, 2014 the Company had vested warrants to purchase 685,061 shares of common stock with a weighted average exercise price of $6.85.

Deferred Compensation Plan

On March 12, 2015, the Company’s Compensation Committee approved the Deferred Compensation Plan allowing all non-employee directors the opportunity to defer all or a portion of their fees or compensation, including restricted stock and restricted stock units. During the three months ended March 31, 2015, certain non-employee directors elected to defer 250,000 restricted stock awards under this plan.

Employee Stock Purchase Plan

As of March 31, 2015, 63,194 shares have been purchased and 136,806 shares are available for future sale under the Employee Stock Purchase Plan (“ESPP”). The Company recognized share-based compensation expense related to this plan of $9,000 and $6,000 for the three months ended March 31, 2015 and 2014, respectively.