| 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 2021 Form 10-K. The following table summarizes, by partner company, the effective date of the Founders Agreements and Payment-in-Kind (“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:
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PIK Dividend as |
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a % of fully |
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diluted |
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outstanding |
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Class of Stock |
Partner Company |
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Effective Date 1 |
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capitalization |
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Issued |
Aevitas |
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July 28, 2017 |
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2.5 |
% |
Common Stock |
Avenue |
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February 17, 2015 |
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0.0 |
%2 |
Common Stock |
Baergic |
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December 17, 2019 5 |
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2.5 |
%3 |
Common Stock |
Cellvation |
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October 31, 2016 |
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2.5 |
% |
Common Stock |
Checkpoint |
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March 17, 2015 |
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0.0 |
%4 |
Common Stock |
Cyprium |
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March 13, 2017 |
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2.5 |
% |
Common Stock |
Helocyte |
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March 20, 2015 |
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2.5 |
% |
Common Stock |
Mustang |
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March 13, 2015 |
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2.5 |
% |
Common Stock |
Oncogenuity |
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April 22, 2020 5 |
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2.5 |
% |
Common Stock |
Urica |
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November 7, 2017 5 |
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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: |
PIK dividends in Avenue were not paid or accrued while InvaGen retained certain rights under that certain Stockholders Agreement, dated as of November 12, 2018, by and among the Company, Avenue, InvaGen and the other stockholder parties thereto (the “Avenue Stockholders Agreement”). In connection with the closing of Avenue’s public offering, InveGen’s shares were repurchased under a Share Repurchase Agreement in October 2022 and upon the closing of the Share Repurchase Agreement, also in October 2022, all of the rights retained by InvaGen pursuant to the avenue Stockholders Agreement were terminated and all of Fortress’ rights were restored (see Note 18). |
Note 3: |
Due to the November 2022 consummation of the Contribution Agreement between the Company and Avenue, Avenue is now eligible to receive the PIK dividend and equity fee payable by Baergic in accordance with the terms of the Founders Agreement and Baergic’s certificate of incorporation. |
Note 4: |
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 5: |
Represents the Trigger Date, the date that the Fortress partner company first acquires, whether by license or otherwise, ownership rights in a product. |
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| 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 partner companies as described in the 2021 Form 10-K. The following table summarizes the effective date of the MSA and the annual consulting fee payable by the partner company to the Company in quarterly installments:
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Annual MSA Fee |
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Partner company |
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Effective Date |
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(Income)/Expense |
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Aevitas |
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July 28, 2017 |
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$ |
500 |
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Avenue1 |
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February 17, 2015 |
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— |
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Baergic2 |
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March 9, 2017 |
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500 |
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Cellvation |
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October 31, 2016 |
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500 |
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Checkpoint |
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March 17, 2015 |
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500 |
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Cyprium |
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March 13, 2017 |
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500 |
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Helocyte |
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March 20, 2015 |
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500 |
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Mustang |
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March 13, 2015 |
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1,000 |
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Oncogenuity |
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February 10, 2017 |
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500 |
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Urica |
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November 7, 2017 |
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500 |
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Fortress |
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(5,000) |
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Consolidated (Income)/Expense |
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$ |
— |
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Note 1: |
MSA fees from Avenue were not paid or accrued so long as InvaGen held certain rights under the Avenue Stockholders Agreement. InvaGen’s shares in Avenue were repurchased in October 2022, and all existing agreements between InvaGen and Avenue (including the Avenue Stockholders Agreement) were terminated as of the closing of the Share Repurchase Agreement in October 2022 (see Note 18). Fortress has been eligible to receive MSA fees from Avenue since such closing occurred. |
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