Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions (Tables)

v3.23.1
Related Party Transactions (Tables)
3 Months Ended
Mar. 31, 2023
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 2022 Form 10-K. The following table summarizes, by partner company/subsidiary, 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:

PIK Dividend as

a % of fully

diluted

outstanding

Class of Stock

Partner Company/Subsidiary

    

Effective Date 1

    

capitalization

    

Issued

Aevitas

July 28, 2017

 

2.5

%  

Common Stock

Avenue

February 17, 2015

 

2.5

%2  

Common Stock

Baergic

December 17, 2019 5

2.5

%3  

Common Stock

Cellvation

October 31, 2016

 

2.5

%  

Common Stock

Checkpoint

March 17, 2015

 

-

%4  

Common Stock

Cyprium

March 13, 2017

 

2.5

%  

Common Stock

Helocyte

March 20, 2015

 

2.5

%  

Common Stock

Mustang

March 13, 2015

 

2.5

%  

Common Stock

Oncogenuity

April 22, 2020 5

2.5

%

Common Stock

Urica

November 7, 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:

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, InvaGen’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 3).

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/subsidiary 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 into Management Services Agreements (the “MSAs”) with certain of its partner companies/subsidiaries as described in the 2022 Form 10-K. The following table summarizes the effective date of each MSA and the annual consulting fee payable by the partner company/subsidiary to the Company in quarterly installments:

Annual MSA Fee

Partner Company/Subsidiary

    

Effective Date

(Income)/Expense

Aevitas

July 28, 2017

$

500

Avenue1

February 17, 2015

 

500

Baergic2

March 9, 2017

 

Cellvation

October 31, 2016

 

500

Checkpoint

March 17, 2015

 

500

Cyprium

March 13, 2017

 

500

Helocyte

March 20, 2015

500

Mustang

March 13, 2015

 

500

Oncogenuity

February 10, 2017

500

Urica

November 7, 2017

500

Fortress

 

(4,500)

Consolidated (Income)/Expense

$

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.