Fortress Biotech, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Commitments and Contingencies

Commitments and Contingencies

3 Months Ended

Mar. 31, 2025

Commitments and Contingencies

Commitments and Contingencies

14. Commitments and Contingencies

Leases

Lease Amendment – Mustang

In February 2025, Mustang concurrently exited the lease of its manufacturing facility in Worcester, Massachusetts, relocating its corporate headquarters to 95 Sawyer Road, Waltham, Massachusetts, and divested certain fixed assets including furniture and equipment to AbbVie Bioresearch Center, Inc. for $1.0 million. In connection with the lease termination, Mustang recorded a net gain on lease termination of $0.4 million recorded in research and development expenses on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2025.

During three months ended March 31, 2025 and 2024, the Company recorded the following as lease costs for the periods presented:


	Three Months Ended March 31,
($ in thousands)	2025		2024
Operating lease cost	$	748	$	640
Shared lease costs		(533)		(523)
Variable lease cost		189		216
Total lease expense	$	404	$	333

The following tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC Topic 842, Leases:


	Three Months Ended March 31,
($ in thousands)	2025			2024
Operating cash flows from operating leases	$	(852)		$	(920)
Weighted-average remaining lease term – operating leases (years)		3.7			4.1
Weighted-average discount rate – operating leases		6.1	%		6.5	%


	Future Lease
($ in thousands)	Liability
Nine months ended December 31, 2025		2,461
Year ended December 31, 2026		2,937
Year ended December 31, 2027		2,940
Year ended December 31, 2028		2,967
Year ended December 31, 2029		3,011
Other		5,114
Total operating lease liabilities		19,430
Less: present value discount		(3,451)
Net operating lease liabilities, short-term and long-term	$	15,979

Indemnification

In accordance with its certificate of incorporation, bylaws and indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date, and the Company has director and officer insurance to address such claims. The Company and its subsidiaries and partner companies also provide indemnification of contractual counterparties (sometimes without monetary caps) to clinical sites, service providers and licensors.

Legal Proceedings

In the ordinary course of business, the Company and its subsidiaries and partner companies may be subject to both insured and uninsured litigation. Suits and claims may be brought against the Company by customers, suppliers, partners and/or third parties (including tort claims for personal injury arising from clinical trials of the Company’s product candidates and property damage) alleging deficiencies in performance, breach of contract, etc., and seeing resulting alleged damages.