Related Party Transactions

3 Months Ended

Mar. 31, 2026

15. Related Party Transactions

Founders Agreement

The Company has entered into Founders Agreements and, in some cases, exchange agreements with certain of its subsidiaries and partner companies as described in the 2025 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' or partner companies’ certificates of incorporation:


				PIK Dividend as
				a % of fully
				diluted
				outstanding		Class of Stock
Partner Company/Subsidiary		Effective Date ¹		capitalization		Issued
Avenue		February 17, 2015		2.5	%	Common Stock
Cellvation		October 31, 2016		2.5	%	Common Stock
Checkpoint		March 17, 2015		—	%²	Common Stock
Cyprium		March 13, 2017		2.5	%	Common Stock
Helocyte		March 20, 2015		2.5	%	Common Stock
LemmaTx		February 11, 2026 ³		2.5	%	Common Stock
Mustang		March 13, 2015		2.5	%	Common Stock
Oncogenuity		April 22, 2020 ³		2.5	%	Common Stock
Urica		November 7, 2017 ³		2.5	%	Common Stock

Note 1:

Represents the effective date of the Founders Agreement of each subsidiary/partner company. 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:

Instead of a PIK dividend, Checkpoint paid the Company an annual equity fee in shares of Checkpoint’s common stock equal to 2.5% of Checkpoint’s fully diluted outstanding capitalization. Due to the deconsolidation of Checkpoint in May 2025 related to the Sun Pharma transaction (see Note 3), Checkpoint no longer has this obligation to the Company.

Note 3:

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

Management Services Agreements

The Company has entered into Management Services Agreements (the “MSAs”) with certain of its partner companies/subsidiaries as described in the 2025 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:



Partner Company/Subsidiary		Effective Date		Annual MSA Fee (Income)/Expense
Avenue		February 17, 2015		$	500
Cellvation		October 31, 2016			500
Checkpoint¹		March 17, 2015			—
Cyprium		March 13, 2017			500
Helocyte		March 20, 2015			500
LemmaTx²		February 11, 2026			442
Mustang		March 13, 2015			500
Oncogenuity		February 10, 2017			500
Urica		November 7, 2017			500
Fortress					(3,942)
Consolidated (Income)/Expense				$	—

Note 1:Checkpoint was acquired by Sun Pharma in May 2025 (see Note 3).

Note 2:Lemma’s MSA fee for the year ended December 31, 2026 is pro-rated for its 2026 effective date of its MSA.

Fees and Stock Grants Received by Fortress

Fees recorded in connection with Fortress’ agreements with its subsidiaries and partner companies are eliminated in consolidation. These include management services fees, issuance of common shares of partner companies in connection with third party raises and annual stock dividend or issuances on the anniversary date of respective Founders Agreements.

Shared Services Agreement with TG Therapeutics, Inc. (“TGTX”)

In July 2015, TGTX and the Company entered into an arrangement to share the cost of certain research and development employees. The Company’s Executive Vice Chairman, Strategic Development, is also Executive Chairman and Chief Executive Officer of TGTX. Under the terms of the agreement, TGTX reimbursed the Company for the salary and benefit costs associated with these employees based upon actual hours worked on TGTX-related projects. In connection with the shared services agreement, for the three months ended March 31, 2025, the Company invoiced TGTX $0.1 million related to this arrangement. There was no amount invoiced to TGTX under this arrangement for the three months ended March 31, 2026.

Desk Share Agreement with TGTX

The Desk Share Agreement between the Company and TGTX, as amended, required TGTX to pay 65% of the average annual rent for the Company’s New York, NY office space. In connection with the Company’s Desk Share Agreement with TGTX for the New York, NY office space, for the three months ended March 31, 2025, the Company had paid $0.7 million in rent, and invoiced TGTX approximately $0.5 million for their prorated share of the rent base.

On March 15, 2026, the Company and TGTX entered into an amendment to the Desk Share Agreement agreeing to an equal allocation of the costs associated with the New York, NY lease during the term of the sublease (see Note 14) to the extent the costs are not reimbursed or otherwise paid by the subtenant under the sublease agreement. In connection with the amended desk share agreement, for the three months ended March 31, 2026, the Company recognized $0.7 million in lease costs, recorded in selling, general and administrative expense in the condensed consolidated statement of operations, and $0.7 million in capitalized sublease costs, recorded to other assets on the Company’s condensed consolidated balance sheet. The Company invoiced TGTX approximately $0.8 million for its proportionate share of these lease costs. At March 31, 2026, there was $0.5 million due from TGTX related to the amended desk share agreement, recorded to other receivables – related party on the Company’s condensed consolidated balance sheet at March 31, 2026.

Cyprium Debt Conversion Agreement and Promissory Note Payoff

On January 26, 2026, the Company entered into a Debt Conversion Agreement with Cyprium, whereby the Company agreed to convert $5.0 million of a total of $11.7 million owed by Cyprium under a promissory note, as amended, into approximately 2.5 million newly issued common shares of Cyprium. In March 2026, subsequent to the closing of the PRV sale (see Note 3), Cyprium made payments to the Company of the outstanding balances under the intercompany note, including accrued interest, and accrued expenses owed to the Company.

Board Services Agreement

In December 2016, Checkpoint entered into an advisory agreement effective January 1, 2017 with Caribe BioAdvisors, LLC (“Caribe”), owned by Michael S. Weiss, to provide the advisory services of Mr. Weiss as Chairman of the Board. Pursuant to the agreement, Caribe will be paid an annual cash fee of $60,000, in addition to any and all annual equity incentive grants paid to members of the board. In June 2023, Mr. Weiss assigned the agreement with Checkpoint to Hawkins BioVentures, LLC, also owned by Michael Weiss. For the three months ended March 31, 2025, Checkpoint recognized $32,000 in expense related to the advisory agreement, including $17,000 in expenses related to annual equity incentive grants. As Checkpoint was deconsolidated in May 2025 (see Note 3) there was no comparative expense in the three months ended March 31, 2026.

In January 2017, Mustang entered into an advisory agreement effective January 1, 2017 with Caribe to provide the advisory services of Mr. Weiss as Chairman of the Board. Pursuant to the agreement, Caribe will be paid an annual cash fee of $60,000, in addition to any and all annual equity incentive grants paid to members of the board. For the three months ended March 31, 2026 and 2025, Mustang recognized approximately $15,000 and $15,000, respectively, in expenses related to the advisory agreement.

Shared Services Agreement with Journey

On November 12, 2021, Journey and the Company entered into an arrangement to share the cost of certain employees. The Company’s Executive Chairman and Chief Executive Officer is also the Executive Chairman of Journey. Under the terms of the arrangement, Journey reimburses the Company for the salary and benefit costs associated with these employees based upon actual hours worked on Journey-related projects following the completion of its initial public offering in November 2021. In addition, Journey reimburses the Company for various payroll-related costs and selling, general and administrative costs incurred by Fortress for the benefit of Journey.

For the three months ended March 31, 2026 and 2025, the Company’s employees have provided services to Journey totaling approximately $13,000 and $12,000, respectively. At March 31, 2026, the Company’s total related party receivable due from Journey was $0.5 million, and primarily relates to reimbursable expenses incurred by Fortress on behalf of Journey.

Cyprium 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock Dividend Obligation

Pursuant to a private placement in August 2020, Cyprium sold 320,000 shares of Cyprium PPS. The Cyprium PPS was fully and unconditionally guaranteed by Fortress.

Pursuant to the terms of the Cyprium PPS, holders of record were entitled to receive a monthly cash dividend of $0.19531 per share, or $2.34375 per share on an annual basis. The Cyprium PPS was required to be redeemed in cash upon the first bona fide, arm’s-length sale of a Priority Review Voucher (a “PPS PRV Sale”) issued by the FDA in connection with the approval of CUTX-101. Upon a PPS PRV Sale, each share of Cyprium PPS would automatically be redeemed for an amount equal to twice the $25.00 liquidation preference, plus accumulated and unpaid dividends to, but excluding, the redemption date. Beginning 24 months after issuance, holders had the right to elect an exchange of the Cyprium PPS, with settlement at Fortress’ election in cash or Fortress’ Series A Preferred Stock. A mandatory exchange, also settleable at Fortress’ election in cash or Fortress’ Series A Preferred Stock, occurred on September 30, 2024 for any investors who did not opt to waive such mandatory exchange mechanism. Specifically, in September 2024, Cyprium offered holders the opportunity to waive enforcement of, and extend the mandatory exchange date to March 31, 2026, and therefore remain eligible to receive the redemption price upon a PPS PRV Sale, and waive the optional exchange right (the “PPS Extension”). Holders of 283,400 shares of Cyprium PPS opted into the PPS Extension.

The Company accounted for the Cyprium PPS as a financing obligation and recorded the carrying amount in the consolidated balance sheets as partner company perpetual preferred liability of $7.1 million as of December 31, 2025.

In addition, the Company concluded that the redemption feature associated with a PPS PRV Sale required bifurcation as an embedded derivative (partner company derivative liability), with remeasurement to fair value at each reporting date. The fair value of the embedded derivative was not material historically. As of December 31, 2025, although the NDA for CUTX-101 had been resubmitted and assigned a new PDUFA date of January 14, 2026, following the October 2024 Complete Response Letter, significant uncertainty remained regarding whether approval would be obtained, whether a PRV would be issued, and whether a PPS PRV Sale could be executed on a timely basis on agreeable terms prior to the March 31, 2026 mandatory exchange date. As a result, the fair value of the partner company derivative liability remained immaterial as of December 31, 2025.

In February 2026, the Company, Cyprium and an undisclosed buyer entered into a definitive agreement to sell Cyprium’s PRV for $205 million. Cyprium recorded the increase in the fair value of the partner company derivative liability of $7.1 million. The Cyprium PPS was automatically redeemed for an amount equal to twice the $25.00 liquidation preference, pursuant to the terms of the Cyprium PPS, in the amount of $14.2 million which was comprised of the $7.1 million partner company perpetual preferred liability and the $7.1 million partner company derivative liability. In March 2026, the sale of the PRV closed (see Note 3).

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Fortress Biotech, Inc. 10-Q