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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 575 added, 1188 removed, 1353 unchanged (57% of the section changed)

Controls and Procedures.

Disclosure Controls and Procedures

Controls and Procedures

25 unchanged sentences

Directors, Executive Officers and Corporate Governance

The following table sets forth certain information regarding our executive officers and directors, including their ages as of the date of this Form 10-K.

Rosenwald, M.D.

Chairman of the Board of Directors, President and Chief Executive Officer

Chief Financial Officer and Head of Corporate Development

Executive Vice Chairman, Strategic Development

Jimmie Harvey, Jr., M.D.

Malcolm Hoenlein

Dov Klein, CPA

Lucy Lu, M.D.

Rosenwald, M.D.

has served as a member of the Company’s Board of Directors since October 2009 and as Chairman, President and Chief Executive Officer of the Company since December 2013.

Rosenwald also currently serves as a member of the board of directors of Fortress partner companies Avenue (OTC:

ATXI), Checkpoint (Nasdaq:

CKPT), Mustang (Nasdaq:

MBIO) and Journey (Nasdaq:

Additionally, Dr.

Rosenwald serves as a member of the board of directors of each of Fortress’ private subsidiaries (and has so served in each case since company inception).

From 1991 to 2008, Dr.

Rosenwald served as the Chairman of Paramount BioCapital, Inc.

Over the past 30 years, Dr.

Rosenwald has acted as a biotechnology entrepreneur and has been involved in the founding, recapitalization and sale of numerous public and private biotechnology and life science companies.

He received his B.S.

in finance from Pennsylvania State University and his M.D.

from Temple University School of Medicine.

David Jin h as served as our Chief Financial Officer since August 2022 and as Head of Corporate Development since May 2020.

He also serves on the Board of Directors of Mustang (Nasdaq:

MBIO) and as Interim Chief Financial Officer and Chief Operating Officer of Avenue (OTC:

ATXI) (both Fortress partner companies).

Previously, he was on the investment team in the Private Equity & Real Assets group at Barings, Director of Corporate Development at Sorrento Therapeutics, Vice President of Healthcare Investment Banking at FBR & Co., and was in the management consulting group at IMS Health (now IQVIA).

He holds a B.S.

in Industrial Engineering & Management Sciences with a double-major in Mathematical Methods in the Social Sciences from Northwestern University.

Weiss has served as our Executive Vice Chairman, Strategic Development since February 2014.

He currently serves as a member of the board of directors of several of our partner companies, including as Chairman of the Board of Directors of Checkpoint (Nasdaq:

CKPT) and Executive Chairman of the Board of Directors of Mustang (Nasdaq:

Since December 2011, Mr.

Weiss has served in multiple capacities at TG Therapeutics, Inc.

TGTX), a related party, and is currently its Executive Chairman, Chief Executive Officer and President.

Weiss founded Access Oncology, which was later acquired by Keryx Biopharmaceuticals (Nasdaq:

KERX) in 2004.

Following the merger, Mr.

Weiss remained as CEO of Keryx.

He began his professional career as a lawyer with Cravath, Swaine & Moore LLP.

Weiss earned his B.S.

in Finance from The University of Albany and his J.D.

from Columbia Law School .

Jimmie Harvey, Jr., M.D.

has served as a member of the Board of Directors since December 2008.

Harvey founded Birmingham Hematology and Oncology Associates, L.L.C.

(now Alabama Oncology, L.L.C.), a private medical company located in Birmingham, Alabama.

Harvey served as President of Alabama Oncology, LLC until 2020.

Harvey has experience in clinical trial execution and management and was a principal investigator in two trials, one investigating a novel monoclonal antibody and the other investigating a small molecule used to treat immunologic malignancies.

Harvey holds a B.A.

in chemistry from Emory University and received his M.D.

from Emory University School of Medicine.

Harvey completed his medical oncology training at the Vincent T.

Lombardi Cancer Center at Georgetown University.

Harvey’s medical background, including his oncology expertise, the Board of Directors believes that Dr.

Harvey has the appropriate set of skills to serve as a member of the Board in light of the Company’s business and structure.

Malcolm Hoenlein has served as a member of the Board of Directors since February 2014.

From 1986 to 2021, Mr.

Hoenlein served as Executive Vice Chairman of the Conference of Presidents of Major American Jewish Organizations, the coordinating body on international and national concerns for 51 national American Jewish organizations and since 2021 continues as Vice Chairman Emeritus.

Previously, he served as the founding Executive Director of the Jewish Community Relations Council of Greater New York.

Prior to that, he was the founding Executive Director of the New York Conference on Soviet Jewry.

A National Defense Fellow at the Near East Center of the University of Pennsylvania, Mr.

Hoenlein taught International Relations in the Political Science Department and served as a Middle East specialist at the Foreign Policy Research Institute.

In addition, he served on the editorial staff of ORBIS, the Journal of World Affairs.

He serves currently as a director of Nanox Imaging Plc.

and Bonus BioGroup.

He previously served as a director for DarioHealth Corp, WellSense Technology, Delek Oil, Eco-Fusion North America, Inc., Powermat USA, and Bank Leumi USA.

Hoenlein has a B.A.

in Political Science from Temple University and an M.A.

in International Relations from the University of Pennsylvania, as well as an Hon.

from Touro College, an Hon.

from Yeshiva University, an Hon.

from Temple University and an Hon.

from Bar Ilan University.

Hoenlein’s demonstrated sound business judgment and leadership and management experience, the Board of Directors believes that Mr.

Hoenlein has the appropriate set of skills to serve as a member of the Board in light of the Company’s business and structure.

Dov Klein, CPA , has served as a member of the Board of Directors since July 2015.

From January 2016 through December 31, 2020, Mr.

Klein was an audit partner at Marks Paneth LLP, a certified public accounting and consulting firm.

Effective January 1, 2021, Mr.

Klein is a retired partner of Marks Paneth LLP.

Prior to 2016, Mr.

Klein was an audit partner at RSSM CPA LLP, a certified public accounting and strategic advisory firm, which he joined in 2001.

His practice focused on audits and reviews and compilation of financial statements for clients in various industries.

Klein has also consulted on matters in litigation and conducted financial due diligence in mergers and acquisitions as well as business planning for growing businesses.

Klein has been a certified public accountant since 1978 and is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants.

Klein received his BSc in Accounting from Brooklyn College, The City University of New York.

Jay Lobell has served as a member of the Board of Directors since June 2006.

Lobell is President of GMF Capital, LLC which he co-founded in January 2016.

Lobell was also a founder of Beech Street Capital, LLC, a real estate lending company, serving as its Vice Chairman from December 2009 until the company’s sale to Capital One Financial Corporation in November 2013.

From January 2005 to December 2009, Mr.

Lobell served as President and Chief Operating Officer of Paramount Biosciences, LLC, or PBS, a private biotechnology investment and development company.

In that capacity, he had substantial responsibility for the assembly and oversight of companies PBS founded and incubated, including the Company.

Lobell currently serves on the board of directors of several private companies, including Sava Senior Care, where he has served since September 2013, Tender Touch Rehabilitation Services, where he has served since October 2014, and Pardes Biosciences, where he has served since January 2021.

Lobell was a partner in the law firm Covington & Burling LLP from October 1996 through January 2005, where he advised companies and individuals as a member of the firm’s securities litigation and white collar defense practice group.

Lobell received his B.A.

(summa cum laude, Phi Beta Kappa) from The City University of New York and his J.D.

from Yale Law School, where he was senior editor of The Yale Law Journal.

Lorenz, J.D ., has served as a member of the Board of Directors since August 2019.

Lorenz has over 25 years of experience guiding and implementing investment strategies across public and private companies.

Since 2021, Mr.

Lorenz has served as a Director at Adventus Capital Partners.

Since 2015, Mr.

Lorenz has been Chief Investment Officer, Senior Vice President, Treasury & Private Investments at the Katz Group in the family office of Daryl Katz, which has operations in sports and entertainment, real estate, and public and private investments.

Lorenz works directly with the principal of the Katz Group to oversee the design, implementation, and monitoring of the overall investment strategy for public and private passive investments.

Prior to joining the Katz Group, Mr.

Lorenz was Director, Ultra High Net Worth (“UHNW”) Private Client Business at Credit Suisse Securities, LLC from 2009 - 2015, where he was selected to expand Credit Suisse’s UHNW private client business into Canada.

From 2004 to 2009, Mr.

Lorenz was the Director, UHNW Management Group at UBS Financial Services, Inc., where he was a key contributor to the formation and development of the company’s first dedicated UBS UHNW office.

Earlier in his career, he held positions of increasing responsibility at Merrill Lynch Pierce Fenner & Smith, Inc.

and the Office of the Comptroller of the Currency, an independent bureau within the U.S.

Department of the Treasury that charters, regulates and supervises all national banks and thrift institutions.

Lorenz holds a J.D.

from George Mason University Antonin Scalia Law School, an M.B.A.

from Benedictine University and a B.S.

in economics from Illinois State University.

Lucy Lu, M.D.

, has served as a member of the Board of Directors since December 2022.

She previously served as the Executive Vice President and Chief Financial Officer of the Company from February 2012 to June 2017 and the President and Chief Executive Officer of Avenue Therapeutics, Inc.

ATXI) from July 2017 until March 2022.

Prior to working in the biotech industry, Dr.

Lu had 10 years of experience in healthcare-related equity research and investment banking.

Additionally, Dr.

Lu has served as a member of the Board of Directors of Veru, Inc.

where she is the Chair of the Audit Committee and serves on the Compensation Committee, since 2021, a position she also held from 2016 to 2018, and has served as a member of the Board of Directors of Iventiva S.A.

From February 2007 through January 2012, Dr.

Lu was a senior biotechnology equity analyst with Citigroup Investment Research.

From 2004 until joining Citigroup, she was with First Albany Capital, serving as Vice President from April 2004 until becoming a Principal of the firm in February 2006.

Lu holds an M.D.

degree from the New York University School of Medicine and an M.B.A.

from the Leonard N.

Stern School of Business at New York University.

Lu obtained a B.A.

from the University of Tennessee’s College of Arts and Science.

Family Relationships

There is no family relationship between and among any of our executive officers or directors.

Board Structure and Leadership

Our Bylaws provide that our Board shall consist of between one and nine directors, and such number of directors within this range may be determined from time to time by resolution of our board of directors or our stockholders.

Currently, we have eight directors.

The Board does not have a formal policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes that it is in the best interests of the Company to make that determination based on the direction of the Company and the current membership of the Board.

The Board has determined that having a director who is also the Chief Executive Officer serve as the Chairman is in the best interest of the Company’s stockholders at this time.

During 2024, our Board held ten meetings.

During 2024, each director attended at least 88% of the meetings of the Board and the meetings of those committees on which each director served, in each case during the period that such person was a director.

Our directors are expected to attend each Annual Meeting of Stockholders.

Director Independence

Fortress adheres to the corporate governance standards adopted by The Nasdaq Stock Market LLC (“Nasdaq”).

Nasdaq rules require our Board to make an affirmative determination as to the independence of each director.

Consistent with these rules, our Board completed its annual review of director independence on March 27, 2025.

During the review, our Board considered relationships and transactions during 2024 and during the past three fiscal years between each director or any member of his or her immediate family, on the one hand, and the Company and our partner companies and affiliates, on the other hand.

The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.

Based on this review, our Board determined that Dr.

Harvey and Messrs.

Hoenlein, Klein, Lobell, and Lorenz are independent under the criteria established by Nasdaq and our Board.

Board Committees

The permanent committees established by our Board are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, descriptions of which are set forth in more detail below.

Audit Committee

The Audit Committee currently consists of Messrs.

Klein (chair) and Lobell, and Dr.

During 2024, the Audit Committee held four meetings.

The duties and responsibilities of the Audit Committee are set forth in the Charter of the Audit Committee which was recently reviewed by our Audit Committee.

Our Audit Committee determined that no revisions needed to be made to the charter at this time.

A copy of the Charter of the Audit Committee is available on our website, located at www.fortressbiotech.com , under the Investors – Governance – Governance Documents section.

Among other matters, the duties and responsibilities of the Audit Committee include reviewing and monitoring our financial statements and internal accounting procedures, the selection of our independent registered public accounting firm and consulting with and reviewing the services provided by our independent registered public accounting firm.

Our Audit Committee has sole discretion over the retention, compensation, evaluation and oversight of our independent registered public accounting firm.

The SEC and Nasdaq have established rules and regulations regarding the composition of audit committees and the qualifications of audit committee members.

Our Board of Directors has examined the composition of our Audit Committee and the qualifications of our Audit Committee members in light of the current rules and regulations governing audit committees.

Based upon this examination, our Board of Directors has determined that each member of our Audit Committee is independent and is otherwise qualified to be a member of our Audit Committee in accordance with the rules of the SEC and Nasdaq.

Additionally, the SEC requires that at least one member of the Audit Committee have a “heightened” level of financial and accounting sophistication.

Such a person is known as the “audit committee financial expert” under the SEC’s rules.

Our Board has determined that Mr.

Klein is an “audit committee financial expert,” as the SEC defines that term, and is an independent member of our Board of Directors and our Audit Committee.

Please see Mr.

Klein’s biography in “Item 10.

Directors, Executive Officers, and Corporate Governance” for a description of his relevant experience.

Compensation Committee

The Compensation Committee held one meeting and took action by unanimous consent one time during 2024.

The Compensation Committee currently consists of Messrs.

Lobell (chair), Klein and Dr.

The duties and responsibilities of the Compensation Committee are set forth in its charter.

A copy of the charter of the Compensation Committee is available on the Company’s website, located at www.fortressbiotech.com, under the Investors — Governance — Governance Documents section.

As discussed in its charter, among other things, the duties and responsibilities of the Compensation Committee include annually evaluating the performance of the Chief Executive Officer and our other executive officers, determining the overall compensation of the Chief Executive Officer and our other executive officers and administering all executive compensation programs, including, but not limited to, our incentive and equity-based plans.

The Compensation Committee also reviews and discusses with management the compensation disclosures in our proxy statement and reviews and approves the say on pay and frequency proposals to be periodically included in our proxy statement.

The Compensation Committee applies discretion in the determination of individual executive compensation packages to ensure compliance with the Company’s compensation philosophy.

The Chief Executive Officer makes recommendations to the Compensation Committee with respect to the compensation packages for officers other than himself.

The Compensation Committee may delegate its authority to grant awards to certain employees, and within specified parameters under the Compensation Committee Charter, to a special committee consisting of one or more directors who may but need not be officers of the Company.

Nasdaq has established rules and regulations regarding the composition of compensation committees and the qualifications of compensation committee members.

Our Board of Directors has examined the composition of our Compensation Committee and the qualifications of our Compensation Committee members in light of the current rules and regulations governing compensation committees.

Based upon this examination, our Board of Directors has determined that each member of our Compensation Committee is independent and is otherwise qualified to be a member of our Compensation Committee in accordance with such rules.

Nominating Committee

The Nominating and Corporate Governance Committee is currently composed of Messrs.

Lobell (chair), Hoenlein and Klein.

The functions of the Nominating and Corporate Governance Committee include, among other things:

● making recommendations to the Board of Directors regarding the size and composition of the Board of Directors;

● developing minimum qualifications for director candidates and evaluating such candidates in such a manner as the Nominating and Corporate Governance Committee deems appropriate;

● except where otherwise required, selecting candidates for election to the Board of Directors and to fill any vacancies on the Board of Directors, such selected candidates to then be voted by the Board of Directors;

● establishing procedures for the nomination process;

● establishing and administering periodic assessment procedures relating to the performance of the Board of Directors as a whole and its individual members;

● making recommendations to the Board of Directors regarding corporate governance matters and practices, including formulating and periodically reviewing corporate governance guidelines to be adopted by the Board of Directors.

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for establishing the qualifications for director candidates.

The Committee does not have a formal policy on Board of Directors candidate qualifications.

It may consider those factors it deems appropriate in evaluating director nominees made either by the Board of Directors or stockholders, including judgment, skill, strength of character, experience with businesses and organizations comparable in size or scope to the Company, experience and skills relative to other Board of Directors’ members, specialized knowledge or experience, and diversity.

Depending upon the current needs of the Board of Directors, certain factors may be weighed more or less heavily than others.

In considering candidates for the Board of Directors, the directors evaluate the entirety of each candidate’s credentials and do not currently have any specific minimum qualifications that must be met.

The directors will consider candidates from any reasonable source, including current Board of Directors’ members, stockholders, professional search firms or other persons.

The directors will not evaluate candidates differently based on who made the recommendation.

Our policy describing our director nomination process is included in our Nominating and Corporate Governance Committee Charter, which is available on the Company’s website, located at www.fortressbiotech.com , under the Investors — Governance — Governance Documents section.

We believe that the current process in place functions effectively to select director nominees who will be valuable members of our Board of Directors.

We identify potential nominees to serve as directors through a variety of business contacts, including current executive officers, directors, community leaders and stockholders.

We may, to the extent appropriate, retain a professional search firm or other advisors to identify potential nominees.

We will also consider candidates recommended by stockholders for nomination to our Board.

A stockholder who wishes to recommend a candidate for nomination to our Board must submit such recommendation to our General Counsel and Corporate Secretary, Sam Berry, at our offices located at 1111 Kane Concourse Suite 301, Bay Harbor Islands, FL 33154.

Any recommendation must be received not less than 45 calendar days nor more than 75 calendar days before the anniversary date of the previous year’s annual meeting.

All stockholder recommendations of candidates for nomination for election to our Board must be in writing and must set forth the following:

(i) the candidate’s name, age, business address, and other contact information, (ii) the number of shares of common stock beneficially owned by the candidate, (iii) the date or dates such shares were acquired and the investment intent of such acquisition, (iv) a complete description of the candidate’s qualifications, experience, background and affiliations, as would be required to be disclosed in the proxy statement pursuant to Schedule 14A under the Exchange Act, (v) a written statement by the candidate in which he or she consents to being named in the proxy statement as a nominee and to serve as director if elected, and (vi) the name and address of the stockholder(s) of record making such a recommendation.

We believe that our Board as a whole should encompass a range of talent, skill, and expertise enabling it to provide sound guidance with respect to our operations and interests.

Our independent directors evaluate all director candidates by reviewing their biographical information and qualifications.

If the independent directors determine that a candidate is qualified to serve on our Board, such candidate is interviewed by at least one of the independent directors and our Chief Executive Officer.

Other members of the Board also have an opportunity to interview qualified candidates.

The independent directors then determine, based on the background information and the information obtained in the interviews, whether to recommend to the Board that the candidate be nominated for approval by the stockholders to fill a directorship.

With respect to an incumbent director whom the independent directors are considering as a potential nominee for re-election, the independent directors review and consider the incumbent director’s service during his or her term, including the number of meetings attended, level of participation, and overall contribution to the Board.

The manner in which the independent directors evaluate a potential nominee does not differ based on whether the candidate is recommended by our directors or stockholders.

We consider the following qualifications, among others, when making a determination as to whether a person should be nominated to our Board:

the independence of the director nominee;

the director nominee’s character and integrity;

financial literacy;

level of education and business experience, including experience relating to biopharmaceutical companies;

whether the director nominee has sufficient time to devote to our Board;

and the director nominee’s commitment to represent the long-term interests of our stockholders.

We review candidates in the context of the current composition of the Board and the evolving needs of our business.

We believe that each of the current members of our Board (all of whom are director nominees) has the requisite business, biopharmaceutical, financial or managerial experience to serve as a member of the Board, as described above in their biographies under the heading “Our Board of Directors.” We also believe that each of the current members of our Board has other key attributes that are important to an effective board, including integrity, high ethical standards, sound judgment, analytical skills, and the commitment to devote significant time and energy to service on the Board and its committees.

Code of Business Conduct and Ethics

We have adopted the Code of Business Conduct and Ethics, or the Code, which applies to all of our directors, officers and employees, including our principal executive officer and principal financial officer.

The Code includes guidelines dealing with the ethical handling of conflicts of interest, compliance with federal and state laws, financial reporting, and our proprietary information.

The Code also contains procedures for dealing with and reporting violations of the Code.

We have posted our Code of Business Conduct and Ethics under the Investors — Governance — Governance Documents section of the Company’s website, located at www.fortressbiotech.com .

Any changes to or waivers of the Code of Ethics will be posted at that website.

Insider Trading Policy Prohibiting Hedging and Speculative Trading

We maintain an insider trading policy (“Insider Trading Policy”) that governs the purchase, sale and other dispositions of our securities by the Company, directors, officers and employees.

Our Insider Trading Policy is designed to promote compliance with insider trading laws, rules and regulations and any applicable listing standards.

Additionally, pursuant to our Insider Trading Policy, our officers, directors, and employees are prohibited from engaging in speculative trading, including hedging transactions or short sale transactions with respect to Company securities.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and beneficial owners of more than ten percent of our common stock to file reports with the SEC indicating their holdings of and transactions in our equity securities, and to provide copies of such reports to us.

Based solely on a review of our records, publicly available information, and written representations by the persons required to file such reports, we believe that during the fiscal year ended December 31, 2024, there were no Section 16(a) filings that were untimely.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders.

Executive Compensation

Named Executive Officers

As determined in accordance with SEC rules, our “named executive officers” (“NEOs”), which include all executive officers serving during 2024, are the individuals set forth below:

Rosenwald, M.D., our Chairman, President and Chief Executive Officer;

● David Jin, our Chief Financial Officer and Head of Corporate Development;

Weiss, our Executive Vice Chairman, Strategic Development

The following table sets forth information concerning compensation paid by the Company and its consolidated subsidiaries to our NEOs for their services rendered in all capacities during the years ended December 31, 2024, and 2023.

Summary Compensation Table

Compensation (2)

Name and principal position(s)

Rosenwald, M.D.

Chairman, President and

Chief Executive Officer

Chief Financial Officer and

Head of Corporate Development

Executive Vice Chairman,

Strategic Development

(1) Represents the aggregate grant date fair value of equity-based awards granted by the Company and its consolidated subsidiaries, computed in accordance with FASB Accounting Standards Codification Topic 718, Stock Compensation, as modified or supplemented (“FASB ASC Topic 718”), as described in Note 13.

In accordance with the terms of the LTIP (as defined below), on January 1, 2025, Dr.

Rosenwald and Mr.

Weiss were each awarded 454,163 shares of restricted common stock of the Company (or one percent (1%) of the total outstanding shares of the Company) for their performance in 2024.

Jin was awarded 1,000,000 Restricted Stock Units of the Company and 65,000 Restricted Stock Units of Avenue for his roles as Interim Chief Operating Officer, Chief Financial Officer and Corporate Secretary of Avenue.

Additionally, Dr.

Rosenwald received 82,051 restricted shares of Checkpoint common stock, 9,728 restricted shares of Journey common stock, and 30,000 options in respect of Avenue common stock for his role on the Board of Directors of those companies for the year ended December 31, 2024.

Weiss received 82,051 restricted shares of Checkpoint common stock in his capacity as Chairman of the Board of Checkpoint for the year ended 2024.

(2) All Other Compensation for 2024 for Dr.

Rosenwald comprises $50,000 in cash fees from each of Checkpoint, Mustang, and Journey for his service on the Boards of Directors of those companies for the year ended December 31, 2024.

All Other Compensation for 2024 for Mr.

Weiss, in each case to an LLC wholly-owned by Mr.

Weiss, comprises $60,000 cash fees received for his service as Chairman of the Board of Checkpoint, and $60,000 in cash fees received for his service as Chairman of the Board and Executive Chairman of Mustang.

All Other Compensation for 2024 for Mr.

Jin comprises Company matching 401(k) contributions of $14,467.

(3) This amount represents an discretionary bonus awarded by the Compensation Committee to Mr.

Jin in January 2025.

Although this bonus was not awarded until 2025, it relates to services performed in 2023 and we have therefore restated Mr.

Jin’s 2023 compensation to include it.

Other than the addition of this bonus amount, no other changes have been made to Mr.

Jin’s previously reported 2023 compensation.

Summary of Material Components of Compensation Program

The Company believes in providing its executive management team a competitive total compensation package featuring a combination of elements.

The executive compensation programs are designed to achieve the following objectives:

● reward performance;

● attract, motivate and retain executives of outstanding ability and potential;

● ensure that executive compensation is rationally related to building stockholder value.

The Board of Directors believes that the Company’s executive compensation programs should include short- and long-term components, including cash and equity-based compensation, and should reward consistent performance that meets or exceeds expectations.

Base Salaries

Base salaries for the Company’s executives are initially established through arm’s-length negotiation at the time the executive is hired, taking into account such executive’s qualifications, experience, prior salary, the scope of his or her responsibilities, and competitive market compensation paid by other companies for similar positions within the industry.

Base salaries are reviewed annually, typically in connection with the annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance, and experience.

While other of the Company’s executives are paid salaries typical within the industry for persons of their experience and expertise, Dr.

Rosenwald and Mr.

Weiss have elected to largely forego the payment of salary from the Company.

Annual Discretionary Bonuses

In addition to the payment of base salaries, the Company believes that discretionary bonuses can play an important role in providing appropriate incentives to its executives to achieve the Company’s strategic objectives.

However, for 2024, no annual bonuses were paid to our executive officers.

Amended and Restated Long Term Incentive Plan

The Fortress Biotech, Inc.

Amended and Restated Long Term Incentive Plan (the “LTIP”) is designed to compensate Dr.

Rosenwald and Mr.

Weiss based on their responsibilities and for their contributions to the successful achievement of certain corporate goals and objectives of the Company.

The LTIP awards are intended to enable each executive to share in the successes and risks of the Company.

Eligible participants in the LTIP include Dr.

Rosenwald, Mr.

Weiss, or any limited liability company or limited partnership owned and controlled by Dr.

Rosenwald or Mr.

Weiss, provided such entity has a bona fide service provider relationship with the Company (“Eligible Entities” and together with Dr.

Rosenwald and Mr.

Weiss, the “LTIP Participants”).

On January 1 of each year, until and including 2025, the LTIP entitles the Company to grant restricted shares of common stock of the Company to each of the LTIP Participants equal to up to one percent (1%) of the total outstanding shares of common stock of the Company, such actual amount to be based upon the achievement of the goals and objectives of each individual as set by the Compensation Committee for the preceding year.

In the case of the LTIP Participants, such goals and objectives include, among other things:

the Company’s in-licensing of new medical technologies of substantial promise;

operational and cash management;

the Company’s issuance of new debt securities;

the Company’s achievement of developmental, regulatory and clinical milestones in respect of its in-licensed technologies;

the recruitment and retention of personnel;

share price performance;

trading volume of the Company’s public securities;

and the overall positioning of the Company within its relevant market.

Restricted shares granted under the LTIP vest upon (i) the Company achieving a specified increase in market capitalization since the grant date and (ii) the participant remaining in service with the Company until (or being involuntarily terminated prior to) July 16, 2025.

The award would also vest upon a change in control of the Company before July 16, 2025, provided the eligible participant remains in service with the Company until the date of such transaction.

If the restricted shares do not vest as described above, they will be subject to a repurchase option by the Company at a nominal price for 90 days following the earlier of July 16, 2025 or the participant’s voluntary separation from service with the Company.

In addition, pursuant to the LTIP, upon the formation of each new subsidiary of the Company, the LTIP Participants are to each receive five percent (5%) of the total outstanding shares of common stock of the subsidiary.

Retirement Plans

We maintain a tax-qualified retirement plan (the “401(k)”) plan for eligible employees, including our named executive officers.

Eligible employees may make voluntary contributions from their eligible pay and may defer up to 86% of their annual compensation, up to certain limitations imposed by the Internal Revenue Code of 1986, as amended.

We match employee contributions in an amount equal to 100% of 4% of the employee’s eligible compensation.

All such employee contributions and matching contributions are immediately and fully vested.

Equity Incentive Compensation

The Company believes that by providing its executives the opportunity to increase their ownership of Company stock, the interests of its executives will be more closely aligned with the best interests of the Company’s stockholders, encouraging long-term performance.

The stock awards enable the executive officers to participate in the appreciation of the value of the Company’s stock, while personally participating in the risks of business setbacks.

The Company grants equity awards to its executives pursuant to the Fortress Biotech, Inc.

2013 Stock Incentive Plan, as has been amended from time to time (the “2013 Plan”).

While the Company has awarded stock options to the executive officers as incentives in the past, it more recently has awarded restricted stock or restricted stock units (“RSUs”) to its executives.

These RSU or restricted stock awards generally vest in installments over a period of several years.

Several of the Company’s subsidiaries also periodically grant awards of stock options, restricted stock or RSUs to executive officers of the Company in respect of their service as officers or directors of those subsidiaries.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table sets forth certain information regarding outstanding equity awards held by the Company’s named executive officers, in securities of the Company and its subsidiaries, as of December 31, 2024.

Option Awards

Exercisable (#)

Unexercisable (#)

Vested ($)(1)

Shares ($)(1)

Rosenwald, M.D.

(1) Based on the closing stock price on the Nasdaq Capital Market on the last trading day of the most recently completed fiscal year, as applicable, Fortress:

$3.20, Journey:

$3.91, Mustang:

$8.85 and Avenue:

(2) Represents vested options in respect of Fortress common stock.

(3) Represents restricted shares in Checkpoint that vest as follows:

4,761 restricted shares that vest on June 16, 2025;

17,483 restricted shares that vest on June 13, 2026;

32,051 restricted shares that vest on May 14, 2027;

and 50,000 shares that vest in three equal installments on the first, second and third anniversaries of the grant date of May 14, 2024.

(4) Represents restricted shares of the Company that vest if both of the following conditions are met:

(a) there is an increase in the market capitalization of the Company of at least $100,000,000 since January 1, 2023 and before July 16, 2025, and (b) the grantee (or a limited liability company or limited partnership owned by the grantee) either remains in service with the Company through July 16, 2025 or experiences an involuntary separation prior to such date.

(5) Represents options in respect of Avenue common stock, which vest (or vested) in equal installments on January 1 of each of 2024, 2025 and 2026.

(6) Represents restricted shares of the Company that vest on July 16, 2025.

(7) Represents restricted shares of the Company that vest if both of the following conditions are met:

(a) there is an increase in the market capitalization of the Company of at least $100,000,000 since January 1, 2024 and before July 16, 2025, and (b) the grantee (or a limited liability company or limited partnership owned by the grantee) either remains in service with the Company through July 16, 2025 or experiences an involuntary separation prior to such date.

(8) Represents options in respect of Avenue common stock, which vest in equal installments on January 1 of each of 2025, 2026 and 2027.

(9) Represents restricted shares in Journey that vest on July 8, 2025.

(10) Represents restricted shares in Mustang that vest as follows:

95 restricted shares that vest on June 17, 2025 and 144 restricted shares that vest on July 5, 2026.

(11) Represents options in respect of Avenue common stock, which vest (or vested) in equal installments on August 1 of each of 2023, 2024, 2025 and 2026.

(12) Represents restricted stock units in Journey which vest in equal installments on July 21 of each of 2025 and 2026.

(13) Represents options in respect of Urica common stock, which vest (or vested) in equal installments on October 10 of each of 2023, 2024, 2025 and 2026.

(14) Represents restricted stock units in Avenue that vest in equal installments on September 23 of each of 2025 and 2026.

(15) Represents deferred restricted stock units of the Company that vest in 16 equal quarterly installments through the period ending December 31, 2028.

(16) Represents deferred restricted stock units of the Company that vest in 12 equal quarterly installments through the period ending December 31, 2027.

(17) Represents deferred restricted stock units of the Company that vest in 22 equal monthly installments through the period ending October 31, 2026.

(18) Represents restricted shares of the Company that vest on December 19, 2027.

Summary of Employment or Agreements and Arrangements

Executive Employment Agreements

The Company has not entered into employment agreements with Dr.

Rosenwald, Mr.

Weiss, or Mr.

The forfeiture conditions applicable to restricted shares granted to Dr.

Rosenwald, Mr.

Weiss or related entities under the LTIP lapses upon the occurrence of a corporate transaction (as defined in the LTIP) if the eligible employee is in service on the date of the corporate transaction, or upon a termination of service other than a voluntary separation.

Clawback Policy

Pursuant to Nasdaq listing requirements, we have adopted a policy providing for the recovery of erroneously awarded incentive-based compensation received by our executive officers or the executive officers of one of our subsidiaries during an applicable recovery period (the “Clawback Policy”).

Under the Clawback Policy, in the event that financial results upon which a cash or equity-based incentive award was based becomes the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements, the Compensation Committee will conduct a review of awards covered by the Clawback Policy and recoup any erroneously awarded incentive-based compensation to ensure that the ultimate award reflects the financial results as restated.

The Clawback Policy covers any cash or equity-based incentive compensation award that was paid, earned or granted to covered executive officers during the last completed three fiscal years immediately preceding the date on which we are required to prepare the accounting restatement.

Timing of Equity Awards

While we have no set policy or practice regarding the timing of stock option awards or similar instruments in relation to the disclosure of material nonpublic information, we do not time the release of material information to affect the value of stock options.

In general, the timing of stock option awards is dictated by the event or circumstance giving rise to the award and the schedules of the directors responsible for approving the award.

In 2024, options were not issued to our named executive officers during the period beginning four business days before and ending one business day after the filing of a Form 10-Q, Form 10-K or Form 8-K that discloses material nonpublic information.

If, in the future, a stock option grant is made at a time that material nonpublic information exists, the directors approving the award would be responsible for considering the anticipated effect of that information on our stock price and would take such effect into account when sizing and pricing the award .

Director Compensation

Non-employee directors are compensated pursuant to the Company’s Non-Employee Director Compensation Policy and each non-employee director is eligible to receive a board fee of $30,000 annually, payable in quarterly installments.

Audit Committee members are eligible to receive an additional committee fee of $7,500 annually, payable in quarterly installments, and the chair of the Audit Committee is eligible to receive an additional Audit Committee chair fee of $55,000 annually, payable in quarterly installments.

Compensation Committee, Nominating and Governance Committee, and Strategic Transaction Committee members are each eligible to receive an additional committee fee of $5,000 annually, payable in quarterly installments, and chairs of each of those committees are eligible to receive a committee chair fee of $10,000 annually, payable in quarterly installments.

Non-employee directors may also receive stock options, restricted stock, or a restricted stock unit grant for shares of the Company’s common stock upon appointment and on an annual basis thereafter.

Simiarly, Strategic Transaction Committee members may also receive an additional equity award upon appointment to that committee and on an annual basis thereafter.

On January 1, 2024, all non-employee directors received $10,000 worth of restricted stock and Strategic Transaction Committee members each received an additional $10,000 worth of restricted stock, with the number of shares determined in each case based on the closing price of our common stock on the last trading day prior to the grant date, and in each case vesting in three equal installments on January 1 of 2025, 2026 and 2027.

Beginning on January 1, 2025, non-employee directors are also eligible to receive, on an annual basis on each January 1, a number of shares of the Company’s common stock equal to $100,000 divided by the closing price of the Company’s common stock on the final trading day of the previous calendar year, with such shares vesting in three (3) equal tranches on each of the first three (3) anniversaries of the grant date.

Non-Qualified Deferred Compensation

On March 12, 2015, the Compensation Committee of the Board approved the Deferred Compensation Plan for Directors (the “Plan”) for non-employee directors (“Participants”).

The Plan is administered by the Compensation Committee.

Pursuant to the Plan, a Participant can defer all or a portion of such Participant’s unearned annual fees, meeting fees and committee fees, including restricted stock and restricted stock units.

Deferred cash compensation will be converted into a number of stock units, determined based upon the closing price of the Company’s common stock on the date such fees would otherwise have been payable and placed into the Participant’s deferred compensation account (“Account”).

Deferred restricted stock unit grants will be converted on a share-for-share basis on the date such restricted stock units would otherwise have been payable and placed into the Participant’s Account.

On the tenth business day of January of the year following the Participant’s separation from service on the Board due to resignation, removal, failure to be re-elected or retirement, the amount of deferred compensation in the Participant’s Account will be distributed to the Participant in a lump sum payment of a number of shares of the Company’s common stock under the Plan equal to the number of whole stock units in the Account and cash in lieu of any fractional shares.

Distributions from the Account may be accelerated in the event of the Participant’s death or upon a corporate transaction (as defined in the Plan).

Director Compensation Table

The following table and related footnotes show the compensation paid to or accrued for the benefit of the Company’s non-employee directors in the fiscal year ended December 31, 2024.

Jimmie Harvey, Jr., M.D.

Malcolm Hoenlein

Dov Klein, CPA

Lucy Lu, M.D.

Rowinsky, M.D

(1) Represents director and committee fees earned in 2024.

(2) Amounts listed represent the aggregate fair value amount computed as of the grant date of each award during 2024 in accordance with FASB ASC Topic 718, as described in Note 13.

(3) In 2024, Drs.

Harvey, Rowinsky, Lu and Mr.

Hoenlein elected to defer 100% of the value of their stock awards.

This amount was credited to each of their deferred compensation accounts, respectively.

(4) In 2024, Mr.

Klein elected to defer 80% of the value of his stock award.

This amount was credited to his deferred compensation account.

(5) In 2024, Dr.

Rowinsky earned a prorated portion of his director compensation fees through May 23, 2024, as he did not stand for reelection.

At December 31, 2024, the aggregate number of restricted stock, restricted stock units ("RSUs"), and options issued to each non-employee director that remains unvested was as follows:

Harvey, 13,332 restricted stock awards (“RSAs”);

Hoenlein, 6,666 RSAs, Mr.

Klein, 13,332 RSAs;

Lobell, 13,332 RSAs;

Lorenz, 6,666 RSAs, and Dr.

Lu, 6,666 RSAs.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance Under Equity Compensation Plans

Our equity compensation plans consist of the Coronado Biosciences, Inc.

2012 Employee Stock Purchase Plan, the Fortress Biotech, Inc.

2013 Stock Incentive Plan, as amended, and the Fortress Biotech, Inc.

Long Term Incentive Plan, all of which were approved by our stockholders.

We do not have any equity compensation plans or arrangements that have not been approved by our stockholders.

The following table contains information about our equity compensation plans as of December 31, 2024.

Securities to be

Available for

Future Issuance

Average Exercise

Plans (Excluding

Plan Category

Rights (a) (1)

Column(a)) (3)

Equity compensation plan approved by shareholders

Equity compensation plan not approved by shareholders

(1) Includes 558,896 stock options, 176,660 deferred shares of restricted stock, 1,609,964 restricted stock units, and 1,372,666 deferred restricted stock units.

(2) Restrcted Stock Units are not included in calculation of weighted-average exercise price, as they do not have an exercise price.

(3) Includes 8,003,399 shares available in the Fortress Biotech, Inc.

2013 Stock Incentive Plan and 999,797 shares under the Coronado Biosciences, Inc.

2012 Employee Stock Purchase Plan.

Stock Ownership of Our Directors, Executive Officers, and 5% Beneficial Owners

The following table shows information, as of March 27, 2025, concerning the beneficial ownership of our common stock by:

● each person we know to be the beneficial owner of more than 5% of our common stock;

● each of our current directors;

● each of our Named Executive Officers (“NEOs”); and

● all current directors and NEOs as a group.

As of March 27, 2025, there were 29,533,840 shares of our common stock outstanding.

In order to calculate a specific stockholder’s percentage of beneficial ownership, we include in that stockholder’s calculation those shares underlying options, warrants, or restricted stock units beneficially owned by that stockholder that are vested or that will vest within 60 days of the Record Date.

Shares of restricted stock are deemed to be outstanding.

Options, warrants, or restricted stock units held by other stockholders that are not attributed to the named beneficial owner are disregarded in this calculation.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares of our common stock.

Unless we have indicated otherwise, each person named in the table below has sole voting power and investment power for the shares listed opposite such person’s name, except to the extent authority is shared by spouses under community property laws.

Options, Warrants

and Restricted

Name of Beneficial Owner

Rosenwald, M.D.

Jimmie Harvey, Jr., M.D.

Dov Klein, CPA

Malcolm Hoenlein

Lucy Lu, M.D.

All current executive officers (including NEOs) and directors as a group (9 persons)

(1) Includes options exercisable and restricted stock units vesting within 60 days of March 27, 2025.

(2) Includes 4,050,495 shares held directly by Dr.

Rosenwald, 11,398 shares held by Capretti Grandi LLC, and 49,524 shares held by PAB Merger LLC and 1,567,515 shares underlying warrants that are currently exercisable.

Rosenwald has voting and dispositive control over the shares held by Capretti Grandi LLC and PAB Merger LLC.

Does not include 96,919 shares of common stock held by trusts established for the benefit of Dr.

Rosenwald’s family, over which Dr.

Rosenwald does not have any voting or dispositive control.

Includes 2,332,840 shares underlying warrants that are currently exercisable

(3) Includes 147,058 shares underlying warrants that are currently exercisable.

(4) Includes 164,375 deferred restricted stock units.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders.

Certain Relationship s and Related Transactions, and Director Independence

Related-Person Transactions

Since January 1, 2024, the Company has not been a party to any transaction in which the amount involved exceeded or will exceed $120,000, and in which any of its directors, named executive officers or beneficial owners of more than 5% of the Company’s capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than as set forth below and other than compensation, termination, and change-in-control arrangements, all of which are described under — “ Item 11.

Executive Compensation” above.

The written charter of the Audit Committee authorizes, and the Nasdaq Stock Market listing rules require, the Audit Committee to review and approve related-party transactions.

In reviewing related-party transactions, the Audit Committee applies the basic standard that transactions with affiliates should be made on terms no less favorable to the Company than could have been obtained from unaffiliated parties.

Therefore, the Audit Committee reviews the benefits of the transactions, terms of the transactions and the terms available from unrelated third parties, as applicable.

All transactions other than compensatory arrangements between the Company and its officers, directors, principal stockholders and their affiliates will be approved by the Audit Committee or a majority of the disinterested directors, and will continue to be on terms no less favorable to the Company than could be obtained from unaffiliated third parties.

Other Related Parties

The Company’s Chairman, President and Chief Executive Officer, individually and through certain trusts over which he has voting and dispositive control, beneficially owned approximately 21.5% and 17.2% of the Company’s issued and outstanding Common Stock as of December 31, 2024 and 2023, respectively.

The Company’s Executive Vice Chairman, Strategic Development individually owned approximately 5.4% and 7.5% of the Company’s issued and outstanding Common Stock at December 31, 2024 and 2023, respectively.

Avenue September 2023 Private Placement

In September 2023, Avenue entered into an arrangement with Fortress and Dr.

Rosenwald, the Company’s Chairman, President and Chief Executive Officer and a director on the board of directors of Avenue, pursuant to which Avenue agreed to issue and sell 767,085 shares of Avenue’s common stock, par value $0.0001 per share, for an aggregate purchase price of approximately $550,000 in a private placement transaction, in compliance with Nasdaq Listing Rule 5365(c).

Employment Arrangements with Immediate Family Members of Our Executive Officers and Directors

Joshua Rosenwald, son of Dr.

Lindsay Rosenwald, our Chairman, President and Chief Executive Officer, was employed by Fortress as a Director of Strategy to work on corporate strategy matters.

During the year ended December 31, 2023, Mr.

Joshua Rosenwald received total compensation of approximately $160,000 and left the Company in November 2023 to pursue other opportunities.

Shared Services Agreement with 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 the Executive Chairman and Interim Chief Executive Officer of TGTX.

Under the terms of the agreement, TGTX will reimburse 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, the Company invoiced TGTX $0.9 million and $0.4 million, and received payments of $0.9 million and $0.4 million for the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024, there was approximately $36,000 due from TGTX related to this arrangement.

Desk Share Agreement with TGTX

The desk share agreement between the Company and TGTX (the “Desk Share Agreement”), as amended, requires TGTX to pay 65% of the average annual rent of the Company’s New York, NY office space.

Additionally, the Company has reserved the right to execute desk share agreements with other third parties and those arrangements will affect the cost of the lease actually borne by the Company.

Each initial desk share agreement has a term of five years.

In connection with the Company’s Desk Share Agreement for the New York, NY office space, for the years ended December 31, 2024 and 2023, the Company paid $2.9 million and $2.8 million in rent, respectively, and invoiced TGTX approximately $1.7 million and $1.8 million respectively, for its prorated share of the rent base.

At December 31, 2023, there were no amounts due from TGTX related to this arrangement.

Shared Services Agreement with Journey

In November 2021, Journey and the Company entered into an arrangement to share the cost of certain legal, finance, regulatory, and research and development employees.

The Company’s Executive Chairman and Chief Executive Officer is the Executive Chairman of Journey.

Under the terms of the arrangement, Journey began reimbursing 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 their 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 years ended December 31, 2024 and 2023, the Company’s employees have provided services to Journey totaling approximately $38,000 and $0.1 million, respectively.

At December 31, 2024, approximately $0.6 million is due from Journey, primarily related to reimbursable expenses incurred by Fortress on behalf of Journey.

Founders Agreement and Management Services Agreement

The Company has entered into founders agreements (the “Founders Agreements”) with each of the Fortress partner companies and subsidiaries listed in the table below.

Pursuant to each Founders Agreement, in exchange for the time and capital expended in the formation of each partner company/subsidiary and the identification of specific assets the acquisition of which result in the formation of a viable emerging growth life science company, Fortress will loan each such partner company/subsidiary an amount representing the up-front fee required to acquire assets.

Each Founders Agreement has a term of 15 years, which upon expiration automatically renews for successive one-year periods unless terminated by the Company or upon a Change in Control (as defined in the Founders Agreement) occurs.

In connection with each Founders Agreement the Company received a number of either Class A Preferred shares or Class A Common Stock.

The Class A Preferred Stock or Class A Common Stock (such stock, the “Founders Stock”) is identical to common stock other than as to voting rights, conversion rights and the Payment-in-Kind (“PIK”) Dividend right (as described below).

Each share of Founders Stock is entitled to vote the number of votes that is equal to one and one-tenth (1.1) times a fraction, the numerator of which is the sum of (A) the shares of outstanding common stock and (B) the whole shares of common stock into which the shares of outstanding Founders Stock are convertible and the denominator of which is the number of shares of outstanding Founders Stock.

Thus, the Founders Stock will at all times constitute a voting majority.

Each share of Founders Stock is convertible, at the holder’s option, into one fully paid and nonassessable share of common stock of such partner company/subsidiary, subject to certain adjustments.

The holders of Founders Stock, as a class, are entitled receive on each effective date or “Trigger Date” (defined as the date that the Company first acquired, whether by license or otherwise, ownership rights to a product) of each agreement (each a “PIK Dividend Payment Date”) and on each anniversary date of such date until the date all outstanding Founders Stock is converted into common stock or redeemed (and the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and nonassessable shares of common stock (“PIK Dividends”) such that the aggregate number of shares of common stock issued pursuant to such PIK Dividend is equal to two and one-half percent (2.5%) of such partner company or subsidiary’s fully-diluted outstanding capitalization on the date that is one (1) business day prior to any PIK Dividend Payment Date.

The Company has reached agreements with several of the partner companies and subsidiaries to change the PIK Dividend Interest Payment Date to January 1 of each year - a change that has not and will not result in the issuance of any additional partner company/subsidiary common stock beyond that amount to which the Company would otherwise be entitled absent such change(s).

The Company owns 100% of the Founders Stock of each partner company/subsidiary that has a Founders Agreement with the Company.

As additional consideration under the Founders Agreement, each partner company and subsidiary with which the Company has entered into a Founders Agreement will also:

(i) pay an equity fee in shares of the common stock of such partner company/subsidiary, payable within five (5) business days of the closing of any equity or debt financing for each partner company/subsidiary or any of its respective subsidiaries that occurs after the effective date of the Founders Agreement and ending on the date when the Company no longer has majority voting control in such partner company or subsidiary’s voting equity, equal to two and one-half (2.5%) of the gross amount of any such equity or debt financing;

and (ii) pay a cash fee equal to four and one-half percent (4.5%) of such partner company or subsidiary’s annual net sales, payable on an annual basis, within ninety (90) days of the end of each calendar year.

In the event of a Change in Control, each such partner company/subsidiary will pay a one-time change in control fee equal to five (5x) times the product of (A) net sales for the twelve (12) months immediately preceding the change in control and (B) four and one-half percent (4.5%).

In the case of Urica, however, the obligation to pay Fortress royalties under the Founders Agreement survives any such Change in Control.

The following table summarizes, by subsidiary, the effective date of the Founders Agreements and PIK dividend or equity fee payable to the Company in accordance with the terms of the Founders Agreements, exchange agreements (the “Exchange Agreements”) and the partner companies’/subsidiaries’ certificates of incorporation.

PIK Dividend as

Class of Stock

Partner Company/Subsidiary

Effective Date 1

capitalization

February 17, 2015

October 31, 2016

March 17, 2015

March 13, 2017

March 20, 2015

March 13, 2015

April 22, 2020 3

November 7, 2017 3

(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.

(2) 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.

Under the support agreement signed by the Company in connection with Checkpoint’s pending merger with Sun Pharma, the Company also agreed to forgo any further payment, dividend or distribution, or issuance or transfer of securities by Checkpoint on or after the date of the support agreement under the Founders Agreement.

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

Equity Fees and PIK Dividends

The following table summarizes, by subsidiary, the value of the PIK dividend or equity fee recorded by the Company in accordance with the terms of the Founders Agreements, Exchange Agreements and the partner companies’/subsidiaries’ certificates of incorporation for the years ended December 31, 2024 and 2023 ($ in thousands):

Year Ended December 31,

Partner company

Management Services Agreements

The Company has entered into Management Services Agreements (the “MSAs”) with certain of its partner companies and subsidiaries.

Pursuant to each MSA, the Company’s management and personnel provide advisory, consulting and strategic services to each partner company/subsidiary that has entered into an MSA with Fortress for a period of five years (with such term automatically extending for additional five-year periods unless terminated by Fortress or the applicable partner company/subsidiary at least 90 days prior to any such initial or additional term).

Such services may include, without limitation, (i) advice and assistance concerning any and all aspects of each such company’s operations, clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on behalf of each such company with accountants, attorneys, financial advisors and other professionals.

Each such partner company/subsidiary is obligated to utilize clinical research services, medical education, communication and marketing services and investor relations/public relation services of companies or individuals designated by Fortress, provided those services are offered at market prices.

However, such companies are not obligated to take or act upon any advice rendered from Fortress, and Fortress shall not be liable to any such partner company/subsidiary for its actions or inactions based upon Fortress’ advice.

Fortress and its affiliates, including all members of Fortress’ Board of Directors, have been contractually exempted from fiduciary duties to each such partner company/subsidiary relating to corporate opportunities.

The following table summarizes, by partner company/subsidiary, the effective date of the MSA and the annual consulting fee payable by the partner company/subsidiary to Fortress in quarterly installments ($ in thousands):

Year Ended December 31,

Partner Company/Subsidiary

Effective Date

February 17, 2015

October 31, 2016

March 17, 2015

March 13, 2017

March 20, 2015

March 13, 2015

February 10, 2017

November 7, 2017

Consolidated (Income)/Expense

(1) On November 13, 2024, the Company entered into a Subscription and Forgiveness Agreement with Avenue, whereby the Company agreed to convert 50% of a total of $0.5 million owed by Avenue under the MSA into newly issued common stock of Avenue and forgive the remaining 50% of the accrued balance.

Therefore, Avenue issued a total of 122,850 shares to the Company based on the closing price of $2.035 on the day prior to the execution of the agreement .

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.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders.

Principal Accounting Fees and Services

During the year ended December 31, 2024, KPMG LLP audited the consolidated financial statements of the Registrant and its subsidiaries.

For the fiscal year ended December 31, 2024 we were billed approximately $3,785,420 by KPMG in fees for the professional services rendered in connection with the audits of our annual financial statements included in our Annual Report on Form 10-K for the 2024 fiscal year, the review of our financial statements included in our Quarterly Reports on Form 10-Q for 2024, and other services provided in connection with registration statements.

In 2024, included in these fees for KPMG is $2,756,520 related to stand-alone audits and filings of certain of the Company’s partner companies and subsidiaries.

For the fiscal year ended December 31, 2023 we were billed approximately $3,292,500 by KPMG in fees for the professional services rendered in connection with the audits of our annual financial statements included in our Annual Report on Form 10-K for the 2023 fiscal year, the review of our financial statements included in our Quarterly Reports on Form 10-Q for 2023, and other services provided in connection with registration statements.

In 2023, included in these fees for KPMG is $2,405,500 related to stand-alone audits and filings of certain of the Company’s partner companies and subsidiaries.

Audit- Related Fees

During the fiscal years ended December 31, 2024 and 2023, we incurred no costs from KPMG for audit-related services reasonably related to the performance of the audits and reviews for the respective fiscal years.

During the fiscal years ended December 31, 2024 and 2023 we were billed approximately $55,229 and $65,916, respectively, from KPMG for fees for professional services rendered for tax compliance, tax advice, and tax planning services for certain of the Company’s partner companies.

All Other Fees

During the fiscal years ended December 31, 2024 and 2023 we incurred no costs from KPMG for other accounting fees not related directly to the audit for the respective fiscal years.

During the fiscal year ended December 31, 2024, certain of the Company’s partner companies and subsidiaries incurred $25,000 from BDO for other accounting fees not directly related to the audit for the respective fiscal year.

Pre-Approval of Services

Our Audit Committee has established a policy setting forth the procedures under which services provided by our independent registered public accounting firm will be pre-approved by our Audit Committee.

The potential services that might be provided by our independent registered public accounting firm fall into two categories:

● Services that are permitted, including the audit of our annual financial statements, the review of our quarterly financial statements, comfort letters, related attestations, benefit plan audits and similar audit reports, financial and other due diligence on acquisitions, and federal, state, and non-US tax services;

● Services that may be permitted, subject to individual pre-approval, including compliance and internal-control reviews, indirect tax services such as transfer pricing and customs and duties, and forensic auditing;

● Services that our independent registered public accounting firm may not provide include such services as bookkeeping, certain human resources services, internal audit outsourcing, and investment or investment banking advice.

All proposed engagements of our independent registered public accounting firm, whether for audit services or permissible non-audit services, are pre-approved by the Audit Committee.

We jointly prepare a schedule with our independent registered public accounting firm that outlines services which we reasonably expect we will need from our independent

registered public accounting firm and categorize them according to the classifications described above.

Each service identified is reviewed and approved or rejected by the Audit Committee.

The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders.

Exhibits and Financial Statement Schedules.

27 unchanged sentences

001-35366) filed with the SEC on June 23, 2021).

Exhibit Title

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Fortress Biotech, Inc.

18 unchanged sentences

001-35366) filed with the SEC on June 16, 2023).

Exhibit Title

Form of Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (file No.

6 unchanged sentences

001-35366) filed with the SEC on September 23, 2024).

Form of Warrant issued to certain affiliates of Oaktree Fund Administration, LLC on December 12, 2025 (incorporated by reference to Exhibit 4.10 of the Registrant’s Registration Statement on Form S-1 (Reg.

333-292154) filed with the SEC on December 16, 2025).

Amended and Restated Consulting Agreement, entered into as of January 1, 2019, by and between the Registrant and Eric Rowinsky (incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form 10-K (file No.

2 unchanged sentences

000-54463) filed with the SEC on August 24, 2011).#

Exhibit Title

Restricted Stock Issuance Agreement, dated as of February 20, 2014, by and between the Registrant and Michael S.

22 unchanged sentences

001-35366) filed with the SEC on May 29, 2024).#

Exhibit Title

Fortress Biotech, Inc.

16 unchanged sentences

001-35366) filed with the SEC on June 27, 2022).#

Exhibit Title

Amendment to the Fortress Biotech, Inc.

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001-35366) filed with the SEC on October 28, 2022).#

Indemnification Agreement between Fortress Biotech, Inc.

and Lucy Lu, M.D.

dated as of December 14, 2022 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No.

001-35366) filed with the Sec on December 19, 2022).#

At Market Issuance Sales Agreement between the Company and Cantor Fitzgerald & Co., Oppenheimer & Co.

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001-35366) filed with the SEC on May 29, 2020) .

Form of Securities Purchase Agreement, dated September 19, 2024, by and among the Company and the purchasers party thereto (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No.

001-35366) filed with the SEC on September 23, 2024).

Placement Agent Agreement entered into by and between the Company and the Placement Agent, dated September 19, 2024 (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K (file No.

001-35366) filed with the SEC on September 23, 2024).

Exhibit Title

Credit Agreement entered into by and among Fortress Biotech, Inc., the lenders from time to time party thereto, and Oaktree Fund Administration, LLC on July 25, 2024 (incorporated by reference to Exhibit 10.34 to the Registrant’s Registration Statement on Form S-1 (Reg.

33-282384) filed with the SEC on September 27, 2024).

First Amendment to Credit Agreement entered into by and among Fortress Biotech, Inc., the lenders from time to time party thereto, and Oaktree Fund Administration, LLC on December 12, 2025 (incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1 (Reg.

333-292154) filed with the SEC on December 16, 2025).

Asset Purchase Agreement, dated as of July 15, 2024, between Urica Therapeutics, Inc.

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001-35366) filed with the SEC on November 14, 2024).***

Agreement and Plan of Merger, dated as of March 9, 2025, by and among Checkpoint Therapeutics, Inc., Sun Pharmaceutical Industries, Inc.

and Snoopy Merger Sub, Inc.

(incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (file No.

001-35366) filed with the SEC on March 10, 2025).

Royalty Agreement, dated as of March 9, 2025, by and among Checkpoint Therapeutics, Inc., Sun Pharmaceutical Industries, Inc., and Fortress Biotech, Inc.

(incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K (file No.

001-35366) filed with the SEC on March 10, 2025).

Fortress Biotech, Inc.

and Subsidiaries Insider Trading Policy.*

and Subsidiaries Insider Trading Policy (incorporated by reference to Exhibit 19.1 of the Registrant’s Annual Report on Form 10-K (file No.

001-35366) filed with the SEC on March 31, 2025.

Subsidiaries of the Registrant.*

Consent Independent Registered Accounting Firm (KPMG LLP, Short Hills, NJ).

Consent Independent Registered Accounting Firm (KPMG LLP, New York, NY).

Certification of Chairman, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

Certification of the of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

Exhibit Title

Certification of Chairman, President and Chief Executive Officer pursuant to 18 U.S.C.

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We have audited the accompanying consolidated balance sheets of Fortress Biotech, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over the classification of warrants issued

As discussed in Notes 2, 9 and 13 to the consolidated financial statements, the Company issued warrants in 2024 in connection with certain equity offerings, private placements, and the New Oaktree Agreement (the 2024 warrants).

These warrants were equity-classified and recorded as a component of additional paid-in capital at the time of issuance.

As of December 31, 2024, the Company has $763.6 million of additional paid-in capital.

We identified the evaluation of the sufficiency of audit evidence over the classification of the 2024 warrants as a critical audit matter.

Evaluating the sufficiency of audit evidence obtained required especially subjective auditor judgement because of the volume of the 2024 warrants issued by the Company and certain of its partner companies.

This included determining the 2024 warrants on which procedures were performed and the supervision and review of those procedures.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Valuation of Investment in Crystalys

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company recorded the estimated fair value of its equity investment in Crystalys Therapeutics, Inc.

(Crystalys) using an option pricing model backsolve method and level 3 inputs.

Inputs used in calculating the fair value include risk free rate of return, volatility, and a discount for lack of marketability.

The increase in the estimated fair value for the year ended December 31, 2025 was $15.1 million and is recorded as other income in the Consolidated Statement of Operations.

We identified the evaluation of the estimated fair value of the investment in Crystalys as a critical audit matter.

Specifically, challenging and complex auditor judgment, including the involvement of valuation professionals with specialized skills and knowledge, was required in evaluating the estimated fair value of the investment in Crystalys due to the degree of subjectivity associated with the estimate, including the volatility assumption used in the valuation.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the classification of the 2024 warrants, including the determination of the 2024 warrants issued by the Company and certain of its partner companies on which procedures were to be performed.

For a selection of the 2024 warrants, we evaluated the terms and conditions of the warrant agreements and assessed the appropriateness of management’s interpretation and application of the relevant accounting literature.

We assessed the sufficiency of audit evidence obtained related to the classification of the 2024 warrants by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We involved valuation professionals with specialized skills and knowledge who assisted in evaluating the estimated fair value of the investment in Crystalys by:

• developing an independent expectation of the expected volatility assumption based on publicly available market information for guideline public companies

• developing an independent estimate of the fair value of the investment in Crystalys using certain independently developed assumptions and comparing to the estimated fair value of the investment in Crystalys recorded by management.

We have served as the Company’s auditor since 2021.

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Restricted cash

Equity investments, at fair value

Intangible assets, net

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Operating lease liabilities, short-term

Partner company convertible preferred shares, short-term, net

Partner company installment payments - licenses, short-term

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Operating lease liabilities, long-term

Partner company redeemable perpetual preferred liability

Other long-term liabilities

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Interest expense and financing fee

Gain (loss) on common stock warrant liabilities

Other income (expense)

Loss on common stock warrant liabilities

Gain from deconsolidation of subsidiary

Total other income (expense)

Loss before income tax expense

Income tax expense

Net loss attributable to non-controlling interests

Net loss attributable to Fortress

Income tax expense (benefit)

Attributable to non-controlling interests

Net income (loss) attributable to Fortress

Preferred A dividends declared and paid and/or cumulated, and Fortress' share of subsidiary deemed dividends

Net loss attributable to common stockholders

Net loss per common share attributable to common stockholders - basic and diluted

Weighted average common shares outstanding - basic and diluted

Net loss per common share attributable to common stockholders - basic & diluted

Weighted average common shares outstanding - basic & diluted

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Issuance of common stock under ESPP

Issuance of stock for equity offerings, net

Exchange of partner company preferred shares

Warrant issued in conjunction with debt

Issuance of common stock for at-the-market offering, net

Common shares issued for dividend on partner company's convertible preferred shares

Common shares issued for exchange of partner company's convertible preferred shares

Warrants issued in conjunction with exchange of partner company's convertible preferred shares

Preferred A dividends declared and paid

Partner companies’ offerings, net

Partner companies’ offerings, net and warrant exercises

Partner companies' at-the-market offering, net

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Exercise of warrants for cash

Exercise of partner company options and warrants for cash, net

Non-controlling interest in subsidiaries

Net loss attributable to non-controlling interest

Net loss attributable to common stockholders

Shares withheld related to net settlement of warrants

Reclass to liabilities for partner company perpetual preferred

Partner company's exercise of options for cash

Deconsolidation of subsidiary non-controlling interests

Changes in non-controlling interest in subsidiaries

Net income attributable to non-controlling interest

Net income attributable to common stockholders

Balance at December 31, 2025

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Issuance of common stock related to equity plans

Issuance of stock for public offerings, net

Issuance of common stock under ESPP

Issuance of stock for equity offerings, net

Warrant issued in conjunction with debt

Issuance of common stock for at-the-market offering, net

Warrant charge in conjunction with Oaktree debt

Common shares issued for dividend on partner company's convertible preferred shares

Payment of Series A perpetual preferred stock dividends

Exercise of warrants for cash

Partner companies’ proceeds from stock and warrants, net

Common shares issued for exchange of partner company's convertible preferred shares

Warrants issued in conjunction with exchange of partner company's convertible preferred shares

Preferred A dividends declared and paid

Partner companies’ offerings, net

Partner companies' at-the-market offering, net

Partner company’s exercise of options for cash

Issuance of common stock under partner company’s ESPP

Partner company’s dividends declared and paid

Partner company’s redemption of preferred shares

Issuance of partner company’s common shares for research and development expenses

Deconsolidation/dissolution of partner companies

Non-controlling interest in subsidiaries

Exercise of warrants for cash

Exercise of partner company options and warrants for cash, net

Changes in non-controlling interest in subsidiaries

Net loss attributable to non-controlling interest

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Cash Flows from Operating Activities:

Net income (loss)

Reconciliation of net loss to net cash used in operating activities:

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Loss on disposal of property and equipment

Bad debt expense

Bad debt (recovery) expense

Amortization of debt discount

Accretion of partner company convertible preferred shares

Non-cash interest

Gain on termination of partner company lease

Loss on extinguishment of debt

Amortization of acquired intangible assets

Settlement of partner company payables

Reduction in the carrying amount of operating lease right-of-use assets

Stock-based compensation expense

Issuance of partner company’s common shares for research and development expenses

Change in fair value of investment

Common shares issued for dividend on partner company's convertible preferred shares

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Research and development - licenses acquired, expense

Loss from deconsolidation/dissolution of subsidiaries

Gain from deconsolidation of subsidiary

Asset impairment loss

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Lease liabilities

Other long-term liabilities

Other liabilities

Net cash used in operating activities

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Acquired intangible assets

Purchase of property and equipment

Proceeds from sale of property and equipment

Purchase of research and development licenses

Net cash used in investing activities

Net cash increase upon deconsolidation of subsidiary

Net cash provided by (used in) investing activities

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Payment of Series A perpetual preferred stock dividends

Proceeds from issuance of common stock for equity offerings, net

Proceeds from issuance of common stock for public offering, net

Proceeds from issuance of common stock for at-the-market offering, net

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Repayment of partner company installment payments - licenses

Proceeds from partner company convertible preferred shares

Stock and warrants issued for exchange of partner company preferred shares

Payment of debt issuance costs associated with partner company convertible preferred shares

Proceeds from long-term debt, net

Proceeds from partner company's long-term debt, net

Repayment of partner companies' long-term debt

Proceeds from partner company's line of credit

Repayment of partner company's line of credit

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

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Cash paid for interest

Cash paid (refunded) for income taxes

Cash paid for income taxes

Supplemental disclosure of non-cash financing and investing activities:

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Partner company's deferred purchase consideration

Unpaid partner company’s offering cost

Partner company derivative warrant liability associated with partner company convertible preferred shares

Warrants issued in conjunction with debt

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Fortress works in concert with its extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition.

The Company has executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center, Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc and Dr.

Reddy’s Laboratories, Ltd.

The Company has executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, Dr.

Reddy’s Laboratories, Ltd., and Sun Pharmaceutical Industries Limited (“Sun Pharma”).

Following the exclusive license or other acquisition of the intellectual property underpinning a product or product candidate, Fortress leverages its business, scientific, regulatory, legal and finance expertise to help its subsidiaries and partner companies achieve their goals.

Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings.

To date, four partner companies are publicly-traded, and three subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.

(“AstraZeneca”) and Sentynl Therapeutics, Inc.

To date, three partner companies are publicly-traded, and four subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.

(“AstraZeneca”), Sentynl Therapeutics, Inc.

(“Sentynl”), Axsome Therapeutics, Inc.

(“Axsome”), and Sun Pharma.

Our subsidiary and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are:

Checkpoint Therapeutics, Inc.

CKPT, “Checkpoint”), Journey Medical Corporation (Nasdaq:

Journey Medical Corporation (Nasdaq:

DERM, “Journey” or “JMC”), Mustang Bio, Inc.

MBIO, “Mustang”), Avenue Therapeutics, Inc.

ATXI, “Avenue”), Baergic Bio, Inc.

(“Baergic,” a subsidiary of Avenue), Cellvation, Inc.

ATXI, “Avenue”), Cellvation, Inc.

(“Cellvation”), Cyprium Therapeutics, Inc.

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(“Oncogenuity”) and Urica Therapeutics, Inc.

Checkpoint Therapeutics, Inc.

(“Checkpoint”), previously a partner company, was acquired by Sun Pharma in May 2025.

Baergic Bio, Inc.

(“Baergic”), previously a subsidiary of Avenue, was acquired by Axsome in November 2025.

As used throughout this filing, the words “we”, “us” and “our” may refer to Fortress individually, to one or more of its subsidiaries and/or partner companies, or to all such entities as a group, as dictated by context.

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Current cash and cash equivalents of $ 35.2 million for Fortress and private subsidiaries primarily funded by Fortress (“Parent Entity”) are considered sufficient to fund the Parent Entity’s operations for at least 12 months following the date of filing of the Company’s Annual Report on 10-K.

However, the Company will need to raise additional funding through strategic relationships, public or private equity or debt financings, sale of partner companies including Checkpoint as discussed in Note 20, grants or other arrangements to develop and prepare regulatory filings and obtain regulatory approvals for the existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for the potential products, sales and marketing capabilities.

However, the Company will need to raise additional funding through strategic relationships, public or private equity or debt financings, sale of partner companies and other assets, including the PRV discussed in Note 20, grants or other arrangements to develop and prepare regulatory filings and obtain regulatory approvals for the existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for the potential products, sales and marketing capabilities.

If such funding is not available or not available on terms acceptable to the Company, the Company’s current development plans and plans for expansion of its general and administrative infrastructure may be curtailed.

Fortress also has the ability, subject to

limitations imposed by Rule 144 of the Securities Act of 1933 and other applicable laws and regulations, to raise money from the sale of common stock of the public companies in which it has ownership positions.

Fortress also has the ability, subject to limitations imposed by Rule 144 of the Securities Act of 1933 and other applicable laws and regulations, to raise money from the sale of common stock of the public companies in which it has ownership positions .

Summary of Significant Accounting Policies

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All intercompany income and/or expense items are eliminated entirely in consolidation prior to the allocation of net gain/loss attributable to non-controlling interest, which is based on ownership interests as calculated quarterly for each subsidiary.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period classification.

The Company has historically included amortization of acquired intangible assets within cost of goods sold on the consolidated statement of operations.

For the years ended December 31, 2024 and 2023, “Costs of goods sold – product revenue” as presented in the consolidated statement of operations was disaggregated into “Costs of goods sold – (excluding amortization of acquired intangible assets)” and “Amortization of acquired intangible assets”.

This presentation has been conformed for all previous periods presented and has no impact on previously reported financial results.

Use of Estimates

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Accruals for these provisions are presented in the Consolidated Financial Statements as reductions to gross sales in determining net sales and as a contra asset within accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).

Amounts recorded for revenue deductions can result from a series of judgements about future events and uncertainties and can rely on estimates

and assumptions.

Amounts recorded for revenue deductions can result from a series of judgements about future events and uncertainties and can rely on estimates and assumptions.

The following section briefly describes the nature of the Company’s provisions for variable consideration and how such provisions are estimated:

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Collaboration Revenue

The Company’s collaboration revenue includes service revenue, license fees and future contingent milestone-based payments.

Collaboration revenue is recognized for contracted R&D services performed for its customers over time.

The Company measures its progress using an input method based on the effort expended or costs incurred toward the satisfaction of the Company’s performance obligation.

The Company estimates the amount of effort to be expended, including the time it will take to complete the activities, or the costs that may be incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation.

This results in a percentage that is multiplied by the transaction price to determine the amount of revenue the Company recognizes each period subject to the constraint on

variable consideration.

This approach requires the use of estimates and judgement.

If the Company’s estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that is recognized in the current and future periods.

The Company’s collaboration revenue includes contingent milestone-based payments contractually owed to the Company under collaboration agreements that the Company recognizes as income when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is typically when the milestone is achieved.

Fair Value Measurement

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The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are currently adequately protected against credit risk.

At times, portions of the Company’s cash and cash equivalents may be uninsured or in deposit accounts that exceed

Federal Deposit Insurance Corporation (“FDIC”) limits, though the Company customarily invests a significant portion of its cash in Insured Cash Sweep (“ICS”) accounts to maximize FDIC insurance coverage across its holdings.

At times, portions of the Company’s cash and cash equivalents may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation (“FDIC”) limits, though the Company customarily invests a significant portion of its cash in Insured Cash Sweep (“ICS”) accounts to maximize FDIC insurance coverage across its holdings.

As of December 31, 2025, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risk on such accounts.

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Assets Held for Sale

Assets held for sale represent assets that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, “Long-lived Assets.” As of December 31, 2024, there were $ 1.2 million of lab and cell processing equipment, furniture and fixtures and computer equipment that are recorded as assets held for sale.

The effect of suspending depreciation on the assets held for sale is immaterial to the results of operations.

The assets held for sale are part of Mustang’s repurchase of assets from uBriGene (Boston) Biosciences, Inc.

The assets held for sale were part of Mustang’s repurchase of assets from uBriGene (Boston) Biosciences, Inc.

(“uBriGene”) (see Note 3).

In February 2025, Mustang completed the sale of these assets.

Intangible Assets

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Potential milestone payments for achieving sales targets or regulatory development milestones are recorded when it is probable of achievement.

Upon a milestone being achieved, the milestone payment will be capitalized and amortized over the remaining useful life for approved products and expensed for milestones prior to FDA approval.

Upon a milestone being achieved, the milestone payment will be capitalized and amortized over the remaining useful life for approved products and expensed for milestones prior to the U.S.

Food and Drug Administration (“FDA”) approval.

Royalty payments for approved products are recorded as cost of goods sold as sales are recognized.

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During the year ended December 31, 2024, Mustang recorded an asset impairment charge of $ 3.7 million (see Note 5).

During the year ended December 31, 2023, Journey recorded an asset impairment charge of $ 3.1 million (see Note 8).

During the year ended December 31, 2025 there were no asset impairments.

Restricted Cash

The Company records cash held in trust or pledged to secure certain debt obligations as restricted cash.

As of December 31, 2024 and 2023, the Company had $ 1.6 million and $ 2.4 million, respectively, of restricted cash representing

pledges to secure letters of credit in connection with certain office leases and an undertaking posted by Cyprium to secure potential damages in an injunctive proceeding.

As of December 31, 2025 and 2024, the Company had $ 1.2 million and $ 1.6 million, respectively, of restricted cash representing pledges to secure letters of credit in connection with certain office leases and, in 2024, an undertaking posted by Cyprium to secure potential damages in an injunctive proceeding.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash from the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows as of the dates presented:

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The Company’s inventory reserves were $ 1.0 million and $ 0.5 million at December 31, 2025 and 2024, respectively.

Investment in Equity Securities

The Company invests in certain entities over which it holds significant influence but not control.

Generally, such investments would be accounted for using the equity method of accounting.

However, for those investments for which the Company has elected the fair value option, the Company measures such investments at fair value on the Consolidated Balance Sheet with subsequent changes in fair value recognized in other (income) expense, net on the Company’s Consolidated Statement of Operations.

The Company elected the fair value option for certain investments that would otherwise have been accounted for using the equity method because the Company believes that fair value measurement provides more relevant information for users of its financial statements and is consistent with the Company’s investment strategy.

Accounts Receivable, Net

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The Company and its subsidiaries have issued freestanding warrants to purchase shares of common stock in connection with financing activities (see Note 13) and accounts for them in accordance with applicable accounting guidance as either liabilities or as equity instruments depending on the specific terms of the warrant agreements.

Warrants classified as liabilities are remeasured each period they are outstanding.

Warrants classified as liabilities are remeasured each period in which they are outstanding.

Any resulting gain or loss related to the change in the fair value of the warrant liability is recognized in change in fair value of warrant liabilities (see Note 6), a component of other income (loss), in the Consolidated Statements of Operations.

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The Company recorded the related issue costs and value ascribed to the warrants as a debt discount of the 2024 Oaktree Note (see Note 9).

The discount is being amortized utilizing the effective interest method over the term of the 2024 Oaktree Note, which is approximately 15.39 % at December 31, 2024.

The discount is being amortized utilizing the effective interest method over the term of the 2024 Oaktree Note, which was approximately 16.38 % at December 31, 2025 and was 15.39 % at December 31, 2024.

Stock-Based Compensation

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Net Loss Per Common Share

Basic and diluted net loss per share attributed to common stockholders is calculated by dividing the net loss attributed to Fortress (less the Series A Preferred Dividend declared and paid and/or cumulated, and Fortress’ share of subsidiary deemed dividends) by the weighted-average number of shares of Common Stock outstanding during the period, not including unvested restricted stock, and without consideration for other potentially dilutive securities.

Diluted net loss per share is the same as the basic loss per share due to net losses incurred in all periods.

Basic net loss per share attributed to common stockholders is calculated by dividing the net loss attributed to Fortress, less the Series A Preferred Dividend declared and paid and/or cumulated, and Fortress’ share of subsidiary deemed dividends, by the weighted-average number of shares of Common Stock outstanding during the period, not including unvested restricted stock and other potentially dilutive securities, such as warrants, stock options, restricted stock units, and restricted stock.

For diluted net loss per share attributed to common stockholders, restricted stock and other potentially dilutive securities are included in the denominator using the treasury stock method, if dilutive.

The impact of these items is anti-dilutive during periods of net loss.

Non-Controlling Interests

The Company records net loss attributable to non-controlling interests in its Consolidated Statements of Operations and presents non-controlling interests as a component of stockholders’ equity on its Consolidated Balance Sheets.

All intercompany income and/or expense items are eliminated entirely in consolidation prior to the allocation of net gain/loss

attributable to non-controlling interest, which is based on a quarterly calculation of ownership interests for each relevant subsidiary.

Subsidiary preferred shares and Class A common shares, if issued, are included in the ownership calculation on a 1 :1 basis consistent with how the relevant contractual agreements provide for the allocation and distribution of earnings.

All intercompany income and/or expense items are eliminated entirely in consolidation prior to the allocation of net gain/loss attributable to non-controlling interest, which is based on a quarterly calculation of ownership interests for each relevant subsidiary.

Subsidiary Class A preferred shares and Class A common shares, if issued, are included in the ownership calculation on a 1 :1 basis consistent with how the relevant contractual agreements provide for the allocation and distribution of earnings.

These shares, if any, are convertible at Fortress’ election on a 1 :1 basis into common stock (with adjustments for stock splits, if any) and upon conversion would have the same voting rights as the common stock.

Only preferred stock and Class A common stock held by Fortress have majority voting rights, which rights would terminate upon conversion into common stock.

Only Class A preferred stock and Class A common stock held by Fortress have majority voting rights, which rights would terminate upon conversion into common stock.

The Company allocates the subsidiaries’ net loss/income to the non-controlling interest on a quarterly basis, and the calculation of non-controlling interest ownership percentage is determined as the average of the prior quarter and the current quarter’s non-controlling ownership interest.

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Recent Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) :

Improvements to Reportable Segment Disclosures The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The amendments introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM.

This guidance is effective for fiscal years, beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this new standard for its consolidated financial statements for the year ended December 31, 2024.

The Company’s adoption of this guidance resulted in increased disclosures in the notes to the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact of the new standard on its consolidated financial statement disclosures.

The update is effective for annual periods beginning after December 15, 2024.

The Company adopted ASU 2023-09 during its fiscal year ending December 31, 2025, on a prospective basis for annual periods, as permitted by the standard.

Adoption of ASU 2023-09 resulted in expanded income tax disclosures, including a more disaggregated reconciliation of the statutory U.S.

federal income tax rate to the Company’s effective tax rate.

The Company’s enhanced income tax disclosures required by ASU 2023-09 are presented in Note 17 to the Consolidated Financial Statements.

In November 2024, the FASB issued ASU No.

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The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

Asset Purchase Agreements

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets .

The guidance provides a practical expedient that can be elected to be applied to accounts receivable and contract assets, which would allow entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets when estimating expected credit losses for such assets.

Entities are required to apply the guidance on a prospective basis.

This update will be effective for the interim and annual periods beginning after December 15, 2025.

Early adoption is permitted.

The Company is currently evaluating the update to determine the impact the adoption will have on its Consolidated Financial Statements.

Asset Purchase and Merger Agreements

Sale of Baergic

In November 2025, Avenue announced the acquisition of its subsidiary Baergic by Axsome.

Under the terms of the stock purchase agreement, Baergic shareholders received a $ 0.3 million upfront payment (less transaction expenses incurred by Avenue) and are eligible to receive as contingent consideration:

(i) milestone payments of up to $ 2.5 million upon the occurrence of certain development and regulatory events for the first indication for AXS-17 (formerly known as BAER-101) and $ 1.5 million for each indication thereafter, (ii) up to $ 79 million in potential sales-based commercial milestones, and (iii) a tiered mid-to-high single-digit royalty on potential global net sales of AXS-17.

For all subsequent payments payable under the agreement, Avenue expects to enter into a payment agreement with a paying agent, and Avenue expects to receive approximately 74 % of all future payments and royalties payable under the agreement.

As a result of the Axsome transaction, Avenue deconsolidated Baergic as of November 5, 2025 and recognized a gain of $ 0.2 million on the deconsolidation of Baergic, including the portion of the upfront payment related to the reimbursement of transaction expenses, within general and administrative expenses in the Consolidated Statement of Operations for the year ended December 31, 2025.

Agreements with InvaGen

In November 2018, Avenue entered into a Stock Purchase and Merger Agreement (the “Avenue SPMA”) with InvaGen Pharmaceuticals Inc.

In November 2021, Avenue delivered InvaGen notice of termination of the Avenue SPMA and, in July 2022, Avenue entered into a Share Repurchase Agreement (the “Avenue SRA”) with InvaGen which closed in October 2022.

In connection with the closing of the Avenue SRA, Avenue repurchased all shares of common stock of Avenue held by InvaGen, and all of the rights retained by InvaGen pursuant to the Stockholders Agreement entered into by and among Avenue, InvaGen and Fortress on November 12, 2018 were terminated.

Under the Avenue SRA, Avenue agreed to pay InvaGen seven and a half percent ( 7.5 %) of the proceeds from future financings, up to $ 4 million, which the Company accounts for as a derivative.

Due to the uncertainty related to future financings, the estimated fair value of the derivative is not material.

The Company recognizes changes in fair value within general and administrative expenses in the consolidated statement of operations.

In connection with funds raised in 2025 and 2024 (see Note 13), Avenue made payments totaling $ 0.2 million and $ 0.7 million, respectively, to InvaGen.

Approximately $ 1.4 million in aggregate has been paid to InvaGen under the Share Repurchase Agreement as of December 31, 2025.

On March 9 , 2025, Checkpoint entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sun Pharmaceutical Industries, Inc., a Delaware corporation (“Sun Pharma” or “Parent”), and Snoopy Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”).

The Merger Agreement provided that, on the terms and subject to the conditions set forth in the Merger Agreement, Parent, Merger Sub and Checkpoint would effect a merger of Merger Sub with and into Checkpoint (the “Merger”), with Checkpoint continuing as the surviving corporation of the Merger and a wholly owned subsidiary of Parent.

On April 23, 2025, Checkpoint filed a definitive proxy statement relating to the Merger Agreement and established May 28, 2025 as the date for a special meeting of Checkpoint stockholders to vote on the Merger.

Following the approval of the Merger by requisite majorities of holders of Checkpoint shares at the special meeting, the transaction closed on May 30, 2025.

As a result of the Merger, the Company deconsolidated Checkpoint as of May 2025 and accounted for the deconsolidation as a sale of a business.

The Company received $ 25.1 million in cash proceeds from the sale in June 2025, and an additional $ 2.9 million in cash proceeds in July 2025.

After the effect of the deconsolidation of Checkpoint’s net liabilities of $ 10.8 million and non-controlling interests of $ 9.9 million, the Company recorded a $ 27.1 million gain on deconsolidation of Checkpoint in the accompanying Consolidated Statements of Operations.

The Company considers the sale of Checkpoint to be consistent with its ongoing strategy to opportunistically monetize investments in biopharma companies and assets, and therefore concluded that the sale did not represent a strategic shift that would be accounted for as a discontinued operation.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock and each share of Class A common stock of Checkpoint (collectively, the “Shares”) (including each unvested Checkpoint restricted share) outstanding immediately prior to the Effective Time was canceled and ceased to exist and was converted into the right to receive (i) $ 4.10 in cash, without interest (the “Common Cash Amount”), and (ii) one non-tradable contingent value right (a “CVR”), which represents the right to receive a contingent cash payment of up to $ 0.70 upon the achievement of specified milestones, subject to and in accordance with the terms and conditions set forth in a Contingent Value Rights Agreement that was entered into at the Effective Time (the “CVR Agreement”), as further described below (the foregoing clauses (i) and (ii), the “Merger Consideration”), in each case subject to applicable withholding taxes.

CVR Agreement

Pursuant to the Merger Agreement, Parent and a rights agent (the “Rights Agent”) entered into the CVR Agreement governing the terms of the CVRs issued in connection with the Merger.

The Rights Agent will maintain an up-to-date register of the holders of CVRs (the “Holders”).

Holders shall not be permitted to transfer the CVRs (subject to certain limited exceptions as set forth in the CVR Agreement).

Each CVR represents the right to receive one of the following contingent cash payments, without interest, subject to any applicable withholding taxes (such applicable payment, the “Milestone Payment”), conditioned upon the achievement of the corresponding milestone condition within the following specified time periods:

(i) $ 0.70 , if the Milestone (as defined below) is first achieved on or prior to the date that is 12 months prior to Milestone Deadline Date (as defined below) and the applicable regulatory approval provides for a dosing schedule of once every three weeks,

(ii) $ 0.45 , if the Milestone is first achieved on or prior to the date that is 12 months prior to the Milestone Deadline Date and the applicable regulatory approval provides for a dosing schedule that is more frequent than once every three weeks,

(iii) $ 0.45 , if the Milestone is first achieved after the date that is 12 months prior to the Milestone Deadline Date but on or prior to the Milestone Deadline Date, and the applicable regulatory approval provides for a dosing schedule of once every three weeks, or

(iv) $ 0.20 , if the Milestone is first achieved after the date that is 12 months prior to the Milestone Deadline Date but on or prior to the Milestone Deadline Date, and the applicable regulatory approval provides for a dosing schedule that is more frequent than once every three weeks.

As used in the CVR Agreement, (a) the “Milestone Deadline Date” means the date that is 36 months after the date on which a marketing authorization application or equivalent for cosibelimab receives a positive validation outcome by the European Medicines Agency (the “EMA”) and (b) the “Milestone” means the receipt of regulatory approval of cosibelimab in (i) the European Union pursuant to the centralized approval procedure or (ii) any of Germany, France, Italy, Spain or the United Kingdom.

Parent (directly or through its affiliates) is obligated to use, and to obligate its licensees to use, certain specified commercially reasonable efforts to (i) file a marketing authorization application for cosibelimab with the EMA within 12 months of the Closing Date or, to the extent any feedback or communications from, or expectations or requirements of, the EMA (including additional trial requirements) make it impracticable or inadvisable to file such marketing authorization application within such time period, as promptly thereafter as practicable, and (ii) achieve the Primary Milestone (as defined in the CVR Agreement) in its then-maximum value as promptly as practicable (including timely filing any appeals and curing any deficiencies identified in a relevant marketing authorization application by the relevant regulatory authority).

Parent’s obligations to use such commercially reasonable efforts terminates on the earlier of (a) the Milestone Deadline Date and (b) the achievement of the Milestone.

There can be no assurance that the Milestone will be achieved on or before the Milestone Deadline Date, or that any Milestone Payments will be made.

The Company is treating the CVR as contingent consideration that would not be recognized until the achievement of the specified milestones.

As of December 31, 2025, the specified milestones have not been met, and the Company has not recorded any value associated with the CVR.

Warrant Amendment

Additionally, in connection with the Checkpoint’s entry into the Merger Agreement, Checkpoint entered into a letter agreement (the “Warrant Amendment”), dated as of March 9, 2025, with Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (“Armistice”).

Pursuant to the Warrant Amendment, Checkpoint and Armistice agreed (i) to, immediately prior to the Effective Time, amend all outstanding Checkpoint Warrants held by or issued to Armistice or any of its affiliates other than the Specified Warrant (the “Armistice Warrants”) to provide that each such Armistice Warrant that remains outstanding and unexercised as of the Effective Time will automatically be converted into the right to receive an amount in cash equal to the product of (a) the number of shares of Checkpoint common stock underlying such Armistice Warrant, multiplied by (b) the excess, if any, of (1) $ 4.10 over (2) the per share exercise price for such Armistice Warrant, less any applicable tax withholdings and (ii) one CVR in respect of each share underlying such Armistice Warrants, and (ii) that at the Effective Time, to the extent that any portion of that certain warrant to purchase 5,853,659 Shares, dated as of July 2, 2024 (the “Specified Warrant”), remains outstanding and unexercised as of the Effective Time, the Specified Warrant will be converted into the right of Armistice to receive, for each Share underlying the Specified Warrant, a cash payment equal to $ 3.62 .

The Warrant Amendment also provides that Armistice will not be entitled to transfer the Armistice Warrants prior to the Effective Time unless the Merger Agreement is validly terminated in accordance with its terms prior to the Effective Time.

Royalty Agreement

Concurrently with the execution of the Merger Agreement, Checkpoint entered into a Royalty Agreement (the “Royalty Agreement”) with Parent and Fortress pursuant to which Fortress will receive a royalty interest right based on worldwide net sales of certain products of Checkpoint and Parent.

The royalty interest right represents the right to receive quarterly cash payments of 2.5 % of net sales of such products during the royalty period set forth in the Royalty Agreement.

No royalty revenue was recognized for the year ended December 31, 2025.

Transition Services Agreement

Pursuant to the Merger Agreement, as of the Effective Time, Checkpoint and Fortress entered into a Transition Services Agreement (the “Transition Services Agreement”), pursuant to which, from and after the Effective Time, Fortress would provide Checkpoint with certain transition services as set forth in the Transition Services Agreement, for the period of time and in exchange for the compensation set forth therein.

The Transition Services Agreement expired on September 15, 2025.

Agreements with uBriGene (Boston) Biosciences, Inc.

On May 18, 2023, Mustang entered into an Asset Purchase Agreement (the “Original Asset Purchase Agreement”) with uBriGene, pursuant to which Mustang agreed to sell its leasehold interest in its cell processing facility located in Worcester,

Massachusetts (the “Facility”), and associated assets relating to the manufacturing and production of cell and gene therapies at the Facility to uBriGene (the “Transaction”).

Mustang and uBriGene subsequently entered into Amendment No.

1 to the Original Asset Purchase Agreement, dated as of June 29, 2023 (“Amendment No.

1”), and Amendment No.

2 to the Original Asset Purchase Agreement, dated as of July 28, 2023 (“Amendment No.

2,” and together with the Original Asset Purchase Agreement and Amendment No.

1, the “Prior Asset Purchase Agreement”).

On July 28, 2023, pursuant to the Prior Asset Purchase Agreement, Mustang completed the sale of all of its assets that primarily relate to the manufacturing and production of cell and gene therapies at the Facility (such operations, the “Transferred Operations” and such assets, the “Transferred Assets”) to uBriGene for upfront consideration of $ 6 million cash (the “Base Amount”).

The Transferred Assets included all of Mustang’s assets, except for Mustang’s lease and related leasehold improvements of the Facility and contracts that are primarily used in the Transferred Operations.

Mustang recorded a gain of $ 1.4 million in connection with the sale of the Transferred Assets and recorded approximately $ 0.3 million of the base consideration as deferred income, that was to be recognized upon the transfer of the lease.

In connection with the Prior Asset Purchase Agreement, Mustang and uBriGene submitted a voluntary joint notice to the U.S.

In May 2023, Mustang agreed to sell its Worcester, Massachusetts cell-processing facility assets to uBriGene under an Asset Purchase Agreement, as later amended.

The sale closed on July 28, 2023, for $ 6.0 million in cash, and Mustang recorded a gain of $ 1.4 million in connection with the equipment and facility assets transferred (excluding the facility lease) and recorded $ 0.3 million of the base consideration as deferred income that would have been recognized upon transfer of the facility lease.

Mustang and uBriGene submitted a voluntary joint notice to the U.S.

Committee on Foreign Investment in the United States (“CFIUS”).

Following CFIUS’s review and subsequent investigation of the transactions related to the Prior Asset Purchase Agreement, on May 13, 2024, Mustang, together with uBriGene and CFIUS, executed a National Security Agreement (the “NSA”), pursuant to which Mustang and uBriGene agreed to abandon the transactions related to the Prior Asset Purchase Agreement and the agreements entered into in connection therewith.

The NSA obligated uBriGene and Mustang to terminate agreements between the two parties, including the Manufacturing Services Agreement, Quality Services Agreement, and Subcontracting CDMO Agreement.

In addition, uBriGene must sell, or otherwise dispose of, the equipment assets purchased within 180 days after the execution of the NSA.

June 2024 Repurchase of Assets

On June 27, 2024 (the “Effective Date”), Mustang entered into an Asset Purchase Agreement (the “Repurchase Agreement”) with uBriGene, pursuant to which Mustang agreed, subject to the terms and conditions set forth therein, to repurchase the Transferred Assets, primarily lab equipment and supplies (collectively, the “Repurchased Assets”).

Pursuant to the terms of the Repurchase Agreement, Mustang and uBriGene also terminated existing manufacturing and services agreements.

As consideration for the Repurchase Agreement, Mustang has agreed to pay to uBriGene a total purchase price (the “Purchase Price”) of $ 1.4 million, consisting of (i) an upfront payment of $ 0.1 million due within five ( 5 ) business days of the Effective Date and a (ii) subsequent amount of $ 1.3 million due on the date that is twelve ( 12 ) months after the closing date (the “Deferred Amount”).

In the event that as of the original (or any extended) date on which the Deferred Amount is payable, Mustang has, as of the date of the public reporting of its then-most recent quarterly audited or unaudited financial statements, net assets below $ 20 million, then Mustang may, upon written notice to uBriGene, elect to delay its payment obligation of the Deferred Amount by an additional six ( 6 ) months, with no limit on the number of such extensions available to Mustang.

Notwithstanding the foregoing, if Mustang has not paid the Deferred Amount in full as of the date that is twelve ( 12 ) months after closing of the Repurchase Agreement, any amounts that remain outstanding will accrue interest at a rate of 5 % per annum beginning on the date that is twelve ( 12 ) months after closing and until the Deferred Amount is paid in full.

Additionally, in connection with the termination of the agreements described above under the Repurchase Agreement, Mustang agreed to forgive a net receivable from uBriGene of approximately $ 3.3 million, comprised of outstanding receivables of $ 6.9 million and payables of $ 3.6 million, resulting in total purchase consideration in the Repurchase Transactions of approximately $ 4.7 million.

The upfront payment of $ 0.1 million was paid in July 2024, and as of December 31, 2024, the $ 1.3 million Deferred Amount was recorded in Accrued Expenses - Other (see Note 10).

Mustang allocated the total purchase consideration of $ 4.7 million to the Repurchased Assets on a relative fair value basis.

Mustang used a third-party to perform a valuation of the repurchased equipment, which resulted in a fair value less costs to sell of approximately $ 2.2 million.

The remaining purchase consideration of $ 2.5 million was allocated to the supplies repurchased.

The supplies repurchased with no alternative future use were recognized as research and development expense in an amount of $ 2.2 million.

Repurchased supplies with an alternative future use of $ 0.3 million were also recognized in research and development expense, as Mustang does not have plans to resume operations in the facility, and

it intends to dispose of the supplies in a single transaction with the equipment.

Mustang concluded that the disposal group, which includes the repurchased equipment assets and associated supplies with an aggregate value of approximately $ 2.2 million, met the criteria to be classified as held for sale at the date of acquisition.

As of December 31, 2024, the disposal group continues to be held for sale at an approximate value of $ 1.2 million (see Note 5).

Following CFIUS’s review, Mustang, together with uBriGene and CFIUS, entered into a National Security Agreement (“NSA”) on May 13, 2024, requiring Mustang and uBriGene to terminate all related agreements and abandon the original transaction.

The NSA also obligated uBriGene to sell or otherwise dispose of the equipment assets purchased within 180 days after the execution of the NSA.

In June 2024, Mustang entered into a new Asset Purchase Agreement with uBriGene to repurchase the previously transferred equipment assets and supplies for total consideration of approximately $ 4.7 million.

Mustang agreed to pay uBriGene a total purchase price of $ 1.4 million consisting of (i) an upfront payment of $ 0.1 million due and (ii) $ 1.3 million due twelve ( 12 ) months after the closing date (the “Deferred Amount”).

In the event that on the date the Deferred Amount is payable, Mustang has net assets below $ 20 million, Mustang may, upon written notice to uBriGene, elect to delay its payment obligation by an additional six ( 6 ) months, and the Deferred Amount will accrue interest at a rate of 5 % per annum beginning on that date twelve months after closing and until the Deferred Amount is paid in full.

The $ 4.7 million purchase consideration was allocated to the repurchased equipment and supplies based on a relative fair value basis.

Mustang used a third-party to perform a valuation of the repurchase equipment, which resulted in fair value less costs to sell of approximately $ 2.2 million.

The remaining $ 2.5 million was allocated to the supplies repurchased and were expensed to research and development expense, as Mustang determined that there was no alternative future use.

The repurchased equipment was classified as held for sale at the acquisition date.

In February 2025, Mustang completed the sale of these assets (see Note 5).

Agreement with Sentynl

On February 24, 2021, Cyprium entered into a development and asset purchase agreement (the “Sentynl APA”) with Sentynl, a U.S.-based specialty pharmaceutical company owned by the Zydus Group.

In 2021, Cyprium entered into a development and asset purchase agreement (the “Sentynl APA”) with Sentynl, a U.S.-based specialty pharmaceutical company owned by the Zydus Group.

Under the Sentynl APA, Sentynl provided $ 8.0 million of upfront development funding for Cyprium’s CUTX-101 program, with Cyprium remaining in control of development of such program;

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Cyprium received notice of Sentynl’s election to effect the Approval Deadline Transfer during such 45 -day period, and the Closing of such transfer occurred in December 2023.

The Approval Deadline Transfer obligated Sentynl to pay Cyprium $ 4.5 million in connection with the Closing, which was received by Cyprium in December 2023 and recorded as collaboration revenue by Fortress in its consolidated statements of operations for the year ended December 31, 2023.

The Approval Deadline Transfer obligated Sentynl to pay Cyprium $ 4.5 million in connection with the Closing.

There were no further obligations required by Cyprium in regards to the $ 4.5 million.

Following such Closing, Sentynl is obligated to use commercially reasonable efforts to develop and commercialize CUTX-101, including the funding of the same.

Additionally, Cyprium remains eligible to receive up to $ 129 million in aggregate development and sales milestones under the Agreement, and royalties on net sales of CUTX-101 as follows:

Following such Closing, Sentynl was obligated to use commercially reasonable efforts to develop and commercialize CUTX-101, including the funding of the same.

Additionally, Cyprium remains eligible to receive up to $ 128 million in aggregate sales milestones under the Agreement, and royalties on net sales of CUTX-101 as follows:

(i) 3 % of annual net sales up to $ 75 million;

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and (iii) 12.5 % of annual net sales in excess of $ 100 million.

Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101.

With respect to the $ 8.0 million upfront payment from Sentynl received in 2021, the Company recognized revenue over the period in which the development activities occurred using an input method based upon the costs incurred to date in relation to the total estimated costs to complete the development activities.

As of the date of the Approval Deadline Transfer, the revenue related to the upfront payment has been fully recognized.

For the year ended December 31, 2023, the Company recognized revenue from this arrangement of $ 0.7 million.

In December 2024, the NDA for CUTX-101 was accepted by the FDA.

The NDA, which has been granted Priority Review, has an assigned Prescription Drug User Fee Act (“PDUFA”) target action date of September 30, 2025.

The NDA, which has been granted Priority Review, had an assigned Prescription Drug User Fee Act (“PDUFA”) target action date of September 30, 2025.

Cyprium received a milestone payment of $ 1.5 million from Sentynl that was due upon NDA acceptance, which was recorded as collaboration revenue by Fortress in its Consolidated Statements of Operations for the year ended December 31, 2024.

Urica Therapeutics, Inc.

In October 2025 the Company and Cyprium announced that the FDA had issued a CRL related to the CUTX-101 NDA.

On November 25, 2025, Sentynl notified Cyprium that Sentynl had resubmitted the NDA for CUTX-101 to the FDA .

On December 15, 2025 the Company and Cyprium announced that the NDA resubmission was accepted by the FDA and the PDUFA target action date of January 14, 2026 was assigned.

On January 13, 2026, the Company announced the FDA approved ZYCUBO (also referred to as CUTX-101) for the treatment of Menkes disease in pediatric patients.

A Rare Pediatric Disease PRV was issued in connection with FDA approval and, pursuant to the transaction with Sentynl, was transferred to Cyprium and subsequently sold for $ 205 million (see Note 20).

Agreement with Crystalys Therapeutics, Inc (“Crystalys”)

On July 15, 2024, Urica entered into an asset purchase agreement (the “APA”), royalty agreement (the “Royalty Agreement”), and related agreements (collectively, the “Transaction Documents”) with Crystalys, a Delaware corporation incorporated in 2022 and seeded by life sciences institutional investors.

Under the Transaction Documents, Urica sold the rights to its URAT1 inhibitor product candidate (see Note 7) in development for the treatment of gout, dotinurad, and related intellectual property, licenses and agreements to Crystalys.

On July 15, 2024, Urica entered into an asset purchase agreement (the “APA”), royalty agreement, and related agreements (collectively, the “Transaction Documents”) with Crystalys Therapeutics, Inc.

(“Crystalys”).

Crystalys is a Delaware corporation incorporated in 2022 and seeded by life sciences institutional investors.

Under the Transaction Documents, Urica sold the rights to its URAT1 inhibitor product candidate, dotinurad, which is in development for the treatment of gout, together with related intellectual property, licenses and agreements, to Crystalys.

In return, Crystalys issued to Urica shares of its common stock equal to 35 % of Crystalys’ outstanding equity.

Urica’s equity position cannot be reduced below 15 % of Crystalys’ fully-diluted equity capitalization until it raises $ 150 million in equity securities.

The Transaction Documents also grant Urica a secured three percent ( 3 %) royalty on future net sales of dotinurad to be paid by Crystalys, as well as the right to receive $ 0.6 million cash reimbursement for certain clinical and development costs incurred by Urica related to dotinurad.

Urica has the right to appoint one director to the board of directors of Crystalys, as well as an additional board observer.

The Company recognized the equity held in Crystalys (see Note 6) within other assets in the Company’s Consolidated Balance Sheet based on its initial estimated fair value at the inception of the APA, which was nominal.

Urica’s equity position cannot be reduced below 15 % of Crystalys’ fully-diluted equity capitalization until Crystalys raises $ 150 million from the sale of equity securities.

At December 31, 2025, Urica held approximately 15 % of the fully-diluted equity of Crystalys, and remains eligible for anti-dilution protection.

The Company has the right to appoint a voting director to Crystalys’ board of directors.

The Company’s board rights and ownership percentage resulted in the Company concluding that the equity method of accounting applies, however, the Company elected the fair value option for the Crystalys investment.

The Transaction Documents also granted Urica a secured three percent ( 3 %) royalty on future net sales of dotinurad to be paid by Crystalys.

Crystalys is obliged to use commercially reasonable efforts to develop and commercialize dotinurad.

The APA also gives Urica the right, but not the obligation, to repurchase the sold assets for a repurchase price not to exceed $ 6.4 million plus accrued interest;

in the event that Crystalys has not consummated a qualified financing of at least $ 120 million before January 8, 2026.

Urica recorded a liability for the $ 0.6 million received, which will be accreted up to the repurchase price over the term of the repurchase option, and will not recognize an asset for its ownership interest received in Crystalys until the expiration of the repurchase option.

Accordingly, for the year ended December 31, 2024, Urica recorded accretion of $ 0.7 million of the repurchase option price, booked to interest expense in the condensed consolidated statement of operations.

Agreement with 4DMT

On April 21, 2023, Aevitas entered into an Asset Purchase Agreement (the “4DMT APA”) with 4DMT under which 4DMT acquired Aevitas’ proprietary rights to its short-form human complement factor H (“sCFH”) asset for the treatment of complement-mediated diseases.

Under the terms of the 4DMT APA, 4DMT will make cash payments totaling up to $ 140 million if certain late-stage development, regulatory and sales milestones are met with respect to sCFH.

A range of single-digit royalties on net sales are also payable.

The aforementioned payments are payable solely to Aevitas, and 4DMT will be responsible for license payment obligations to the licensor of sCFH, University of Pennsylvania.

4DMT is not a related party to the Company and has assumed all ongoing and future development costs.

The fair value of the interest in Aevitas retained by the Company of $ 2.6 million was based on the risk-adjusted present value of the aforementioned potential cash payments (see Note 6).

In connection with the 4DMT APA, the preferred shares of Aevitas held by the Company converted to Aevitas common shares, at which point the Company no longer maintained voting control of Aevitas.

As a result, the Company deconsolidated its holdings in Aevitas.

In connection with this transaction, the Company recorded a loss on deconsolidation of Aevitas of $ 3.4 million during the year ended December 31, 2023 in other expense in the Consolidated Statement of Operations.

Agreements with InvaGen

In November 2018, Avenue entered into a Stock Purchase and Merger Agreement (the “Avenue SPMA”) with InvaGen Pharmaceuticals Inc.

In connection with the closing of the Avenue SRA, Avenue repurchased all the common shares of Avenue held by InvaGen, and all of the rights retained by InvaGen pursuant to the Stockholders Agreement entered into by and among Avenue, InvaGen and Fortress on November 12, 2018, were terminated.

Under the Avenue SRA, Avenue agreed to pay InvaGen seven and a half percent ( 7.5 %) of the proceeds from future financings, up to $ 4 million.

In connection with funds raised in 2024 and 2023 (see Note 13), Avenue made payments totaling $ 0.7 million and $ 0.5 million, respectively, to InvaGen.

The royalties represent variable consideration that is constrained and therefore no amounts of royalties were recognized as income for the years ended December 31, 2025 and 2024.

The APA gave Urica the right, but not the obligation, to repurchase the sold assets for a repurchase price not to exceed $ 6.4 million plus accrued interest;

the repurchase option would expire upon the consummation by Crystalys of a qualified financing of at least $ 120 million by July 15, 2026.

Urica recorded a liability for the $ 0.6 million received from Crystalys under the terms of the APA, which was being accreted up to the repurchase price over the term of the repurchase option, and the Company was not recognizing an asset for its ownership interest received in Crystalys until the expiration of the repurchase option.

For the years ended December 31, 2025 and 2024, Urica recorded $ 1.3 million and $ 0.7 million, respectively, of accretion of the repurchase option price, which was recorded in interest expense and financing fee in the Consolidated Statement of Operations.

In September 2025, Crystalys announced it had sold equity securities in a Series A financing to support the advancement of global Phase 3 clinical studies evaluating dotinurad for the treatment of gout.

With the closing of this Series A financing, the repurchase option expired and Urica reversed the related $ 2.6 million liability related to the repurchase option, which was recognized as other income in the Company’s Consolidated Statement of Operations.

Inventory consisted of the following:

($ in thousands)

Raw materials

Work-in-process

Finished goods

Work-in-process

Raw materials

Inventory at cost

Inventory reserve

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Leasehold improvements

Construction in progress

Total property and equipment

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As such, Mustang recorded an additional impairment charge of $ 1.0 million for the property, plant and equipment held for sale.

See Note 8 for asset impairment of $ 3.1 million recognized in the year ended December 31, 2023.

In February 2025, Mustang terminated the lease of its manufacturing facility.

The remaining lease liability of approximately $ 0.8 million was reversed, and the remaining leasehold improvements of approximately $ 0.3 million and right of use assets of approximately $ 0.1 million were written off, resulting in a net gain of $ 0.4 million recorded in research and development expense in the Consolidated Statement of Operations for the year ended December 31, 2025.

Fair Value Measurements

Fair Value of Aevitas

The Company valued its retained investment in Aevitas, which is accounted for as an equity method investment for which the Company elected the fair value option, and estimated the fair value to be $ 2.6 million based on a per share value of $ 0.328 .

Fair Value of Crystalys

Urica valued its equity investment in Crystalys using an option pricing model backsolve method and level 3 inputs.

The fair value of its investment in Crystalys increased after Crystalys announced a Series A financing and to recognize additional shares received pursuant to its anti-dilution rights under the APA, resulting in an increase in estimated fair value of $ 15.1 million which was recorded as other income in the Consolidated Statement of Operations for the year ended December 31, 2025.

The following inputs were utilized to derive the value:

risk free rate of return of 3.7 %, volatility of 80 % and a discount for lack of marketability of 39.7 %.

risk free rate of return:

and a discount for lack of marketability:

There are significant judgments and estimates inherent in the determination of the fair value, such as those regarding the selection of comparable companies used in estimating volatility, and the probability of possible future events.

Such estimates involve inherent uncertainties and the application of significant judgment.

Changes in judgements could have a material impact on our results of operation.

The $ 15.1 million represents the cumulative unrealized gain since acquisition of the investment.

The Company has not recorded any impairment losses through December 31, 2025.

Fair Value of Aevitas

The Company has not recognized any gains, losses, or impairments on the investment in 2025, 2024, or on a cumulative basis.

Common Stock Warrant Liabilities

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Balance at December 31, 2023

Avenue common stock warrants

Urica placement agent warrants

Change in fair value of common stock warrants - Avenue

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Change in fair value of placement agent warrants - Urica

Exercise of common stock warrants - Checkpoint

Exercise of common stock warrants - Avenue

Exchange of common stock warrants - Urica

Balance at December 31, 2024

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Change in fair value of common stock warrants - Checkpoint

Change in fair value of placement agent warrants - Urica

Exercise of common stock warrants - Avenue

Exchange of common stock warrants - Urica

Deconsolidation of Checkpoint

Balance at December 31, 2025

On December 16, 2022, Checkpoint closed on an offering for the sale of shares of its common stock and pre-funded warrants (the “Checkpoint December 2022 Registered Direct Offering”).

The common stock and the pre-funded warrants were sold together with December 2022 Common Stock Warrants.

Checkpoint also issued the placement agent warrants to purchase up to 104,046 shares of common stock with an exercise price of $ 5.406 per share (the “December 2022 Placement Agent Warrants”).

Checkpoint deemed the December 2022 Common Stock Warrants and December 2022 Placement Agent Warrants to be classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside its control.

The December 2022 Common Warrants and December 2022 Placement Agent Warrants were recorded at the time of closing at a fair value, determined by using the Black-Scholes Model.

In October 2023, Checkpoint entered into the October 2023 Inducement with a holder of certain of its existing warrants to exercise for cash an aggregate of 6,325,354 shares of Checkpoint’s common stock at a reduced exercise price of $ 1.76 per share.

Included in the exercise were the entirety of the December 2022 Common Stock Warrants.

Checkpoint revalued the December 2022 Common Stock Warrants on October 4, 2023, resulting in a fair value of $ 3.1 million.

Checkpoint also revalued the December 2022 Common Stock Warrants and December 2022 Placement Agent Warrants at each reporting period in 2023, and the decrease in the fair value of the common stock warrant liability throughout the year resulted in an offsetting gain on common stock warrant liabilities in the Statements of Operations.

Since the December 2022 Placement Agent Warrants issued in the December 2022 Registered Direct Offering were not included in the October 2023 Inducement and have not been exercised, they will continue to be revalued at each reporting period for as long as

they remain outstanding.

Checkpoint revalued the warrants at December 31, 2024 and 2023, resulting in a fair value of approximately $ 0.2 million and $ 0.1 million, respectively.

($ in thousands)

Common Stock Warrant liabilities at December 31, 2022

Change in fair value of common stock warrant liabilities

Exercise of common stock warrants

Common Stock Warrant liabilities at December 31, 2023

Change in fair value of common stock warrant liabilities

Common Stock Warrant liabilities at December 31, 2024

Checkpoint deemed the placement agent warrants it issued in connection with a registered direct offering (the “December 2022 Placement Agent Warrants”) to be classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside its control.

The December 2022 Placement Agent Warrants were recorded at the time of closing at a fair value determined by using the Black-Scholes model.

Checkpoint revalued the December 2022 Placement Agent Warrants at each reporting period thereafter until the closing date of the transaction with Sun Pharma, May 2025 (see Note 3).

A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the warrant liability that are categorized within Level 3 of the fair value hierarchy was as follows:

Checkpoint Warrants

Exercise price

Expected life in years

Risk-free rate

Avenue issued freestanding warrants to purchase shares of its common stock in connection with financing activities in October 2022 (the “October 2022 Warrants”) and January 2023 (the “January 2023 Warrants”, collectively the “Avenue Warrants”).

The Avenue Warrants are classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside of its control.

In connection with the Avenue January 2023 Registered Direct Offering (see Note 13) in January 2023, the down-round price protection feature was triggered and the exercise price for the October 2022 Warrants was permanently adjusted to $ 116.25 , which was the offering price for the Avenue Registered Offering in January 2023.

The Black-Scholes model was used to value the October 2022 Warrants and January 2023 Warrants as of December 31, 2024 and 2023.

For the years ended December 31, 2024 and 2023, the decrease in the fair value of the Avenue Warrants resulted in a decrease in common stock warrant liabilities of $ 0.2 million and $ 4.3 million, respectively, with an offsetting gain recorded in the Statements of Operations.

($ in thousands)

Avenue common stock warrant liabilities at December 31, 2022

Issuance of common warrants

Change in fair value of common stock warrant liabilities

Avenue common stock warrant liabilities at December 31, 2023

Exercise of Avenue common warrants

Change in fair value of common stock warrant liabilities

Avenue common stock warrant liabilities at December 31, 2024

A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Avenue warrant liability that are categorized within Level 3 of the fair value hierarchy was as follows:

Risk-free interest rate

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Expected volatility

Urica’s outstanding contingently issuable placement agent warrants were exchanged at the time of the exchange of the Urica 8 % Cumulative Convertible Class B Preferred Stock on June 27, 2024 (see Note 9) for 202,834 warrants to purchase Fortress common stock at an exercise price of $ 1.68 .

The Fortress common stock warrants have a five-year life, expiring on June 27, 2029.

The Company determined the placement agent warrants met the criteria for equity classification.

At December 31, 2024 and 2023, the value of Urica’s contingent payment warrant was nil and $ 0.2 million, respectively, and was recorded on the consolidated balance sheet.

Avenue has previously issued freestanding warrants to purchase shares of its common stock in connection with financing activities.

Avenue’s outstanding warrants to purchase common stock were originally issued in October 2022 (the “October 2022 Warrants”).

The October 2022 Warrants are classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside of its control.

In connection with the Avenue January 2023 registered direct offering in January 2023, the down-round price protection feature was triggered and the exercise price for the October 2022 Warrants was permanently adjusted to $ 116.25 , which was the offering price for the Avenue registered direct offering in January 2023.

The Black-Scholes model was used to value the October 2022 Warrants as of December 31, 2025 and 2024.

At December 31, 2025 and December 31, 2024, the liability associated with the October 2022 Warrants was approximately $ 1,000 and $ 16,000 , respectively.

Risk-free interest rate

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License Agreements

In accordance with ASC 730-10-25-1, Research and Development , costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached commercial feasibility and has no alternative future use.

The licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach commercial feasibility and have no alternate use.

The purchase prices of the licenses acquired is classified as research and development-licenses acquired in the consolidated statements of operations and for the years ended December 31, 2024 and 2023, expense recognized was $ 0.3 million and $ 4.3 million, respectively.

Emrosi (also known as DFD-29)

In June 2021, Journey entered a license, collaboration, and assignment agreement (the “Emrosi Agreement”) to obtain global rights for the development and commercialization of Emrosi TM (Minocycline Hydrochloride Extended-Release Capsules, 40mg), for the treatment of rosacea with Dr.

In accordance with ASC 730-10-25-1, Research and Development , costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use.

The licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility and have no alternate use.

The purchase price of the licenses acquired is classified as research and development-licenses acquired in the Company’s Consolidated Statements of Operations and for the years ended December 31, 2025 and 2024, expense recognized was nil and $ 0.3 million, respectively.

In June 2021, Journey entered a license, collaboration, and assignment agreement (the “Emrosi Agreement”) to obtain global rights for the development and commercialization of Emrosi (Minocycline Hydrochloride Extended-Release Capsules, 40mg), formerly known as DFD-29, for the treatment of rosacea with Dr.

Reddy’s Laboratories, Ltd (“DRL”);

provided, that DRL retained certain rights to the program in select markets including Brazil, Russia, India and China.

provided, that DRL retained certain rights to the program in select markets, namely in Armenia, Azerbaijan, Belarus, Brazil, Georgia, India Kazakhstan, Kyrgyzstan, Moldova, the People’s Republic of China (“PRC”), Russia, Taiwan, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

Pursuant to the terms and conditions of the Emrosi Agreement, Journey paid $ 10.0 million.

In addition, Journey paid two developmental milestones in 2024.

In April 2024 Journey paid a $ 3.0 milestone to DRL, based on FDA acceptance of the NDA application for Emrosi, and in December of 2024 Journey paid a $ 15.0 million milestone payment to DRL, which was triggered by the FDA marketing approval of Emrosi.

Upon the $ 15.0 million milestone payment, the assets that had been the subject of the exclusive license related to Emrosi, including the NDA itself, the patents and other intellectual property, were assigned to Journey (see Note 8).

Pursuant to the Emrosi Agreement, Journey may be required to pay additional contingent regulatory, commercial, and corporate-based milestone payments, totaling up to $ 150.0 million.

Journey is required to pay royalties ranging from approximately ten percent to fourteen percent on net sales of Emrosi, subject to certain possible reductions.

In April 2024, Journey made a $ 3.0 million milestone payment to DRL, recorded in research and development expenses on the Consolidated Statement of Operations, based on FDA acceptance of the NDA for Emrosi, and in December of 2024 Journey made a $ 15.0 million milestone payment to DRL, which was triggered by the November 1, 2024 FDA marketing approval of Emrosi, which was capitalized as an acquired intangible asset.

Upon the $ 15.0 million milestone payment, all assets related to Emrosi, including the NDA, regulatory documentation and intellectual property, transferred to Journey.

Pursuant to the Emrosi Agreement, Journey may be required to make additional contingent regulatory and commercial milestone payments to DRL, totaling up to $ 150.0 million.

Journey is required to pay royalties ranging from ten percent to fourteen percent on net sales of Emrosi, subject to a 50 % reduction in the event that a generic competitor launches in an applicable country where Journey markets and sells Emrosi.

In March 2021, Journey executed an Asset Purchase Agreement (the “Qbrexza APA”) with Dermira, Inc., a subsidiary of Eli Lilly and Company (“Dermira”).

Pursuant to the terms of the Qbrexza APA, Journey acquired the rights to Qbexza® (glycopyrronium), a prescription cloth towelette to treat primary axillary hyperhidrosis in patients nine years of age or older from Dermira, Inc., Journey paid the upfront fee of $ 12.5 million to Dermira.

In addition, Journey is obligated to pay Dermira up to $ 144 million in the aggregate upon the achievement of certain sales milestones.

The royalty structure for the agreement is tiered with royalties for the first two years ranging approximately 40 % to 30 %.

Pursuant to the terms of the Qbrexza APA, Journey acquired the rights to Qbrexza (glycopyrronium), a prescription cloth towelette to treat primary axillary hyperhidrosis in patients nine years of age or older.

Journey paid an upfront fee of $ 12.5 million to Dermira.

In addition, Journey is obligated to pay Dermira up to $ 144 million in the aggregate upon the achievement of certain net sales milestones.

The royalty structure for the Qbrexza APA is tiered with royalties for the first two years ranging approximately 40 % to 30 %.

Thereafter for a period of eight years royalties are approximately 12 % to 19 %.

Royalty amounts are subject to certain reductions in the event there is loss of exclusivity.

On August 31, 2023, Journey entered into a license agreement (the “New License Agreement”) with Maruho, whereby Journey agreed to grant an exclusive license to Maruho to develop and commercialize Qbrexza® for the treatment of primary axillary hyperhidrosis, in South Korea, Taiwan, Hong Kong, Macau, Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Brunei, Cambodia, Myanmar and Laos (the “Territory”).

Under the terms of the New License Agreement, in exchange for the exclusive rights to Qbrexza in the Territory and the amendment to the royalty payments associated with the Japanese license, Maruho paid $ 19.0 million to Journey as a non-refundable upfront payment.

Royalty amounts are subject to certain reductions in the event there is a loss of exclusivity.

In August 2023, Journey entered into a license agreement (the “New License Agreement”) with Maruho Co.

(“Maruho”), whereby Journey agreed to grant an exclusive license to Maruho to develop and commercialize Qbrexza for the treatment of primary axillary hyperhidrosis, in South Korea, Taiwan, Hong Kong, Macau, Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Brunei, Cambodia, Myanmar and Laos (the “Territory”).

Under the terms of the New License Agreement, in exchange for the exclusive rights to Qbrexza in Japan and the amendment to the royalty payments associated with the Japanese license, Maruho paid $ 19.0 million to Journey as a non-refundable upfront payment.

Prior to the date of the New License Agreement, Journey and Maruho were party to an existing exclusive amended and restated license agreement (the “First A&R License Agreement”), under which Maruho acquired exclusive license rights to Qbrexza in Japan.

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All other remaining potential milestone payment obligations, which aggregate to $ 45 million, remain in full force and effect.

Journey recognized $ 19.0 million as other revenue in the consolidated statements of operations during the year ended December 31, 2023.

In July 2020, Journey entered into an exclusive license and supply agreement for Accutane (the “Accutane Agreement”) with DRL.

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Journey may also terminate the Accutane Agreement without cause upon 180 days written notice to DRL.

Amzeeq and Zilxi

In January 2022, Journey entered into an Asset Purchase Agreement (the “Vyne APA”) with Vyne Therapeutics, Inc.

(“Vyne”) to acquire Vyne’s Molecule Stabilizing Technology TM franchise (the “Acquisition”) for an upfront payment of $ 20.0 million and an additional $ 5.0 million payment on the one-year anniversary of the closing of the Acquisition.

(“Vyne”) to acquire two FDA approved products, Amzeeq (minocycline) topical foam, 4%, and Zilxi (minocycline) topical foam, 1.5%, for an upfront payment of $ 20.0 million and an additional $ 5.0 million payment on the one-year anniversary of the closing of the Vyne APA.

The Vyne APA also provides for contingent net sales milestone payments:

in the first calendar year in which annual sales reach each of $ 100 million, $ 200 million, $ 300 million, $ 400 million and $ 500 million, Journey will be required to make a one-time payment of $ 10 million, $ 20 million, $ 30 million, $ 40 million and $ 50 million, respectively, in that year only, per product, totaling up to $ 450 million.

In addition, Journey will pay Vyne 10 % of any upfront payment received by Journey from a licensee or sublicensee of the products in any territory outside of the United States, subject to exceptions for certain jurisdictions as detailed in the Vyne APA.

There are no subsequent milestone payments or royalties beyond the aforementioned payments.

The Acquisition included two FDA-approved products (Amzeeq® and Zilxi®), and a development-stage dermatology program (FCD105), along with the Molecule Stabilizing Technology proprietary platform.

Part of the Vyne APA was Journey’s assumption of a license agreement with Cutia Therapeutics (HK) Limited, a Hong Kong biopharmaceutical company with experience in developing pharmaceutical products in the greater China region (the “Cutia Agreement”).

Part of the Vyne APA was Journey’s assumption of a license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), a Hong Kong biopharmaceutical company with experience in developing pharmaceutical products in the greater China region (the “Cutia Agreement”).

Pursuant to the Cutia Agreement, Cutia was granted an exclusive license to obtain regulatory approval of and commercialize Amzeeq (topical 4% minocycline foam) and Zilxi (topical 1.5% minocycline foam) in mainland China, Taiwan, Hong Kong and Macau.

Journey has agreed to supply the finished licensed products to Cutia for clinical and commercial use at an agreed price.

On November 11, 2024, Cutia received marketing approval for topical 4% minocycline foam from the National Medical Products Administration (the “NMPA”) of the People’s Republic of China (the “PRC”).

Additionally, Journey will earn a royalty in the low single digit percentages on net sales of the licensed products by Cutia.

On November 11, 2024, Cutia received marketing approval for topical 4% minocycline foam from the National Medical Products Administration of the PRC.

The approval triggered a $ 1.0 million milestone payment to Journey.

The $ 1.0 million milestone payment was recorded as a component of other revenue in the Company’s Consolidated Statements of Operations for the year ended December 31, 2024.

In July 2019, Journey entered into an asset purchase agreement for Ximino® (the “Ximino APA”) with Sun Pharmaceutical Industries, Inc.

Pursuant to the Ximino APA, total consideration was $ 9.4 million, with an upfront payment of $ 2.4 million paid in 2019.

Pursuant to the terms of the Ximino APA, the remaining $ 7.0 million was due on the second anniversary and for the next four anniversaries of the Ximino APA thereafter.

No additional licensing or milestone payments were required.

Journey commenced sales of this product in August 2019, and discontinued selling Ximino in September 2023.

In August 2024, Journey executed a settlement agreement with Sun for amounts owed under the Ximino APA (see Note 9).

On February 28, 2023, Avenue entered into a license agreement with AnnJi Pharmaceutical Co.

The $ 1.0 million milestone payment was recorded as a component of other revenue on the approval date of November 11, 2024, in the Consolidated Statements of Operations.

Journey received the cash payment from Cutia of $ 1.0 million on January 2, 2025.

During 2025, Journey began supplying Cutia with finished licensed products for Cutia’s commercial use and earning a royalty on net sales of Amzeeq made by Cutia.

Journey recognized $ 0.6 million in Other revenue associated with royalties and the supply of Amzeeq to Cutia for the year ended December 31, 2025.

In February 2023, Avenue entered into a license agreement with AnnJi Pharmaceutical Co.

("AnnJi"), whereby Avenue obtained an exclusive license (the "AnnJi License Agreement") from AnnJi to the intellectual property rights pertaining to the molecule known as JM17, which activates Nrf1 and Nrf2, enhances androgen receptor degradation and underlies AJ201, a clinical product candidate currently in a Phase 1b/2a clinical trial in the U.S.

for the treatment of SBMA, also known as Kennedy's Disease.

Under the AnnJi License Agreement, in exchange for exclusive rights to the intellectual property underlying the AJ201 product candidates, Avenue agreed to pay $ 3.0 million, which was paid in the year ended December 31, 2023.

The license provided under the AnnJi License Agreement is exclusive as to all oral forms of AJ201 for use in all indications (other than androgenetic alopecia and Alzheimer’s disease) in the United States, Canada, the European Union, the United Kingdom and Israel.

The AnnJi License Agreement also contains customary representations and warranties and provisions related to confidentiality, diligence, indemnification and intellectual property protection.

Avenue will initially be obligated to obtain both clinical and commercial supply of AJ201 exclusively through AnnJi.

AnnJi retains the manufacturing rights for AJ201 and Avenue has the option to acquire those rights from AnnJi as described in the AnnJi License Agreement.

Pursuant to the terms of the AnnJi License Agreement, Avenue was also obligated to issue two tranches of shares of its common stock and make additional payments including:

reimbursement of payments up to $ 10.8 million in connection with the product’s Phase 1b/2a clinical trial (which AnnJi is currently administering with Joint Steering Committee Oversight before assigning the IND to Avenue upon such trial’s conclusion, and which is reflective of market pricing for the services to be received), up to $ 14.5 million in connection with certain development milestones pertaining to the first indication in the U.S., up to $ 27.5 million in connection with certain drug development milestones pertaining to additional indications and development outside the U.S., up to $ 165 million upon the achievement of certain net sales milestones ranging from $ 75 million to $ 750 million in annual net sales, and royalty payments based on a percentage of net sales ranging from mid-single digits to the low-double digits, which are subject to potential diminution in certain circumstances.

In connection with the signing of the AnnJi License Agreement, Avenue issued 11,089 shares of its common stock to AnnJi (“First Tranche Shares”) and recognized expense of $ 0.9 million;

and issued 3,688 shares of common stock (“Second Tranche Shares”) and recognized expense of $0.3 million paid on September 26, 2023 upon enrollment of the eighth patient in the ongoing Phase 1b/2a SBMA clinical trial.

Avenue and AnnJi entered into a Subscription Agreement, dated as of February 28, 2023, that provided for the issuance of First Tranche Shares which were issued March 30, 2023.

In the event that the common stock of Avenue ceases to be traded on a national securities exchange, AnnJi has the right to

sell the common stock of Avenue back to Avenue at a price of $ 2.10 per share, subject to the terms of the AnnJi License Agreement.

On March 3, 2025, Avenue received a “notice of intent to terminate” letter from AnnJi with respect to the AnnJi License Agreement;

Avenue believes that the grounds for termination stated in the purported termination notice are without merit and intends to avail itself of the dispute resolution procedures set forth in the AnnJi License Agreement.

In May 2021, Urica entered into an exclusive license agreement with Fuji to develop dotinurad in North America, Europe, and the UK.

Dotinurad is approved for the treatment of gout and hyperuricemia in Japan.

Urica paid a $ 3.0 million milestone payment in December 2021 upon IND submission of dotinurad.

In December 2022 Urica expanded its exclusive license agreement with Fuji for the development of dotinurad to include the Middle East and North Africa (“MENA”) and Turkey territories.

The amendment to the exclusive license agreement included a one-time license amendment payment of $ 0.3 million.

In July 2024, Urica sold the rights to dotinurad to Crystalys (see Note 3).

Under the AnnJi License Agreement, in exchange for exclusive rights to the intellectual property underlying the AJ201 product candidates, Avenue paid $ 3.0 million, issued $ 1.2 million in shares of Avenue stock in two tranches, and agreed to make additional payments including:

reimbursement of payments up to $ 10.8 million in connection with the product’s Phase 1b/2a clinical trial, up to $ 14.5 million in connection with certain development milestones pertaining to the first indication in the U.S., up to $ 27.5 million in connection with certain drug development milestones pertaining to additional indications and development outside the U.S., up to $ 165 million upon the achievement of certain net sales milestones ranging from $ 75 million to $ 750 million in annual net sales, and royalty payments based on a percentage of net sales ranging from mid-single digits to the low-double digits, which were subject to potential diminution in certain circumstances.

On March 3, 2025, Avenue received a notice of AnnJi’s intent to terminate the AnnJi License Agreement, in which AnnJi asserted several bases for its right to terminate the AnnJi License Agreement.

On April 24, 2025 (the “Termination Effective Date”), Avenue and AnnJi entered into a License Termination and Program Transfer Agreement (the “Termination and Transfer Agreement”), pursuant to which:

(i) the AnnJi License Agreement and related agreements were terminated with immediate effect;

(ii) the parties dismissed all pending dispute resolution proceedings between them and provided mutual releases of claims;

(iii) Avenue transferred to AnnJi all of its rights, title and interest to and under the assets arising under the AnnJi License Agreement and otherwise related to AJ201 and (iv) Avenue agreed not to, for 48 months following the date of the Termination and Transfer Agreement, develop, commercialize, manufacture or sell any product competing with AJ201 in the US, Canada, the European Union, Great Britain or Israel.

Under the Termination and Transfer Agreement, Avenue repurchased all shares of common stock held by AnnJi for an aggregate payment of $ 1.00 , and Avenue also made a payment of $ 0.2 million to AnnJi for legal expense reimbursement, which was accounted for as consideration payable to a customer and reduced the amount of revenue recognized by Avenue under the agreement.

AnnJi agreed to make payments to Avenue of $ 1.6 million net of 20 % tax withholding, with $ 0.8 million collected by Avenue in May 2025 and $ 0.8 million collected by Avenue in July 2025.

The $ 1.6 million, less the $ 0.2 million as consideration for legal expenses, was recognized as other revenue as the performance obligations related to rights transferred to AnnJi were satisfied during the year ended December 31, 2025.

Additionally, Avenue will be eligible to receive from AnnJi:

● payments totaling up to $ 5 million in the aggregate upon the occurrence of certain development and regulatory milestone events pertaining to AJ201;

● payments totaling up to $ 17 million in the aggregate upon AJ201 experiencing certain commercial sales milestone events;

● a 1.75 % royalty on net sales of AJ201, which royalty percentage is subject to potential diminution in certain circumstances;

● in the event that AnnJi enters into one or more subsequent licenses of rights to AJ201 with third party licensee(s), 15 % of payments received by AnnJi from such licensee(s), up to a cap of $ 7.5 million, and with a minimum of $ 4 million owing under certain mechanism in the event of an approval of a New Drug Application in the U.S.

with respect to AJ201.

The Termination and Transfer Agreement also contains customary representations and warranties and provisions related to confidentiality and indemnification.

Partner Companies and Subsidiaries

The Company’s partner companies and subsidiaries have also entered into other various license agreements with research institutions and medical centers.

These license agreements include upfront payments which were expensed and various d evelopment milestone payments due upon achievement of various milestones which in the aggregate are approximately $ 191.3 million, of which $ 65.0 million relates to Mustang agreements.

The license agreements also have sales-based milestone payments that total approximately $ 117.4 million.

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The approval triggered a $ 15.0 million milestone payment to DRL, which Journey capitalized as an acquired intangible asset.

During the year ended December 31, 2023, Journey experienced lower net product revenues and gross profit levels for its Ximino products.

Based on these results, Journey revised the financial outlook and plans for its Ximino products.

Journey assessed the revised forecast for Ximino and determined that this constituted a triggering event and the results of the analysis indicated the carrying amount was not expected to be recovered.

Journey recorded an intangible asset impairment charge of $ 3.1 million during the year ended December 31, 2023.

This non-cash charge was recorded to operating expenses on the Consolidated Statements of Operations.

The future amortization of these intangible assets is as follows:

For the years ended:

($ in thousands)

December 31, 2025

December 31, 2026

December 31, 2027

December 31, 2028

December 31, 2029

Asset not yet placed in service

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2024 Oaktree Note

2020 Oaktree Note

August - 2025

SWK Term Loan

December - 2027

Discount on notes payable

Total notes payable

Total notes payable, long term, net

As of December 31, 2025, the carrying value of the notes payable approximates their fair value as the interest rate is variable and approximates the market rate for loans with similar terms and risk characteristics.

2024 Oaktree Note

On July 25, 2024, Fortress entered into a $ 50.0 million senior secured credit agreement (the “New Oaktree Agreement”) with a maturity date of July 25, 2027 with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”).

On July 25, 2024, Fortress entered into the $ 50.0 million senior secured credit agreement (the “2024 Oaktree Agreement”) with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”).

On December 12, 2025, Fortress entered into the First Amendment to the 2024 Oaktree Agreement (the “First Oaktree Amendment”), which provided for, among other things, an extension of the maturity date to June 30, 2028, and an adjustment to the minimum net sales covenant.

The First Amendment was accounted for as a modification and did not have a material impact on the financial statements.

On February 22, 2026, the Company entered in the Second Amendment to the 2024 Oaktree Agreement (the “Second Oaktree Amendment” and, together with the 2024 Oaktree Agreement and the First Oaktree Amendment, the “New Oaktree Agreement”), which provided for, among other things, the elimination of certain financial covenants once Fortress has received the distribution of proceeds from Cyprium following the closing of the sale of Cyprium’s priority review voucher and the outstanding principal balance of the Oaktree loan is less than or equal to $ 15.0 million (see Note 20).

The Company borrowed $ 35.0 million under the New Oaktree Agreement on the Closing Date (the “2024 Oaktree Note”) and is eligible to draw up to an additional $ 15.0 million at the lenders’ discretion to support future business development activities.

The 2024 Oaktree Note replaces the 2020 Oaktree Note (as defined below) in which the remaining $ 50.0 million balance was repaid in full.

Under the terms of the New Oaktree Agreement, the loans have a 30-month interest-only period with a maturity date of July 25, 2027, and bear interest at an annual rate equal to the 3-month Secured Overnight Financing Rate ( SOFR ) plus 7.625 % (subject to a 2.50 % SOFR floor and a 5.75 % SOFR cap).

The 2024 Oaktree Note replaced the 2020 Oaktree Note (as defined below), with respect to which the remaining $ 50.0 million balance was repaid in full.

Under the terms of the New Oaktree Agreement, as amended, the loans have a 41 -month interest-only period with a maturity date of June 30, 2028, and bear interest at an annual rate equal to the 3-month Secured Overnight Financing Rate ( SOFR ) plus 7.625 % (subject to a 2.50 % SOFR floor and a 5.75 % SOFR cap).

At December 31, 2025, the interest rate applicable to the 2024 Oaktree Note was 11.6 %.

The Company is required to make quarterly interest-only payments until the maturity date, except fifty percent of the then-outstanding principal balance of the loans is due on March 31, 2027, with the remaining principal amount due on the maturity date.

The Company may voluntarily prepay, in whole or in part, the amounts due under the New Oaktree Agreement at any time subject to a prepayment fee.

The Company is required to make quarterly interest-only payments until the maturity date, except 12.5 % of the then-outstanding principal balance of the loans is due on September 30, 2027, 12.5 % of the principal balance of the loans is due on December 30, 2027, 37.5 % of the principal balance of the loans is due on March 31, 2028, with the remaining principal amount due on the maturity date.

The Company may voluntarily prepay, in whole or in part, the amounts due under the New Oaktree Agreement, as amended, at any time subject to a prepayment fee.

Subject to prior written notice by the Company, to repay any amounts due prior to the maturity date, the Company must pay the sum of (A) the aggregate principal amount of the Loans being prepaid, (B) any accrued but unpaid interest on the principal amount of the Loans being prepaid, (C) any applicable Yield Protection Premium (as defined in the New Oaktree Agreement) and (D) if applicable, other unpaid amounts then due and owing pursuant to the New Oaktree Agreement and the other loan documents (such aggregate amount, the “Prepayment Price”);

provided that each partial prepayment of the principal amount of the Loans shall be in an aggregate amount of at least $ 5.0 million and

integral multiples of $ 1.0 million in excess thereof.

provided that each partial prepayment of the principal amount of the Loans shall be in an aggregate amount of at least $ 5.0 million and integral multiples of $ 1.0 million in excess thereof.

The Company is required to make mandatory prepayments of the Loans with net cash proceeds from (i) certain casualty events, (ii) certain monetization events, including, among other things, certain asset sales and the sale(s) of priority review vouchers by certain subsidiaries of the Company, and the receipt by the Company of any dividend or other distributions in cash from any of its subsidiaries in excess of $ 5.0 million other than in connection with certain monetization events, (iii) debt issuances that are not permitted, and (iv) failure to comply with certain covenants.

The lenders may elect to receive warrants to purchase common stock of the Company as an alternative to cash prepayments in some situations where a mandatory prepayment would otherwise be required.

No mandatory prepayments were required for the year ended December 31, 2024.

The New Oaktree Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions.

In addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that the Company maintain a minimum liquidity of $ 7.0 million, which may be reduced or increased as described in the New Oaktree Agreement (“the “Liquidity Requirement”), and (ii) that product net sales of Journey meet a consolidated minimum net sales amount of $ 50.0 million on a trailing 12-month basis, tested quarterly, which may be reduced or increased as described in the New Oaktree Agreement (the “Minimum Net Sales Test”), subject to certain exclusions.

Due to the approval of Emrosi, the minimum net sales amount will increase by $ 7.5 million each quarter, beginning in the third quarter of 2025, provided that the minimum net sales amount will in no event exceed $ 80.0 million.

Due to the receipt of proceeds from the sale of Checkpoint (see Note 3), the Company made payments to Oaktree comprised of:

$ 5.5 million in principal, $ 0.1 million in interest, and $ 0.3 million in Yield Protection Premium.

The New Oaktree Agreement, as amended, contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions.

In addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that the Company maintain a minimum liquidity of $ 7.0 million, which may be reduced or increased as described in the New Oaktree Agreement (“the “Liquidity Requirement”), and (ii) that product net sales of Journey meet a consolidated minimum net sales amount on a trailing 12 -month basis, tested quarterly, which may be reduced or increased as described in the Oaktree Amendment (the “Minimum Net Sales Test”), subject to certain exclusions.

The minimum net sales amount for December 31, 2025 is $ 60 million and will increase by $ 5.0 million each subsequent quarter, provided that the minimum net sales amount will in no event exceed $ 80.0 million.

Both the Minimum Net Sales Test and the Liquidity Requirement will be reduced to $ 0 while the outstanding principal balance is less than or equal to $ 10.0 million.

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Failure by the Company to comply with the financial covenants will result in an event of default, subject to certain cure rights of the Company with respect to the Minimum Net Sales Test.

The New Oaktree Agreement contains events of default that are customary for financings of this type, in certain circumstances subject to customary cure periods.

In addition, the Company is also required to (i) raise capital, or receive in monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $ 20 million or 50 % of an amount set forth in an annual budget delivered to the lenders and (ii) maintain a specified minimum equity stake in Journey.

The capital raise and minimum stake covenants and financial covenants, including minimum liquidity and minimum net sales, will not apply if the outstanding principal balance of the loan is less than or equal to $ 10 million.

Following an event of default and any cure period, if applicable, the Agent will have the right upon notice to accelerate all amounts outstanding under the New Oaktree Agreement, in addition to other remedies available to the lenders as secured creditors of the Company.

In connection with the New Oaktree Agreement, the Company granted a security interest in favor of the Agent, for the benefit of the lenders, in substantially all of the Company’s assets, subject to customary exceptions, as collateral securing the Company’s obligations under the New Oaktree Agreement.

Also in connection with the New Oaktree Agreement, the Company granted warrants to the lenders to purchase up to 506,390 shares of the Company’s common stock at a purchase price of $ 2.0735 per share (the “Warrants”), later reduced to $ 1.65 per share in connection with the financing consummated by the Company in September 2024 (see note 13).

The New Oaktree Agreement, as amended, contains events of default that are customary for financings of this type, in certain circumstances subject to customary cure periods.

In addition, the Company is also required to (i) raise cash proceeds from the sale of common stock, or receive monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $ 20 million or 50 % of an amount set forth in an annual budget delivered to the lenders (the “Capital Raise Test”) and (ii) maintain a specified minimum equity stake in Journey (“the “Minimum JMC Stake Covenant”).

These capital raise and minimum stake covenants and financial covenants, will not apply if the outstanding principal balance of the loan is less than or equal to $ 10 million.

Following an event of default and any cure period, if applicable, Oaktree will have the right upon notice to accelerate all amounts outstanding under the New Oaktree Agreement, in addition to other remedies available to the lenders as secured creditors of the Company.

Pursuant to the terms of the Second Oaktree Amendment, certain financial covenants were amended such that in the event that the outstanding principal balance under the 2024 Oaktree Note is less than or equal to $ 15.0 million and the Company receives the distribution of proceeds from Cyprium following the closing of the sale of the PRV by Cyprium pursuant to the PRV APA (the “2026 Cyprium Monetization Event”), the Liquidity Requirement will be $ 2.0 million, and the Minimum Net Sales Test, Capital Raise Test, and Minimum JMC Stake Covenant will no longer apply.

Under the New Oaktree Agreement, as amended, the Company granted a security interest in favor of Oaktree, for the benefit of the lenders, in substantially all of the Company’s assets, subject to customary exceptions, as collateral securing the Company’s obligations under the New Oaktree Agreement.

In connection with the 2024 Oaktree Agreement, as amended, the Company granted equity classified warrants to the lenders to purchase up to 506,390 shares of the Company’s common stock at a purchase price of $ 2.0735 per share (the “Warrants”), later reduced to $ 1.65 per share.

The Warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offerings and pro rata distributions.

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The Warrants are exercisable from July 25, 2024 and will expire on July 25, 2031 and may be net exercised for no cash payment at the holder’s election.

The Company filed a registration statement to register the resale of the shares of Company common stock issuable upon exercise of the Warrants (see Note 13).

The Company was in compliance with all applicable covenants under the New Oaktree Agreement as of December 31, 2024.

The Company filed a registration statement to register the resale of the shares of Company’s common stock issuable upon exercise of the Warrants (see Note 13).

The fair value of the warrants were estimated using the Black-Scholes model and level 3 inputs, resulting in an estimated fair value of $ 1.1 million, which is recorded as a discount on the note payable.

In connection with the Oaktree Amendment Fortress issued equity classified warrants to Oaktree and certain of its affiliates to purchase up to 0.6 million shares of Common Stock at a purchase price of $ 2.62 per share (the “2025 Warrants”) with similar rights and terms as the Warrants (see Note 13).

The fair value of the warrants were estimated using the Black-Scholes model and level 3 inputs, resulting in an estimated fair value of $ 1.3 million, which is recorded as a discount on the note payable.

The Company has filed registration statements to register the resale of shares of the Company’s common stock issuable upon exercise of the Warrants and the 2025 Warrants.

In the year ended December 31, 2025, Oaktree elected a cashless exercise of 253,195 warrants, and as a result the Company issued 140,830 common shares to Oaktree.

The Company was in compliance with all applicable financial covenants under the New Oaktree Agreement, as amended, as of December 31, 2025.

2020 Oaktree Note

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the loss on extinguishment was recorded to interest expense in the Consolidated Statement of Operations for the year ended December 31, 2024.

The Company had entered the Prior Oaktree Agreement in August 2020.

The Prior Oaktree Agreement contained customary representations and warranties and customary affirmative and negative covenants as well as certain financial covenants, including, among other things, (i) maintenance of minimum liquidity and (ii) a minimum revenue test that required Journey’s annual revenue to be equal to or to exceed annual revenue projections set forth in the Prior Oaktree Agreement.

Failure by the Company or Journey, as applicable, to comply with the Prior Oaktree Agreement covenants would result in an event of default, subject to certain cure rights of the Company.

The Company was required to make quarterly interest-only payments until the fifth anniversary of the closing date of the 2020 Oaktree Note, August 27, 2025 , at which point the outstanding principal amount would have been due.

The Company could have voluntarily prepaid the 2020 Oaktree Note at any time subject to a prepayment fee.

The Company was required to make mandatory prepayments of the 2020 Oaktree Note under various circumstances as defined in the Prior Oaktree Agreement

SWK Term Loan

On December 27, 2023 (the “SWK Closing Date”), Journey entered into a Credit Agreement with SWK Funding LLC (“SWK”).

The Credit Agreement provides for a term loan facility (the “Credit Facility”) in the original principal amount of up to $ 20.0 million.

On December 27, 2023 (the “SWK Closing Date”), Journey entered into the credit agreement (the “SWK Credit Agreement”) with SWK Funding LLC (“SWK”).

The SWK Credit Agreement provides for a term loan facility (the “SWK Credit Facility”) in the original principal amount of up to $ 20.0 million.

On the SWK Closing Date, Journey drew $ 15.0 million.

On June 26, 2024, Journey drew the remaining $ 5.0 million under the Credit Facility.

On July 9, 2024, Journey entered into the Amendment to the Credit Agreement with SWK.

The Amendment increased the original principal amount of the Credit Facility from $ 20.0 million to $ 25.0 million.

On June 26, 2024, Journey drew the remaining $ 5.0 million under the SWK Credit Facility.

On July 9, 2024, Journey entered into an amendment to the SWK Credit Agreement with SWK, which increased the original principal amount of the SWK Credit Facility from $ 20.0 million to $ 25.0 million.

The $ 5.0 million of additional principal added in the amendment was contractually required to be drawn upon FDA approval of Emrosi, subject to Journey receiving approval on or before June 30, 2025.

Journey drew on the remaining $ 5.0 million relating to the FDA approval of Emrosi on November 25, 2024.

Loans under the Credit Facility (the “Term Loans”) mature on December 27, 2027.

The Term Loans accrue interest at a rate per annum equal to the three-month term SOFR (subject to a SOFR floor of 5 %) plus 7.75 % and interest is payable quarterly and resets quarterly.

Beginning in February 2026, Journey is required to repay a portion of the outstanding principal of the Term Loans quarterly in an amount equal to 7.5 % of the principal amount of funded Term Loans, with any remaining principal balance due on the maturity date.

If the total revenue of Journey, measured on a trailing twelve-month basis, is greater than $ 70.0 million as of December 31, 2025, the principal repayment start date is extended from February 2026 to February 2027, at which point Journey is required to repay a portion of the outstanding principal of the Term Loans quarterly in an amount equal to 15 % of the principal amount of funded Term Loans, with any remaining principal balance due on the maturity date.

Pursuant to the terms under the SWK Credit Facility, as amended, repayments of principal were to commence in February 2026 in an amount equal to $ 1.9 million per quarter, or 7.5 %, of the principal amount of funded Term Loans, with any remaining principal balance due on the maturity date.

Term loans under the SWK Credit facility accrue interest, which is payable quarterly in arrears, and bear interest at a rate per annum equal to the three-month term SOFR (subject to SOFR floor of 5 %) plus 7.75 %.

The interest rate resets quarterly.

On September 25, 2025, Journey entered into the Third Amendment to the SWK Credit Agreement (the “Third Amendment”).

The Third Amendment, among other things, extends the maturity date of Journey’s existing SWK Credit Facility from December 27, 2027 to June 27, 2028.

The Third Amendment also modifies the Revenue-Based Payment provision, as defined in the SWK Credit Agreement, by lowering the applicable revenue threshold, measured based on the twelve months ended December 31, 2025, from $ 70.0 million to $ 60.0 million.

Journey satisfied the $ 60.0 million Revenue-Based Payment provision as of December 31, 2025.

Accordingly, the interest-only period under the SWK Credit Facility was extended by one year , with scheduled principal repayments commencing in February 2027 rather than February 2026.

Thereafter, Journey will be required to make quarterly principal payments equal to $ 2.5 million per quarter, or 10.0 %, of the outstanding principal amount of the funded SWK Credit Facility, with any remaining principal balance due on the maturity date.

Journey may at any time prepay the outstanding principal balance of the Term Loans in whole or in part.

Prepayment of the Term Loans is subject to payment of a prepayment premium equal to (i) 2 % of the Term Loans prepaid plus the amount of interest that would have been due through the first anniversary of the SWK Closing Date if the Term Loans are prepaid prior to the first anniversary of the SWK Closing Date, (ii) 1 % of the Term Loans prepaid if the Term Loans are prepaid on or after the first anniversary of the SWK Closing Date but prior to the second anniversary of the SWK Closing Date, or (iii) 0 % if prepaid thereafter.

Upon repayment in full of the Term Loans, Journey will pay an exit fee equal to 5 % of the original principal amount of the Term Loans.

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The effective interest rate on the SWK Term Loan as of December 31, 2025 was 14.1 %.

The SWK Credit Facility also includes both revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by substantially all assets of Journey.

As of December 31, 2024, Journey was in compliance with the financial covenants under the SWK Credit Facility.

East West Bank Line of Credit and Long-Term Debt (“EWB Term Loan”)

Journey was previously party to a Loan and Security Agreement, dated March 31, 2021 (as amended, the “EWB Facility”), with East West Bank (“EWB”), under which EWB made a $ 20.0 million term loan and a $ 10 million revolving line of credit available to Journey.

In January 2022 and August 2022, Journey borrowed $ 15 million and $ 5 million, respectively, against the term loan.

During 2023, Journey voluntarily repaid the entire $ 20 million outstanding term loan principal balance under the EWB Facility.

The repayment satisfied all of Journey’s outstanding debt obligations under the EWB Facility.

Journey has no further obligations to EWB.

Mustang Runway Growth Finance Corp.

Debt Facility (“Runway Note”)

On April 11, 2023, the long-term debt facility with Runway Growth Finance Corp.

(the “Mustang Term Loan” or the “Runway Note”), was terminated upon receipt by Runway of a payoff amount of $ 30.4 million from Mustang comprising of principal, interest and the applicable final payment amount.

A loss on extinguishment of $ 2.8 million was recorded to interest expense in the Consolidated Statement of Operations for the year ended December 31, 2023.

The SWK Credit Agreement also includes both revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by substantially all assets of Journey.

As of December 31, 2025, Journey was in compliance with the financial covenants under the SWK Credit Agreement.

IDB Letters of Credit

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Urica 8 % Cumulative Convertible Class B Preferred Offering

In December 2022 and February 2023, Urica closed private offerings of its 8 % Cumulative Convertible Class B Preferred Stock (the “Urica Preferred Stock”), at a price of $ 25.00 per share (“Subscription Price”) pursuant to which it sold a total of 135,494 shares of Preferred Stock for gross proceeds of $ 3.4 million, before deducting underwriting discounts and commissions and offering expenses of approximately $ 0.5 million (the “Urica Offering”).

A non-cash contingent warrant value of $ 0.1 million was also recorded in debt discount (see Note 6).

The Urica Preferred Shares have no voting rights and have liquidation rights on parity with all equity securities issued by Urica, and junior to all equity securities issued by Urica with terms outlining senior rank and current and future indebtedness.

The Company evaluated the terms of the Urica Preferred Offering under ASC 480, Distinguishing Liabilities from Equity, and determined the instrument met the criteria to be recorded as a liability.

The value at conversion does not vary with the value of Urica’s common shares, therefore the settlement provision would not be considered a conversion feature.

Accordingly, the Company determined liability classification is appropriate and as such, this instrument was accounted for as a liability.

Harley Capital LLC (“Harley”) was the primary placement agent for the Urica Offering and received a 10 % cash fee on gross proceeds raised, plus either warrants to purchase 10 % of the Urica common stock into which the Urica Preferred Stock converts (in the event of a sale of Urica or a qualified financing) or 10 % of the Company common stock for which the Urica Preferred Stock is exchanged (in the event neither a sale of Urica nor a qualified financing occurs), in addition to reimbursement of legal and other expenses (see Note 6).

Urica had previously closed private offerings of its 8 % Cumulative Convertible Class B Preferred Stock (the “Urica Preferred Stock”), at a price of $ 25.00 per share (“Subscription Price”) pursuant to which it sold a total of 135,494 shares of Preferred Stock for net proceeds of $ 2.9 million.

A non-cash contingent warrant value of $ 0.1 million had also been recorded in debt discount.

Dividends on the Urica Preferred Stock were payable monthly by Fortress in shares of Fortress Common Stock based upon a 7.5 % discount to the average trading price over the 10-day period preceding the dividend payment date.

Dividends were recorded as interest expense.

For the years ended December 31, 2024 and 2023, the Company recorded expense of $ 0.1 million and $ 0.3 million, respectively, associated with the Urica dividends paid on the outstanding Urica Preferred Stock.

The shares mandatorily converted into Urica common stock upon either:

(i) a qualified financing pursuant to which Urica raises at least $ 20 million in aggregate gross proceeds;

or (ii) a sale of Urica.

Additionally, in the event that neither such a qualified financing nor a sale of Urica had occurred prior to June 27, 2024, then each holder of Urica Preferred Stock was eligible to receive, at Fortress’ election, one of:

(x) a cash payment equal to the product of the Subscription Price and the number of shares of Urica Preferred Stock held by such holder;

(y) a number of shares of Fortress common stock equal to the Fortress Share Exchange Amount;

or (z) a combination of the foregoing.

On June 27, 2024, as neither a qualified financing nor a sale of Urica occurred, Fortress elected to exchange the outstanding shares of Urica Preferred Stock, which was recorded as a liability, into 2,028,345 shares of Fortress common stock.

For the year ended December 31, 2024, the Company recorded expense of $ 0.1 million associated with the Urica dividends paid on the outstanding Urica Preferred Stock.

On June 27, 2024, as neither a qualified financing nor a sale of Urica had occurred, Fortress elected to exchange the outstanding shares of Urica Preferred Stock, which had been recorded as a liability, into 2,028,345 shares of Fortress common stock.

Ximino Settlement

In August 2024, Journey executed a settlement agreement (the “Settlement Agreement”) to settle the $ 3.0 million of license installment payments Journey owed to Sun associated with the Ximino APA.

In August 2024, Journey executed a settlement agreement (the “Settlement Agreement”) to settle the $ 3.0 million of license installment payments Journey owed to Sun Pharmaceutical Industries, Inc.

(“Sun”) associated with the Ximino asset purchase agreement.

Pursuant to the Settlement Agreement, Journey agreed to settle the total outstanding obligation owed to Sun for a total of $ 1.9 million, payable in three installments:

1) $ 0.6 million upon execution of the Settlement Agreement, 2) $ 0.6 million on December 1, 2024, and 3) $ 0.6 million on January 15, 2025.

Journey accounted for the settlement of the license installment payment as a $ 1.1 million gain on extinguishment of debt in the Condensed Consolidated Statements of Operations for the year ended December 31, 2024.

Journey accounted for the settlement of the license installment payment as a $ 1.1 million gain on extinguishment of debt in the Consolidated Statements of Operations for the year ended December 31, 2024.

Interest Expense

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Partner company convertible preferred shares

Partner company installment payments - licenses 2

Partner company notes payable

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Includes loss on extinguishment of debt of $ 3.6 million related to the payoff of the 2020 Oaktree Note on July 25, 2024.

Imputed interest expense related to Ximino, Accutane, Anti-itch product license and VYNE product licenses (see Note 8) for the year ended December 31, 2023.

Includes loss on extinguishment of debt of $ 2.8 million recorded by Mustang related to payoff of the Runway Note on April 11, 2023.

Relates to Urica’s optional repurchase obligation to Crystalys (see Note 3).

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Total accounts payable and accrued expenses

Other includes approximately $ 1.3 million of accrued consideration for the Mustang Repurchase Agreement with uBriGene, see Note 3.

Other as of December 31, 2025 and 2024 includes approximately $ 1.3 million of accrued consideration for the Mustang Asset Purchase Agreement with uBriGene, see Note 3.

Non-Controlling Interests

On April 21, 2023, Aevitas ceased to be a controlled Fortress entity and as such is no longer consolidated (see Note 3).

Tamid was dissolved in the year ended December 31, 2023 due to inactivity.

The Company’s ownership interest in its consolidated subsidiaries in 2024 was similar to 2023, except for Avenue, which increased from 4 % to 9.2 % due to the acquisition of additional common shares (see Note 16);

Journey, which decreased from 50 % to 44.5 % due to dilution from the issuance of equity securities (see Note 13) and Mustang, which decreased from 19 % to 6.3 % due to dilution from the issuance of equity securities (see Note 13).

On May 30, 2025, Checkpoint ceased to be a controlled Fortress entity and as such is no longer consolidated (see Note 3).

On November 5, 2025, Baergic ceased to be a controlled Avenue entity and as such is no longer consolidated by Avenue.

The Company’s ownership interest in its consolidated subsidiaries in 2025 was similar to 2024, except for Journey, which decreased from 44.5 % to 36.3 % due to dilution from the issuance of equity securities (see Note 13).

Net Loss per Common Share

Basic and diluted net loss per share attributed to common stockholders is calculated by dividing the net loss attributed to Fortress (less the Series A Preferred dividends) by the weighted-average number of shares of Common Stock outstanding during the period, not including unvested restricted stock, and without consideration for other potentially dilutive securities.

Diluted net loss per share is the same as the basic loss per share due to net losses in all periods.

Basic net income or loss per share attributed to common stockholders is calculated by dividing the net income or loss attributed to Fortress, less the Series A Preferred dividends and subsidiary deemed dividends, by the weighted-average number of shares of Common Stock outstanding during the period, not including unvested restricted stock and other potentially dilutive securities.

Diluted net income (loss) per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as warrants, stock options, restricted stock units, and restricted stock using the treasury stock method, if dilutive.

The impact of these items is anti-dilutive during periods of net loss.

The Series A Preferred dividends included in the net loss per share calculation include dividends paid as well as dividends cumulated (but undeclared) (see Note 13).

For the years ended December 31, 2024 and 2023, the effect on the net loss per share calculation from Series A Preferred dividends was $ 8.0 million and $ 8.0 million, respectively, and deemed dividends were $ 1.9 million and $ 0.7 million, respectively.

The following shares of potentially dilutive securities, weighted during the years ended December 31, 2024 and 2023 have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be anti-dilutive:

For the years ended December 31, 2025 and 2024, the effect on the net loss per share calculation from Series A Preferred dividends was $ 8.0 million and $ 8.0 million, respectively, and subsidiary deemed dividends were $ 0.7 million and $ 1.9 million, respectively.

The following potentially dilutive securities would be excluded from the computation of net loss per common share as of the dates presented if the Company was in a net loss position:

Warrants to purchase Common Stock

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Unvested Restricted Stock units and deferred Restricted Stock units

Total Potentially Dilutive Securities

Stockholders’ Equity

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The Board intends to revisit its decision regarding the monthly dividend regularly and will assess the profitability and cash flow of the Company to determine whether and when the pause should be lifted.

The Company recorded approximately $ 4.0 million and $ 8.0 million of dividends in Additional Paid in Capital on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively.

The Company recorded approximately nil and $ 4.0 million of dividends in Additional Paid in Capital on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

At December 31, 2025, the Company had total undeclared dividends of approximately $ 12.0 million, which represents the cumulated (but undeclared) dividends due to Series A Preferred shareholders on December 31, 2025.

Dividends in arrears that have not been declared by the Board of Directors are not recorded in the condensed consolidated balance sheets but are reflected in the net loss attributable to common shareholders (see Note 12).

Dividends in arrears that have not been declared by the Board of Directors are not recorded in the Consolidated Balance Sheets but are reflected in the net loss attributable to common shareholders (see Note 12).

No Maturity Date or Mandatory Redemption

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2012 Employee Stock Purchase Plan (the “ESPP”) (collectively, the “Plans”) and the Fortress Biotech, Inc.

Long Term Incentive Plan (the “LTIP”).

In the years ended December 31, 2024 and 2023, the Company’s Board of Directors and stockholders approved increases of 11.0 million and 0.5 million shares, respectively, to the Plans, bringing the aggregate total of authorized shares available under the Plans to 13.1 million shares.

Long Term Incentive Plan, as amended (the “LTIP”).

In the years ended December 31, 2025 and 2024, the Company’s Board of Directors and stockholders approved increases of nil and 11.0 million shares, respectively, to the Plans, bringing the aggregate total of authorized shares available under the Plans to 13.1 million shares.

A total of 4.7 million shares have been granted under the Plans, net of cancellations, and 8.4 million shares remained available for issuance as of December 31, 2025.

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2016 Incentive Plan

Checkpoint Therapeutics, Inc.

Amended and Restated 2015 Incentive Plan

Cyprium Therapeutics, Inc.

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Total stock-based compensation expense

For the years ended 2024 and 2023, $ 7.1 million and $ 3.2 million was included in research and development expenses, and $ 25.5 million and $ 13.8 million was included in selling, general and administrative expenses, respectively.

Year Ended December 31,

($ in thousands)

Research and development

Selling, general and administrative

Total stock-based compensation expense

The following table summarizes Fortress stock option activities, excluding activities related to partner companies:

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During the years ended December 31, 2025 and 2024, there were no exercises of Fortress stock options.

The Company used the Black-Scholes option pricing model for determining the estimated fair value of stock-based compensation related to stock options.

The table below summarizes the assumptions used:

December 31, 2024

Risk-free interest rate

Expected dividend yield

Expected term in years

Expected volatility

As of December 31, 2024, Fortress had $0.4 million of unrecognized stock-based compensation expense related to Fortress stock options, which is expected to be recognized over a weighted-average period of 3.2 years.

As of December 31, 2024, on a consolidated basis, the Company had $ 1.0 million of unrecognized stock-based compensation expense related to stock options of Fortress and subsidiaries, which is expected to be recognized over a weighted-average period of 2.1 years.

As of December 31, 2025, Fortress had no unrecognized stock-based compensation expense related to Fortress stock options.

As of December 31, 2024, Fortress had $ 0.4 million of unrecognized stock-based compensation expense related to Fortress stock options, which was expected to be recognized over a weighted-average period of 3.2 years.

As of December 31, 2025 and 2024, on a consolidated basis, the Company had $ 1.3 million and $ 1.0 million, respectively, of unrecognized stock-based compensation expense related to stock options of Fortress and subsidiaries, which is expected to be recognized over a weighted-average period of 1.4 years and 2.1 years, respectively.

Restricted Stock

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Restricted stock vested

( 2,248,494 )

Restricted stock units granted

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Unvested balance at December 31, 2025

The total fair value of restricted stock units and awards that vested during the years ended December 31, 2024 and 2023 was $ 5.8 million and $ 9.6 million, respectively.

As of December 31, 2025, Fortress had unrecognized stock-based compensation expense related to all unvested Fortress restricted stock and Fortress restricted stock unit awards of $ 5.9 million and $ 5.4 million, respectively, which is expected to be recognized over the remaining weighted-average vesting period of 1.7 years and 3.1 years, respectively.

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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 years ended December 31, 2024 and 2023, certain non-employee directors elected to defer an aggregate of approximately 25,000 and 27,000 restricted stock awards, respectively, under this plan.

During the years ended December 31, 2025 and 2024, certain non-employee directors elected to defer an aggregate of approximately 0.2 million and 25,000 restricted stock awards, respectively, under this plan.

Employee Stock Purchase Plan

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Outstanding as of December 31, 2024

( 1,574,699 )

Outstanding as of December 31, 2025

Exercisable as of December 31, 2025

In connection with the First Amendment to the 2024 Oaktree Note (see Note 9), the Company issued warrants to Oaktree and certain of its affiliates to purchase up to approximately 0.6 million shares of Common Stock at a purchase price of $ 2.62 per share (the “2025 Oaktree Warrants”).

In connection with the 2024 Oaktree Note (see Note 9), the Company issued warrants to Oaktree and certain of its affiliates to purchase up to approximately 0.5 million shares of Common Stock at a purchase price of $ 2.0735 per share (the “2024 Oaktree Warrants”).

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As a result of the September 2024 registered direct offering (see Note 13), the exercise price on the 2024 Oaktree warrants was lowered to $ 1.65 per share, and approximately $ 20,000 was recorded to interest expense.

The Company evaluated the accounting treatment of the 2024 Oaktree Warrants and determined that the 2024 Oaktree warrants should be classified in stockholders’ equity.

As such, the Company used a Black-Scholes model to value the Oaktree Warrants.

Utilizing the following inputs:

term of 7 years, volatility of 90.52 %, risk-free rate of return of 4.18 % yielding a value of $ 1.1 million and was recorded as a component of Stockholders’ Equity in the Company’s Condensed Consolidated Balance Sheet.

The Company evaluated the accounting treatment of the 2025 Oaktree Warrants and the 2024 Oaktree Warrants and determined that the aforementioned warrants should be classified in stockholders’ equity.

As such, the Company used a Black-Scholes model to value the Oaktree Warrants, utilizing the following inputs to determine a value of $ 1.3 million and $ 1.1 million, respectively:

Oaktree Warrants

Exercise price

Expected life in years

Risk-free rate

Dividend yield

In connection with the 2020 Oaktree Note (see Note 9), in August 2020 the Company had issued warrants to Oaktree and certain of its affiliates to purchase up to approximately 0.1 million shares of Common Stock at an exercise price of $ 8.14 per share (the “Oaktree Warrants”).

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The Company filed registration statement No.

333-282384 on Form S-1 to register the resale of the shares of Common Stock issuable upon exercise of the 2024 Oaktree Warrants and the additional Oaktree Warrants, which was declared effective by the SEC on October 7, 2024.

333-292154 on Form S-1 to register the resale of the shares of Common Stock issuable upon exercise of the 2025 Oaktree Warrants, which was declared effective by the SEC on December 17, 2025.

The Company had filed registration statement No.

333-282384 on Form S-1 to register the resale of the shares of Common Stock issuable upon exercise of the 2024 Oaktree Warrants and the additional Oaktree Warrants, which had been declared effective by the SEC on October 7, 2024.

Amended and Restated Long-Term Incentive Program (“LTIP”)

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Rosenwald, and Executive Vice Chairman, Strategic Development, Mr.

The LTIP consists of a program to grant equity interests in the Company and in the Company’s subsidiaries, and a performance-based bonus program that is designed to compensate LTIP participants based on their responsibilities and for their contributions to the successful achievement of certain corporate goals and objectives of the Company.

Weiss (amended and restated with stockholder approval on June 7, 2017 and May 23, 2024).

The LTIP consists of a program to grant equity interests in the Company and in the Company’s subsidiaries, and a performance-based bonus program that is designed to result in performance-based compensation that is deductible without limit under Section 162(m) of the Internal Revenue Code of 1986, as amended.

On January 1, 2025 and 2024, the Compensation Committee granted 454,163 and 216,465 shares each to Dr.

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Weiss, respectively.

These equity grants, made in accordance with the LTIP, represent 1 % of total outstanding shares of the Company as of the dates of such grants.

Each of these four equity grants, made in accordance with the LTIP, represent 1 % of total outstanding shares of the Company as of the dates of such grants.

Restricted shares granted under the LTIP vest upon (i)(A) the Company achieving a specified increase in market capitalization since the grant date and (B) the participant remaining in service with the Company until (or being involuntarily terminated prior to) July 16, 2025, or (ii) a change in control of the Company, provided the eligible participant remains in service with the Company until the date of such transaction.

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For the year ended December 31, 2025 and 2024, the Company recorded stock compensation expense related to LTIP grants of approximately $ 5.4 million and $ 6.7 million, respectively, on the Consolidated Statement of Operations.

As of December 31, 2025, Fortress had no unrecognized stock-based compensation expense related to LTIP grants.

Capital Raises

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As a result, the Company is no longer eligible to use Form S-3 and has lost the ability to use the 2024 Shelf.

The Company will regain eligibility to use the 2024 Shelf on the date it files its Annual Report on Form 10-K, so long as it has:

(i) by that date, paid all accrued but unpaid dividends at that time and (ii) timely paid all dividends accruing since the end of the fiscal year to which such Form 10-K relates.

Because the Company is not currently eligible to use Form S-3 due to the failure to pay dividends on the Series A Preferred Stock, on April 1, 2025 the Company filed a post-effective amendment to certain prior Form S-3 registration statements to continue the registration of:

● the offer and sale by certain selling stockholders who were previously holders of shares of 8 % Cumulative Redeemable Perpetual Class B Preferred Stock of Urica, of an aggregate of up to 1,987,250 shares of the Company’s common stock;

● the offer and sale of up to 5,885,000 shares underlying warrants originally issued as part of units, each consisting of one share of Common Stock and one warrant, originally registered pursuant to the prospectus filed with the SEC under November 10, 2023;

● the offer and sale of up to 3,303,305 shares underlying warrants originally issued as part of units, each consisting of one share of Common Stock and one warrant, originally registered pursuant to the prospectus filed with the SEC on December 29, 2023;

● the offer and sale by certain selling stockholders of up to 116,637 shares of Common Stock issuable upon the exercise of warrants, as amended, granted to Oaktree and its affiliates under the Prior Oaktree Agreement.

This post-effective amendment was declared effective by the SEC on April 2, 2025.

Common Stock At the Market Offering

For the year ended December 31, 2024, the Company issued approximately 2.0 million shares of common stock at an average price of $ 1.98 per share for net proceeds of $ 3.8 million after deducting aggregate fees of $ 0.1 million.

For the year ended December 31, 2025, the Company issued approximately 0.5 million shares of common stock at an average price of $ 1.94 per share for net proceeds of $ 1.0 million under the Company’s at-the-market offering program.

The at-the-market offering program is currently suspended as a result of the Company’s current ineligibility to use Form S-3 registration statements.

Equity Offerings and Private Placements

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Net proceeds to Fortress from the September 2024 registered direct offering and the concurrent private placements, after deducting the placement agent’s fees and other offering expenses and assuming no exercises of the Private Placement Warrants or the Concurrent Private Placement Warrants, were approximately $ 7.3 million.

At December 31, 2025, 3,764,194 Private Placement Warrants and all of the Concurrent Private Placement Warrants remain outstanding.

The Company filed a registration statement (No.

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The November 2023 Warrants contained a one-time exercise price adjustment provision that reduced the exercise price upon the next equity financing at a price lower than the exercise price at issuance which was $ 1.70 per share.

At December 31, 2025, 4,609,130 of the November 2023 Warrants remain outstanding.

In January 2024, Fortress closed a registered direct offering of an aggregate of 3,303,305 shares of its common stock and warrants to purchase up to 3,303,305 shares of its common stock at a combined purchase price of $ 3.33 per share of common stock and accompanying warrant priced at-the-market under Nasdaq rules.

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Net proceeds to Fortress, after deducting the placement agent’s fees and other offering expenses, were approximately $ 10.1 million.

Journey 2022 Shelf Registration Statement and At the Market Offering (the “Journey ATM”)

Journey 2022 Shelf Registration Statement and At the Market Offerings

On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No.

333-269079 ), which was declared effective by the SEC on January 26, 2023 (the Journey 2022 S-3”).

The Journey 2022 S-3 covers the offering, issuance and sale by Journey of up to an aggregate of $ 150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.

In connection with the Journey 2022 S-3, Journey has entered into the Sales Agreement with B.

Riley, relating to shares of the Journey’s common stock.

In accordance with the terms of the Sales Agreement, Journey may offer and sell up to 4,900,000 shares of its common stock, par value $ 0.0001 per share, from time to time through or to B.

The Journey 2022 S-3 covered the offering, issuance and sale by Journey of up to an aggregate of $ 150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.

In connection with the Journey 2022 S-3, Journey has entered into the At Market Issuance Sales Agreement with B.

Riley (the “Journey ATM”), relating to shares of the Journey’s common stock.

In accordance with the terms of the Journey ATM, Journey had the ability to offer and sell up to 4,900,000 shares of its common stock, par value $ 0.0001 per share, from time to time through or to B.

Riley acting as Journey’s agent or principal.

In August 2025, Journey executed a new At Market Issuance Sales Agreement (the “Journey 2025 ATM”) with B.

Riley Securities, Inc.

and Lake Street Capital Markets, LLC (each, an “Agent” and together, the “Agents”) and terminated the Journey ATM Sales Agreement.

In accordance with the terms of the Journey 2025 ATM, Journey may offer and sell up to 3,750,000 shares of common stock, from time to time through or to the Agents, each acting as sales agent or principal.

As of December 31, 2025, 750,000 shares of Journey common stock were issued and sold under the Journey 2025 ATM Sales Agreement.

For the year ended December 31, 2025, Journey issued and sold approximately 2.6 million shares of common stock at an average price of $ 6.53 per share for net proceeds of $ 16.4 million under the Journey ATM after deducting aggregate fees of $ 0.5 million.

For the year ended December 31, 2024, Journey issued approximately 1.6 million shares of common stock at an average price of $ 5.19 per share for net proceeds of $ 7.9 million under the Journey ATM after deducting aggregate fees of $ 0.2 million.

At December 31, 2024, 2,586,987 shares remain available for issuance under the Journey 2022 S-3.

Checkpoint 2023 Shelf Registration Statements

In March 2023, Checkpoint filed a registration statement on Form S-3 (File No.

333-270843), which was declared effective May 5, 2023 (the “Checkpoint 2023 S-3”).

Under the Checkpoint 2023 S-3, Checkpoint may sell up to a total of $ 150 million of its securities.

As of December 31, 2024, approximately $ 65.7 million of the securities remain available for sale through the Checkpoint 2023 S-3.

Checkpoint Registered Direct Offerings

On January 15, 2026, Journey filed a shelf registration statement on Form S-3 (File No.

333-292758) (the “Journey 2026 S-3”), which was declared effective by the Securities and Exchange Commission on January 21, 2026.

This shelf registration statement covers the offering, issuance and sale by Journey of up to an aggregate of $ 150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.

The Journey 2026 S-3 replaces the Journey 2022 S-3.

Sales under the Journey 2025 ATM Sales Agreement after the effective date will occur under the Journey 2026 S-3.

Checkpoint Registered Direct Offerings and Warrant Exercises

In January 2025, Checkpoint received approximately $ 2.1 million from the exercise of warrants for the issuance of 740,000 shares of common stock with an exercise price of $ 2.84 per share.

In March 2025, Checkpoint received approximately $ 36.0 million from the exercise of warrants for the issuance of 21,691,003 shares of common stock with an average exercise price of $ 1.66 per share.

In April 2025, Checkpoint received approximately $ 9.2 million from the exercise of warrants for the issuance of 3,256,269 shares of common stock with an average exercise price of $ 2.82 per share.

In November 2024, Checkpoint received approximately $ 9.2 million upon the exercise of existing Series B warrants to purchase 3,256,269 shares of Checkpoint common stock, which warrants were originally issued and sold in a registered direct offering from May 2023 with an exercise price of $ 2.821 per share.

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In July 2024, Checkpoint closed on a registered direct offering (the “Checkpoint July 2024 Registered Direct Offering”) for the issuance and sale of an aggregate of 1,230,000 shares of its common stock at a purchase price of $ 2.05 per share.

In addition, the offering includes 4,623,659 shares of common stock in the form of pre-funded warrants at a price of $ 2.0499 .

In addition, the offering included 4,623,659 shares of common stock in the form of pre-funded warrants at a price of $ 2.0499 .

In a concurrent private placement, Checkpoint issued and sold common warrants (the “Checkpoint July 2024 Common Stock Warrants”) to purchase up to 5,853,659 shares of common stock.

The Checkpoint July 2024 Common Stock Warrants have an exercise price of $ 2.05 per share, will be exercisable after requisite approval of Checkpoint’s stockholders is received, and have a term of exercise of five years from the issuance date.

The Checkpoint July 2024 Common Stock Warrants had an exercise price of $ 2.05 per share, were exercisable after requisite approval of Checkpoint’s stockholders, and had a term of exercise of five years from the issuance date.

Checkpoint also issued the placement agent warrants to purchase up to 351,220 shares of common stock with an exercise price of $ 2.5625 per share.

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The shares of common stock and the shares underlying the pre-funded warrants were sold in a registered offering under the Checkpoint 2023 S-3.

In August 2024, Checkpoint filed a registration statement on Form S-3 to register the public rsale of the shares of Checkpoint common stock issuable upon exercise of each of the Checkpoint July 2024 Common Stock Warrants and the placement agent warrants, which was declared effective August 30, 2024 (File No.

All of the pre-funded warrants from the Checkpoint July 2024 Registered Direct Offering have been fully exercised.

In January 2024, Checkpoint closed on a registered direct offering (the “Checkpoint January 2024 Registered Direct Offering”) for the issuance and sale of 1,275,000 shares of its common stock at a purchase price of $ 1.805 per share.

In addition, the offering includes pre-funded warrants to purchase 6,481,233 shares of common stock , which were sold at a price of $ 1.8049 .

In addition, the offering included pre-funded warrants to purchase 6,481,233 shares of common stock , which were sold at a price of $ 1.8049 .

In a concurrent private placement, Checkpoint issued and sold common warrants (the “Checkpoint January 2024 Common Warrants”) to purchase up to 7,756,233 shares of Checkpoint common stock.

The Checkpoint January 2024 Common Warrants are exercisable immediately upon issuance and will expire five years following the issuance date and have an exercise price of $ 1.68 per share.

The Checkpoint January 2024 Common Warrants were exercisable immediately upon issuance and expired five years following the issuance date and had an exercise price of $ 1.68 per share.

Checkpoint also issued the placement agent warrants to purchase up to 465,374 shares of common stock with an exercise price of $ 2.2563 per share.

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The offer and sale of the shares of common stock and the shares underlying the pre-funded warrants were registered for sale under the Checkpoint 2023 S-3.

In March 2024, Checkpoint filed a registration statement on Form S-3 to register the public resale of the shares of Checkpoint common stock issuable upon exercise of each of the Checkpoint January 2024 Common Stock Warrants and the placement agent warrants, which was declared effective April 5, 2024 (File No.

All of the pre-funded warrants from the Checkpoint January 2024 Registered Direct Offering have been fully exercised.

Pursuant to the Company’s Founders Agreement with Checkpoint (see Note 16), Checkpoint issued to Fortress 2.5 % of the aggregate number of shares of common stock issued in the January 2025 warrant exercises noted above.

Accordingly, Checkpoint issued 18,500 shares of common stock to Fortress in the five months ended May 31, 2025.

Pursuant to the Support Agreement between Fortress, Checkpoint and Sun Pharma, Fortress waived its right to receive any equity fee with respect to any equity issuances by Checkpoint (including those resulting from warrant exercise) that are effected subsequent to May 30, 2025, the date on which the Merger Agreement was executed (see Note 3).

Mustang 2021 Shelf Registration Statement and At-the-Market Offering

On April 23, 2021, Mustang filed a shelf registration statement on Form S-3 (File No.

333-255476) (the “Mustang 2021 S-3”), which was declared effective on May 24, 2021.

Through the Mustang 2021 S-3, Mustang was able to sell up to a

total of $ 200 million of its securities.

In 2024, Mustang sold approximately $ 4.4 million of securities under the Mustang 2021 S-3 until Mustang’s ability to register new offers and sales of securities under such registration statement expired on May 24, 2024.

On May 31, 2024, Mustang filed a shelf registration statement on Form S-3 (File No.

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Under the Mustang 2024 S-3, Mustang may sell up to a total of $ 40.0 million of its securities.

As of December 31, 2024, approximately $ 34.8 million of the Mustang 2024 S-3 remains available for sales of securities, subject to General Instruction I.B.6.

As of December 31, 2025, approximately $ 34.2 million of the Mustang 2024 S-3 remained available for sales of securities, subject to General Instruction I.B.6.

The ability of Mustang to register new offers and sales of securities under the Mustang 2024 S-3 expires on June 12, 2027.

On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3.

During the year ended December 31, 2025, Mustang issued approximately 0.1 million shares of common stock at an average price of $ 11.55 per share for net proceeds of $ 0.6 million under the Mustang ATM, after deducting aggregate fees of approximately $ 27,000 .

During the year ended December 31, 2024, Mustang issued approximately 0.1 million shares of common stock at an average price of $ 18.78 per share for net proceeds of $ 2.5 million under the Mustang ATM, after deducting aggregate fees of approximately $ 0.1 million.

During the year ended December 31, 2023, Mustang issued approximately 1,000 shares (adjusted for reverse split) of common stock at an average price of $ 158.07 per share for net proceeds of $ 0.2 million under the Mustang ATM.

Mustang Registered Direct and Equity Offerings, Warrant Inducement and Private Placement

In February 2025, Mustang closed on an equity offering of (i) 495,000 shares of its common stock, par value $ 0.0001 per share (the “Shares”), (ii) pre-funded warrants to purchase up to an aggregate of 2,162,807 shares of common stock (the “Pre-Funded Warrant Shares), (iii) Series C-1 warrants (the “Series C-1 Warrants”) to purchase up to 2,657,807 shares of common stock, and (iv) Series C-2 warrants (the “Series C-2 Warrants”) to purchase up to 2,657,807 shares of common stock.

Each Share or Pre-Funded Warrant was sold together with one Series C-1 Warrant to purchase one share of common stock and one Series C-2 Warrant to purchase one share of common stock.

The combined public offering price for each Share and accompanying Warrants was $ 3.01 , and the combined public offering price for each Pre-Funded Warrant and accompanying Warrants was $ 3.0099 .

The Pre-Funded Warrants had an exercise price of $ 0.0001 per share, were exercisable immediately upon issuance and expired when exercised in full.

Each Warrant has an exercise price of $ 3.01 per share and became exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (the “Warrant Stockholder Approval”).

The Series C-1 Warrants expire five years from Warrant Stockholder Approval and the Series C-2 Warrants expire twenty-four months from Warrant Stockholder Approval.

The net proceeds of the offering, after deducting the fees and expenses of the placement agent in the transaction, and other offering expenses payable by Mustang, but excluding the net proceeds from the exercise of the Warrants, was approximately $ 6.8 million.

In July 2025, the remaining approximately 0.5 million of the Pre-Funded Warrants and approximately 2.4 million of the Series C-2 Warrants were exercised.

In connection with these exercises, Mustang received approximately $ 7.1 million in proceeds and issued approximately 2.9 million shares of its common stock.

As of December 31, 2025, all of the Series C-1 Warrants and 284,452 of the Series C-2 Warrants remain outstanding.

In October 2024, Mustang entered into a definitive agreement for the exercise of certain existing warrants to purchase an aggregate of 337,552 shares of its common stock having an exercise price of $ 11.85 per share, originally issued in May 2024.

The issuance or resale of the shares of common stock issuable upon exercise of the existing warrants are registered pursuant to an effective registration statement filed by Mustang on Form S-1 (File No.

The net proceeds to Mustang from the exercise of the existing warrants were approximately $ 3.6 million, prior to deducting placement agent fees and offering expenses payable by Mustang of $ 0.4 million.

In consideration for the immediate exercise of the existing warrants for cash, Mustang issued two new series of unregistered warrants to purchase up to an aggregate of 675,104 shares of common stock.

The net proceeds to Mustang from the exercise of the existing warrants were approximately $ 3.6 million, after deducting placement agent fees and offering expenses of $ 0.4 million.

In consideration for the immediate exercise of the existing warrants for cash, Mustang issued two new series of unregistered warrants to purchase up to an aggregate of 675,104 shares of common stock on Warrant Stockholder Approval.

The new warrants have an exercise price of $ 13.50 per share and will be exercisable commencing on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the new warrants (the “Stockholder Approval”).

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Pursuant to the terms of the Second Amended and Restated Founders Agreement, Mustang owes to Fortress 2.5 % of the aggregate number of shares of Mustang common stock issued in the offerings noted above.

Accordingly, Mustang issued 23,450 common shares to Fortress for the year ended December 31, 2024.

Accordingly, Mustang issued 127,140 common shares and 23,450 common shares to Fortress for the years ended December 31, 2025 and December 31, 2024, respectively.

Avenue 2021 Shelf Registration Statement and At-the-Market Offering

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333-261520) on Form S-3 (the “Avenue 2021 S-3”), which was declared effective on December 10, 2021.

As of December 31, 2024, approximately $ 2.2 million of the securities were available for sale under the Avenue 2021 S-3, subject to General Instruction I.B.6.

Avenue filed a replacement shelf registration on Form S-3 on December 4, 2024 (the "Avenue Replacement Shelf"), under the Securities Act of 1933, as amended, which was later withdrawn.

However, effective as of July 18, 2025, Avenue was formally delisted from Nasdaq with Nasdaq's filing on that date of a Form 25 with the SEC;

Avenue is therefore ineligible to use Form S-3 and unable to use the Avenue 2021 S-3 or the Avenue Replacement Shelf.

On December 15, 2025, Avenue filed a Post-Effective Amendment No.

1 to Form S-3 on Form S-1 (File No.

333-279125), which Post-Effective Amendment was declared effective on December 16, 2025.

In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue may offer and sell, from time to time at its sole discretion, up to $ 3.9 million of shares of its common stock.

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During the year ended December 31, 2025, Avenue issued 0.9 million shares through the Avenue ATM for net proceeds of $ 2.1 million.

During the year ended December 31, 2024, Avenue issued 0.6 million shares through the Avenue ATM for net proceeds of $ 1.6 million

Avenue 2024 Warrant Exercises and Private Placement

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The net proceeds to Avenue from the exercise of the warrants was approximately $ 4.5 million, after deducting placement agent fees and estimated offering costs, but without giving effect to the exercise of the Series A Warrants and Series B Warrants issued in the January 2024 Warrant Inducement.

The fair value of the Series A Warrants and Series B Warrants was allocated between the January 2023 Warrants and the November 2023 Warrants on a weighted basis, with approximately $ 0.6 million allocated to the January 2023 Warrants and recorded to loss on common stock warrant liabilities in the condensed consolidated statement of operations, and the approximately $ 4.3 million allocated to the November 2023 Warrants deemed to be a dividend.

The fair value of the Series A Warrants and Series B Warrants was allocated between the January 2023 Warrants and the November 2023 Warrants on a weighted basis, with approximately $ 0.6 million allocated to the January 2023 Warrants and recorded to loss on common stock warrant liabilities in the Consolidated Statement of Operations, and the approximately $ 4.3 million allocated to the November 2023 Warrants deemed to be a dividend.

Also in April 2024, Avenue entered into definitive agreements for the immediate exercise of certain of its existing outstanding warrants to purchase an aggregate of 689,680 shares of Avenue’s common stock at a reduced exercise price of $ 6.20 per share (the “May 2024 Warrant Inducement”).

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Total net proceeds to Avenue were approximately $ 3.7 million after deducting placement agent fees and other expenses payable by Avenue.

In consideration for the immediate exercise of the warrants for cash in the May 2024 Warrant Inducement, Avenue issued two new unregistered series of warrants (the “Avenue May 2024 Warrants”) to purchase up to a total of 1,379,360 shares

of Avenue common stock for a payment of $ 0.125 per warrant.

The Avenue May 2024 Warrants have an exercise price of $ 6.20 per share, and terms of eighteen months for one series and five years for the other series.

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Pursuant to the Founders Agreement, Avenue issued to Fortress 2.5 % of the aggregate number of shares of Avenue common stock issued in the offerings noted above.

Accordingly, Avenue issued 43,772 shares to Fortress for the year ended December 31, 2024.

Accordingly, Avenue issued 23,474 common shares and 43,772 common shares to Fortress for the years ended December 31, 2025 and December 31, 2024, respectively.

Commitments and Contingencies

The Company’s lease portfolio includes leases for our corporate headquarters, office spaces, and a cell manufacturing facility.

Most of the Company’s lease liabilities result from the lease of its New York City, NY office, which expires in 2031 and Mustang’s Worcester, MA cell processing facility lease, which expires in 2026 (see Note 20).

The Company’s lease portfolio includes leases for our corporate headquarters and office spaces.

Most of the Company’s lease liabilities result from the lease of its New York City, NY office, which expires in 2031 .

Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

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The Company does not act as a lessor or have any leases classified as financing leases.

For the year ended December 31, 2024, Mustang identified triggering events that required an impairment of the asset group consisting of its right-of-use asset and associated leasehold improvements, and the impairment loss was allocated to leasehold improvements and the right-of-use assets based on the relative arrying amounts of the assets (see Note 5), with $ 0.4 million of the impairment allocated to the right-of-use asset group.

For the year ended December 31, 2024, Mustang identified triggering events that required an impairment of the asset group consisting of its right-of-use asset and associated leasehold improvements, and the impairment loss was allocated to leasehold improvements and the right-of-use assets based on the relative carrying amounts of the assets (see Note 5), with $ 0.4 million of the impairment allocated to the right-of-use asset group.

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 Consolidated Statement of Operations.

At December 31, 2025, the Company had operating lease liabilities of $ 14.8 million and right of use assets of $ 12.3 million, which are included in the Company’s Consolidated Balance Sheet.

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Fortress and the other sellers under the DOSPA are explicit releasees and third party beneficiaries under the UTRF-Caelum Settlement Agreement.

In connection with the execution of the UTRF-Caelum Settlement Agreement, Caelum, Alexion and Fortress

entered into an amendment to the DOSPA (the “DOSPA Amendment”), which, inter alia :

In connection with the execution of the UTRF-Caelum Settlement Agreement, Caelum, Alexion and Fortress entered into an amendment to the DOSPA (the “DOSPA Amendment”), which, inter alia :

(1) terminated any continuing indemnification by Fortress and the other sellers under the DOSPA in respect of the UTRF Litigation;

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Each Founders Agreement has a term of 15 years , which upon expiration automatically renews for successive one-year periods unless terminated by the Company or upon a Change in Control (as defined in the Founders Agreement) occurs.

In connection with each Founders Agreement the Company received a number of either Class A Preferred shares or Class A Common Stock – see Note 20).

In connection with each Founders Agreement the Company received a number of Class A Preferred shares.

The Class A Preferred Stock (such stock, the “Founders Stock”) is identical to common stock other than as to voting rights, conversion rights and the Payment-in-Kind (“PIK”) Dividend right (as described below).

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Each share of Founders Stock is convertible, at the holder’s option, into one fully paid and nonassessable share of common stock of such partner company/subsidiary, subject to certain adjustments.

a “PIK Dividend Payment Date”) and on each anniversary date of such date until the date all outstanding Founders Stock is converted into common stock or redeemed (and the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and nonassessable shares of common stock (“PIK Dividends”) such that the aggregate number of shares of common stock issued pursuant to such PIK Dividend is equal to two and one-half percent ( 2.5 %) of such partner company or subsidiary’s fully-diluted outstanding capitalization on the date that is one (1) business day prior to any PIK Dividend Payment Date.

The holders of Founders Stock, as a class, are entitled receive on each effective date or “Trigger Date” (defined as the date that the Company first acquired, whether by license or otherwise, ownership rights to a product) of each agreement (each a “PIK Dividend Payment Date”) and on each anniversary date of such date until the date all outstanding Founders Stock is converted into common stock or redeemed (and the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and nonassessable shares of common stock (“PIK Dividends”) such that the aggregate number of shares of common stock issued pursuant to such PIK Dividend is equal to two and one-half percent ( 2.5 %) of such partner company or subsidiary’s fully-diluted outstanding capitalization on the date that is one (1) business day prior to any PIK Dividend Payment Date.

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Partner company

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.

Management Services Agreements

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Year Ended December 31,

Partner Company/Subsidiary

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Avenue’s MSA fee for 2024 was subject to a Subscription and Forgiveness Agreement signed in November 2024.

Fees and Stock Issuances Received by Fortress

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.

Fees and Stock Grants Received by Fortress

Fees recorded in connection with Fortress’ agreements with its subsidiaries and partner companies are eliminated in consolidation.

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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 Executive Chairman and Interim Chief Executive Officer of TGTX.

Under the terms of the Agreement, TGTX will reimburse the Company for the salary and benefit costs associated with these employees based upon actual hours worked on TGTX related projects.

The Executive Chairman and Interim Chief Executive Officer of TGTX is also the Company’s Executive Vice Chairman, Strategic Development.

Under the terms of the Agreement, TGTX reimburses 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 years ended December 31, 2025 and 2024, the Company invoiced TGTX $ 0.8 million and $ 0.9 million, respectively.

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Therefore, Avenue issued a total of 122,850 shares to the Company based on the closing price of $ 2.035 on the day prior to the execution of the agreement.

Avenue September 2023 Private Placement

In September 2023, Avenue entered into an arrangement with Fortress and Dr.

Rosenwald (Dr.

Rosenwald and Fortress, together, the “Avenue Private Placement Investors”), pursuant to which Avenue agreed to issue and sell 10,227 shares of Avenue common stock for an aggregate purchase price of approximately $ 550,000 in a private placement transaction.

The Avenue common shares were purchased at a price per share of $ 53.775 , by the Avenue Private Placement Investors, which was the “consolidated closing bid price” of the Avenue common stock on Nasdaq as of September 7, 2023, in compliance with Nasdaq Listing Rule 5365(c).

The net proceeds to Avenue from the private placement were approximately $ 550,000 .

Board Services Agreement

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Weiss assigned the agreement with Checkpoint to Hawkins BioVentures, LLC, also owned by Michael Weiss.

For the years ended December 31, 2024 and 2023, Checkpoint recognized approximately $ 153,000 and $ 110,000 in expenses related to the advisory agreement, including approximately $ 93,000 and $ 50,000 in expenses related to annual equity incentive grants.

For the years ended December 31, 2025 and 2024, Checkpoint recognized approximately $ 0.2 million and $ 0.2 million in expenses related to the advisory agreement, including approximately $ 0.2 million and $ 0.1 million in expenses related to annual equity incentive grants.

As of May 2025, Checkpoint was deconsolidated due to the sale to Sun Pharma (see Note 3).

In January 2017, Mustang entered into an advisory agreement effective January 1, 2017 with Caribe BioAdvisors, LLC, owned by Michael S.

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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 years ended December 31, 2024 and 2023, Mustang recognized approximately $ 60,000 and $ 110,000 in expenses related to the advisory agreement, respectively, including $ 50,000 in expenses related to annual equity incentive grants in 2023.

Checkpoint Collaborative Agreements with TGTX

Checkpoint previously entered into various agreements with TGTX to develop and commercialize certain assets in connection with its licenses, including a collaboration agreement for some of the Dana Farber licensed antibodies, and a sublicense agreement for the Jubilant family of patents.

Effective September 30, 2023, Checkpoint and TGTX agreed to mutually terminate both the collaboration agreement and the sublicense agreement.

For the years ended December 31, 2025 and 2024, Mustang recognized approximately $ 60,000 and $ 60,000 in expenses related to the advisory agreement, respectively.

Shared Services Agreement with Journey

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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 year ended December 31, 2024 and 2023, the Company’s employees have provided services to Journey totaling approximately $ 38,000 and $ 0.1 million, respectively.

For the year ended December 31, 2025 and 2024, the Company’s employees have provided services to Journey totaling approximately $ 43,000 and $ 38,000 , respectively.

At December 31, 2025, approximately $ 0.5 million is due from Journey, primarily related 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 shares of its 9.375 % Series A Cumulative Redeemable Perpetual Preferred Stock (“Cyprium PPS”);

as of December 31, 2024, there are 320,000 shares of Cyprium PPS outstanding.

Cyprium 9.375 % Cumulative Redeemable Perpetual Preferred Stock Dividend Obligation

Pursuant to a private placement in August 2020, Cyprium sold shares of its 9.375 % Cumulative Redeemable Perpetual Preferred Stock (“Cyprium PPS”);

as of December 31, 2025, there are 320,000 shares of Cyprium PPS outstanding, including 36,600 shares held by Fortress.

The Cyprium PPS is fully and unconditionally guaranteed by Fortress.

Pursuant to the terms of the Cyprium PPS, shareholders on the record date are entitled to receive a monthly cash dividend of $ 0.19531 per share which yields an annual dividend of $ 2.34375 per share.

The Cyprium PPS will automatically be redeemed upon the first (and only the first) bona fide, arm’s-length sale of a Priority Review Voucher (a “PRV Sale”) issued by the FDA in connection with the approval of CUTX-101, a product candidate previously developed by Cyprium.

Upon the PRV Sale, each share of Cyprium PPS will be automatically redeemed in exchange for a payment equal to twice the $ 25.00 liquidation preference, plus accumulated and unpaid dividends to, but excluding, the redemption date.

If a PRV Sale has not occurred by March 31, 2026 (the “Exchange Date), the Cyprium PPS will automatically be exchanged for Fortress Series A Preferred Stock or cash, at the discretion of Fortress.

Pursuant to the terms of the Cyprium PPS, holders of record are entitled to receive a monthly cash dividend of $ 0.19531 per share, or $ 2.34375 per share on an annual basis.

The Cyprium PPS is 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 is automatically 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, was initially scheduled to occur on September 30, 2024.

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.

For the purposes of the consolidated financial statements as of December 31, 2025, the Company recorded an immaterial out of period adjustment to account for the Cyprium PPS as a financing obligation and recorded the carrying amount in the consolidated balance sheets as partner company perpetual preferred liability.

In addition, the Company concluded that the redemption feature associated with a PPS PRV Sale required bifurcation as an embedded derivative, with remeasurement to fair value at each reporting date.

The fair value of the embedded derivative was not material in any period presented.

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 embedded derivative 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 (see Note 20) and the Cyprium PPS was automatically redeemed in accordance with its terms for an amount equal to twice the $ 25.00 liquidation preference, pursuant to the terms of the Cyprium PPS, plus accumulated and unpaid dividends to, but excluding, the redemption date.

In March 2026, Cyprium paid $ 14.2 million to redeem the outstanding Cyprium PPS, which included accumulated and unpaid dividends, and subsequently the sale of the PRV also closed.

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

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($ in thousands)

For the years ended December 31, 2024 and 2023, income tax expense was $ 0.3 million and $ 0.5 million, respectively, resulting in an effective income tax rate of - 0.2 % and - 0.3 %.

The income tax expense in 2024 is primarily due to uncovered deferred tax liabilities with respect to investments in subsidiaries, state income taxes and interest accrued related to a prior years' uncertain tax position.

For the years ended December 31, 2025 and 2024, income tax expense (benefit) was ($ 0.6 ) million and $ 0.3 million, respectively, resulting in an effective income tax rate of 1.9 % and - 0.2 %.

The income tax benefit in 2025 is primarily driven by uncovered deferred tax liabilities related to investments in subsidiaries, state income taxes and state uncertain tax positions, and interest that rolled off and accrued related to a prior-year uncertain tax position .

The Company has incurred net operating losses since inception.

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Deferred tax liabilities:

Section 483 imputed interest

Debt issuance costs

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Total deferred tax liabilities, net

A reconciliation of the statutory tax rates and the effective tax rates is as follows:

For the Year Ended December 31,

The Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, on a prospective basis.

As a result, the 2025 rate reconciliation is presented in accordance with the new disclosure requirements, while the 2024 reconciliation continues to be presented under the disclosure requirements in effect for that period.

A reconciliation of income tax computed at the federal statutory rate to the provision for income taxes pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025, was as follows:

Year Ended December 31,

($ in thousands)

federal statutory tax rate

State and local income taxes, net of federal income tax effect 1

Change in valuation allowance

Non-deductible items:

Share-based compensation

Transaction costs

Changes in unrecognized tax benefits

Other Adjustments:

Sale of subsidiaries 2

Provision for income taxes and effective income tax rate

During the year ended December 31, 2025, state taxes in New York, New York City, Massachusetts, and Florida comprised greater than 50% of the tax effect in this category.

The Sale of Subsidiaries is mostly driven by the write-off of Checkpoint’s tax attributes and other deferred tax assets due to the sale of the subsidiary in 2025.

There is an offsetting impact within the Change in Valuation Allowance as the deferred tax assets maintain a full valuation allowance.

A reconciliation of the statutory tax rates and the effective tax rates for the year ended December 31, 2024 is as follows:

Year Ended December 31,

Percentage of pre-tax income:

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Change in subsidiary basis

Deconsolidation/dissolution of subsidiaries

Adjustment for warrants

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Effective income tax rate

The Company files a consolidated income tax return with subsidiaries for which the Company has an 80 % or greater ownership interest.

Subsidiaries and partner companies for which the Company does not have an 80 % or more ownership are not included in the Company’s consolidated income tax group and file their own separate income tax return.

The Company files a consolidated income tax return with subsidiaries in which the Company has an 80 % or greater ownership interest.

Subsidiaries and partner companies in which the Company does not have an 80 % or more ownership are not included in the Company’s consolidated income tax group and file their own separate income tax return.

As a result, certain corporate entities included in these financial statements are not able to combine or offset their taxable income or losses with other entities’ tax attributes.

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Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025 and 2024.

The valuation allowance increased by a net $ 11.6 million during the current year.

The valuation allowance decreased by a net $ 83.9 million during the current year.

The Company has incurred net operating losses (“NOLs”) since inception.

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The table below sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:

Year Ended December 31,

($ in thousands)

Balance at December 31, 2024

Reductions for lapse in statute of limitations

Balance at December 31, 2025

For the year ended December 31, 2025, the Company has $ 1.0 million of unrecognized tax benefits.

If the $ 1.0 million of unrecognized tax benefits is recognized, approximately $ 0.2 million would affect the effective tax rate.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s recognized tax positions

will significantly increase or decrease within the next 12 months.

At this time, the estimate of the range of the reasonably possible outcomes cannot be made.

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The NOLs from tax years 2012 through 2024 remain open to examination (and adjustment) by the Internal Revenue Service and state taxing authorities.

In addition, federal tax years ending December 31, 2021, 2022 and 2023 are open for assessment of federal taxes.

The expiration of the statute of limitations related to the various state income and franchise tax returns varies by state.

In addition, due to net operating losses, all federal tax years dating back to 2012 remain open for the assessment of income taxes.

The expiration of the statute of limitations for state income and franchise tax returns varies by state.

On July 4, 2025, President Donald J.

Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law.

Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to interest limitation rules, and expanded aggregation requirements for compensation deductibility limits.

In accordance with ASC 740, the Company recognized the effects of the new tax law in the period enacted.

As a result, the Company immediately expensed current-year domestic research and experimental expenditures and elected to continue amortizing its existing domestic capitalized research and experimental expenditures over their remaining useful lives.

Urica Therapeutics, Inc.

and Cyprium Therapeutics, Inc., however, elected to accelerate amortization of the previously unamortized costs over one-year and two-year periods, respectively.

Due to the Company having a full valuation allowance, there were no impacts to the effective tax rate.

Income taxes paid (net of refunds received) by jurisdiction, pursuant to the disclosure requirements of ASU 2023-09, were as follows:

Year Ended December 31,

($ in thousands)

Total net payments

Segment Information

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Product revenue, net

Collaboration revenue

Revenue - related party

Other revenue

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Research and development

Research and development - licenses acquired

Selling, general and administrative

Loss recovery

Asset impairment

Total operating expenses

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Gain (loss) on common stock warrant liabilities

Other income (expense)

Gain from deconsolidation of subsidiary

Other expense

Total other income (expense)

Loss before income tax expense

Income (loss) before income tax expense

Income tax expense (benefit)

Segment net loss

Net loss attributable to NCI

Net loss attributable to Fortress

Segment net income (loss)

Attributable to non-controlling interests

Net income attributable to Fortress

Intersegment activity 3 :

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Other Significant Items:

Depreciation expense

Additions to intangible assets

Change in fair value of equity method investment accounted for at fair value within other income

Segment assets

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Stock-based compensation - Selling, general and administrative

Checkpoint results through May 2025 due to deconsolidation as a result of acquisition by Sun Pharma (see Note 3).

Includes Fortress and private subsidiaries primarily funded by Fortress, including Cellvation, Cyprium, Helocyte, Oncogenuity and Urica;

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Selling, general and administrative

Loss recovery

Asset impairment

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Loss before income tax expense

Income tax (expense) benefit

Income tax expense

Segment net loss

Net loss attributable to NCI

Attributable to non-controlling interests

Net loss attributable to Fortress

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Research and development

Research and development - licenses acquired

Selling, general and administrative

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Depreciation expense

Additions to intangible assets

Segment assets

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Includes Fortress and private subsidiaries primarily funded by Fortress:

Aevitas (until April 2023), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica;

Cellvation, Cyprium, Helocyte, Oncogenuity and Urica;

and intercompany eliminations.

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All of Journey’s product revenues are recorded in the U.S.

During 2023, Journey received a one-time upfront license payment totaling $ 19.0 million from Maruho Ltd., its exclusive licensing partner in Japan (“Maruho”), under the license agreement Journey entered into with Maruho, dated August 31, 2023 (the “New License Agreement”) in which it granted Maruho exclusive rights to Qbrexza in Korea and other Asian countries.

The Company’s collaboration revenue is from Cyprium’s agreement with Sentynl (see Note 3).

The Company’s revenue - related party is from Checkpoint’s collaborations with TGTX (see Note 16).

The Company’s collaboration revenue for the year ended December 31, 2024 is from Cyprium’s agreement with Sentynl (see Note 3).

The Company’s revenue - related party for the year ended December 31, 2024 was from Checkpoint’s collaborations with TGTX.

The table below summarizes the Company’s revenue for the years ended December 31, 2025 and 2024:

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($ in thousands)

Foam franchise products (Amzeeq & Zilxi)

Other / legacy product revenue

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Total net revenue

Other revenue for the year ended December 31, 2025, consists of $ 0.6 million recognized by Journey related to the Cutia Agreement (see Note 7) and $ 1.4 million recognized by Avenue related to the AnnJi license termination and program transfer (see Note 7) .

Other revenue for the year ended December 31, 2024 , reflects a $ 1.0 million milestone payment from Cutia triggered by the marketing approval Cutia received in the fourth quarter of 2024 for topical 4% minocycline foam in China (see Note 7) .

Other revenue for the year ended December 31, 2023 , includes $ 0.5 million of royalties on sales of Rapifort in Japan from our licensing partner Maruho, from Maruho, and also reflects a net $ 19.0 million payment from Maruho under the New License Agreement (see Note 7).

Significant Customers

For the years ended December 31, 2025 and 2024, none of Journey’s Dermatology Products customers individually accounted for more than 10.0% of its total gross product revenue.

For the year ended December 31, 2024, one of Journey’s Dermatology Products customers accounted for more than 10% of its total accounts receivable balance at 10.3 %.

For the year ended December 31, 2025, none of Journey’s Dermatology Products customers accounted for more than 10% of its total accounts receivable balance.

For the year ended December 31, 2024, one of Journey’s Dermatology Products customers accounted for more than 10% of its total accounts receivable balance at 10.3 %.

Subsequent Events

Checkpoint Merger Agreement

The Merger Agreement provides that, on the terms and subject to the conditions set forth in the Merger Agreement, Parent, Merger Sub and Checkpoint will effect

a merger of Merger Sub with and into Checkpoint (the “Merger”), with Checkpoint continuing as the surviving corporation of the Merger and a wholly owned subsidiary of Parent.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock and each share of Class A common stock of Checkpoint (collectively, the “Shares”) (including each unvested Checkpoint restricted share) outstanding immediately prior to the Effective Time will be canceled and cease to exist and be converted into the right to receive (i) $ 4.10 in cash, without interest (the “Common Cash Amount”), and (ii) one non-tradable contingent value right (a “CVR”), which will represent the right to receive a contingent cash payment of up to $ 0.70 upon the achievement of specified milestones, subject to and in accordance with the terms and conditions set forth in a Contingent Value Rights Agreement, substantially in the form attached as Exhibit B to the Merger Agreement (the “CVR Agreement”), as further described below (the foregoing clauses (i) and (ii), the “Merger Consideration”), in each case subject to applicable withholding taxes.

Consummation of the Merger is subject to customary closing conditions, including, but not limited to:

(i) the adoption of the Merger Agreement and approval of the Merger by (a) the affirmative vote of the holders of at least a majority of the outstanding Shares beneficially owned by Checkpoint stockholders other than (1) Fortress and its controlled affiliates (other than Checkpoint ), (2) the members of the Checkpoint board of directors (the “Checkpoint Board ”) (and their controlled affiliates, if any) and (3) any person that Checkpoint has determined to be an “officer” of Checkpoint within the meaning of Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (the “Unaffiliated Checkpoint Stockholders”), and (b) the affirmative vote of the holders of a majority in voting power of outstanding the Shares;

(ii) expiration or early termination of any waiting periods applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, without the imposition of any burdensome condition;

(iii) absence of any law or order prohibiting or making illegal the consummation of the Merger ;

and (iv) no Checkpoint material adverse effect having occurred that is continuing.

The consummation of the Merger is also conditioned upon each of the Support Agreement , the Transition Services Agreement , the Royalty Agreement , and the CVR Agreement (in each case, as defined below) being in full force and effect.

The Merger Agreement contains customary representations, warranties and covenants made by each of Parent, Checkpoint and Merger Sub, including, among others customary covenants regarding the operation of the business of Checkpoint prior to the Effective Time , and “no-shop” restrictions regarding certain alternative acquisition proposals or discussions with third parties.

The Merger Agreement includes customary termination rights for the parties, including that, subject to certain limitations, Checkpoint or Parent may terminate the Merger Agreement prior to the Effective Time if:

(i) a governmental body issues or enacts a final and non-appealable order, injunction or other legal requirement prohibiting or making illegal the consummation of the Merger, (ii) if the Effective Time has not occurred on or prior to 11:59 p.m.

Eastern Time on September 5, 2025 or (iii) the stockholders of Checkpoint fail to adopt the Merger Agreement by the requisite majorities at a meeting of Checkpoint’s stockholders at which a vote on the Merger is conducted.

Checkpoint may terminate the Merger Agreement in certain additional limited circumstances, including to allow Checkpoint to enter into an agreement providing for an alternative acquisition transaction that constitutes a Superior Proposal (as defined in the Merger Agreement).

Parent may terminate the Merger Agreement in certain additional limited circumstances, including if the Checkpoint Board , or any committee thereof, including the Special Committee of the Checkpoint Board, withdraws, withholds, amends or qualifies or modifies, in each case, in a manner adverse to Parent or Merger Sub, its recommendation that the stockholders of Checkpoint vote to adopt the Merger Agreement and approve the Merger.

Upon termination of the Merger Agreement under certain specified circumstances, Checkpoint will be required to pay Parent a termination fee (the “Checkpoint Termination Fee”) of $ 12.5 million .

Specifically, the Checkpoint Termination Fee is payable if (i) the Merger Agreement is terminated in certain circumstances;

(ii) prior to such termination (but after the date of the Merger Agreement) a bona fide proposal for an alternative acquisition transaction has been publicly disclosed or otherwise made to the Checkpoint Board and not publicly withdrawn (if made publicly);

and (iii) within one year of such termination, Checkpoint subsequently consummates an alternative acquisition transaction or enters into a definitive agreement providing for an alternative acquisition transaction and such transaction is ultimately consummated.

The Checkpoint Termination Fee will also be payable if the Merger Agreement is terminated:

(a) by Parent, if Checkpoint Board , or any committee thereof, including the Special Committee of the Checkpoint Board, withdraws, withholds, amends or qualifies or modifies, in each case, in a manner adverse to Parent or Merger Sub, its recommendation that the stockholders of Checkpoint vote to adopt the Merger Agreement and approve the Merger;

or (b) by Checkpoint in order to enter into an agreement providing for an alternative acquisition transaction that constitutes a Superior Proposal.

CVR Agreement

Pursuant to the Merger Agreement, as of or prior to the Effective Time, Parent and a rights agent (the “Rights Agent”) will enter into the CVR Agreement governing the terms of the CVRs issued in connection with the Merger.

The Rights Agent will maintain an up-to-date register of the holders of CVRs (the “Holders”).

Holders shall not be permitted to transfer the CVRs (subject to certain limited exceptions as set forth in the CVR Agreement).

As used in the CVR Agreement, (a) the “Milestone Deadline Date” means the date that is 36 months after the date on which a marketing authorization application or equivalent for cosibelimab receives a positive validation outcome by the European Medicines Agency (the “EMA”) and (b) the “Milestone” means the receipt of regulatory approval of (i) cosibelimab in the European Union pursuant to the centralized approval procedure or (ii) any of Germany, France, Italy, Spain or the United Kingdom.

Parent’s obligations to use such commercially reasonable efforts terminates on the earlier of (a) the Milestone Deadline Date and (b) the achievement of the Milestone.

There can be no assurance that the Milestone will be achieved on or before the Milestone Deadline Date, or that any Milestone Payments will be made.

Support Agreement

Concurrently with the execution of the Merger Agreement , Checkpoint entered into a Support Agreement (the “ Support Agreement ”) with Parent and Fortress.

Under the terms of the Support Agreement, Fortress has agreed to, among other

things, during the term of the Support Agreement , (i) vote its Shares in favor of the adoption of the Merger Agreement and the approval of the Merger and the other transactions contemplated by the Merger Agreement , and against any acquisition proposal or any action, proposal, agreement, transaction or arrangement that is intended, or would reasonably be expected, to result in a material breach of a covenant, representation or warranty or any obligation of Checkpoint under the Merger Agreement or any of the conditions to Checkpoint ’s obligations under the Merger Agreement not being fulfilled or satisfied, (ii) not transfer its Shares (subject to certain exceptions), and (iii) waive and not to exercise any appraisal rights in respect of such Shares that may arise with respect to the Merger and not to commence or participate in, any class action or legal action (a) challenging the validity of, or seeking to enjoin or delay the operation of any provision of the Merger Agreement or (b) with respect to claims against the Checkpoint Board , or any committee thereof, Parent of Merger Sub relating to the Merger Agreement or the transactions contemplated thereby.

Under the Support Agreement , subject to the occurrence of the Effective Time , Fortress also agreed to forgo any further payment, dividend or distribution, or issuance or transfer of securities by Checkpoint on or after the date of the Support Agreement pursuant to the Amended and Restated Founders Agreement, dated as of July 11, 2016, between Fortress and Checkpoint and certain other agreements between Fortress and Checkpoint.

The Support Agreement also includes certain representations and warranties and covenants of Fortress to Parent, including certain restrictive covenants that apply to Fortress following the Effective Time .

As of March 9, 2025, Fortress beneficially owned an aggregate of approximately 11.2 % of the outstanding Shares (consisting of 6,222,249 shares of common stock and 700,000 shares of Class A common stock) and controlled a majority of the outstanding voting power of Checkpoint ’s capital stock through its ownership of all outstanding shares of Checkpoint ’s Class A common stock.

The Support Agreement will terminate upon termination of the Merger Agreement , the Effective Time and certain other specified events.

Royalty Agreement

Concurrently with the execution of the Merger Agreement , Checkpoint entered into a Royalty Agreement (the “ Royalty Agreement ”) with Parent and Fortress pursuant to which following, and subject to the occurrence of, the Effective Time, Fortress will receive a royalty interest right based on worldwide net sales of certain products of Checkpoint and Parent.

The royalty interest right represents the right to receive quarterly cash payments of 2.5 % of net sales of such products during the time period set forth in the Royalty Agreement.

Transition Services Agreement

Pursuant to the Merger Agreement, as of or prior to the Effective Time, Checkpoint and Fortress will enter into a Transition Services Agreement (the “Transition Services Agreement”), pursuant to which, from and after the Effective Time, Fortress would provide Checkpoint with certain transition services as set forth in the Transition Services Agreement, for the period of time and in exchange for the compensation set forth therein.

March 2025 Warrant Exercise – Checkpoint

In March 2025, Checkpoint received approximately $ 36.0 million from the exercise of warrants for the issuance of 21,691,003 shares of common stock with an average exercise price of $ 1.66 per share.

February 2025 Public Offering - Mustang

In February 2025, Mustang closed on an equity offering of 2,657,807 shares of common stock (or common stock equivalent in lieu thereof ) and Series C-1 warrants to purchase up to 2,657,807 shares of common stock and Series C-2 warrants to purchase up to 2,657,807 shares of common stock at a combined public offering price of $ 3.01 per share (or per common stock equivalent in lieu thereof).

The warrants have an exercise price of $ 3.01 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the warrants.

The Series C-1 warrants will expire five years from the date of stockholder approval and the Series C-2 warrants will expire twenty-four months from the date of stock holder approval.

The warrants contain customary anti-dilution adjustments to the exercise price, including share splits, share dividends, rights offerings and pro rata distributions.

The net proceeds of the equity offering, after deducting the fees and expenses of the placement agent and other offering expenses payable by Mustang were $ 6.9 million.

Lease Amendment – Mustang

In February 2025, Mustang concurrently exited the lease of its manufacturing facility in Worcester, Massachusetts, relocating their 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.

CUTX-101 Product Approval, PRV Sale, and Cyprium PPS Redemption - Cyprium

On January 13, 2026, the FDA approved ZYCUBO (formerly known as CUTX-101) for the treatment of Menkes disease in pediatric patients .

A PRV was issued in connection with the FDA approval and was transferred to Cyprium (see Note 3).

On February 22, 2026, Cyprium entered into a definitive asset purchase agreement to sell its PRV (the “PRV APA”) for gross proceeds of $ 205 million upon the closing of the transaction.

Cyprium is obligated to pay 20 % of the PRV APA proceeds to the Eunice Kennedy Shriver National Institute of Child Health and Human Development, an institute of the National Institutes of Health.

The PRV APA contains customary representations, warranties, covenants and indemnification provisions, in each case subject to certain limitations.

On March 30, 2026, the Company and Cyprium announced the closing of the PRV APA transaction.

The Company is currently evaluating the tax effect of the sale and whether it will be able to realize any of its net operating loss carryforwards.

In connection with the PRV APA, the Cyprium PPS was automatically redeemed in accordance with its terms for an amount equal to twice the $ 25.00 liquidation preference, pursuant to the terms of the Cyprium PPS, plus accumulated and unpaid dividends to, but excluding, the redemption date.

New York, NY Sublease - Fortress

On February 10, 2026, the Company entered into a sublease agreement for all of its leased square footage, approximately 23,000 square feet, of its New York, NY office leased by the Company pursuant to a lease between the Company and Sage Realty Corporation (“Landlord”).

The sublease, subject to Landlord approval, will commence on April 1, 2026, and expires on August 31, 2031.

The Company will receive approximately $ 11.8 million in base rent payments over the term of the sublease.

ATX-04 License from Duke University – Avenue

On February 18, 2026, Avenue entered into a license agreement with Duke University (“Duke”), whereby Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to clenbuterol for the treatment of lysosomal storage diseases.

ATX-04 is a selective β2-adrenergic agonist with human proof-of-concept data demonstrating improved muscle function and enhanced response to enzyme replacement therapy.

Under the ATX-04 License, Avenue agreed to make an upfront payment and reimburse certain patent expenses to Duke and has an obligation to make development, regulatory, and commercial milestone payments upon the achievement of certain milestones.

In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04.

Avenue intends to advance ATX-04 through a late-stage clinical development program leveraging existing human safety and efficacy data, with an initial focus on treating Pompe disease as an adjunct to enzyme replacement therapy.

Second Amendment to the 2024 Oaktree Agreement – Fortress

On February 22, 2026, the Company, as borrower, entered into the Second Amendment to the 2024 Oaktree Agreement (the “Second Amendment”).

Pursuant to the terms of the Second Amendment, certain financial covenants were amended such that in the event that the outstanding principal balance under the 2024 Oaktree Agreement is less than or equal to $ 15.0 million and the Company receives the distribution of proceeds from Cyprium following the closing of the sale of the PRV by Cyprium pursuant to the PRV APA (the “2026 Cyprium Monetization Event”), the minimum liquidity required will be $ 2.0 million (the “Minimum Liquidity Amount”), the Minimum Net Sales Covenant (whereby the product net sales of JMC must meet a consolidated minimum net sales amount on a trailing twelve-month basis, tested quarterly, as defined in the 2024 Oaktree Agreement) will no longer apply, the Capital Raise Covenant (whereby the Company must have received certain minimum amounts through capital raises or monetizations in each year, as defined in the New Oaktree Agreement) will no longer apply, and the Minimum JMC Stake Covenant (whereby the Company must maintain certain levels of ownership in JMC, as defined in the New Oaktree Agreement) will no longer apply.

Each of the above-described covenants, namely, the Minimum Liquidity Amount, the Minimum Net Sales Covenant, the Capital Raise Covenant and the Minimum JMC Stake Covenant will no longer apply in the event the outstanding principal balance under the 2024 Oaktree Agreement is less than or equal to $ 10.0 million.

Failure by the Company to comply with the financial covenants will result in an event of default, subject to certain cure rights of the Company with respect to the described covenants.

In addition, the Second Amendment also obligates the Company to cause Cyprium to repay any amounts that the Company advanced to Cyprium pursuant to the Second Amended and Restated Future Advance Promissory Note issued by Cyprium in favor of the Company in connection with a 2026 Cyprium Monetization Event and to make a mandatory prepayment of the amount owed under the New Oaktree Agreement in an aggregate principal amount of $ 10.0 million (the “Cyprium Monetization Prepayment”), together with accrued interest and the Yield Protection Premium (as defined in the New Oaktree Agreement) subject to applicable fees and conditions as described in the New Oaktree Agreement.

On March 30, 2026, the Company made aggregate prepayments on the loan under the New Oaktree Agreement, including the Cyprium Monetization Prepayment, that reduced the outstanding principal balance to $ 15.0 million.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

30 unchanged sentences

March 31, 2026

/s/ Lucy Lu, M.D.

March 31, 2025

Lucy Lu, M.D.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures