Note 4 - Related Party Agreements |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Related Party Transactions Disclosure [Text Block] |
Note 4 — Related Party Agreements
Founders Agreement and Management Services Agreement with Fortress
In February 2015, Fortress entered into a Management Services Agreement (the “MSA”) with the Company to provide services for the Company pursuant to the terms of the MSA. Expenses related to the MSA are recorded 50% in research and development expenses and 50% in general and administrative expenses in the Unaudited Consolidated Statements of Operations. For the three months ended March 31, 2026 and 2025, the Company recorded expense related to the MSA of $0.1 million and $0.1 million, respectively.
In February 2015, Fortress entered into a Founders Agreement with the Company, under which the Company agreed to: (i) issue annually to Fortress, shares of common stock equal to two and one half percent (2.5%) of the fully-diluted outstanding equity of the Company at the time of issuance (the “Annual Equity Fee”) and (ii) issue shares of the common stock equal to two and one half percent (2.5%) of the gross amount of any equity or debt financing (the “Financing Equity Fee”).
Annual Equity Fee
Pursuant to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Company issued 111,209 shares of common stock to Fortress as the Annual Stock Dividend on January 1, 2026 (as such term is defined in the Certificate of Incorporation), representing 2.5% of the fully-diluted outstanding equity of the Company on December 31, 2025. The value of these shares was recorded as common stock issuable to Fortress in the Statement of Stockholders’ Equity at December 31, 2025. The Company recorded an expense of approximately $0.1 million in research and development – licenses acquired related to these issuable shares during the year ended December 31, 2025.
Financing Equity Fee
For the three months ended March 31, 2026, the Company did not have a Financing Equity Fee.
For the three months ended March 31, 2025, the Company recorded a Financing Equity Fee of $0.1 million and issued 23,474 shares of the Company's common stock to Fortress.
Payables and Accrued Expenses Related Party
In the normal course of business, Fortress incurs certain expenses on behalf of the Company. Such expenses are recorded as accounts payable and accrued expenses – related party and are recorded at the invoiced amount and reimbursed to Fortress in the normal course of business. The Company believes that the difference, if any, between the amounts invoiced and the amounts that would have been incurred if the Company operated as an unaffiliated entity is not material.
Founders Agreement and Management Services Agreement with Baergic
In connection with the Company’s previous ownership of Baergic, the Company was party to a Founders Agreement (“Avenue-Baergic Founders Agreement”) and a Management Services Agreement (“Avenue-Baergic MSA”) with Baergic, which were assigned to the Company in November 2022. Under the Avenue-Baergic Founders Agreement, the Company was entitled to (i) an annual stock dividend equal to 2.5% of Baergic’s fully-diluted equity, (ii) equity-based fees equal to 2.5% of certain financing transactions, (iii) a cash fee equal to 4.5% of Baergic’s annual net sales, and (iv) a change-in-control fee based on a multiple of net sales. Under the Avenue-Baergic MSA, the Company provided management and advisory services to Baergic and received an annual consulting fee of $0.5 million, which was subject to an increase of $1.0 million in years when Baergic’s net assets exceeded $100 million.
The Avenue-Baergic Founders Agreement and Avenue-Baergic MSA were terminated on November 5, 2025 in connection with the sale of Baergic.
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