Related Party Agreements
|9 Months Ended|
Sep. 30, 2023
|Related Party Agreements|
|Related Party Agreements||
Note 4 - Related Party Agreements
Founders Agreement and Management Services Agreement with Fortress
In connection with the Company’s Management Services Agreement (the “Management Services Agreement”) with Fortress for the three and nine months ended September 30, 2023 and 2022, respectively, expenses related to the MSA are recorded 50% in research and development expenses and 50% in general and administrative expenses in the Unaudited Statements of Operations. For the three months ended September 30, 2023 and 2022, the Company recorded expense of $0.1 million and $0.2 million, respectively, related to the MSA. For the nine months ended September 30, 2023 and 2022, the Company recorded expense of $0.4 million and $0.8 million, respectively, related to this agreement.
Under the terms of the Second Amended and Restated Founders Agreement (the “Founders Agreement”), which became effective July 22, 2016, Fortress will receive a grant of shares of our common stock equal to two and one-half percent (2.5%) of the gross amount of any equity or debt financing. For the nine months ended September 30, 2023, the Company recorded approximately $4,000 of common stock issuable to Fortress under the Founders Agreement. For the three months ended September 30, 2023 and 2022, the Company recorded expense of approximately $4,000 and $18,000, respectively, in general and administrative expenses related to these shares. For the nine months ended September 30, 2023 and 2022, the Company recorded expense of approximately $4,000 and $0.9 million, respectively, in general and administrative expenses related to these shares.
Annual Stock Dividend
Pursuant to the Amended and Restated Articles of Incorporation, the Company issued 187,134 shares of common stock to Fortress for the Annual Stock Dividend, representing 2.5% of the fully-diluted outstanding equity of Mustang on January 6, 2023. This was shown in the Statement of Stockholders’ Equity at December 31, 2022, as Common stock issuable – Founders Agreement. The Company recorded an expense of approximately $1.1 million in research and development – licenses acquired related to these issuable shares during the year ended December 31, 2022.
Payables and Accrued Expenses Related Party
In the normal course of business Fortress pays for certain expenses on behalf of the Company. Such expenses are recorded as payables and accrued expenses - related party and are reimbursed to Fortress in the normal course of business.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef