Terms

Series

9.375% Series A Cumulative Redeemable Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

9.375%

Rate Type

Fixed

Annual Dividend

$2.34

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

December 15, 2022

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Any Equity Securities Expressly Designated As Senior Preferred, Indebtedness And Liabilities Of Existing And Future Subsidiaries; Pari Passu With: Any Future Equity Securities Expressly Designated As Parity Preferred; Senior To: Common Stock, All Other Equity Securities Not Explicitly Ranking Senior Or Pari Passu

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,000,000

Prospectus Summary

Fortress Biotech, Inc. (Nasdaq: FBIO), a biopharmaceutical holding company, is offering 1,000,000 shares of its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (ticker: FBIOP) at a $25.00 liquidation preference per share. The fixed coupon of 9.375% equates to $2.34375 per share annually ($0.5859 per quarter), paid on March 31, June 30, September 30, and December 31. This is a cumulative preferred, meaning that if Fortress fails to declare or pay any dividend, the unpaid amount accumulates and must be satisfied in full before any dividend can be paid on common or junior preferred stock. The stock is perpetual with no maturity, but becomes optionally callable at $25.00 on or after December 15, 2022. The Series A Preferred sits above Fortress's common stock and any non-designated equity in the capital stack, but is explicitly junior to all existing and future debt obligations of Fortress and to all liabilities of its operating subsidiaries. Because Fortress is a holding company, the preferred is structurally subordinated to claims at the subsidiary level — subsidiaries have no obligation to upstream funds for preferred dividends. There is no regulatory capital call provision. Upon a Change of Control (acquirer gains >50% voting power and the surviving entity loses listed-exchange status), holders gain a limited right to convert into common stock at up to 13.05483 shares per preferred share; alternatively, the company may redeem within 120 days at $25.00 plus accrued dividends. At the $25.00 offering price, the stated yield is 9.375%. Dividends are paid quarterly with record dates on the 15th of March, June, September, and December. However, investors should note a meaningful tax risk: Fortress has a large accumulated deficit and may lack sufficient current or accumulated earnings and profits to cause distributions to qualify as dividends for U.S. federal income tax purposes. If distributions do not qualify as dividends, neither the 15%/20% qualified dividend income (QDI) preferential rate for individual holders nor the dividends-received deduction (DRD) for corporate holders will be available. Distributions may instead be treated as return of capital or capital gain. Investors should consult their tax advisors before relying on preferential dividend tax treatment.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Fortress has not paid full cumulative dividends on the Series A Preferred Stock, it cannot pay dividends on its common stock or any junior or parity preferred stock. Additionally, dividends may be prohibited if any debt agreement restricts such payments.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 50 (Average)