Related Party Transactions
|6 Months Ended|
Jun. 30, 2021
|Related Party Transactions|
|Related Party Transactions||
17. Related Party Transactions
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 10.7% of the Company’s issued and outstanding Common Stock as of June 30, 2021. The Company’s Executive Vice Chairman, Strategic Development owns approximately 11.6% of the Company’s issued and outstanding Common Stock as of June 30, 2021.
Shared Services Agreement with TG Therapeutics, Inc (“TGTX”)
In July 2015, TGTX and the Company entered into an arrangement to share the cost of certain research and development employees. The Company’s Executive Vice Chairman, Strategic Development, is 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. For the three months ended June 30, 2021 and 2020, the Company invoiced TGTX $0.1 million and 0.1 million, respectively. For the six months ended June 30, 2021 and 2020, the Company invoiced TGTX $0.2 million and $0.2 million, respectively. On June 30, 2021, the amount due from TGTX related to this arrangement approximated $34,000.
Desk Space Agreements with TGTX and OPPM
In connection with the Company’s Desk Space Agreements for the New York, NY office space, for the three months ended June 30, 2021 and 2020, the Company had paid $0.7 million and $0.7 million in rent, respectively, and invoiced TGTX and OPPM approximately $0.4 million and $0.4 million and nil and nil respectively, for their prorated share of the rent base. At June 30, 2021, there were no material amounts due related to this arrangement from TGTX or OPPM.
As of July 1, 2018, TGTX employees began to occupy desks in the Waltham, MA office under the Desk Share Agreement. TGTX began to pay their share of the rent based on actual percentage of the office space occupied on a month by month basis. For the three months ended June 30, 2021 and 2020, the Company had paid approximately $0.1 million and $0.1 million in rent for the Waltham, MA office, and invoiced TGTX approximately $28,000 and $29,000, respectively.
Avenue Secondment with Journey
Effective June 1, 2021, the Company, InvaGen, Avenue and Journey entered into a secondment agreement for a certain Avenue employee to be seconded to Journey. During the secondment, Journey will have the authority to supervise the Avenue employee and will reimburse Avenue for the employee’s salary and salary-related costs. The term of this agreement lasts until the approval of IV tramadol by the FDA or until the employee’s services are needed again by the Company. The amount reimbursable to Avenue is $25,000 for the three and six months ended June 30, 2021.
Avenue Key Employee Retention
Effective June 24, 2021, the Company and certain of Avenue’s key employees entered into retention agreements (the “Avenue Retention Agreements”) pursuant to which retention bonuses are payable only if the Merger Transaction (as defined in the SPMA) occurs and the applicable employee remains employed by Avenue immediately prior to the closing of such Merger Transaction. These Avenue Retention Agreements are effective until the earlier of the consummation of the Merger Transaction or the termination of the SPMA. Amounts potentially payable to these Avenue key employees are $2.9 million as of June 30, 2021.
The Company has entered into Founders Agreements and, in some cases, Exchange Agreements with certain of its subsidiaries as described in the Company's Form 10-K for the year ended December 31, 2020, filed with the SEC on March 31, 2021. The following table summarizes, by partner company, 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, and the subsidiaries' certificates of incorporation:
Management Services Agreements
The Company has entered in Management Services Agreements (the “MSAs”) with certain of its partner companies as described in the Company’s Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. The following table summarizes the effective date of the MSA and the annual consulting fee payable by the partner company to the Company in quarterly installments:
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