Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of the Results of Operations
Statements in the following discussion and throughout this Form 10-K that are not historical in nature are “forward-looking statements.” You can identify forward-looking statements by the use of words such as “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this report because of numerous factors, many of which are beyond our control. These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Please see “Special Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Form 10-K.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10-K. We undertake no obligation to update any forward-looking statements in the discussion of our financial condition and results of operations to reflect events or circumstances after the date of this report or to reflect actual outcomes.
Overview
We are a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs into potential cures for difficult-to-treat cancers. We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest in the technologies, funding their research and development and eventually either out-licensing or bringing the technologies to market.
Our pipeline is currently focused on novel therapies for solid tumors. For these therapies we have partnered with world class research institutions, including the City of Hope National Medical Center (“COH” or “City of Hope”), and Nationwide Children’s Hospital (“Nationwide”).
We expect to incur substantial expenses for the foreseeable future relating to research, development and commercialization of our potential products and may never achieve profitability. We do not have any products that are approved for commercial sale and, therefore, do not expect to generate any revenues from product sales in the foreseeable future, if ever. Additionally, there can be no assurance that we will be successful in securing additional resources when needed, on terms acceptable to us, if at all.
Development Pipeline
Our pipeline is being developed under exclusive licenses from world class research institutions. Our strategy is to license these technologies, support preclinical and clinical research activities by our partners and develop these product candidates through to potential approval.
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In partnership with COH, we are developing CAR T therapy for solid tumors targeting IL13Rα2 (MB-101). In addition, we have partnered with Nationwide for a herpes simplex virus type 1 (“HSV-1”) oncolytic virus (MB-108) in order to enhance the activity of MB-101 for the treatment of patients with high-grade malignant brain tumors. The Phase 1 clinical trial sponsored by COH for MB-101 (ClinicalTrials.gov Identifier: NCT02208362) has completed the treatment phase and patients continue to be assessed for long-term safety. A Phase 1 clinical trial sponsored by the University of Alabama at Birmingham (“UAB”) for MB-108 (ClinicalTrials.gov Identifier: NCT03657576) has also completed the treatment phase and patients continue to be assessed for long-term safety. In October 2023, we announced that the FDA accepted our IND application for the combination of MB-101 and MB-108 – which is referred to as MB-109 – for the treatment of patients with IL13Rα2+ relapsed or refractory glioblastoma (“GBM”) and high-grade astrocytoma. Pursuant to termination of the lease for our cell processing center in Worcester, MA, we are exploring with COH and Nationwide the possibility of initiating this clinical trial as an investigator-sponsored single-institution study at COH in the second quarter of 2026.
MB-109 (Combination of MB-101 CAR T Therapy with MB-108 Oncolytic Virus Therapy for Malignant Brain Tumors)
In October 2023, we received a safe-to-proceed letter from the FDA for our MB-109 IND application allowing us to initiate a Phase 1, open-label, non-randomized, multicenter study of MB-109 in patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma. The Phase 1 clinical study under that IND would evaluate the combination of CAR-T cells (MB-101) and the herpes simplex virus type 1 oncolytic virus (MB-108) in patients with IL13Rα2+ high-grade gliomas. As originally written and approved by the FDA, the study involved first a lead-in cohort, wherein patients would be treated with MB-101 alone without prior MB-108 administration. This lead-in cohort was required by the FDA due to the change in cell processing site from COH to Mustang Bio, which would have involved methodological changes as well as the obvious change in equipment and personnel. After successful confirmation of the safety profile of MB-101 alone, the study would then investigate increasing doses of intratumorally administered MB-108 followed by dual intratumoral (ICT) and intraventricular (ICV) administration of MB-101.
On November 7, 2024, we announced that the FDA granted Orphan Drug Designation to Mustang for MB-108, an HSV-1 oncolytic virus, for the treatment of malignant glioma. On July 7, 2025, we announced that the FDA granted Orphan Drug Designation to Mustang for MB-101, IL13Ra2-targeted CAR T-cells, for the treatment of recurrent diffuse and anaplastic astrocytoma (astrocytomas) and glioblastoma. The Orphan Drug Designation provides certain incentives, such as tax credits toward the cost of clinical trials upon approval and prescription drug user fee waivers. If a product receives Orphan Drug Status from the FDA, that product is entitled to seven years of market exclusivity for the disease in which it has Orphan Drug designation, which is independent from intellectual property protection.
We are currently exploring with COH and Nationwide the possibility of conducting an investigator-sponsored single-institution trial under the COH IND to treat patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109 that could potentially be initiated in the second quarter of 2026. Because cell processing for MB-101 will revert back to COH – where the product continues to be manufactured today for other investigator-sponsored clinical trials being conducted by COH in malignant brain tumors (NCT04003649, NCT04661384, NCT04510051), we believe that it is reasonable to assume that the FDA will not require the aforementioned lead-in cohort. Should this, indeed, be the case, the first patient enrolled will receive the combination of MB-101 and MB-108, which will represent a considerable savings of time and money – as well as afford the potential benefit of both therapies to every patient treated on study.
Terminated Product Candidate (CAR-T Therapy)
In September 2025, we received notice from Fred Hutch of its intent to terminate the CD20 License for cause in connection with unpaid patent expenses and maintenance fees. A 90-day cure period was applicable under the CD20 License. In December 2025, we agreed to terminate the CD20 License with Fred Hutch in exchange for a mutual release of liability and forgiveness of approximately fifty percent of amounts previously owed to them. Additionally, we are eligible to receive royalties on any subsequent licensing consideration Fred Hutch may enter into during the three-year period following the termination.
To date, we have not received approval for the sale of any of our product candidates in any market and, therefore, have not generated any product sales from our product candidates. In addition, we have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable.
Recent Events
Reverse Stock Split
On January 15, 2025, we filed a certificate of amendment (the “Amendment”) to our amended and restated certificate of incorporation, as amended, with the Secretary of State of the State of Delaware, to effect a 1-for-50 reverse stock split of our issued and outstanding common
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stock, without any change to par value. The Amendment became effective upon such filing. No fractional shares were issued in connection with the reverse stock split as all fractional shares were rounded down to the next whole share. The reverse stock split was intended to bring the Company into compliance with the continued listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”).
All share and per share amounts of our common stock listed in this Form 10-K have been adjusted to give effect to the reverse stock split.
Termination of lease and sale of equipment
On February 10, 2025, we entered into a Bill of Sale and Surrender Agreement (the “Sale/Surrender Agreement”), effective as of January 31, 2025 (the “Effective Date”), with AbbVie Bioresearch Center Inc., a Delaware corporation (“AbbVie”). We were the tenant in the leased premises located at 377 Plantation Street, Worcester, Massachusetts (the “Premises”) under a Lease Agreement, dated as of October 27, 2017 (the “Lease”) with WCS - 377 Plantation Street, Inc., a Massachusetts nonprofit corporation (the “Landlord”). In connection with the entrance into the Sale/Surrender Agreement, we also entered into an Escrow Agreement, dated February 10, 2025 (the “Escrow Agreement”), with Bowditch & Dewey, LLP, as escrow agent (the “Escrow Agent”), pursuant to which the Escrow Agent would disburse the Purchase Price (defined herein) pursuant to the terms of the Escrow Agreement.
Pursuant to the terms of the Sale/Surrender Agreement, AbbVie agreed to purchase from us, and we agreed to sell and convey to AbbVie, certain furniture, fixtures and equipment (“FF&E”), which we classified as held for sale as of December 31, 2024, located in the Premises and other items as set forth in the Sale/Surrender Agreement for a purchase price of $1.0 million (the “Purchase Price”). AbbVie also agreed to lease the Premises from the Landlord following the termination of the Lease pursuant to a First Amendment to Lease Agreement (the “Amendment”), dated as of February 7, 2025.
The closing of the transactions described above occurred on February 21, 2025 (the “Closing”), with AbbVie’s issuance of an Acceptance Notice (as defined in the Sale/Surrender Agreement) to us stating that a Sufficient Percentage (as defined in the Sale/Surrender Agreement) of the FF&E items listed in the Sale/Surrender Agreement are present in the Premises and functional for their intended purpose without the need for repair or replacement. On February 25, 2025, as a result of the issuance of the Acceptance Notice, pursuant to the terms of the Escrow Agreement, the Escrow Agent released the Purchase Price to us. On February 27, 2025, we announced the relocation of our corporate headquarters to 95 Sawyer Road, Waltham, Massachusetts 02453.
Financing Activities
February 2025 Equity Offering (the “February 2025 Equity Offering”)
On February 5, 2025, we commenced a best efforts public offering of an aggregate of (i) 495,000 shares (the “Shares”) of its common stock, par value $0.0001 per share, (ii) pre-funded warrants (the “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 an aggregate of 2,657,807 shares of common stock (the “Series C-1 Warrant Shares”), and (iv) Series C-2 warrants (the “Series C-2 Warrants,” and together with the Series C-1 Warrants, the “Warrants”) to purchase up to an aggregate of 2,657,807 shares of common stock (the “Series C-2 Warrant Shares,” and together with the Series C-1 Warrant Shares, the “Warrant Shares”). 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 have an exercise price of $0.0001 per share, are exercisable immediately upon issuance and will expire when exercised in full. Each Warrant has 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 Warrant Shares (the “Warrant Stockholder Approval”). The Series C-1 warrants will expire five years from the Warrant Stockholder Approval and the Series C-2 warrants will expire twenty-four months from the Warrant Stockholder Approval.
The net proceeds of the Offering, after deducting the fees and expenses of the Placement Agent (as defined below), described in more detail below, and other offering expenses payable by the Company, but excluding the net proceeds, if any, from the exercise of the Warrants, was approximately $6.8 million. The February 2025 Equity Offering closed on February 10, 2025.
July 2025 Warrant Exercises
In July 2025, certain investors from the February 2025 Equity Offering exercised outstanding Pre-Funded and Series C-2 warrants resulting in us issuing approximately 2.9 million shares of our common stock and our receipt of proceeds of approximately $7.1 million.
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At the Market Offering Agreement
On May 31, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Wainwright (the “Manager”) under which we may offer and sell, from time to time at our sole discretion, shares of our common stock (the “ATM Shares”), through or to the Manager. The offer and sale, if any, of ATM Shares by us under the Offering Agreement will be made pursuant to our registration statement on Form S-3 (File No. 333-279891) (the “Registration Statement”) under the Securities Act, and the related prospectus included therein, filed with the SEC on May 31, 2024, and declared effective on June 12, 2024.
Under the ATM Agreement, the Manager may sell ATM Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. The Manager will use commercially reasonable efforts to sell the ATM Shares from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay the Manager a commission of 3.0% of the gross proceeds from the sales of ATM Shares sold through the Manager under the ATM Agreement and have provided the Manager with customary indemnification and contribution rights. We will also reimburse the Manager for certain expenses incurred in connection with the ATM Agreement. Together with the Manager, we may each terminate the ATM Agreement at any time upon specified prior written notice.
The offering of ATM Shares pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all ATM Shares subject to the ATM Agreement or (ii) the termination of the ATM Agreement in accordance with its terms.
During the year ended December 31, 2025, we issued approximately 54,000 shares of common stock at an average price of $11.55 for gross proceeds of $0.6 million under the ATM Agreement. In connection with these sales, we paid aggregate fees of approximately $27,000.
The number of securities we are able to sell pursuant to the registration statements on Form S-3 is limited. See “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”
Critical Accounting Policies and Use of Estimates
Our financial statements include certain amounts that are based on management’s best estimates and judgments. Our significant estimates include, but are not limited to, useful lives assigned to long-lived assets and amortizable intangible assets, fair value of stock options and warrants, stock-based compensation, accrued expenses, provisions for income taxes and contingencies. Due to the uncertainty inherent in such estimates, actual results may differ from these estimates. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
While our significant accounting policies are described in the notes to our financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.
Research and Development
Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Upfront and milestone payments due to third parties that perform research and development services on our behalf will be expensed as services are rendered or when the milestone is achieved.
Research and development costs primarily consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, and costs associated with regulatory filings, laboratory costs and other supplies.
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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. In each case, we evaluate if the license agreement results in the acquisition of an asset or a business. Such licenses purchased by us require substantial completion of research and development, regulatory and marketing approval efforts in order to reach commercial feasibility and have no alternative future use. Accordingly, the total purchase price for the licenses acquired during the period was reflected as research and development expenses on the Statements of Operations for the years ended December 31, 2025, and 2024.
Accrued Research and Development Expense
We record accruals for estimated costs of research, preclinical, clinical and manufacturing development within accrued expenses which are significant components of research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers. We accrue the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements. We determine the estimated costs through discussions with internal personnel and external service providers as to the progress, or stage of completion or actual timeline (start-date and end-date) of the services and the agreed-upon fees to be paid for such services. Payments made to third parties under these arrangements in advance of the performance of the related services are recorded as prepaid expenses until the services are rendered.
If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust accrued expenses or prepaid expenses accordingly, which impact research and development expenses. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
Recent Accounting Pronouncements
See Note 2 to the financial statements included in this Form 10-K.
Smaller Reporting Company Status
We are a “smaller reporting company,” meaning that the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K , have reduced disclosure obligations regarding executive compensation, and smaller reporting companies are permitted to delay adoption of certain recent accounting pronouncements discussed in Note 2 to our financial statements located in “Part IV, Item 15., Exhibits and Financial Statement Schedules” in this Form 10-K.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
For the year ended December 31,
Change
($ in thousands)
2025
2024
$
%
Operating expenses:
Research and development
$
(1,516)
$
8,418
$
(9,934)
(118)
%
Asset impairment
—
3,692
(3,692)
100
%
General and administrative
3,948
4,135
(187)
(5)
%
Total operating expenses
2,432
16,245
(13,813)
(85)
%
Loss from operations
(2,432)
(16,245)
13,813
(85)
%
Other income
Other income
—
314
(314)
(100)
%
Interest income, net
511
179
332
185
%
Total other income
511
493
18
4
%
Net Loss
$
(1,921)
$
(15,752)
$
13,831
(88)
%
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Research and Development Expenses
Research and development expenses primarily consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license, sponsored research and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of manufacturing clinical trial materials, costs associated with regulatory filings and laboratory service costs.
Research and development expenses decreased by approximately $9.9 million from $8.4 million for the year ended December 31, 2024, to ($1.5) million for the year ended December 31, 2025. The decrease in research and development expense for the year ended December 31, 2025, was primarily attributable to the following:
● $3.2 million decrease in costs incurred related to the non-repeat of the termination of the transaction with uBriGene and the June 2024 Repurchase of Assets;
● $1.0 million decrease in clinical trial related costs;
● $2.3 million decrease in outside service expenses, including assay development costs;
● $2.0 million decrease in sponsored research and license related expenses;
● $0.5 million decrease in consulting expenses;
● $0.6 million decrease in depreciation expense;
● $0.4 million gain recognized on the termination of the Plantation Street Facility lease;
● $0.3 million decrease in expense related to the Annual Stock Dividend to Fortress
● $1.0 million decrease in other expenses; offset by
● $1.4 million increase in personnel related costs related to the non-repeat of stock compensation expense credits and reversal of accrued bonus from the April 2024 reduction in the workforce.
Additionally, we have been actively negotiating settlements of aged payables, and recognized savings of approximately $2.1 million, which resulted in a credit for research and development expenses during the year ended December 31, 2025. This credit is not indicative of our research and development expenses going forward.
Asset Impairment
For the year ended December 31, 2024, we incurred impairment charges of $3.7 million, of which approximately $2.7 million was attributable to our assessment of the recoverability of the asset group consisting of leasehold improvements and associated right-of-use asset, and approximately $1.0 million was attributable to property, plant and equipment held for sale at December 31, 2024, and subsequently sold in 2025. No impairment was recorded in the year ended December 31, 2025.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses, including stock-based compensation, for executives and other administrative personnel, recruitment expenses, professional fees and other corporate expenses, including investor relations, legal activities including patent fees, and facilities-related expenses.
General and administrative expense decreased by approximately $0.2 million from $4.1 million for the year ended December 31, 2024, to $3.9 million for the year ended December 31, 2025. The decrease in general and administrative expense for the year ended December 31, 2025, was primarily attributable to the following:
● $0.5 million decrease in consulting expenses;
● $0.1 million decrease in legal and patent protection expenses; offset by
● $0.4 million increase in state taxes, primarily due to non-repeat credits for overpayments recorded in the prior year .
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Total Other Income
Other income for the year ended December 31, 2025, was $0.5 million relating to interest income. Other income for the year ended December 31, 2024, was $0.5 million relating to the non-repeat gain on the termination of the Mercantile Center lease in June 2024 and $0.2 million of interest income.
Liquidity and Capital Resources
Since our inception, we have incurred substantial operating losses and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. To date, we have funded our operations primarily with the proceeds from sales of equity securities. As of December 31, 2025, we had an accumulated deficit of $398.6 million and cash and cash equivalents of $17.3 million.
We have previously disclosed in our financial statements for the year ended December 31, 2024, and our most recent quarterly report on Form 10-Q for the period ended September 30, 2025, that substantial doubt existed regarding our ability to continue as a going concern. Although we have a history of negative cash flows from operations and operating losses, we have raised approximately $14.5 million in net proceeds from the February 2025 Equity Offering, the ATM Agreement and the July 2025 warrant exercises, as described in “Financing Activities” above, during the year ended December 31, 2025. In addition to these net proceeds, we have been actively negotiating settlements of aged payables and have recognized approximately $2.1 million in savings during the year ended December 31, 2025, and we have significantly reduced our operating costs.
We expect to continue generating operating losses and negative operating cash flows as we develop our products through to potential approval, however, based on the improvement in our cash position for the year ended December 31, 2025, we believe we have sufficient cash and cash equivalents to fund our operations for at least twelve months from the date of this annual report on Form 10-K. Therefore, we have concluded that substantial doubt no longer exists.
As of the date of this Form 10-K, our public float was less than $75 million. As a result, we are subject to the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, which means we only have the capacity to sell an amount of securities up to one-third of our public float under shelf registration statements in any twelve-month period. If our public float decreases, the number of securities we may sell under our Form S-3 shelf registration statements will also decrease. We will remain constrained by the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, at which time the number of securities we may sell under a Form S-3 registration statement will no longer be limited by limitations of General Instruction I.B.6 to Form S-3.
Sources of Liquidity
Registration Statements
On May 31, 2024, the Company filed a shelf registration statement on Form S-3 (File No. 333-279891) (the “2024 S-3”), which was declared effective on June 12, 2024. Under the 2024 S-3, the Company may sell up to a total of $40.0 million of its securities. As of December 31, 2025, approximately $34.2 million of the 2024 S-3 remained available for sales of securities.
As of the filing of this Form 10-K, the Company is subject to the General Instruction I.B.6 to Form S-3, known as the “baby shelf rules,” which limit the number of securities it can sell under its registration statements on Form S-3.
Equity Offerings
During the year ended December 31, 2025, we completed the February 2025 Equity Offering and the July 2025 Warrant Exercises (together, the “Capital Raises”), as described above in “ Management’s Discussion and Analysis of the Results of Operations – Financing Activities.” Net proceeds from the Capital Raises were approximately $14.3 million. We intend to use the net proceeds from the Capital Raises for working capital and general corporate purposes.
In connection with the February 2025 Equity Offering and July 2025 Warrant Exercises, pursuant to the Founders Agreement, we issued 125,779 shares of common stock to Fortress.
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At-the-Market Offering
On May 31, 2024, the Company entered into an At-the-Market Offering Agreement (the “Offering Agreement”) with Wainwright (the “Manager”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock through or to the Manager pursuant to the 2024 S-3. Under the Offering Agreement, the Company pays the Manager a commission of 3.0% of the gross proceeds from the sales of any shares of common stock. The Company will also reimburse the Manager for certain expenses incurred in connection with the Offering Agreement. The Company and the Manager may each terminate the Sales Agreement at any time upon specified prior written notice.
During the year ended December 31, 2025, the Company issued approximately 54,000 shares of common stock at an average price of $11.55 per share for gross proceeds of $0.6 million under the ATM Agreement. In connection with these sales, the Company paid aggregate fees of approximately $27,000 for net proceeds of approximately $0.6 million.
During the year ended December 31, 2024, the Company issued approximately 140,000 shares of common stock at an average price of $18.78 per share for gross proceeds of $2.6 million under the ATM Agreement. In connection with these sales, the Company paid aggregate fees of approximately $0.1 million for net proceeds of approximately $2.5 million.
Pursuant to the Founders Agreement, the Company issued 1,361 shares of common stock to Fortress at a weighted average price of $11.55 per share for the year ended December 31, 2025. For the year ended December 31, 2024, the Company issued 3,509 shares of common stock to Fortress at a weighted average price of $18.78 per share.
The number of securities we are able to sell pursuant to the registration statements on Form S-3 is limited. See “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”
Cash Flows
The following table summarizes our cash flows during the years ended December 31, 2025 and 2024:
For the year ended December 31,
($ in thousands)
2025
2024
Statement of cash flows data:
Total cash (used in) provided by:
Operating activities
$
(5,264)
$
(11,410)
Investing activities
1,165
—
Financing activities
14,526
11,265
Net change in cash and cash equivalents
$
10,427
$
(145)
Operating Activities
Net cash used in operating activities for the year ended December 31, 2025, was primarily due to approximately $1.9 million in net loss, $1.7 million change in operating assets and liabilities, $2.1 million non-cash savings from the settlement of payables, $0.4 million gain on the termination of the Plantation Street Facility lease, partially offset by $0.4 million equity fee to Fortress, $0.3 million common shares issuable in connection with Annual Stock Dividend to Fortress and $0.1 million non-cash stock based compensation.
Net cash used in operating activities for the year ended December 31, 2024, was primarily due to approximately $15.8 million in net loss, $2.4 million non-cash savings from the settlement of payables, $0.5 million of non-cash stock based compensation, and $0.3 million gain on the termination of lease, partially offset by $3.7 million of asset impairment, $1.8 million change in operating assets and liabilities, $0.7 million of depreciation expense, $0.6 million of common shares issuable in connection with the Annual Stock Dividend to Fortress, $0.3 million equity fee to Fortress related to Mustang ATM and Equity Offerings, $0.2 million of amortization of operating lease right-of-use assets, and $0.3 million in research and development – licenses acquired.
Investing Activities
Net cash provided by investing activities was $1.2 million for the year ended December 31, 2025, which primarily reflects the proceeds from the sale of equipment to AbbVie.
No cash was used in or provided by investing activities for the year ended December 31, 2024.
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Financing Activities
Net cash provided by financing activities was $14.5 million during the year ended December 31, 2025, primarily reflecting the proceeds from the February 2025 Equity Offering, the ATM Agreement and the July 2025 warrant exercises.
Net cash provided by financing activities was $11.3 million during the year ended December 31, 2024, primarily reflecting the proceeds from the May 2024 Offering, June 2024 Offering and the ATM Agreement.
Contractual Obligations
We enter into contracts in the normal course of business with licensors, CROs, contract manufacturing organizations (“CMOs”) and other third parties for the procurement of various products and services, including without limitation biopharmaceutical development, biologic assay development, commercialization, clinical and preclinical development, clinical trials management, pharmacovigilance and manufacturing and supply. These contracts typically do not contain minimum purchase commitments (although they may) and are generally terminable by us upon written notice. Payments due upon termination or cancelation/delay consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation; in certain cases, our contractual arrangements with CROs and CMOs include cancelation and/or delay fees and penalties.
Item 7A. Quantitative and Qualitative Disclosures About Market Risks
None.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item is set forth in the financial statements and notes thereto beginning at page F-1 of this Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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