MUSTANG BIO, INC. 10-K

Item 9A. Controls and Procedures. ​ Disclosure Controls and Procedures Controls and Procedures Disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are designed only to provide reasonable assurance that they will meet their objectives. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of December 31, 2023, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Internal Control over Financial Reporting Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”), and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements. Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making the assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013) . Based on our assessment, our management has concluded that, as of December 31, 2023, our internal controls over financial reporting were effective based upon those criteria. 75 ​ Table of Contents Changes in Internal Controls over Financial Reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information ​ During the three months ended December 31, 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ​ Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevents Inspections. ​ None. ​ PART III Item 10. Directors, Executive Officers and Corporate Governance ​ The following table sets forth information regarding our executive officers and directors, including their ages as of the date of this Form 10-K. ​ Name Age Position(s) Executive Officers Manuel Litchman, M.D. 70 President, Chief Executive Officer, and Director James Murphy 67 Interim Chief Financial Officer ​ ​ ​ ​ ​ Non-Employee Directors Michael S. Weiss 58 Chairman of the Board of Directors and Executive Chairman Adam J. Chill 56 Director Neil Herskowitz 67 Director Lindsay A. Rosenwald, M.D. 68 Director Michael J. Zelefsky, M.D. 63 Director ​ Information about our Executive Officers ​ Manuel Litchman, M.D. - President, Chief Executive Officer, and Director Dr. Litchman has served as our President and Chief Executive Officer, and as a member of our Board, since April 2017. Dr. Litchman joined us from Arvinas, LLC, where he served as President and Chief Executive Officer. While at Arvinas, Dr. Litchman oversaw the advancement of the company’s pipeline of protein-degradation therapeutics for the treatment of cancers and other diseases toward Investigational New Drug applications and secured multi-target discovery collaborations with Merck and Genentech. Prior to Arvinas, Dr. Litchman spent more than 18 years with Novartis Pharmaceuticals Corporation, where he held positions of increasing responsibility related to the development of Novartis’ oncology pipeline. Most recently, Dr. Litchman served as Senior Vice President and Executive Global Program Head, CTL019, Cell & Gene Therapies Unit, where he led a collaboration with the University of Pennsylvania investigating chimeric antigen receptor modified T cells (“CAR Ts”) directed against CD19 on B cell malignancies. Prior to the CTL019 collaboration, Dr. Litchman served as Novartis’ Vice President and Head, Oncology Business Development & Licensing. Earlier in his career, Dr. Litchman was a senior equity analyst at Ursus Capital and directed oncology/immunology clinical research at Hoffmann-La Roche Inc. Dr. Litchman received his M.D. from Yale University School of Medicine, and his B.A. from Princeton University. He completed his internal medicine residency and hematology-oncology fellowship at New York-Presbyterian/Weill Cornell Medical Center. Based on Dr. Litchman’s biotechnology and pharmaceutical industry experience and in-depth understanding of our business, we believe that Dr. Litchman has the appropriate set of skills to serve as a member of the Board. James Murphy - Interim Chief Financial Officer Mr. Murphy has served as our Interim Chief Financial Officer since January 2024. Mr. Murphy has served as a consultant to several companies through Danforth, an advisory firm that provides operational and strategic support services to life science companies. During Mr. Murphy’s tenure at Danforth, he has served as interim Chief Financial Officer in both public and private life science companies since 2012. 76 ​ Table of Contents Prior to joining Danforth, Mr. Murphy served as the Chief Financial Officer at OxiGene, Inc., a publicly traded biotechnology company, from February 2004 to April 2012. Mr. Murphy began his career in the life sciences sector in 1990 when he joined Sepracor Inc., a publicly traded specialty pharmaceutical and device company. Mr. Murphy received his B.A. in economics and accounting from the College of the Holy Cross. ​ Information about our Non-Employee Directors ​ Michael S. Weiss - Chairman of the Board of Directors and Executive Chairman Mr. Weiss has served as Chairman of our Board since May 2015 and has also served as our Executive Chairman since January 2017. He previously served as our interim President & Chief Executive Officer from March 2015 to April 2017. He is also a board member and the Executive Vice Chairman, Strategic Development of Fortress Biotech, Inc., a position he has held since February 2014, and the Chairman of the Board of Directors of Checkpoint Therapeutics, Inc., where he previously served as interim President & Chief Executive Officer from March 2015 to December 2016. Mr. Weiss was also a board member of Avenue Therapeutics, Inc. from March 2015 to February 2018 and the Chairman of the Board of National Holdings Corporation from September 2016 to June 2018. Since December 2011, Mr. Weiss has served in multiple capacities at TG Therapeutics, Inc., and is currently its Executive Chairman, Chief Executive Officer and President. Mr. Weiss earned his J.D. from Columbia Law School and his B.S. in Finance from The University at Albany. He began his professional career as a lawyer with Cravath, Swaine & Moore LLP. In 1999, Mr. Weiss founded Access Oncology, which was later acquired by Keryx Biopharmaceuticals in 2004. Following the merger, Mr. Weiss remained as Chief Executive Officer of Keryx. Based on Mr. Weiss’s biotechnology and pharmaceutical industry experience, as well as his extensive management experience, we believe that Mr. Weiss has the appropriate set of skills to serve as a member of the Board in light of our business and structure. Effective January 1, 2017, our Board of Directors approved and authorized the execution of a Board Advisory Agreement with Caribe BioAdvisors, LLC (the “Advisor”), which is owned by Michael S. Weiss, to provide the Board with the advisory services of Mr. Weiss as Chairman of the Board and Executive Chairman. Pursuant to the Advisory Agreement, the Advisor is paid an annual cash fee of $60,000, in addition to any and all annual equity incentive grants paid to members of the Board. ​ Adam J. Chill - Director Mr. Chill has served as a member of our Board since June 2017. Mr. Chill is the President of and a Portfolio Manager at Kingsbrook Partners LP, an alternative asset management firm he co-founded in March 2009. From February 2001 to March 2009, Mr. Chill was a Portfolio Manager and Managing Director at Highbridge Capital Management, LLC, an alternative asset management firm owned by J.P. Morgan Asset Management. At Highbridge, Mr. Chill was responsible for structuring, negotiating and monitoring Highbridge’s portfolio of structured investments in public and private companies worldwide. From April 2000 to February 2001, Mr. Chill worked at Angelo, Gordon & Co., an alternative asset management firm. From October 1992 to April 2000, Mr. Chill was a corporate attorney specializing in securities and mergers and acquisitions at Stroock & Stroock & Lavan LLP. Mr. Chill is a co-founder of the Bayit Association of New Jersey. Mr. Chill received his B.A., magna cum laude, from Yeshiva University and his J.D. from Columbia University School of Law, where he was a Harlan Fiske Stone Scholar. Based on Mr. Chill’s extensive investment experience and knowledge of the biotechnology industry, we believe that Mr. Chill has the appropriate set of skills to serve as a member of the Board. Neil Herskowitz - Director Mr. Herskowitz has served as a member of our Board since August 2015. Mr. Herskowitz has served as the managing member of the ReGen Group of companies, located in New York, since 1998, which include ReGen Capital Investments LLC and Riverside Claims Investments LLC. He has also served as the President of its affiliate, Riverside Claims LLC, since June 2004. Mr. Herskowitz serves as a member of the board of directors for two of our affiliates, Checkpoint Therapeutics, Inc. and Avenue Therapeutics, Inc. Mr. Herskowitz received a B.B.A. in Finance from Bernard M. Baruch College in 1978. Based on Mr. Herskowitz’s financial industry experience and in-depth understanding of our business, we believe that Mr. Herskowitz has the appropriate set of skills to serve as a member of the Board. Lindsay A. Rosenwald, M.D. - Director Dr. Rosenwald has served as a member of our Board since our inception. Dr. Rosenwald has been a member of the Board of Directors of Fortress Biotech, Inc. since October 2009 and has served as its Chairman, President and Chief Executive Officer since December 2013. From November 2014 to August 2015, Dr. Rosenwald served as Interim President and CEO of Checkpoint Therapeutics, Inc. and remains on that company’s board of directors. He also serves on the board of directors of Avenue Therapeutics, Inc. and Journey Medical Corporation. Prior to that, from 1991 to 2008, he served as the Chairman of Paramount BioCapital, Inc. Over the last 30 years, Dr. Rosenwald has acted as a biotechnology entrepreneur and has been involved in the founding and recapitalization of numerous public and private 77 ​ Table of Contents biotechnology and life sciences companies. Dr. Rosenwald received his B.S. in finance from Pennsylvania State University and his M.D. from Temple University School of Medicine. We believe that Dr. Rosenwald’s extensive biotechnology, pharmaceutical and finance expertise, as well as his medical background and in-depth understanding of our businesses, makes him an exemplary candidate to continue serving on our Board. Michael J. Zelefsky, M.D. - Director Dr. Zelefsky has served as a member of our Board since June 2017. Dr. Zelefsky has served as a Member at NYU Langone since 2023 and before that was a Member at the Memorial Sloan-Kettering Cancer Center Department of Radiation Oncology since 2005. He has served as Chief of Memorial Sloan-Kettering’s Brachytherapy Services since 2000 and has been a Professor of Radiation Oncology at Weill Cornell Medical College, Cornell University since 1994. He is a recognized expert in radiation therapy and has helped develop and enhance Memorial Sloan-Kettering’s prostate brachytherapy program during his tenure. Dr. Zelefsky received a Bachelor of Arts in Biology (summa cum laude) from Yeshiva University in 1982 and a Medical Doctor degree from Albert Einstein College of Medicine in 1986. Dr. Zelefsky is currently Editor-in-Chief of Brachytherapy and has previously served as president of the American Brachytherapy Society. Based on Dr. Zelefsky’s extensive experience and background in oncology, we believe that Dr. Zelefsky has the appropriate set of skills to serve as a member of the Board. Family Relationships There is no family relationship between and among any of our executive officers or directors. ​ Board Structure and Leadership Our Bylaws provide that our Board shall consist of between one and nine directors, and such number of directors within this range may be determined from time to time by resolution of our board of directors or our stockholders. Currently, we have six directors. The Board does not have a formal policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes that it is in the best interests of the Company to make that determination based on the direction of the Company and the current membership of the Board. The Board has determined that having a director who is also the Chief Executive Officer serve as the Chairman is not in the best interest of the Company’s stockholders at this time. During 2023, our Board held eleven meetings. During 2023, each director attended at least 75% of the meetings of the Board and the meetings of those committees on which each director served, in each case during the period that such person was a director. The permanent committees established by our Board are the Audit Committee and the Compensation Committee, descriptions of which are set forth in more detail below. Our directors are expected to attend each Annual Meeting of Stockholders. Director Independence ​ We adhere to the corporate governance standards adopted by The Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq rules require our Board to make an affirmative determination as to the independence of each director. Consistent with these rules, our Board completed its annual review of director independence and considered relationships and transactions during 2023 between each director or any member of his immediate family, on the one hand, and the Company and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that Adam Chill, Neil Herskowitz, and Michael Zelefsky, M.D. are independent under the criteria established by Nasdaq and our Board. Fortress Biotech, Inc. (“Fortress”) beneficially owns capital stock representing more than 50% of the voting power of our outstanding voting stock eligible to vote in the election of directors. As a result, we qualify as a “controlled company” and avail ourselves of certain “controlled company” exemptions under the Nasdaq corporate governance rules. As a controlled company, we are not required to have a majority of “independent directors” on our Board as defined under the Nasdaq rules, or have a compensation, nominating or governance committee composed entirely of independent directors. Despite qualifying as a controlled company, we have a separately constituted Compensation Committee consisting entirely of independent directors. ​ Board Committees The permanent committees established by our Board are the Audit Committee and the Compensation Committee, descriptions of which are set forth in more detail below. 78 ​ Table of Contents Audit Committee The Audit Committee currently consists of Adam J. Chill, Neil Herskowitz, and Michael J. Zelefsky, M.D. Mr. Chill chairs the Audit Committee. The Audit Committee held four meetings during the fiscal year ended December 31, 2023. The duties and responsibilities of the Audit Committee are set forth in the Charter of the Audit Committee which was recently reviewed by our Audit Committee. A copy of the Charter of the Audit Committee is available on our website, located at ir.mustangbio.com. Among other things, the duties and responsibilities of the Audit Committee include reviewing and monitoring our financial statements and internal accounting procedures, the selection of, consultation with and review of the services provided by our independent registered public accounting and identifying and assessing any related party transactions in collaboration with counsel, accountants and management. Our Audit Committee has sole discretion over the retention, compensation, evaluation and oversight of our independent registered public accounting firm. The SEC and Nasdaq have established rules and regulations regarding the composition of audit committees and the qualifications of audit committee members. Our Board has examined the composition of our Audit Committee and the qualifications of our Audit Committee members in light of the current rules and regulations governing audit committees. Based upon this examination, our Board has determined that each member of our Audit Committee is independent and is otherwise qualified to be a member of our Audit Committee in accordance with the rules of the SEC and Nasdaq. Additionally, the SEC requires that at least one member of the Audit Committee have a “heightened” level of financial and accounting sophistication. Such a person is known as the “audit committee financial expert” under the SEC’s rules. Our Board has determined that Mr. Chill is an “audit committee financial expert,” as the SEC defines that term, and is an independent member of our Board and our Audit Committee. Please see Mr. Chill’s biography in Item 10. Directors, Executive Officers, and Corporate Governance. Compensation Committee The Compensation Committee currently consists of Adam J. Chill, Neil Herskowitz and Michael J. Zelefsky, M.D. Mr. Herskowitz chairs the Compensation Committee. The Compensation Committee held two meetings during the fiscal year ended December 31, 2023. The duties and responsibilities of the Compensation Committee are set forth in the Charter of the Compensation Committee which was recently reviewed by our Compensation Committee. A copy of the Charter of the Compensation Committee is available on our website, located at ir.mustangbio.com. As discussed in its Charter, among other things, the duties and responsibilities of the Compensation Committee include approving any corporate goals and objectives relating to the compensation of our executive officers, evaluating the performance of our executive officers, and administering all of our executive compensation programs, including, but not limited to, our incentive and equity-based plans. The Compensation Committee evaluates the performance of all of our executive officers on an annual basis and reviews and approves on an annual basis all compensation programs and awards relating to such officers. The Compensation Committee applies discretion in the determination of individual executive compensation packages to ensure compliance with our compensation philosophy. Our Chief Executive Officer makes recommendations to the Compensation Committee with respect to the compensation packages for officers other than himself. Nasdaq has established rules and regulations regarding the composition of compensation committees and the qualifications of compensation committee members. Our Board has examined the composition of our Compensation Committee and the qualifications of our Compensation Committee members in light of the current rules and regulations governing compensation committees. Based upon this examination, our Board of Directors has determined that each member of our Compensation Committee is independent and is otherwise qualified to be a member of our Compensation Committee in accordance with such rules. Nominating Process We do not currently have a nominating committee or any other committee serving a similar function. Although we do not have a written charter in place to select director nominees, our Board has adopted resolutions regarding the director nomination process. We believe that the current process in place functions effectively to select director nominees who will be valuable members of our Board. We identify potential nominees to serve as directors through a variety of business contacts, including current executive officers, directors, community leaders and stockholders. We may, to the extent deemed appropriate by the Board, retain a professional search firm and other advisors to identify potential nominees. We will also consider candidates recommended by stockholders for nomination to our Board. A stockholder who wishes to recommend a candidate for nomination to our Board must submit such recommendation to our Interim Chief Financial Officer, James Murphy, at our 79 ​ Table of Contents offices located at 377 Plantation Street, Worcester, Massachusetts 01605. Any recommendation must be received not less than 50 calendar days nor more than 90 calendar days before the anniversary date of the previous year’s annual meeting. On April 7, 2017, we entered into an Executive Employment Agreement with Dr. Litchman, pursuant to which, among other things, we agreed to use our best efforts to cause Dr. Litchman to be nominated and reelected to the Board. Except as described herein, there are no arrangements or understandings between any of our executive officers or directors and any other person pursuant to which any of them are elected as an officer or director. We believe that our Board as a whole should encompass a range of talent, skill, and expertise enabling it to provide sound guidance with respect to our operations and interests. Our independent directors evaluate all candidates to our Board by reviewing their biographical information and qualifications. If the directors determine that a candidate is qualified to serve on our Board, such candidate is interviewed by at least one of the directors and our Chief Executive Officer. Other members of the Board also have an opportunity to interview qualified candidates. The directors then determine, based on the background information and the information obtained in the interviews, whether to recommend to the Board that the candidate be nominated for approval by the stockholders to fill a directorship. With respect to an incumbent director whom the directors are considering as a potential nominee for re-election, the directors review and consider the incumbent director’s service during his or her term, including the number of meetings attended, level of participation, and overall contribution to the Board. The manner in which the directors evaluate a potential nominee will not differ based on whether the candidate is recommended by our directors or stockholders. We consider the following qualifications, among others, when making a determination as to whether a person should be nominated to our Board: the independence of the director nominee; the nominee’s character and integrity; financial literacy; level of education and business experience, including experience relating to biopharmaceutical companies; whether the nominee has sufficient time to devote to our Board; and the nominee’s commitment to represent the long-term interests of our stockholders. We review candidates in the context of the current composition of the Board and the evolving needs of our business. We believe that each of the current members of our Board has the requisite business, biopharmaceutical, financial or managerial experience to serve as a member of the Board, as described above in their biographies under the heading “Information about our Executive Officers” and “Information about our Non-Employee Directors.” We also believe that each of the current members of our Board has other key attributes that are important to an effective board, including integrity, high ethical standards, sound judgment, analytical skills, and the commitment to devote significant time and energy to service on the Board and its committees. We are not currently in compliance with Nasdaq’s Board Diversity Rule, as we do not have a “Diverse Director” as defined by Nasdaq’s rules. We evaluate all qualified candidates to serve on our Board, including those with diverse backgrounds, and will continue to do so in furtherance of efforts to gain compliance with Nasdaq’s Board Diversity Rule. Code of Business Conduct and Ethics We have adopted a Code of Ethics (the “Code”), which applies to all of our directors and employees, including our principal executive officer and principal financial officer. The Code includes guidelines dealing with the ethical handling of conflicts of interest, compliance with federal and state laws, financial reporting, and our proprietary information. The Code also contains procedures for dealing with and reporting violations of the Code. We have posted a copy of the Code on our website, located at www.mustangbio.com. Policy Prohibiting Hedging and Speculative Trading Pursuant to our Insider Trading Policy, our officers, directors, and employees are prohibited from engaging in speculative trading, including hedging transactions or short sale transactions with respect to Company securities. Delinquent Section 16(a) Reports ​ Section 16 of the Exchange Act requires our directors, certain officers, and beneficial owners of more than ten percent of our common stock to file reports with the SEC indicating their holdings of and transactions in our equity securities, and to provide copies of such reports to us. Based solely on a review of our records, publicly available information, and written representations by the persons required to file such reports, we believe that during the fiscal year ended December 31, 2023, the following Section 16(a) filings were untimely due to administrative error: one Form 4 for each of Mr. Herskowitz (covering a total of one transaction), Dr. Zelefsky (covering a total of one transaction), Mr. Chill (covering a total of one transaction), Mr. Weiss (covering a total of one transaction), and Dr. Rosenwald (covering a total of three transactions); and two Forms 4 for Dr. Litchman (covering a total of four transactions). ​ ​ ​ 80 ​ Table of Contents Item 11. Executive Compensation ​ Named Executive Officers As determined in accordance with SEC rules, our “named executive officers” (“NEOs”) for the year ended December 31, 2023, are the individuals set forth below: ● Manuel Litchman, M.D., our President and Chief Executive Officer; and ● Eliot Lurier, our Interim Chief Financial Officer. The following table sets forth information concerning compensation paid by us to our NEOs for their services rendered to us in all capacities during the years ended December 31, 2023, and 2022. Summary Compensation Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock ​ ​ Option ​ ​ Incentive Plan ​ ​ All Other ​ ​ ​ ​ ​ ​ ​ ​ Salary ​ Bonus ​ ​ Awards (1) ​ ​ Awards ​ ​ Compensation ​ ​ Compensation ​ ​ Total Name and Principal Position Year ​ ($) ($) ​ ($) ​ ($) ​ ($) ​ ($) ​ ($) Manuel Litchman, M.D. ​ 2023 ​ $ 480,788 ​ $ — (2) ​ $ 21,050 ​ $ — ​ $ — ​ $ — ​ $ 501,838 President and Chief Executive Officer ​ 2022 ​ $ 448,269 ​ $ 150,000 ​ $ 37,820 ​ $ — ​ $ — ​ $ — ​ $ 636,089 Eliot Lurier (3) ​ 2023 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 244,283 ​ ​ 244,283 Interim Chief Financial Officer ​ 2022 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 282,825 ​ ​ 282,825 ____________________ (1) The amounts in the “Stock Awards” column reflect the aggregate grant date fair value of restricted stock units granted during the year computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used in calculating these amounts are incorporated by reference to Note 9 to the financial statements included in this Form 10-K . (2) As of March 11, 2024, Dr. Litchman’s 2023 annual cash incentive has not yet been approved by the Compensation Committee . (3) Effective April 18, 2022, Mr. Lurier was appointed as our Interim Chief Financial Officer, although he remained a consultant employed by Danforth Advisors, LLC (“Danforth”) and was contracted to work for us on a part time basis, as described under “Narrative to Summary Compensation Table” below. The amount shown represents fees and expenses payable to Danforth in connection with the Chief Financial Officer services provided by Mr. Lurier based on a negotiated hourly rate. On December 8, 2023, Mr. Lurier passed away unexpectedly. Narrative to Summary Compensation Table Employment Agreements Dr. Litchman In April 2017, we entered into an employment agreement with Dr. Litchman, our President and Chief Executive Officer, pursuant to which he received an initial annual base salary of $395,000. As part of his annual review in January 2023, the Board increased Dr. Litchman’s annual base salary to $485,500 effective as of April 1, 2023. The employment agreement further provides eligibility for an incentive bonus linked to the realization of certain corporate milestones to be established annually by the Board or the Compensation Committee. Dr. Litchman’s target annual bonus is equal to fifty percent (50%) of his annual salary, and the Board or the Compensation Committee will determine the actual payout amount each year. Dr. Litchman’s annual bonus for 2023 is described under “Annual Incentive Bonus” below. The employment agreement provides that if we terminate Dr. Litchman without cause or if he resigns for good reason, as those terms are defined in the employment agreement, he will be entitled to: (i) severance payments at a rate equal to his base salary then in effect for a period of 12 months following his termination date; (ii) a pro-rata share of the annual incentive bonus for the year in which the termination occurred, to be paid when and if such bonus would have been paid under the employment agreement; (iii) accelerated partial vesting of all unvested time-based equity awards with respect to the same number of shares that would have vested if Dr. Litchman had continued in employment for one year following the termination date; and (iv) if Dr. Litchman timely elects continued health insurance coverage under COBRA, the entire premium necessary to continue such coverage for Dr. Litchman and Dr. Litchman’s eligible dependents until the conclusion of the time when Dr. Litchman is receiving continuation of base salary payments or until Dr. Litchman becomes eligible for group health insurance coverage under another employer’s plan, whichever occurs first, provided however that we have the right to terminate 81 ​ Table of Contents such payment of COBRA premiums on behalf of Dr. Litchman and instead pay him a lump sum amount equal to the COBRA premium times the number of months remaining in the specified period if we determine in our discretion that continued payment of COBRA premiums is or may be discriminatory under Section 105(h) of the Internal Revenue Code. In addition, if Dr. Litchman is terminated without cause or resigns for good reason within twelve months following a change in control, he will be entitled to the severance benefits described in (i), (ii) and (iv) of the immediately preceding sentence, as well as 100% accelerated vesting of the options and other equity awards granted to him. In the event Dr. Litchman’s employment is terminated due to his death or disability, he or his estate will receive continuing salary payments for ninety days and a pro-rata share of the annual incentive bonus for the year in which the termination occurred, to be paid when and if such bonus would have been paid under the employment agreement. In each case, the severance benefits are conditioned upon Dr. Litchman’s execution and non-revocation of a release of claims against us and compliance with certain non-solicitation and non-competition covenants during his employment and for a period of six months thereafter. Also, the severance benefits are subject to reduction to avoid the imposition of excise taxes under Sections 280G and 4999 of the Code, provided that such reduction would result in a better after-tax result for Dr. Litchman. Mr. Lurier Mr. Lurier provided consulting services to us pursuant to a consulting agreement between us and Danforth Advisors, LLC and received no compensation directly from us. Annual Cash Incentive Bonus In 2023, Dr. Litchman was eligible to earn a target annual cash incentive equal to 50% of his base salary per the terms of his Employment Agreement. Dr. Litchman’s annual cash incentive bonus is based upon our performance against pre-established corporate goals and objectives, which included a combination of clinical and nonclinical goals related to our products (weighted at an aggregate of 90% of the target awards) as well as other corporate development goals (weighted at 10% of the target awards), and his individual performance based upon subjective performance reviews. Our corporate goals were achieved at an aggregate level of 96% reflecting the successful achievement of clinical, nonclinical, and corporate development goals. As of March 11, 2024, Dr. Litchman’s annual cash incentive bonus has not yet been approved by the Compensation Committee. The actual amounts paid to Dr. Litchman pursuant to his annual cash incentive award is reported in the “Summary Compensation Table” as non-equity incentive plan compensation. Equity Awards The Compensation Committee has granted Dr. Litchman equity awards under our Mustang Bio, Inc. 2016 Incentive Plan (the “2016 Plan”). In 2017, Dr. Litchman received an option to purchase 69,445 shares, and he received awards of 4,067 restricted stock units in 2022 and 5,000 restricted stock units in 2023, which vest as described in footnotes (2) and (3), respectively, to the Outstanding Equity Awards table below. Outstanding Equity Awards at Fiscal Year-Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option Awards ​ Stock Awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market Value ​ ​ Number of ​ Number of ​ ​ ​ ​ ​ ​ Number of ​ of Shares or ​ ​ securities ​ securities ​ ​ ​ ​ ​ ​ Shares or ​ Units of Stock ​ ​ underlying ​ underlying ​ Option ​ ​ ​ Units of ​ That Have ​ ​ unexercised ​ unexercised ​ exercise ​ Option ​ Stock That ​ Not ​ ​ options (#) ​ options (#) ​ price ​ Expiration ​ Have Not ​ Vested (1) Name exercisable unexercisable ($) Date Vested (#) ($) Manuel Litchman M.D. 43,403 (2) ​ 26,042 (2) ​ $ 85.95 4/24/2027 11,102 (3) ​ $ 14,988 Eliot Lurier ​ — ​ — ​ ​ — ​ — ​ — ​ ​ — __________________ (1) Market value is based on $1.35 per share, the closing price of our common stock on the Nasdaq Capital Market on December 29, 2023, the last trading day of the fiscal year . (2) The option vests as follows: (i) one half of the option will vest over time, with 25% of such shares vesting after twelve months of employment, and the remaining shares vesting in twelve equal quarterly installments thereafter, subject to Dr. Litchman’s “continuous service” (as defined in the 2016 Plan) to the Company on each vesting date; (ii) the remaining one half of the option will vest and become exercisable upon the occurrence of the following milestones being achieved, in each case subject to Dr. Litchman’s continuous 82 ​ Table of Contents service to the Company on the date of such occurrences: (A) 25% of such shares will vest upon the dosing of the first patient in the first Phase 2 clinical trial of any Company product candidate; (B) 25% of such shares will vest upon the dosing of the first patient in the first Phase 2 clinical trial of a second Company product candidate; (C) 25% of such shares will vest upon our achievement of a fully-diluted market capitalization of $500,000,000; and (D) 25% of such shares will vest upon our achievement of a fully-diluted market capitalization of $1 billion . Notwithstanding the foregoing, in the event that a Phase 2 clinical trial for either of the Company product candidates referenced in subsections (i) or (ii) of this paragraph is bypassed, the corresponding percentage of the Performance Option grant that would have otherwise vested pursuant to subsections (i) or (ii) of this paragraph will vest upon the earlier of (x) the dosing of the first patient in the first Phase 3 clinical trial for that Company product candidate, or (y) the filing of a Biologics License Application or New Drug Application with the U.S. Food and Drug Administration, or alternatively the filing of an equivalent regulatory filing with a foreign regulatory agency, with respect to that Company product candidate. (3) Subject to Dr. Litchman’s continuous service, the restricted stock units vest as follows: (i) 4,301 shares will vest on April 24, 2024; (ii) 3,284 shares will vest on April 24, 2025; (iii) 2,267 shares will vest on April 24, 2026; and (iv) 1,250 shares will vest on April 24, 2027. ​ Clawback Policy ​ Pursuant to Nasdaq listing requirements, we have adopted a policy providing for the recovery of erroneously awarded incentive-based compensation received by our executive officers or the executive officers of one of our subsidiaries during an applicable recovery period (the “Clawback Policy”). Under the Clawback Policy, in the event that financial results upon which a cash or equity-based incentive award was based becomes the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements, the Compensation Committee will conduct a review of awards covered by the Clawback Policy and recoup any erroneously awarded incentive-based compensation to ensure that the ultimate award reflects the financial results as restated. The Clawback Policy covers any cash or equity-based incentive compensation award that was paid, earned or granted to covered executive officers during the last completed three fiscal years immediately preceding the date on which we are required to prepare the accounting restatement. ​ Director Compensation ​ Directors who are also employees are not compensated separately for serving on the Board or any of its committees. Each of our non-employee directors receives cash compensation for his or her services. The Compensation Committee periodically conducts reviews of peer company director compensation practices, including before considering changes to our director compensation program and amounts. In addition, to better align the interests of our Board with our stockholders, the Compensation Committee considers and recommends to the Board long-term equity compensation. Director Compensation Program In January 2016, the Board adopted a Non-Employee Directors Compensation Plan for our non-employee directors, which determines the cash and equity compensation payable to our non-employee directors. The Non-Employee Directors Compensation Plan provides for our non-employee directors to receive the following compensation: Cash Compensation : ● $50,000 annual retainer; and ● $10,000 additional annual retainer for the Audit Committee Chair. However, for Mr. Weiss, in lieu of the cash compensation described above, $60,000 of annual cash compensation is paid to the Advisor according to the Advisory Agreement. ​ 83 ​ Table of Contents Equity Compensation : ● Initial Equity Grant: 50,000 shares of restricted stock, which shares shall vest and become non-forfeitable in equal annual installments over three years, beginning on the third (3 rd ) anniversary of the grant date, subject to the director’s continued service on the Board on such date. ● Re-Election Equity Grant: The greater of (i) a number of shares of restricted stock having a fair market value on the grant date of $50,000, or (ii) 10,000 shares of restricted stock, which shares shall vest and become non-forfeitable on the third (3 rd ) anniversary of the grant date, subject to the director’s continued service on the Board on such date. In addition, each non-employee director receives reimbursement for reasonable travel expenses incurred in attending meetings of our Board and meetings of committees of our Board. ​ Director Compensation Table The following table sets forth the cash and other compensation we paid to the non-employee members of our Board for all services in all capacities during 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fees Earned or Stock ​ ​ ​ ​ Paid in Cash ​ Awards ​ Total Name ​ ($) (1) ​ ($) (2) ​ ($) Neil Herskowitz ​ $ 50,000 ​ $ 50,000 ​ $ 100,000 Lindsay A. Rosenwald, M.D. ​ $ 50,000 ​ $ 50,000 ​ $ 100,000 Michael S. Weiss (3) ​ $ 60,000 ​ $ 50,000 ​ $ 110,000 Adam J. Chill ​ $ 60,000 ​ $ 50,000 ​ $ 110,000 Michael J. Zelefsky, M.D. ​ $ 50,000 ​ $ 50,000 ​ $ 100,000 ____________________ (1) Represents the cash retainer for serving on our Board and committees of the Board. (2) As of December 31, 2023, each of Mr. Herskowitz, Dr. Rosenwald, Mr. Weiss, Mr. Chill and Dr. Zelefsky had 13,610 shares of unvested restricted stock pursuant to prior awards. (3) Pursuant to the Advisory Agreement, the Advisor is paid an annual cash fee of $60,000, for the services of Mr. Weiss as Chairman of the Board and Executive Chairman in addition to any and all annual equity incentive grants paid to members of the Board. ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ​ Securities Authorized for Issuance Under Equity Compensation Plans ​ The following table contains information about our equity compensation plans as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity Compensation Plan Information ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ remaining available ​ ​ ​ ​ Weighted- ​ for future issuance ​ ​ ​ ​ average ​ under equity ​ ​ Number of securities to be ​ exercise price of ​ compensation plans ​ ​ issued upon exercise of ​ outstanding ​ (excluding securities ​ ​ outstanding options, ​ options, warrants ​ reflected in Plan Category ​ warrants and rights ​ and rights ​ column (a)) ​ (a) (b) (c) Equity compensation plans approved by security holders 76,112 ​ $ 85.95 282,334 Equity compensation plans not approved by security holders — ​ — — Total 76,112 ​ $ 85.95 282,334 84 ​ Table of Contents ​ Our equity compensation plans consist of the 2016 Plan, and the Mustang Bio, Inc. 2019 Employee Stock Purchase Plan, which were each approved by our stockholders. We do not have any equity compensation plans or arrangements that have not been approved by our stockholders. ​ Security Ownership of Our Directors, Executive Officers, and 5% Beneficial Owners ​ The following table shows information, as of March 8, 2024, concerning the beneficial ownership of our common stock by: ● each person we know to be the beneficial owner of more than 5% of our common stock; ● each of our current directors; ● each of our NEOs shown in our Summary Compensation Table; and ● all current directors and executive officers as a group. As of March 8, 2024, there were 9,544,747 shares of our common stock, 845,385 shares of our Class A common stock, and 250,000 shares of our Class A Preferred Stock outstanding. In order to calculate a stockholder’s percentage of beneficial ownership, we include in the calculation those shares underlying options or warrants beneficially owned by that stockholder that are vested or that will vest within 60 days of March 8, 2024. Shares of restricted stock are deemed to be outstanding. Options or warrants held by other stockholders that are not attributed to the named beneficial owner are disregarded in this calculation. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares of our common stock. Unless we have indicated otherwise, each person named in the table below has sole voting power and investment power for the shares listed opposite such person’s name, except to the extent authority is shared by spouses under community property laws. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Under ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable ​ ​ ​ ​ ​ ​ ​ ​ ​ Options and ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested ​ Total Shares ​ ​ ​ ​ ​ ​ ​ Restricted Stock ​ Beneficially ​ ​ ​ Name of Beneficial Owner (1) ​ Shares owned ​ Units (2) ​ Owned ​ % of total CS ​ Michael S. Weiss (3) ​ 49,637 ​ — ​ 49,637 ​ * % Manuel Litchman, M.D ​ 73,318 ​ 54,505 ​ 127,823 ​ 1.2 % Lindsay A. Rosenwald, M.D (3) ​ 60,525 ​ — ​ 60,525 ​ * % Neil Herskowitz ​ 19,703 ​ — ​ 19,703 ​ * % Adam J. Chill ​ 19,170 ​ — ​ 19,170 ​ * % Michael J. Zelefsky, M.D ​ 18,970 ​ — ​ 18,970 ​ * % James Murphy ​ — ​ — ​ - ​ * % All current executive officers and directors as a group (7 persons) ​ 241,323 ​ 54,505 ​ 295,828 ​ 2.8 % 5% or Greater Stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress Biotech, Inc (4) ​ 1,927,797 ​ — ​ 1,927,797 ​ 18.6 % Armistice Capital, LLC. (5) ​ 974,907 ​ — ​ 974,907 ​ 9.4 % _________________ * Less than 1% of our common stock outstanding (1) The address of each of the directors and executive officers is c/o Mustang Bio, Inc., 377 Plantation Street, Worcester, Massachusetts 01605, and the address of Fortress Biotech, Inc. is c/o Fortress Biotech, Inc., 1111 Kane Concourse, Suite 301, Bay Harbor Island, FL 33154 (2) Includes only options exercisable within 60 days of March 8, 2024 and unvested restricted stock units. (3) Includes 33,334 warrants issued by Fortress to each of Mr. Weiss and Dr. Rosenwald that cover shares of our common stock that are owned by Fortress. These do not represent equity compensation by us to either Mr. Weiss or Dr. Rosenwald . 85 ​ Table of Contents (4) Includes shares underlying 33,334 warrants issued to each of Mr. Weiss and Dr. Rosenwald, and excludes 250,000 of Class A Preferred Stock, which are convertible into 16,666 shares of Common Stock. (5) Based solely on information included in a Schedule 13G/A filed with the SEC on February 14, 2024. The address of Armistice Capital, LLC is 510 Madison Avenue, 7th Floor, New York, New York 10022. The following table shows information, as of March 8, 2024, concerning the beneficial ownership of our Class A Common Stock: ​ Class A Common Stock Beneficially Owned Name and Address of Beneficial Owner (1) Number of Shares and Nature of Beneficial Ownership Percentage of Total Class A Common Stock City of Hope 845,385 100% ____________________ (1) The address of City of Hope is 1500 East Duarte Road, Duarte, California 91010. The following table shows information, as of March 8, 2024, concerning the beneficial ownership of our Class A Preferred Stock: ​ Class A Preferred Stock Beneficially Owned Name and Address of Beneficial Owner (1) Number of Shares and Nature of Beneficial Ownership Percentage of Total Class A Preferred Stock Fortress Biotech, Inc 250,000 100% ​ ____________________ (1) The address of Fortress Biotech Inc. is c/o Fortress Biotech, Inc., 1111 Kane Concourse, Suite 301, Bay Harbor Islands, FL 33154. ​ Item 13. Certain Relationships and Related Transactions, and Director Independence ​ Since January 1, 2022, we have not been a party to any transaction in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, NEOs, or beneficial owners of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, and other than compensation, termination, and change-in-control arrangements. The written charter of the Audit Committee authorizes, and Nasdaq rules require, the Audit Committee to review and approve related-party transactions. In reviewing related-party transactions, the Audit Committee applies the basic standard that transactions with affiliates should be made on terms no less favorable to us than could have been obtained from unaffiliated parties. Therefore, the Audit Committee reviews the benefits of the transactions, terms of the transactions and the terms available from unrelated third parties, as applicable. All transactions other than compensatory arrangements between us and our officers, directors, principal stockholders and their affiliates will be approved by the Audit Committee or a majority of the disinterested directors and will continue to be on terms no less favorable to us than could be obtained from unaffiliated third parties. Founders Agreement and Management Services Agreement with Fortress Effective March 13, 2015, we entered a Founders Agreement with Fortress, which was amended and restated on May 17, 2016, and again on July 26, 2016 (the “Mustang Founders Agreement”). The Mustang Founders Agreement provides that, in exchange for the time and capital expended in the formation of our company and the identification of specific assets the acquisition of which result in the formation of a viable emerging growth life science company, Fortress loaned $2.0 million, representing the up-front fee required to acquire our license agreement with COH. The Mustang Founders Agreement has a term of 15 years, which upon expiration automatically renews for successive one-year periods unless terminated by Fortress and the Company or a Change in Control (as defined in the Mustang Founders Agreement) occurs. Concurrently with the second amendment on July 26, 2016, to the Mustang Founders Agreement, Fortress entered into an Exchange Agreement whereby Fortress exchanged its 7.25 million Class B Common shares for 466,667 common shares and 250,000 Class A Preferred 86 ​ Table of Contents shares. Class A Preferred Stock is identical to common stock other than as to voting rights, conversion rights and the Annual Stock Dividend right (as described below). Each share of Class A Preferred Stock is entitled to vote the number of votes that is equal to one and one-tenth (1.1) times a fraction, the numerator of which is the sum of (A) the shares of our outstanding common stock and (B) the whole shares of our common stock into which the shares of outstanding Class A common stock and Class A Preferred Stock are convertible and the denominator of which is the number of shares of outstanding Class A Preferred Stock. Thus, the Class A Preferred Stock will at all times constitute a voting majority. Each share of Class A Preferred Stock is convertible, at Fortress’ option, into one fully paid and nonassessable share of our common stock, subject to certain adjustments. As holders of Class A Preferred Stock, Fortress will receive on each January 1 (each a “Annual Stock Dividend Payment Date”) until the date all outstanding Class A Preferred Stock is converted into common stock, pro rata per share dividends paid in additional fully paid and nonassessable shares of common stock (“Annual Stock Dividends”) such that the aggregate number of shares of common stock issued pursuant to such Annual Stock Dividend is equal to two and one-half percent (2.5%) of our fully-diluted outstanding capitalization on the date that is one (1) business day prior to any Annual Stock Dividend Payment Date. As additional consideration under the Mustang Founders Agreement, we are required to: (i) pay an equity fee in shares of common stock, payable within five (5) business days of the closing of any equity or debt financing that occurs after the effective date of the Mustang Founders Agreement and ending on the date when Fortress no longer has majority voting control in our voting equity, equal to two and one-half (2.5%) of the gross amount of any such equity or debt financing; and (ii) pay a cash fee equal to four and one-half percent (4.5%) of our annual net sales, payable on an annual basis, within ninety (90) days of the end of each calendar year. In the event of a Change in Control, we will pay a one-time change in control fee equal to five (5x) times the product of (A) net sales for the twelve (12) months immediately preceding the change in control and (B) four and one-half percent (4.5%). Effective as of March 13, 2015, we entered into a Management Services Agreement (the “MSA”) with Fortress, pursuant to which Fortress renders advisory and consulting services to us. The MSA has an initial term of five years and is automatically renewed for successive five-year terms unless terminated in accordance with its provisions. Services provided under the MSA may include, without limitation, (i) advice and assistance concerning any and all aspects of our operations, clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on our behalf with accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). We are obligated to utilize clinical research services, medical education, communication and marketing services and investor relations/public relation services of companies or individuals designated by Fortress, provided those services are offered at market prices. However, we are not obligated to take or act upon any advice rendered from Fortress and Fortress shall not be liable for any of its actions or inactions based upon their advice. Pursuant to the MSA and our Certificate of Incorporation, Fortress and its affiliates, including all members of our Board, will have no fiduciary or other duty to communicate or present any corporate opportunities to us or to refrain from engaging in business that is similar to that of our company. In consideration for the Services, we pay Fortress an annual consulting fee of $0.5 million (the “Annual Consulting Fee”), payable in advance in equal quarterly installments on the first business day of each calendar quarter in each year, provided, however, that such Annual Consulting Fee shall be increased to $1.0 million for each calendar year in which we have net assets in excess of $100 million at the beginning of the calendar year. We record fifty percent of the Annual Consulting Fee in research and development expense and fifty percent in general and administrative expense in the Statement of Operations. For the years ended December 31, 2023 and 2022, we recorded expense of $0.5 million and $1.0 million, respectively, related to this agreement. For the year ended December 31, 2023, we issued zero shares of common stock and recorded 66,003 shares issuable to Fortress, which equaled 2.5% of the gross proceeds of $0.2 million from the sale of shares of common stock under our At-the-Market Offering and $4.4 million gross proceeds on the Registered Direct Offering. We recorded an expense of approximately $0.1 million in general and administrative expenses related to these shares for the year ended December 31, 2023. For the year ended December 31, 2022, we issued 13,131 shares of common stock and recorded zero shares issuable to Fortress, which equaled 2.5% of the gross proceeds of $6.6 million from the sale of shares of common stock under the Mustang ATM. We recorded an expense of approximately $0.2 million in general and administrative expenses related to these shares for the year ended December 31, 2022. Payables and Accrued Expenses Related Party In the normal course of business Fortress pays for certain expenses on our behalf. Such expenses are recorded as Payables and accrued expenses - related party and are reimbursed to Fortress in the normal course of business. Director Compensation Dr. Rosenwald Pursuant to the terms of the Director Compensation Plan, Dr. Rosenwald will receive a cash fee of $50,000 per year paid quarterly and an annual stock award of the greater of (i) a number of shares of common stock having a fair market value on the grant date of $50,000 or 87 ​ Table of Contents (ii) 10,000 shares of common stock, which shares shall vest and become non-forfeitable on the third anniversary of the grant date, subject to continued service on the Board on such date. For the year ended December 31, 2023, we recognized $100,000 in expense in our Statements of Operations related to the director compensation, including approximately $50,000 in expense related to equity incentive grants. For the year ended December 31, 2022, we recognized $100,000 in expense in our Statements of Operations related to the director compensation, including approximately $50,000 in expense related to equity incentive grants. We issued Dr. Rosenwald 7,246 and 4,777 restricted stock awards for the years ended December 31, 2023 and 2022, respectively. Mr. Weiss - Advisory Agreement with Caribe BioAdvisors, LLC The Board approved and authorized our entrance into an advisory agreement, dated January 1, 2017 (the “Advisory Agreement”), with Caribe BioAdvisors, LLC (the “Advisor”), owned by Michael S. Weiss, the Chairman of the Board, to provide the board advisory services of Mr. Weiss as Chairman of the Board. Pursuant to the Advisory Agreement, the Advisor will be paid an annual cash fee of $60,000, paid quarterly and an annual stock award of the greater of (i) a number of shares of common stock having a fair market value on the grant date of $50,000 or (ii) 10,000 shares of common stock, which shares shall vest and become non-forfeitable on the third anniversary of the grant date, subject to continued service on the Board on such date. For the year ended December 31, 2023, we recognized $110,000 in expense in our Statements of Operations related to the advisory agreement, including approximately $50,000 in expense related to equity incentive grants. For the year ended December 31, 2022, we recognized $110,000 in expense in our Statements of Operations related to the advisory agreement, including approximately $50,000 in expense related to equity incentive grants. We issued Mr. Weiss 7,246 and 4,777 shares of restricted stock for the years ended December 31, 2023 and 2022, respectively. ​ It em 14. Principal Accounting Fees and Services ​ Audit Fees, Audit-Related Fees, Non-Audit Fees, Tax Fees and Other Fees Audit Fees For the year ended December 31, 2023, KPMG LLP billed us an aggregate of approximately $372,000 in fees and professional services rendered in connection with the audit of our annual financial statements included in our Annual Reports on Form 10-K for the 2023 fiscal year and the review of our financial statements included in our Quarterly Reports on Form 10-Q during that fiscal year. For the year ended December 31, 2022, KPMG LLP billed us an aggregate of approximately $330,000 in fees and professional services rendered in connection with the audit of our annual financial statements included in our Annual Reports on Form 10-K for the 2022 fiscal year and the review of our financial statements included in our Quarterly Reports on Form 10-Q during that fiscal year. Audit-Related Fees For the year ended December 31, 2023, and 2022, KPMG LLP billed us an aggregate of approximately $70,000 and $95,000, respectively, in fees for audit-related services rendered in connection with securities offerings and registration statements, in addition to the fees described above under the heading “Audit Fees.” Tax Fees During the fiscal years ended December 31, 2023 and 2022 we were not billed by KPMG LLP for fees for professional services rendered for tax compliance, tax advice, and tax planning services. All Other Fees During the fiscal years ended December 31, 2023 and 2022, we were not billed by KPMG LLP for any fees for services, other than those described above, rendered to us for each of those fiscal years. ​ 88 ​ Table of Contents Pre-Approval of Services ​ Our Audit Committee has established a policy setting forth the procedures under which services provided by our independent registered public accounting firm will be pre-approved by our Audit Committee. The potential services that might be provided by our independent registered public accounting firm fall into two categories: ● Services that are permitted, including the audit of our annual financial statements, the review of our quarterly financial statements, related attestations, benefit plan audits and similar audit reports, financial and other due diligence on acquisitions, and federal, state, and non-US tax services; and ● Services that may be permitted, subject to individual pre-approval, including compliance and internal-control reviews, indirect tax services such as transfer pricing and customs and duties, and forensic auditing. Services that our independent registered public accounting firm may not legally provide include such services as bookkeeping, certain human resources services, internal audit outsourcing, and investment or investment banking advice. All proposed engagements of our independent registered public accounting firm, whether for audit services or permissible non-audit services, are pre-approved by our Audit Committee. We jointly prepare a schedule with our independent registered public accounting firm that outlines services which we reasonably expect we will need from our independent registered public accounting firm and categorize them according to the classifications described above. Each service identified is reviewed and approved or rejected by our Audit Committee. ​ PART IV Item 15. Exhibits, Financial Statement Schedules ​ (a) Financial Statements. The following financial statements are filed as part of this Form 10-K: ​ Report of Independent Registered Public Accounting Firm ( KPMG LLP , New York, NY ; PCAOB ID: 185 ) F-2 Financial Statements: Balance Sheets as of December 31, 2023 and 2022 F-4 Statements of Operations for the Years Ended December 31, 2023 and 2022 F-5 Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023 and 2022 F-6 Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-7 Notes to Financial Statements F-8 - F-30 ​ (b) Exhibits. ​ Exhibit No. Description 1.1 ​ At Market Issuance Sales Agreement, dated July 27, 2018, between the Company, B. Riley FBR, Inc., Cantor Fitzgerald & Co., National Securities Corporation, and Oppenheimer & Co. Inc. (incorporated by reference to the Exhibit 1.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 27, 2018). ​ 1.2 ​ Amendment No. 1 to At Market Issuance Sales Agreement, dated July 20, 2020, between the Company, B. Riley FBR, Inc., Cantor Fitzgerald & Co., National Securities Corporation and Oppenheimer & Co. Inc. (incorporated by reference to the Exhibit 1.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 24, 2020). ​ 1.3 ​ Amendment No. 2 to At Market Issuance Sales Agreement, dated December 31, 2020, between the Company, B. Riley Securities, Inc., Cantor Fitzgerald & Co., National Securities Corporation, Oppenheimer & Co. Inc. and H.C. Wainwright & Co., LLC. (incorporated by reference to the Exhibit 1.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on December 31, 2020). ​ 89 ​ Table of Contents Exhibit No. Description 1.4 ​ Amendment No. 3 to At Market Issuance Sales Agreement, dated April 14, 2023, between the Company, B. Riley Securities, Inc., Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC (incorporated by reference to the Exhibit 1.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on April 20, 2023). ​ 2.1 ​ Asset Purchase Agreement, dated May 18, 2023, between the Company and uBriGene (Boston) Biosciences, Inc. (incorporated by reference to the Exhibit 1.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on May 22, 2023). # ​ 2.2 ​ First Amendment to Asset Purchase Agreement, dated June 29, 2023, between the Company and uBriGene (Boston) Biosciences, Inc. (incorporated by reference to the Exhibit 2.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 30, 2023). ​ 2.3 ​ Second Amendment to Asset Purchase Agreement, dated July 28, 2023, between the Company and uBriGene (Boston) Biosciences, Inc. (incorporated by reference to the Exhibit 2.3 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 31, 2023). ​ 3.1 Amended and Restated Certificate of Incorporation of Mustang Bio, Inc. (formerly Mustang Therapeutics, Inc.), dated July 26, 2016 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). ​ 3.2 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated June 14, 2018 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q (file No. 001-38191) filed with the SEC on June 14, 2018). 3.3 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated September 30, 2019 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on September 30, 2019). ​ ​ 3.4 ​ Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated December 4, 2020 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on December 4, 2020). ​ ​ ​ 3.5 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated June 17, 2021 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 22, 2021). ​ ​ ​ ​ 3.6 ​ Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated July 5, 2022 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 5, 2022). ​ 3.7 ​ Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Mustang Bio, Inc., dated April 3, 2023 (incorporated by reference to the Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on April 3, 2023). ​ 3.8 ​ Amended and Restated Bylaws of Mustang Bio, Inc. (incorporated by reference to the Exhibit 3.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on April 3, 2023). 4.1 Form of warrant agreement (incorporated by reference to the Exhibit 4.2 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 4.2 Description of Securities of Mustang Bio, Inc. ** 4.3 ​ Common Stock Warrant issued by Mustang Bio, Inc. to NSC Biotech Venture Fund I, LLC, dated July 5, 2016 (incorporated by reference to the Exhibit 10.5 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 90 ​ Table of Contents Exhibit No. Description 4.4 ​ Warrant to Purchase Common Stock issued to Runway Growth Finance Corp., dated March 4, 2022 (incorporated by reference to the Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on March 8, 2022). ​ 4.5 ​ Form of Pre-funded Warrant (incorporated by reference to the Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on October 30, 2023). ​ 4.6 ​ ​ Form of Warrant (incorporated by reference to the Exhibit 4.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on October 30, 2023). ​ 4.7 ​ Form of Wainwright Warrant (incorporated by reference to the Exhibit 4.3 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on October 30, 2023). ​ 10.1 Second Amended and Restated Founders Agreement between Fortress Biotech, Inc. and Mustang Bio, Inc., dated July 26, 2016 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.2 Management Services Agreement between Fortress Biotech, Inc. and Mustang Bio, Inc., dated March 13, 2015 (incorporated by reference to the Exhibit 10.2 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.3 Future Advance Promissory Note to Fortress Biotech, Inc., dated May 5, 2016 (incorporated by reference to the Exhibit 10.3 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.4 Promissory Note to NSC Biotech Venture Fund I, LLC, dated July 5, 2016 (incorporated by reference to the Exhibit 10.4 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.5 License Agreement by and between Mustang Bio, Inc. and City of Hope, dated March 17, 2015 (incorporated by reference to the Exhibit 10.6 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). # ​ 10.6 Sponsored Research Agreement by and between Mustang Bio, Inc. and City of Hope, dated March 17, 2015 (incorporated by reference to the Exhibit 10.7 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.7 Mustang Bio, Inc. Non-Employee Directors Compensation Plan (incorporated by reference to the Exhibit 10.9 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). † 10.8 Agreement by and between Mustang Bio, Inc. and Chord Advisors, LLC, dated April 8, 2016 (incorporated by reference to the Exhibit 10.10 of the Registrant’s Form 10-12G (file No. 000-55668) filed with the SEC on July 28, 2016). 10.9 Board Advisory Services Agreement by and between Mustang Bio, Inc. and Caribe BioAdvisors, LLC, dated January 1, 2017 (incorporated by reference to the Exhibit 10.11 of the Registrant’s Annual Report on Form 10-K (file No. 000-55668) filed with the SEC on March 31, 2017). 10.10 Exclusive License Agreement by and between Mustang Bio, Inc. and The Regents of the University of California, dated March 17, 2017 (incorporated by reference to the Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q (file No. 000-55668) filed with the SEC on August 14, 2017). # 10.11 Exclusive License Agreement (IV/ICV) by and between Mustang Bio, Inc. and City of Hope, dated February 17, 2017. Filed as Exhibit 10.5 on the Company’s Form 10-Q filed on August 14, 2017 (incorporated by reference to the Exhibit 10.5 of the Registrant’s Quarterly Report on Form 10-Q (file No. 000-55668) filed with the SEC on August 14, 2017). # 10.12 Amended and Restated Exclusive License Agreement (CD123) by and between Mustang Bio, Inc. and City of Hope, dated February 17, 2017 (incorporated by reference to the Exhibit 10.14 of the Registrant’s Annual Report on Form 10-K (file No. 000-55668) filed with the SEC on March 31, 2017). # 91 ​ Table of Contents Exhibit No. Description 10.13 Amended and Restated Exclusive License Agreement ( IL13R a 2 ) by and between Mustang Bio, Inc. and City of Hope, dated February 17, 2017 (incorporated by reference to the Exhibit 10.15 of the Registrant’s Annual Report on Form 10-K (file No. 000-55668) filed with the SEC on March 31, 2017). # ​ 10.14 Amended and Restated Exclusive License Agreement (Spacer) by and between Mustang Bio, Inc. and City of Hope, dated February 17, 2017 (incorporated by reference to the Exhibit 10.16 of the Registrant’s Annual Report on Form 10-K (file No. 000-55668) filed with the SEC on March 31, 2017). # ​ 10.15 Employment Agreement between Manuel Litchman and Mustang Bio, Inc., effective as of April 24, 2017 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 000-55668) filed with the SEC on April 24, 2017). † ​ 10.16 License Agreement (CSI) by and between Mustang Bio, Inc. and City of Hope, dated May 31, 2017 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q/A (file No. 001-38191) filed with the SEC on November 14, 2017). # ​ 10.17 License Agreement (PSCA)by and between Mustang Bio, Inc. and City of Hope, dated May 31, 2017 (incorporated by reference to the Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q/A (file No. 001-38191) filed with the SEC on November 14, 2017). # ​ ​ ​ ​ 10.18 License Agreement (HER2) by and between Mustang Bio, Inc. and City of Hope, dated May 31, 2017 (incorporated by reference to the Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q/A (file No. 001-38191) filed with the SEC on November 14, 2017). # ​ ​ 10.19 Lease Agreement by and between Mustang Bio, Inc. and WCS - 377 Plantation Street, Inc., dated October 27, 2017 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q (file No. 001-38191) filed with the SEC on November 14, 2017). ​ 10.20 Sublease Agreement by and between Mustang Bio, Inc., and The Paul Reverse Life Insurance Company, dated June 14, 2022. (incorporated by reference to Exhibit 10.22 of the Registrant’s Annual Report on Form 10-K (file No. 001-38191) filed with the SEC on March 30, 2023). 10.21 ​ First Amendment to Sublease Agreement by and between Mustang Bio, Inc. and The Paul Revere Life Insurance Company, dated October 25, 2022. (incorporated by reference to Exhibit 10.23 of the Registrant’s Annual Report on Form 10-K (file No. 001-38191) filed with the SEC on March 30, 2023). ​ 10.22 ​ Second Amendment to Sublease, dated April 27, 2023, between the Company and The Paul Revere Life Insurance Company (incorporated by reference to the Exhibit 10.2 of the Registrant’s Current Report on Form 8-K (file No. 000-55668) filed with the SEC on July 20, 2023). ​ 10.23 ​ Third Amendment to Sublease, dated June 15, 2023, between the Company and The Paul Revere Life Insurance Company (incorporated by reference to the Exhibit 10.3 of the Registrant’s Current Report on Form 8-K (file No. 000-55668) filed with the SEC on July 20, 2023). ​ 10.24 Mustang Bio, Inc. 2016 Incentive Plan, dated May 17, 2016 (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-12G filed on July 28, 2016). ​ ​ ​ 10.25 ​ Amendment to Mustang Bio, Inc. 2016 Incentive Plan, filed with the Registrant’s Definitive Proxy Statement for the Annual Meeting of Stockholders on June 14, 2018, filed on April 30, 2018. ​ 10.26 ​ Second Amendment to the Mustang Bio, Inc. 2016 Equity Incentive Plan, dated June 17, 2021 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 22, 2021). † ​ ​ ​ 92 ​ Table of Contents Exhibit No. Description 10.27 ​ Third Amendment to Mustang Bio, Inc. 2016 Equity Incentive Plan, dated June 21,2022 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 24, 2022). † ​ 10.28 ​ Form of Option Agreement ** ​ 10.29 ​ Form of Restricted Stock Unit Agreement ** ​ 10.30 ​ Form of Director Stock Award Agreement ** ​ 10.31 ​ Mustang Bio, Inc. 2019 Employee Stock Purchase Plan (incorporated by reference to the Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q (file No. 001-38191) filed with the SEC on August 9, 2019).† ​ 10.32 ​ Amendment to the Mustang Bio, Inc. 2019 Employee Stock Purchase Plan, dated June 17, 2021 (incorporated by reference to the Exhibit 10.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 22, 2021). † ​ 10.33 ​ Amendment No. 2 to the Mustang Bio, Inc. 2019 Employee Stock Purchase Plan, dated June 21, 2023 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on June 21, 2023). † ​ 10.34 ​ Loan and Security Agreement by and between Mustang Bio, Inc., the Borrower, the Lenders, and Runway Growth Finance Corp. (as agent), dated March 4, 2022 (incorporated by reference to the Exhibit 99.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on March 8, 2022). ​ 10.35 ​ First Amendment to Loan and Security Agreement by and between Mustang Bio, Inc., the Borrower, the Lenders and Runway Growth Finance Corp. (as agent), dated December 7, 2022 (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on December 13, 2022). ​ 10.36 ​ Consulting Agreement by and between Mustang Bio, Inc. and Danforth Advisors, LLC dated March 17, 2022 (incorporated by reference to the Exhibit 99.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on April 22, 2022). ​ 10.37 ​ Manufacturing Services Agreement, dated July 28, 2023, between the Company and uBriGene (Boston) Biosciences, Inc. (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 31, 2023). ​ 10.38 ​ Sub-Contracting Manufacturing Services Agreement, dated July 28, 2023, between the Company and uBriGene (Boston) Biosciences, Inc. (incorporated by reference to the Exhibit 10.2 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on July 31, 2023). ​ 10.39 ​ Form of Securities Purchase Agreement, dated October 26, 2023, by and between the Company and the purchaser party thereto (incorporated by reference to the Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file No. 001-38191) filed with the SEC on October 30, 2023). ​ 23.1 ​ Consent of Independent Registered Public Accounting Firm, KPMG, LLP, Boston , Massachusetts. ** ​ ​ ​ 31.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ** 31.2 Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ** 32.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *** 93 ​ Table of Contents Exhibit No. Description 32.2 Certification of Principal Financial Officer, pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *** 97 ​ Compensation Clawback Policy ** ​ ​ ​ 101 The following financial information from Mustang Bio, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statement of Stockholders’ Equity, (iv) the Statements of Cash Flows, and (v) Notes to the Financial Statements (filed herewith). ​ 104 ​ ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) # Confidential treatment has been granted with respect to omitted portions of this exhibit. ​ † Indicates management contract or compensatory plan or arrangement. ​ ** Filed herewith. ​ *** Furnished herewith. ​ Item 16. Form 10-K Summary. ​ None. ​ ​ ​ 94 ​ Table of Contents ​ INDEX TO FINANCIAL STATEMENTS ​ Report of Independent Registered Public Accounting Firm (KPMG LLP, New York, NY; PCAOB ID: 185) F-2 Balance Sheets as of December 31, 2023 and 2022 F-4 Statements of Operations for the Years Ended December 31, 2023 and 2022 F-5 Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023 and 2022 F-6 Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-7 Notes to Financial Statements F-8 – F-30 ​ ​ ​ F-1 ​ Table of Contents ​ Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Mustang Bio, Inc.: ​ Opinion on the Financial Statements We have audited the accompanying balance sheets of Mustang Bio, Inc. (the Company) as of December 31, 2023 and 2022, the related statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. ​ Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s expectation to generate operating losses and negative operating cash flows in the future, and the need for additional funding to support its planned operations raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements and supplemental information do not include any adjustments that might result from the outcome of this uncertainty. ​ Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Accounting for the transaction with uBriGene As discussed in Note 5 to the financial statements, during 2023, the Company entered into an Asset Purchase Agreement and related amendments with uBriGene Biosciences, Inc. (uBriGene), pursuant to which the Company has agreed to sell its leasehold interest in its cell processing facility and associated assets relating to the production of cell and gene therapies to uBriGene. The Company received proceeds of $6.0 million, which it allocated to the individual sold assets on a relative fair value basis. The Company recognized a gain of $1.5 million and recorded $0.2 million of the consideration as deferred income of in its 2023 financial statement. The transaction requires governmental and lessor approval before the lease interest can be transferred to uBriGene. The Company will recognize the F-2 ​ Table of Contents deferred income and will receive additional proceeds from uBriGene totaling $5.0 million, if the Company, within two years from the closing date, (i) completes an issuance of equity securities in an amount equal to or greater than $10.0 million and (ii) obtains consent of the landlord to the proposed lease transfer. We identified the evaluation of the Company’s accounting for the transaction with uBriGene as a critical audit matter. Specifically, challenging and complex auditor judgment and specialized skills and knowledge were required in identifying the elements of the transaction, including those that were delivered in 2023 and those that were yet to be delivered, and evaluating the application of the relevant accounting guidance. The following are the primary procedures we performed to address this critical audit matter. We inspected the Company’s accounting analysis for the transaction. We compared management’s assessment of the elements of the transaction delivered and those that were yet to be delivered to supporting documentation. We involved professionals with specialized skills and knowledge, who assisted in: ● inspecting the underlying agreements to understand the relevant terms and conditions and identify the elements of the transaction ● evaluating whether the Company’s accounting for the transaction is in accordance with the relevant accounting guidance. ​ /s/ KPMG LLP ​ We have served as the Company’s auditor since 2021. ​ Boston, Massachusetts March 11, 2024 ​ ​ ​ F-3 ​ Table of Contents MUSTANG BIO, INC. BALANCE SHEETS (in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 ​ ​ ​ ​ ​ ASSETS ​ ​ Current Assets: ​ ​ Cash and cash equivalents ​ $ 6,234 ​ $ 75,656 Other receivables - related party ​ - ​ 36 Other receivables ​ ​ 3,879 ​ ​ 263 Prepaid expenses and other current assets ​ 1,233 ​ 2,897 Total current assets ​ 11,346 ​ 78,852 ​ ​ ​ Property, plant and equipment, net ​ 3,218 ​ 8,440 Fixed assets - construction in process ​ 29 ​ 951 Restricted cash ​ 750 ​ 1,000 Other assets ​ 833 ​ 261 Operating lease right-of-use asset, net ​ ​ 1,566 ​ ​ 2,918 Total Assets ​ $ 17,742 ​ $ 92,422 ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current Liabilities: ​ ​ Accounts payable and accrued expenses ​ $ 14,017 ​ $ 13,731 Payables and accrued expenses - related party ​ ​ 834 ​ ​ 766 Operating lease liabilities - short-term ​ ​ 520 ​ ​ 612 Total current liabilities ​ 15,371 ​ 15,109 ​ ​ ​ Deferred income ​ 270 ​ 270 Note payable, long-term, net ​ - ​ 27,436 Operating lease liabilities - long-term ​ ​ 1,978 ​ ​ 3,334 Total Liabilities ​ 17,619 ​ 46,149 ​ ​ ​ ​ Commitments and Contingencies (Note 7) ​ ​ ​ ​ ​ Stockholders’ Equity ​ ​ Preferred stock ($ 0.0001 par value), 2,000,000 shares authorized, 250,000 shares of Class A preferred stock issued and outstanding as of December 31, 2023 and December 31, 2022, respectively ​ — ​ — Common stock ($ 0.0001 par value), 200,000,000 shares authorized as of December 31, 2023 and December 31, 2022, respectively ​ ​ Class A common shares, 845,385 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively ​ — ​ — Common shares, 8,374,869 and 7,100,111 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively ​ 1 ​ 11 Common stock issuable, 419,089 and 187,134 shares as of December 31, 2023 and December 31, 2022, respectively ​ 591 ​ 1,109 Additional paid-in capital ​ 380,502 ​ 374,522 Accumulated deficit ​ ( 380,971 ) ​ ( 329,369 ) Total Stockholders’ Equity ​ 123 ​ 46,273 Total Liabilities and Stockholders’ Equity ​ $ 17,742 ​ $ 92,422 ​ See accompanying notes to financial statements. F-4 Table of Contents MUSTANG BIO, INC. STATEMENTS OF OPERATIONS (in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 Operating expenses: ​ ​ Research and development ​ $ 40,513 ​ $ 62,475 Research and development – licenses acquired ​ 527 ​ 1,474 Gain on the sale of property and equipment ​ ​ ( 1,466 ) ​ ​ — General and administrative ​ 9,686 ​ 12,210 Total operating expenses ​ 49,260 ​ 76,159 Loss from operations ​ ( 49,260 ) ​ ( 76,159 ) ​ ​ ​ Other income (expense) ​ ​ Other income ​ ​ 917 ​ ​ 1,304 Interest income ​ 850 ​ 689 Interest expense ​ ( 4,109 ) ​ ( 3,359 ) Total other income (expense) ​ ( 2,342 ) ​ ( 1,366 ) Net Loss ​ $ ( 51,602 ) ​ $ ( 77,525 ) ​ ​ ​ ​ Net loss per common share outstanding, basic and diluted ​ $ ( 6.00 ) ​ $ ( 10.09 ) ​ ​ ​ Weighted average number of common shares outstanding, basic and diluted ​ 8,604,104 ​ 7,684,508 ​ See accompanying notes to financial statements. ​ ​ F-5 Table of Contents MUSTANG BIO, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ ​ ​ ​ Total ​ ​ Class A Preferred Stock ​ Class A Common Shares ​ Common Shares ​ Stock ​ Paid-in ​ Accumulated ​ Stockholders’ ​ Shares Amount Shares Amount Shares Amount Issuable Capital Deficit Equity Balances at December 31, 2021 250,000 ​ $ — 845,385 ​ $ — 6,238,866 ​ $ 9 $ 4,329 $ 359,906 $ ( 251,844 ) $ 112,400 Common stock issuable - Annual Stock Dividend — ​ — — ​ — — ​ — 1,109 — — 1,109 Issuance of common shares - Annual Stock Dividend — ​ — — ​ — 169,107 ​ — ​ ( 4,212 ) ​ 4,212 ​ — — Issuance of common shares, net of offering shares -At-the-Market Offering ​ — ​ ​ — ​ — ​ ​ — ​ 525,206 ​ ​ 2 ​ ​ — ​ ​ 6,498 ​ ​ — ​ ​ 6,500 Issuance of common shares - Equity fee on At-the-Market Offering ​ — ​ ​ — ​ — ​ ​ — ​ 16,550 ​ ​ — ​ ​ ( 117 ) ​ ​ 283 ​ ​ — ​ ​ 166 Issuance of common shares under ESPP — ​ — — ​ — 22,056 ​ — ​ — ​ 206 ​ — ​ 206 Stock-based compensation expenses — ​ — — ​ — 64,664 ​ — ​ — ​ 2,283 ​ — ​ 2,283 Issuance of common shares - Equity fee on RWG debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 63,662 ​ ​ — ​ ​ — ​ ​ 750 ​ ​ — ​ ​ 750 Issuance of warrants for RWG debt — ​ ​ — — ​ ​ — — ​ ​ — ​ ​ — ​ ​ 384 ​ ​ — ​ 384 Net loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 77,525 ) ​ ​ ( 77,525 ) Balances at December 31, 2022 250,000 ​ $ — 845,385 ​ $ — 7,100,111 ​ $ 11 ​ $ 1,109 ​ $ 374,522 ​ $ ( 329,369 ) ​ $ 46,273 Common stock issuable - Annual Stock Dividend ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 477 ​ ​ - ​ ​ — ​ ​ 477 Issuance of common shares - Annual Stock Dividend — ​ — — ​ — 187,134 ​ — ​ ( 1,109 ) ​ 1,109 ​ — ​ — Issuance of common shares, net of offering costs - At-the-Market Offering — ​ — — ​ — 51,880 ​ — ​ — ​ 160 ​ — ​ 160 Issuance of common shares, equity fee on At-the-Market Offering ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 4 ​ ​ - ​ ​ — ​ ​ 4 Issuance of common shares, net of offering costs - Registered Direct Offering ​ — ​ ​ — ​ — ​ ​ — ​ 920,000 ​ ​ — ​ ​ — ​ ​ 3,955 ​ ​ — ​ ​ 3,955 Issuance of common shares, equity fee on Registered Direct Offering ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 110 ​ ​ - ​ ​ — ​ ​ 110 Issuance of common shares under ESPP ​ — ​ ​ — ​ — ​ ​ — ​ 47,511 ​ ​ — ​ ​ — ​ ​ 178 ​ ​ — ​ ​ 178 Stock-based compensation expenses ​ — ​ ​ — ​ — ​ ​ — ​ 69,773 ​ ​ — ​ ​ — ​ ​ 568 ​ ​ — ​ ​ 568 Exercise of warrants ​ — ​ ​ — ​ — ​ ​ — ​ 93 ​ — ​ ​ — ​ ​ - ​ ​ — ​ ​ — Reverse Split (15:1) adjustment ​ — ​ ​ — ​ — ​ ​ — ​ ( 1,633 ) ​ ( 10 ) ​ ​ — ​ ​ 10 ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ - ​ ​ ( 51,602 ) ​ ​ ( 51,602 ) Balances at December 31, 2023 250,000 ​ $ — 845,385 ​ $ — 8,374,869 ​ $ 1 ​ $ 591 ​ $ 380,502 ​ $ ( 380,971 ) ​ $ 123 ​ See accompanying notes to financial statements. ​ ​ F-6 Table of Contents MUSTANG BIO, INC. STATEMENTS OF CASH FLOWS (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 Cash Flows from Operating Activities: ​ ​ Net loss ​ $ ( 51,602 ) ​ $ ( 77,525 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Issuance of common shares - Equity fee on at-the-market offering to Fortress Biotech ​ — ​ 166 Common shares issuable - Equity fee on at-the-market offering to Fortress Biotech ​ ​ 4 ​ ​ — Common shares issuable - Equity fee on Registered Direct Offering to Fortress Biotech ​ ​ 110 ​ ​ — Common shares issuable - Annual Stock Dividend to Fortress Biotech ​ ​ 477 ​ ​ 1,109 Issuance of common shares - Equity fee on note payable to Fortress Biotech ​ ​ — ​ ​ 750 Research and development - licenses acquired ​ ​ 50 ​ ​ 365 Stock-based compensation expenses ​ 568 ​ 2,283 Depreciation expense ​ 1,860 ​ 2,723 Amortization of debt discount ​ ​ 118 ​ ​ 470 Amortization of operating lease right-of-use assets ​ ​ 365 ​ ​ 308 Loss on disposal of property and equipment ​ ​ — ​ ​ 255 Gain on sale of property and equipment ​ ​ ( 1,466 ) ​ ​ — Loss on extinguishment of debt ​ ​ 2,796 ​ ​ — Gain on lease modification ​ ​ 220 ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ 1,092 ​ ( 1,006 ) Other receivables ​ ​ ( 3,616 ) ​ ​ ( 15 ) Other receivables - related party ​ ​ 36 ​ ​ 14 Accounts payable and accrued expenses ​ 125 ​ 5,257 Payable and accrued expenses - related party ​ 67 ​ 43 Lease liabilities ​ ​ ( 680 ) ​ ​ ( 263 ) Net cash used in operating activities ​ ( 49,477 ) ​ ( 65,066 ) ​ ​ ​ Cash Flows from Investing Activities: ​ ​ Purchase of research and development licenses ​ ( 50 ) ​ ( 365 ) Proceeds from the sale of property and equipment ​ ​ 6,000 ​ ​ 127 Purchase of fixed assets ​ ( 64 ) ​ ( 2,714 ) Net cash provided by (used in) investing activities ​ 5,886 ​ ( 2,952 ) ​ ​ ​ Cash Flows from Financing Activities: ​ ​ Payment of debt ​ ( 30,375 ) ​ — Proceeds from issuance of common shares - at-the-market offering ​ ​ 163 ​ ​ 6,623 Offering costs for the issuance of common shares -at-the-market offering ​ ​ ( 3 ) ​ ​ ( 123 ) Proceeds from issuance of common shares - Registered Direct Offering ​ ​ 4,398 ​ ​ — Offering costs for the issuance of common shares - Registered Direct Offering ​ ​ ( 443 ) ​ ​ — Proceeds from debt issuance ​ ​ — ​ ​ 30,000 Fees paid on the issuance of debt ​ ​ — ​ ​ ( 2,650 ) Proceeds from issuance of common shares under ESPP ​ ​ 178 ​ ​ 206 Net cash (used in) provided by financing activities ​ ( 26,081 ) ​ 34,056 ​ ​ ​ Net change in cash, cash equivalents and restricted cash ​ ( 69,672 ) ​ ( 33,962 ) Cash, cash equivalents and restricted cash, beginning of the period ​ 76,656 ​ 110,618 Cash, cash equivalents and restricted cash, end of the period ​ $ 6,984 ​ $ 76,656 ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid for interest ​ $ 1,352 ​ $ 2,710 ​ ​ ​ Supplemental disclosure of noncash activities: ​ ​ Issuance of common shares - Founders Agreement ​ $ 1,109 ​ $ 4,212 Note payable final payment fee (incurred but not paid) ​ $ — ​ $ 1,050 Issuance of warrants - note payable ​ $ — ​ $ 384 Lease liabilities arising from obtaining right-of-use assets ​ $ — ​ $ 2,176 ​ See accompanying notes to financial statements. F-7 Table of Contents Notes to Financial Statements Note 1 - Organization and Description of Business Mustang Bio, Inc. (the “Company” or “Mustang”) was incorporated in Delaware on March 13, 2015. Mustang is as a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell and gene therapy into potential cures for hematologic cancers, solid tumors and rare genetic diseases. The Company may acquire rights to these technologies by licensing the rights 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. The Company is a majority-controlled subsidiary of Fortress Biotech, Inc. (“Fortress” or “Parent”). The Company’s common stock is listed on the Nasdaq Capital Market and trades under the symbol “MBIO.” Reverse Stock Split On March 3, 2023, the Board of Directors of the Company (the “Board”) unanimously adopted resolutions to approve and recommend stockholder approval of a form amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding Common Stock within a range of between 5 -for-1 and 20 -for-1 (with our Board being authorized to determine the exact ratio), with such reverse stock split to be effected at such time and date before January 31, 2024, if at all, as determined by the Board in its sole discretion (such reverse stock split, the “Reverse Stock Split” and such amendment, the “Amendment”). On March 3, 2023, the holders of a majority in voting power of issued and outstanding shares of our Common Stock and issued and outstanding shares of our Class A Preferred Stock, par value $ 0.0001 (together, the “Majority Holders”) approved the Amendment by written consent in lieu of a meeting (the “Written Consent”). On March 15, 2023, the Board selected the 15 -for-1 reverse stock split ratio. Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, a Schedule 14C information statement was filed with the SEC and provided to the stockholders of the Company. The Reverse Stock Split became effective on April 3, 2023, or twenty (20) days from the mailing of the information statement to the common stockholders of record. All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock and warrants outstanding at April 3, 2023, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants. No fractional shares were issued in connection with the Reverse Stock Split and stockholders who would otherwise be entitled to a fraction of one share received a proportional cash payment. Liquidity and Capital Resources The Company has incurred substantial operating losses and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of December 31, 2023, the Company had an accumulated deficit of $ 381.0 million. The Company has funded its operations to date primarily through the sale of equity and via debt raises, which included its loan and financing agreement with Runway Growth Finance Corporation (the "Lender"), herein referred to as the "Term Loan." On April 11, 2023, the Company repaid the Term Loan, see Note 8. The Company expects to continue to use the proceeds from previous financing transactions primarily for general corporate purposes, including financing the Company’s growth, developing new or existing product candidates, and funding capital expenditures, acquisitions and investments. F-8 Table of Contents On May 18, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with uBriGene (Boston) Biosciences, Inc. (“uBriGene”), pursuant to which the Company agreed to sell its leasehold interest in its cell processing facility located in Worcester, MA (the “Facility”) and associated assets relating to the manufacturing and production of cell and gene therapies at the Facility to uBriGene. The Company and uBriGene subsequently entered into Amendment No. 1, dated as of June 29, 2023, and Amendment No. 2, dated as of July 28, 2023, to the Asset Purchase Agreement (the Asset Purchase Agreement, as so amended, the “Amended Asset Purchase Agreement”). On July 28, 2023, pursuant to the terms and conditions of the Amended Asset Purchase Agreement, the Company completed the sale of all of the Company’s assets primarily relating to the manufacturing and production of cell and gene therapies to uBriGene for a base consideration of $ 6.0 million. uBriGene will be obligated to pay to the Company a contingent amount of $ 5.0 million less certain severance obligations and payments payable in connection with the transfer of certain contracts related to the transferred assets, if the Company, within two years of the closing date, (i) completes an issuance of equity securities in an amount equal to or greater than $ 10.0 million after the closing and (ii) obtains consent of the landlord to the proposed lease transfer within two years of the closing date. As contemplated by the Asset Purchase Agreement, the Company entered into a Manufacturing Services Agreement, where the Company contracted uBriGene to manufacture its lead product candidates, including MB-106, and it committed to spend at least $8.0 million over a period of two years after the closing of the transaction to purchase manufacturing and related services from uBriGene. On October 26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single institutional accredited investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market (the “Registered Offering”), (i) 920,000 shares of common stock, $ 0.0001 par value per share, at a price per Share of $ 1.70 and (ii) pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 1,668,236 shares of its common stock, at a price per Pre-funded Warrant equal to $ 1.699 , the price per Share, less $ 0.001 . The Pre-funded Warrants have an exercise price of $ 0.001 per share, became exercisable upon issuance and remain exercisable until exercised in full. In a concurrent private placement, pursuant to the terms of the Purchase Agreement, the Company also agreed to issue and sell unregistered warrants (the “Warrants”) to purchase up to 2,588,236 shares of Common Stock, at an offering price of $ 0.125 per Warrant to purchase one share of common stock (the “Private Placement” and, together with the Registered Offering, the “Offerings”) (which offering price is included in the purchase price per Share or Pre-funded warrant). The Warrants have an exercise price of $ 1.58 per share (subject to customary adjustments as set forth in the Warrants), are exercisable upon issuance and will expire five and one-half years from the date of issuance. The Warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions. The Registered Offering and Private Placement closed on October 30, 2023. The Company received approximately $ 4.4 million in gross proceeds from the Offerings, before deducting placement agency fees and offering expenses of approximately $ 0.5 million. ​ The Company will be required to expend significant funds in order to advance the development of its product candidates. The Company will require additional financings through equity and debt offerings, collaborations and licensing arrangements or other sources to fully develop, prepare regulatory filings, obtain regulatory approvals and commercialize its existing and any new product candidates. The continuation of our business as a going concern is dependent upon raising additional capital and eventually attaining and maintaining profitable operations. ​ In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these F-9 Table of Contents consolidated financial statements are issued. In performing its evaluation, management excluded elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future equity or debt issuances, and the potential sale of priority review vouchers cannot be considered probable at this time because these plans are not entirely within the Company’s control nor have been approved by the Board of Directors as of the date of these financial statements. The Company's expectation to generate operating losses and negative operating cash flows in the future, and the need for additional funding to support its planned operations raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that these consolidated financial statements are issued. The Company continues to monitor its spending by reducing 2024 expenses, which may include projected savings through delaying the development timelines of certain programs, or termination of such programs and the pursuit of additional cash resources through public or private equity or debt financings. The Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of issuance of these consolidated financial statements. ​ The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary if the Company is unable to continue as a going concern. ​ ​ Note 2 - Significant Accounting Policies Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company has no subsidiaries. All inter-company transactions between Fortress and Mustang are classified as due from or due to related party in the financial statements. The Company believes that the assumptions underlying the financial statements are reasonable. Segments Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating and reporting segment. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at December 31, 2023 and 2022, consisted of cash and certificates of deposit in institutions in the United States. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are currently adequately protected against credit risk. At times, portions of the Company’s cash and cash equivalents may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation (FDIC) limits, though the Company customarily invests a significant portion of its cash in Certificate of Deposit Account Registry Service (“CDARS”) accounts to maximize FDIC insurance coverage across its holdings. As of December 31, 2023, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risk on such accounts. F-10 Table of Contents Other Receivables – Related Party Other receivables include amounts due to the Company from Fortress and is recorded at the invoiced amount. Restricted Cash The Company records cash held in an escrow account as a security deposit for the manufacturing facility in Worcester, Massachusetts, as restricted cash. The Company had $ 0.8 million and $ 1.0 million in restricted cash as of December 31, 2023 and 2022, respectively. The Facility initiated cell processing operations for personalized CAR T and gene therapies in 2018. Property, plant and equipment, net Property and equipment, net, which consists primarily of leasehold improvements, are carried at cost less accumulated depreciation. Depreciation for leasehold improvements is computed over the shorter of the estimated useful lives or the term of the respective leases. Depreciation for all other property and equipment assets is recorded over the useful lives of the respective assets, generally five years , using the straight-line method. Property and equipment - Construction in Process In connection with the Company’s Mercantile Street Facility, the Company incurred costs for the design and buildout of the office space of $ 29,000 recorded in fixed assets – construction in process on the Balance Sheet at December 31, 2023. The Company does not yet occupy the Mercantile Street Facility. In connection with the Company’s Plantation Street Facility, the Company incurred costs for the design and construction of the facility and the purchase of equipment of $ 1.0 million recorded in fixed assets - construction in process on the Balance Sheet at December 31, 2022. Upon completion of the facility’s buildout and the improvements being placed into service, the costs will be recorded as leasehold improvements and amortized over the shorter of the estimated useful lives or the term of the respective leases. Research and Development Costs 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 the Company’s 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, costs associated with regulatory filings, laboratory costs and other supplies. In accordance with Accounting Standards Codification (“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. The licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts to reach commercial feasibility and has no alternative future use. Accordingly, the total purchase price for the licenses acquired is reflected as research and development – licenses acquired in the Company’s Statements of Operations. Annual Stock Dividend In July 2016, in connection with the Amended and Restated Articles of Incorporation, the Company issued 250,000 Class A preferred shares to Fortress. The Class A preferred shares entitle the holder to a stock dividend equal to 2.5 % of the fully diluted outstanding equity of the Company (the “Annual Stock Dividend”). The Annual Stock Dividend was part of the consideration payable for formation of the Company and the identification of certain assets, including the license contributed to Mustang by Fortress (see Note 4). F-11 Table of Contents In June 2018, in connection with the Amended and Restated Articles of Incorporation, the Company amended the Annual Stock Dividend due date from March 13th to January 1st. Pursuant to the Amended and Restated Articles of Incorporation, the Company issued 353,086 shares of common stock to Fortress for the Annual Stock Dividend, representing 2.5 % of the fully-diluted outstanding equity of Mustang on January 1, 2024. The value of these shares is shown in the Statement of Stockholders’ Equity at December 31, 2023, as Common stock issuable – Annual Stock Dividend. The Company recorded an expense of approximately $ 0.5 million in research and development – licenses acquired related to these issuable shares during the year ended December 31, 2023. 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 1, 2023. The value of these shares is shown in the Statement of Stockholders’ Equity at December 31, 2022, as Common stock issuable – Annual Stock Dividend. 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. Fair Value Measurement The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis. Under the accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: ​ Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. ​ The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Leases Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. F-12 Table of Contents Stock-Based Compensation The Company expenses stock-based compensation to employees over the requisite service period based on the estimated grant-date fair value of the awards and forfeiture rates. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model or 409a valuations, as applicable. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Income Taxes The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if management believes it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. Net Loss per Share Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period less unvested restricted stock. Since dividends are declared, paid and set aside among the holders of shares of common stock and Class A common shares pro-rata on an as-if-converted basis, the two-class method of computing net loss per share is not required. Diluted net loss per share does not reflect the effect of shares of common stock to be issued upon the exercise of warrants or outstanding Class A preferred shares, as their inclusion would be anti-dilutive. The two-class method is an earnings allocation formula that treats participating securities as having rights that would otherwise have been available to common stockholders. In addition, as our non-pre-funded warrants are participating securities, we are required to calculate diluted earnings per share under the if-converted method and utilize the most dilutive result. In periods where there is a net loss, no allocation of undistributed net loss to non-pre-funded warrants is performed as the holders of our non-pre-funded warrants are not contractually obligated to participate in our losses. The table below summarizes potentially dilutive securities that were not considered in the computation of diluted net loss per share because they would be anti-dilutive. ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 Warrants (1) 2,813,632 ​ 70,195 Options 76,112 76,112 Class A Preferred Shares 250,000 250,000 Unvested restricted stock awards 64,706 34,016 Unvested restricted stock units 95,197 165,912 Total 3,299,647 596,235 ​ (1) Excludes 1,668,236 pre-funded warrants. The shares underlying the pre-funded warrants are included in basic net loss per share. ​ Comprehensive Loss The Company has no components of other comprehensive loss, and therefore, comprehensive loss equals net loss. F-13 Table of Contents ​ Recent Accounting Pronouncements In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Updated and Simplification Initiative , which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. ASU 2023-06 was issued in response to the U.S. Securities and Exchange Commission’s (the “SEC”) August 2018 final rule that updated and simplified disclosure requirements and is intended to align U.S. GAAP requirements with those of the SEC and to facilitate the application of U.S. GAAP for all entities. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently evaluating the impact of this guidance, but we do not expect the adoption of this guidance to have a material impact on our financial statements and disclosures. ​ In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures .” The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extend certain annual disclosures to interim periods, clarify single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM. This guidance is effective for fiscal years, beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption will be permitted. The Company is currently evaluating the impact of this standard on its financial statements. ​ In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact that this guidance will have on our financial statements and disclosures. ​ ​ ​ Note 3 - License, Clinical Trial and Sponsored Research Agreements Research and Development Expenses – All Licenses For the years ended December 31, 2023 and 2022, the Company recorded the following expense in research and development for licenses acquired: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ($ in thousands) 2023 2022 City of Hope National Medical Center ​ ​ ​ ​ ​ ​ IV/ICV ​ ​ — ​ ​ 125 HER2 ​ ​ — ​ ​ 200 CSL Behring (Calimmune) ​ ​ 50 ​ ​ 40 Fortress Annual Stock Dividend ​ ​ 477 ​ ​ 1,109 Total ​ $ 527 ​ $ 1,474 ​ F-14 Table of Contents License Agreements City of Hope IV/ICV In February 2017, the Company entered into an exclusive license agreement (the “IV/ICV License”) with COH to acquire intellectual property rights in patent applications related to the intraventricular (“IV”) and intracerebroventricular (“ICV”) methods of delivering T cells that express CARs. Pursuant to the IV/ICV License, in March 2017, the Company paid COH an upfront fee of $ 0.1 million. COH is eligible to receive a milestone payment totaling approximately $ 0.1 million, upon and subject to the achievement of a milestone, and an annual maintenance fee of $ 25,000 . Royalty payments in the low single digits are due on net sales of licensed products. The Company is obligated to pay COH a percentage of certain revenues received in connection with a sublicense in the mid-thirties, but no such payments are due in connection with sublicenses that are granted in conjunction with the sublicense of other CAR T programs that are licensed from COH to the Company. For the year ended December 31, 2022, the Company expensed a non-refundable milestone payment of $ 0.1 million in connection with the first patent within the Patent Rights issued. There were no such expenses for the year ended December 31, 2023. HER2 License (MB-103) On May 31, 2017, the Company entered into an exclusive license agreement with the COH for the use of human epidermal growth factor receptor 2 (“HER2”) CAR T technology, which will initially be applied in the treatment of glioblastoma multiforme. Pursuant to this agreement, the Company paid an upfront fee of $ 0.6 million and pays an annual maintenance fee of $ 50,000 (which began in 2019). Additional payments are due for the achievement of ten development milestones totaling $ 14.9 million, and royalty payments in the mid-single digits are due on net sales of licensed products. For the year ended, December 31, 2022, the Company expensed a non-refundable milestone payment of $ 0.2 million in connection with the first patent within the Patent Rights issued. There were no such expenses for the year ended December 31, 2023. In May 2023, the Company terminated the HER2 License and associated Clinical Research Support Agreement. CSL Behring (Calimmune) License On August 23, 2019, the Company entered into a non-exclusive license agreement with CSL Behring (Calimmune, Inc.) (“Calimmune License”) for the rights to the Cytegrity TM stable producer cell line for the production of viral vector for our lentiviral gene therapy program for the treatment of XSCID (MB-107 and MB-207). We previously licensed the XSCID gene therapy program from St. Jude Children’s Research Hospital, Inc. (“St. Jude”) in August 2018. Pursuant to the terms of the Calimmune License, the Company paid an upfront fee of $ 0.2 million. CSL Behring is eligible to receive additional payments totaling $ 1.2 million upon the achievement of three development and commercialization milestones. Royalty payments in the low-single digits are due on net sales of licensed products. For the year ended December 31, 2023 and 2022, the Company expensed a non-refundable milestone payments of $ 50,000 and $ 40,000 , respectively, in connection with the Calimmune license. On August 14, 2023, we notified Calimmune that we were terminating the Calimmune license, which took effect 60 days following notification. F-15 Table of Contents Research and Development Expenses - Sponsored Research and Clinical Trial Agreements For the year ended December 31, 2023 and 2022, the Company recorded the following expense in research and development for sponsored research and clinical trial agreements: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ($ in thousands) 2023 2022 City of Hope National Medical Center ​ ​ ​ ​ ​ CD123 $ 23 ​ $ 166 IL13Rα2 ​ 1,115 ​ ​ 1,486 CS1 ​ 188 ​ ​ 482 HER2 ​ - ​ ​ 784 PSCA ​ 44 ​ ​ 103 Fred Hutchinson Cancer Center - CD20 ​ 1,254 ​ ​ 1,987 St. Jude Children's Research Hospital - XSCID ​ 637 ​ ​ 508 Leiden University Medical Center - RAG1 SCID ​ 350 ​ ​ 505 Mayo Clinic ​ 551 ​ ​ 968 Total $ 4,162 ​ $ 6,989 ​ City of Hope CD123 (MB-102) Clinical Research Support Agreement In February 2017, the Company entered into a Clinical Research Support Agreement for CD123 (the “CD123 CRA”). Pursuant to the terms of the CD123 CRA the Company made an upfront payment of $ 19,450 and will contribute an additional $ 0.1 million per patient in connection with the on-going investigator-initiated study. Further, the Company agreed to fund approximately $ 0.2 million over three years pertaining to the clinical development of CD123. For the years ended December 31, 2023 and 2022, the Company recorded $ 23,000 and $ 0.2 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. In May 2023, the Company terminated the CD123 License and associated Clinical Research Support Agreement. IL13Rα2 (MB-101) Clinical Research Support Agreements In February 2017, the Company entered into a Clinical Research Support Agreement for IL13Rα2 (the “IL13Rα2 CRA”). Pursuant to the terms of the IL13Rα2 CRA the Company made an upfront payment of approximately $ 9,300 and will contribute an additional $ 0.1 million related to patient costs in connection with the on-going investigator-initiated study. Further, the Company agreed to fund approximately $ 0.2 million over three years pertaining to the clinical development of IL13Rα2. For the years ended December 31, 2023 and 2022, the Company recorded $ 1.1 million and $ 1.5 million, respectively, in research and development expenses under the IL13Rα2 CRA in the Statements of Operations pursuant to the terms of this agreement. In October 2020, the Company entered into a Clinical Research Support Agreement for the IL13Rα2-directed CAR T program for adult patients with leptomeningeal glioblastoma, ependymoma or medulloblastoma (the “IL13Rα2 Leptomeningeal CRA”). Pursuant to the terms of the IL13Rα2 Leptomeningeal CRA, the Company made an upfront payment of approximately $ 29,000 and will contribute an additional $ 0.1 million per patient in connection with the on-going investigator-initiated study. Further, the Company agreed to fund approximately $ 0.2 million annually pertaining to the clinical development of the IL13Rα2-directed CAR T therapy. In October 2020, the Company entered into a Sponsored Research Agreement (“SRA”) with COH to conduct combination studies of a potential IL13Rα2 CAR and C134 oncolytic virus therapy. Pursuant to the SRA, the Company funded research in the amount of $ 0.3 million for the program. In November 2022, the SRA was amended to include additional funding of $ 0.6 million. In March 2021, the Company entered into a clinical research support agreement for an Institutional Review Board-approved, investigator-initiated protocol entitled: “Single Patient Treatment with Intraventricular Infusions of IL13Rα2- F-16 Table of Contents targeting and HER2-targeting CAR T cells for a Single Patient (UPN 181) with Recurrent Multifocal Malignant Glioma.” Pursuant to the terms of this agreement, the Company will contribute up to $ 0.2 million in connection with the ongoing investigator-initiated study. CS1 (MB-104) Clinical Research Support Agreement ​ In June 2020, the Company entered into a clinical research support agreement with COH in connection with an Investigator-sponsored study conducted under an Institutional Review Board-approved, investigator-initiated protocol entitled: “Phase I Study to Evaluate Cellular Immunotherapy Using Memory-Enriched T Cells Lentivirally Transduced to Express a CS1-Targeting, Hinge-Optimized, 41BB-Costimulatory Chimeric Antigen Receptor and a Truncated EGFR Following Lymphodepleting Chemotherapy in Adult Patients with CS1+ Multiple Myeloma.” The CAR T being studied under this protocol has been designated as MB-104. Under the terms of the agreement the Company will reimburse COH for costs associated with this trial not to exceed $ 2.4 million. The agreement will expire upon the delivery of a final study report or earlier. For the years ended December 31, 2023 and 2022, the Company recorded $ 0.2 million and $ 0.5 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. In May 2023, the Company terminated the CS1 License and associated Clinical Research Support Agreement. ​ HER2 (MB-103) Clinical Research Support Agreement In September 2020, the Company entered into a clinical research support agreement with COH in connection with an Investigator-sponsored study conducted under an Institutional Review Board-approved, investigator-initiated protocol entitled: “Phase I Study of Cellular Immunotherapy using Memory-Enriched T Cells Lentivirally Transduced to Express a HER2-Specific, Hinge-Optimized, 41BB-Costimulatory Chimeric Receptor and a Truncated CD19 for Patients with Recurrent/Refractory Malignant Glioma.” The CAR T being studied under this protocol has been designated as MB-103. Under the terms of the agreement the Company will pay COH $ 29,375 upon execution and will reimburse COH for costs associated with this trial not to exceed $ 3.0 million. The agreement will expire upon the delivery of a final study report or earlier. For the year ended December 31, 2023 and 2022, the Company recorded zero and $ 0.8 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. In May 2023, the Company terminated the HER2 License and associated Clinical Research Support Agreement. PSCA (MB-105) Clinical Research Support Agreement ​ In October 2020, the Company entered into a clinical research support agreement with COH in connection with an Investigator-sponsored study conducted under an Institutional Review Board-approved, investigator-initiated protocol entitled: “A Phase 1b study to evaluate PSCA-specific chimeric antigen receptor (CAR)-T cells for patients with metastatic castration resistant prostate cancer.” The CAR T being studied under this protocol has been designated as MB-105. Under the terms of the agreement the Company will pay COH $ 33,000 upon execution and will reimburse COH for costs associated with this trial not to exceed $ 2.3 million. The agreement will expire upon the delivery of a final study report or earlier. For the years ended December 31, 2023 and 2022, the Company recorded $ 44,000 and $ 0.1 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. In May 2023, the Company terminated the PSCA License and associated Clinical Research Support Agreement. ​ Fred Hutch CD20 Clinical Trial Agreement On July 3, 2017, in conjunction with the CD20 Technology License from Fred Hutch, we entered into an investigator-initiated clinical trial agreement (“CD20 CTA”) to provide partial funding for a Phase 1/2 clinical trial at Fred Hutch evaluating the safety and efficacy of the CD20 Technology in patients with relapsed or refractory B-cell non-Hodgkin lymphomas. In connection with the CD20 CTA, the Company agreed to fund up to $ 5.3 million of costs associated with the clinical trial, which commenced during the fourth quarter of 2017. In November 2020, the CD20 CTA was amended to include additional funding of approximately $ 1.8 million for the treatment of five patients with chronic lymphocytic leukemia and other research costs. In January 2022, the CD20 CTA was amended to include additional funding of $ 2.2 million increasing the total payment obligation of the Company in connection with the CD20 CTA not to exceed $ 9.3 million. F-17 Table of Contents For the years ended December 31, 2023 and 2022, the Company recorded $ 1.3 million and $ 2.0 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. St. Jude - XSCID (MB-117) Data Transfer Agreement In June 2020, the Company entered into a Data Transfer Agreement with St. Jude under which we will reimburse St. Jude for costs associated with St. Jude’s clinical trial for the treatment of infants with XSCID. Pursuant to the terms of this agreement the Company paid an upfront fee of $ 1.1 million in July 2020, and will continue to reimburse St. Jude for costs incurred in connection with this clinical trial. For the years ended December 31, 2023 and 2022, the Company recorded $ 0.6 million and $ 0.5 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. LUMC - RAG1-SCID (MB-110) Sponsored Research Support Agreement ​ On September 8, 2021, in connection with the LUMC License, the Company entered into an SRA with LUMC under which the Company will fund research in the amount of approximately $ 0.5 million annually over a period of 5 years . The research performed pursuant to this agreement will support technology the Company has licensed from LUMC for the use of a gene therapy under development for the treatment of severe immunodeficiency caused by RAG1. For the year ended December 31, 2023 and 2022, the Company recorded $ 0.4 million and $ 0.5 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. Mayo Clinic - Sponsored Research Support Agreement In June 2021, the Company entered into an SRA with Mayo Clinic under which the Company will fund research in the amount of $ 2.1 million over a period of two years . The research performed pursuant to this agreement will support technology the Company has licensed from Mayo Clinic for a novel technology that may be able to transform the administration of CAR T therapies and has the potential to be used as an off-the-shelf therapy. In October 2022, the SRA was amended to include additional funding of approximately $ 0.1 million. For the year ended December 31, 2023 and 2022, the Company recorded $ 0.6 million and $ 1.0 million, respectively, in research and development expenses in the Statements of Operations pursuant to the terms of this agreement. ​ ​ Note 4 - Related Party Agreements Founders Agreement and Management Services Agreement with Fortress Effective March 13, 2015, the Company entered a Founders Agreement with Fortress, which was amended and restated on May 17, 2016, and again on July 26, 2016 (the “Mustang Founders Agreement”). The Mustang Founders Agreement provides that, in exchange for the time and capital expended in the formation of Mustang and the identification of specific assets the acquisition of which result in the formation of a viable emerging growth life science company, Fortress loaned $ 2.0 million, representing the up-front fee required to acquire the Company’s license agreement with COH. The Mustang Founders Agreement has a term of 15 years , which upon expiration automatically renews for successive one-year periods unless terminated by Fortress and the Company or a Change in Control (as defined in the Mustang Founders Agreement) occurs. Concurrently with the second amendment on July 26, 2016, to the Mustang Founders Agreement, Fortress entered into an Exchange Agreement whereby Fortress exchanged its 7.25 million Class B Common shares for 7.0 million common shares and 250,000 Class A Preferred shares. Class A Preferred Stock is identical to common stock other than as to voting rights, conversion rights and the Annual Stock Dividend right (as described below). Each share of Class A Preferred Stock is entitled to vote the number of votes that is equal to one and one-tenth ( 1.1 ) times a fraction, the numerator of which is the sum of (A) the shares of outstanding Mustang common stock and (B) the whole shares of Mustang common stock into which the shares of outstanding Class A Common Stock and Class A Preferred Stock are convertible and the denominator of which is the number of shares of outstanding Class A Preferred Stock. Thus, the Class A Preferred Stock will at all times constitute a voting majority. Each share of Class A Preferred Stock is convertible, at Fortress’ option, into one fully paid and nonassessable share of Mustang common stock, subject to certain adjustments. As holders of Class A Preferred Stock, Fortress will receive on each January 1 (each a “Annual Stock Dividend Payment Date”) until the date all outstanding Class A Preferred Stock is converted into common stock, pro rata per share dividends paid in additional fully F-18 Table of Contents paid and nonassessable shares of common stock (“Annual Stock Dividends”) such that the aggregate number of shares of common stock issued pursuant to such Annual Stock Dividend is equal to two and one-half percent ( 2.5 %) of Mustang’s fully-diluted outstanding capitalization on the date that is one (1) business day prior to any Annual Stock Dividend Payment Date. The Company records the value of all shares issued for the Annual Stock Dividend as research and development – licenses expense in its Statements of Operations. Pursuant to the Amended and Restated Articles of Incorporation, the Company issued 353,086 shares of common stock to Fortress for the Annual Stock Dividend, representing 2.5 % of the fully-diluted outstanding equity of Mustang on January 1, 2024. The value of these shares is shown in the Statement of Stockholders’ Equity at December 31, 2023, as Common stock issuable – Annual Stock Dividend. The Company recorded an expense of approximately $ 0.5 million in research and development – licenses acquired related to these issuable shares during the year ended December 31, 2023. 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 1, 2023. The value of these shares is shown in the Statement of Stockholders’ Equity at December 31, 2022, as Common stock issuable – Annual Stock Dividend. 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. As additional consideration under the Mustang Founders Agreement, Mustang will also: (i) pay an equity fee in shares of common stock, payable within five (5) business days of the closing of any equity or debt financing for Mustang that occurs after the effective date of the Mustang Founders Agreement and ending on the date when Fortress no longer has majority voting control in the Company’s voting equity, equal to two and one-half ( 2.5 %) of the gross amount of any such equity or debt financing; and (ii) pay a cash fee equal to four and one-half percent ( 4.5 %) of the Company’s annual net sales, payable on an annual basis, within ninety (90) days of the end of each calendar year. In the event of a Change in Control, the Company will pay a one-time change in control fee equal to five (5x) times the product of (A) net sales for the twelve (12) months immediately preceding the change in control and (B) four and one-half percent ( 4.5 %) (see Note 9). The Company records the value of all shares issued for the equity fee component of the Mustang Founders Agreement as Stock-based compensation expense in its Statements of Operations. Effective as of March 13, 2015, the Company entered into a Management Services Agreement (the “MSA”) with Fortress, pursuant to which Fortress renders advisory and consulting services to the Company. The MSA has an initial term of five years and is automatically renewed for successive five-year terms unless terminated in accordance with its provisions. Services provided under the MSA may include, without limitation, (i) advice and assistance concerning any and all aspects of the Company’s operations, clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on behalf of the Company with accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). The Company is obligated to utilize clinical research services, medical education, communication and marketing services and investor relations/public relation services of companies or individuals designated by Fortress, provided those services are offered at market prices. However, the Company is not obligated to take or act upon any advice rendered from Fortress and Fortress shall not be liable for any of its actions or inactions based upon their advice. Pursuant to the MSA and the Company’s Certificate of Incorporation, Fortress and its affiliates, including all members of the Company’s Board of Directors, will have no fiduciary or other duty to communicate or present any corporate opportunities to the Company or to refrain from engaging in business that is similar to that of the Company. In consideration for the Services, the Company will pay Fortress an annual consulting fee of $ 0.5 million (the “Annual Consulting Fee”), payable in advance in equal quarterly installments on the first business day of each calendar quarter in each year, provided, however, that such Annual Consulting Fee shall be increased to $ 1.0 million for each calendar year in which the Company has net assets in excess of $ 100 million at the beginning of the calendar year. The Company records fifty percent of the Annual Consulting Fee in research and development expense and fifty percent in general and administrative expense in the Statement of Operations. For the years ended December 31, 2023 and 2022, the Company recorded expense of $ 1.0 million and $ 0.5 million, respectively, related to this agreement. For the year ended December 31, 2023, the Company did not issue any shares of common stock and recorded the value of 66,003 shares issuable to Fortress, which equaled 2.5 % of the sum of the gross proceeds of $ 0.2 million from the sale of shares of common stock under Mustang’s At-the-Market Offering and $ 4.4 million gross proceeds on the Registered Direct Offering. The Company recorded an expense of approximately $ 0.1 million in general and administrative expenses related to these shares for the year ended December 31, 2023. F-19 Table of Contents For the year ended December 31, 2022, the Company issued 13,131 shares of common stock and did not record any shares issuable to Fortress, which equaled 2.5 % of the gross proceeds of $ 6.6 million from the sale of shares of common stock under Mustang’s At-the-Market Offering. The Company recorded an expense of approximately $ 0.2 million in general and administrative expenses related to these shares for 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. Director Compensation Dr. Rosenwald Pursuant to the terms of the Director Compensation Plan, Dr. Rosenwald will receive a cash fee of $ 50,000 per year paid quarterly and an annual stock award of the greater of (i) a number of shares of common stock having a fair market value on the grant date of $ 50,000 or (ii) 10,000 shares of common stock, which shares shall vest and become non-forfeitable on the third anniversary of the grant date, subject to continued service on the Board on such date. For the year ended December 31, 2023, the Company recognized $ 100,000 in expense in its Statements of Operations related to the director compensation, including approximately $ 50,000 in expense related to equity incentive grants. For the year ended December 31, 2022, the Company recognized $ 100,000 in expense in its Statements of Operations related to the director compensation, including approximately $ 50,000 in expense related to equity incentive grants. The Company issued Dr. Rosenwald 7,246 and 4,777 restricted stock awards for the years ended December 31, 2023 and 2022, respectively. Mr. Weiss - Advisory Agreement with Caribe BioAdvisors, LLC The Board of the Company by unanimous written consent approved and authorized the execution of an advisory agreement dated January 1, 2017 (the “Advisory Agreement”), with Caribe BioAdvisors, LLC (the “Advisor”), owned by Michael S. Weiss, the Chairman of the Board, to provide the board advisory services of Mr. Weiss as Chairman of the Board. Pursuant to the Advisory Agreement, the Advisor will be paid an annual cash fee of $ 60,000 , paid quarterly and an annual stock award of the greater of (i) a number of shares of common stock having a fair market value on the grant date of $ 50,000 or (ii) 10,000 shares of common stock, which shares shall vest and become non-forfeitable on the third anniversary of the grant date, subject to continued service on the Board on such date. For the year ended December 31, 2023, the Company recognized $ 110,000 in expense in its Statements of Operations related to the advisory agreement, including approximately $ 50,000 in expense related to equity incentive grants. For the year ended December 31, 2022, the Company recognized $ 110,000 in expense in its Statements of Operations related to the advisory agreement, including approximately $ 50,000 in expense related to equity incentive grants. The Company issued Mr. Weiss 7,246 and 4,777 shares of restricted stock for the years ended December 31, 2023 and 2022, respectively. ​ Note 5 – Property, Plant and Equipment, and Fixed Assets – Construction in Process On May 18, 2023, the Company entered into an Asset Purchase Agreement with uBriGene (Boston) Biosciences, Inc. (“uBriGene”), as amended by a first amendment thereto, dated as of June 29, 2023, and further amended by a second amendment thereto, dated as of July 28, 2023, pursuant to which the Company has agreed, subject to the terms and conditions therein, to sell its leasehold interest in its cell processing facility located in Worcester, Massachusetts (the “Facility”) and associated assets relating to the manufacturing and production of cell and gene therapies at the Facility to uBriGene. On July 28, 2023, the Company completed the sale of the assets relating to the manufacturing and production of cell and gene therapies at the Facility. In connection with the sale of such assets, the Company received base proceeds of $ 6.0 million for the assets and lab supplies on-hand as of the transaction date. Based on the fair value of the consideration received and the relative fair value F-20 Table of Contents allocation of the consideration, the Company recorded a gain of $ 1.5 million in the Statements of Operations, for the year ended December 31, 2023. The Company recorded approximately $ 0.2 million of the consideration as deferred income, which will be recognized upon the transfer of the lease. The Company will record adjustments to the fair value of the potential future consideration each reporting period, prospectively. ​ Mustang’s property, plant and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Useful December 31, December 31, ($ in thousands) ​ Life (in years) ​ 2023 ​ 2022 Computer equipment 3 ​ $ — ​ $ 145 Furniture and fixtures 5 ​ — ​ 370 Machinery and equipment 5 ​ — ​ 8,632 Leasehold improvements 9 ​ 7,694 ​ 7,694 Total property, plant and equipment ​ ​ ​ 7,694 ​ 16,841 Less: accumulated depreciation ​ ​ ​ ( 4,476 ) ​ ( 8,401 ) Property, plant and equipment, net ​ ​ ​ $ 3,218 ​ $ 8,440 ​ Depreciation expense for the years ended December 31, 2023 and 2022, was approximately $ 1.9 million and $ 2.7 million, respectively, and was recorded in research and development expense in the Statements of Operations. ​ Fixed assets – construction in process primarily reflects buildout costs and equipment that have not yet been placed into service. For the years ended December 31, 2023, and 2022, fixed assets – construction in process was approximately $ 29,000 and $ 1.0 million, respectively. ​ Note 6 - Accounts Payable and Accrued Expenses At December 31, 2023 and 2022, accounts payable and accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ($ in thousands) ​ 2023 2022 Accounts payable ​ $ 6,322 ​ $ 6,833 Accrued research and development ​ ​ 4,118 ​ ​ 2,782 Accrued compensation ​ ​ 2,838 ​ ​ 3,468 Other ​ ​ 739 ​ ​ 648 Total accounts payable and accrued expenses ​ $ 14,017 ​ $ 13,731 ​ ​ ​ ​ ​ ​ F-21 Table of Contents Note 7 - Commitments and Contingencies Leases On June 14, 2022, the Company entered into a sublease agreement with The Paul Revere Life Insurance Company. Pursuant to the terms of the sublease lease agreement, the Company agreed to lease 26,503 square feet, located at 1 Mercantile Street, Worcester, MA (the “Mercantile Street Facility”), through January 2030. The Company recorded a right of use asset and related operating lease liability of $ 2.2 million on the Balance Sheet at the lease inception. On July 18, 2023, the Company executed, with a retroactive Effective Date of June 15, 2023, a Third Amendment to Sublease (the “Third Amendment”), with the Paul Revere Life Insurance Company, pursuant to which the Company relocated from the 26,503 square feet of rentable space on the fourth floor of the Mercantile Center to 11,916 square feet of rentable space on the second floor of the Mercantile Center. As a result of the modification, the Company recorded an adjustment to its right of use asset and related operating lease liability of $ 1.0 million and $ 1.2 million, respectively, and $ 0.2 million gain on the modification of the sublease, which is recorded in Other Income in the Statements of Operations. The Company does not yet occupy the Mercantile Street Facility. On October 27, 2017, the Company entered into a lease agreement with WCS - 377 Plantation Street, Inc., a Massachusetts nonprofit corporation. Pursuant to the terms of the lease agreement, the Company agreed to lease 27,043 square feet from the landlord, located at 377 Plantation Street in Worcester, MA (the “Plantation Street Facility”), through November 2026, subject to additional extensions at the Company’s option. Base rent, net of abatements of $ 0.6 million over the lease term, totals approximately $ 3.6 million, on a triple-net basis. The terms of the lease also require that the Company post an initial security deposit of $ 0.8 million, in the form of $ 0.5 million letter of credit and $ 0.3 million in cash, which increased to $ 1.3 million ($ 1.0 million letter of credit, $ 0.3 million in cash) on November 1, 2019. After the fifth lease year, the letter of credit obligation is subject to reduction. In January 2023, the letter of credit was reduced to $ 0.8 million. The Plantation Street Facility began operations for the production of personalized CAR T and gene therapies in 2018. The Company leases office space and copiers under agreements classified as operating leases that expire on various dates through 2030. The Company’s lease liabilities result from the lease of its facilities in Massachusetts, which expire in 2030 and 2026, for the Mercantile Street Facility and Plantation Street Facility, respectively, and its copiers, which expire in 2024. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options. The Company does not act as a lessor or have any leases classified as financing leases. At December 31, 2023, the Company had operating lease liabilities of $ 2.5 million and right of use assets of $ 1.6 million, which were included in the Balance Sheet. At December 31, 2022, the Company had operating lease liabilities of $ 3.9 million and right of use assets of $ 2.9 million, which were included in the Balance Sheet. The following summarizes quantitative information about the Company’s operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ December 31, ​ ​ December 31, ​ ($ in thousands) 2023 2022 Lease cost ​ ​ ​ Operating lease cost $ 439 $ 565 ​ Variable lease cost ​ ​ 467 ​ ​ 488 ​ Total $ 906 $ 1,053 ​ F-22 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ($ in thousands) 2023 2022 Operating cash flows from operating leases $ 529 ​ $ 485 ​ Gain on lease modification ​ $ 220 ​ ​ $ — ​ Weighted-average remaining lease term – operating leases ​ ​ 4.5 ​ ​ ​ 5.9 ​ Weighted-average discount rate – operating leases ​ ​ 9.1 % ​ ​ 9.1 % ​ Maturities of our operating leases, excluding short-term leases, are as follows: ​ ​ ​ ​ ​ ($ in thousands) ​ ​ Year ended December 31, 2024 ​ $ 723 Year ended December 31, 2025 ​ ​ 774 Year ended December 31, 2026 ​ 703 Year ended December 31, 2027 ​ 269 Year ended December 31, 2028 ​ 274 Thereafter ​ ​ 303 Total ​ 3,046 Less present value discount ​ ​ ( 548 ) Operating lease liabilities ​ $ 2,498 ​ ​ ​ Note 8 – Notes Payable On April 11, 2023, the Company’s long-term debt facility with Runway Growth Finance Corp. (the “Term Loan”) was terminated upon receipt by Runway of a payoff amount of $ 30.4 million from the Company comprised of principal, interest and the applicable final payment amount. The loss on extinguishment was recorded in interest expense in the Statements of Operations. For the years ended December 31, 2023 and 2022, the Company recorded the following components in interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ($ in thousands) ​ 2023 2022 Interest expense ​ $ 1,187 ​ $ 2,899 Amortization of Debt Discount ​ ​ 118 ​ ​ 445 Loss on Extinguishment ​ ​ 2,795 ​ ​ — Other ​ ​ 9 ​ ​ 15 Total Interest Expense ​ $ 4,109 ​ $ 3,359 ​ The Company entered into the Term Loan on March 4, 2022. Under the Term Loan, $ 30.0 million of the $ 75.0 million loan was funded on the Closing Date, with the remaining $ 45.0 million fundable if the Company achieved certain predetermined milestones. The Term Loan accrued interest at a variable annual rate equal to 8.75 % plus the greater of (i) 0.50 % and (ii) the three month LIBOR Rate for U.S. dollar deposits or the rate otherwise reasonably determined by the Lender to be the rate at which U.S. dollar deposits with a term of three months would be offered by banks in London, England to major banks in the London or other offshore interbank market (the “Applicable Rate”); provided that the Applicable Rate would not be less than 9.25 %. On December 7, 2022, the Company entered into the First Amendment (the “First Amendment”) to the Loan Agreement by and between the Company and Runway. The First Amendment amended certain definitions and other provisions of the Loan Agreement to replace LIBOR-based benchmark rates applicable to loans outstanding under the Loan Agreement with SOFR-based rates, subject to adjustments as specified in the First Amendment. The Applicable Rate at December 31, 2022 was 11.69 %. For the year ended December 31, 2023, the Company made interest payments of $ 1.3 F-23 Table of Contents million, recorded in interest expense in the Statements of Operations. For the year ended December 31, 2022, the Company made interest payments of $ 2.7 million, recorded in interest expense in the Statements of Operations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ($ in thousands) 2023 2022 Note payable $ — $ 31,050 Discount on note payable ​ ​ — ​ ​ ( 3,614 ) Long-term note payable $ — $ 27,436 ​ ​ Amortization of the debt discount associated with the Term Loan was approximately $ 0.1 million and $ 0.5 million for the year ended December 31, 2023, and 2022, respectively, and was recorded in interest expense in the Statements of Operations. In addition, the Term Loan was secured by a lien on substantially all of our assets other than certain intellectual property assets and certain other excluded collateral, and it contained a minimum liquidity covenant and other covenants that include among other items: (i) limits on indebtedness, repurchase of stock from employees, officers and directors. ​ Note 9 - Stockholders’ Equity Common Stock The Company, in accordance with its certificate of incorporation, as amended in November 2020 and June 2021, which was retroactively applied, and July 2022, is authorized to issue (i) 200,000,000 common shares with a par value of $ 0.0001 per share, of which 1,000,000 shares are designated as Class A Common Stock and the remainder are undesignated Common Stock, and (ii) 2,000,000 shares of Preferred Stock, 250,000 of which are designated as Class A Preferred Stock and the remainder are undesignated Preferred Stock (see below Stock Issuances to Fortress and Note 4). In connection with the Company’s formation, Fortress subscribed for 7,000,000 shares of the Class B Common Stock and 2,000,000 shares of the Company’s Common Stock, pursuant to the Founders Agreement. Fortress paid the par value of $ 900 in 2016. The fair value of the Company’s common shares approximated par value as no licenses had been transferred at that time. In July 2016, the Class B Common Stock held by Fortress was exchanged for Class A Preferred Stock, and the Company amended and restated its Certificate of Incorporation to eliminate the Class B Common Stock and authorized a new series of Class A Preferred Stock. Dividends, if and when declared, are to be distributed pro-rata to the Class A Common Stock, Common Stock and Class A Preferred Common Stock. The holders of Common Stock are entitled to one vote per share of Common Stock held. The holders of Class A Common Stock are entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of Class A Common Stock held by such holder are convertible and for a period of ten years from its issuance, the holders of the Class A Common Stock have the right to appoint one member of the board of directors of Mustang; to date, the holders of Class A Common Stock have not yet appointed such director. At-the-Market Offering of Common Stock In July 2018, the Company entered into an At-the-Market Issuance Sales Agreement (the “Mustang ATM”) with B. Riley Securities, Inc. (formerly B. Riley FBR, Inc.), Cantor Fitzgerald & Co., National Securities Corporation, (now B. Riley FBR, Inc.), and Oppenheimer & Co. Inc. (each an “Agent” and collectively, the “Agents”), relating to the sale of shares of common stock pursuant to the 2020 S-3. Under the Mustang ATM, the Company pays the Agents a commission rate of up to 3.0 % of the gross proceeds from the sale of any shares of common stock. On December 31, 2020, the Mustang ATM was amended to add H.C. Wainwright & Co., LLC as an Agent. On April 14, 2023, the Mustang ATM was amended to add the limitations imposed by General Instruction I.B.6 to Form S-3 and remove Oppenheimer & Co., Inc. as an Agent. F-24 Table of Contents During the year ended December 31, 2023, the Company issued approximately 52,000 shares of common stock at an average price of $ 3.15 per share for gross proceeds of $ 163,000 under the ATM Agreement. In connection with these sales, the Company paid aggregate fees of approximately $ 3,000 for net proceeds of approximately $ 160,000 . During the year ended December 31, 2022, the Company issued approximately 0.5 million shares of common stock at an average price of $ 12.61 per share for gross proceeds of $ 6.6 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 $ 6.5 million. Pursuant to the Founders Agreement, the Company did not issue any shares of its common stock to Fortress for the year ended December 31, 2023, and recorded the value of 1,297 shares issuable to Fortress in connection with the Mustang ATM. Pursuant to the Founders Agreement, Mustang issued 13,131 shares of common stock to Fortress at a weighted average price of $ 13.56 per share for the year ended December 31, 2022, in connection with the Mustang ATM. Registered Direct Offering On October 26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single institutional accredited investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market (the “Registered Offering”), (i) 920,000 shares of common stock, $ 0.0001 par value per share, at a price per Share of $ 1.70 and (ii) pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 1,668,236 shares of its common stock, at a price per Pre-funded Warrant equal to $ 1.699 , the price per Share, less $ 0.001 . The Pre-funded Warrants have an exercise price of $ 0.001 per share, became exercisable upon issuance and remain exercisable until exercised in full. In a concurrent private placement, pursuant to the terms of the Purchase Agreement, the Company also agreed to issue and sell unregistered warrants (the “Warrants”) to purchase up to 2,588,236 shares of Common Stock, at an offering price of $ 0.125 per Warrant to purchase one share of common stock (the “Private Placement” and, together with the Registered Offering, the “Offerings”) (which offering price is included in the purchase price per Share or Pre-funded warrant). The Warrants have an exercise price of $ 1.58 per share (subject to customary adjustments as set forth in the Warrants), are exercisable upon issuance and will expire five and one-half years from the date of issuance. The Warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions. The Registered Direct Offering and Private Placement closed on October 30, 2023. The Company received approximately $ 4.4 million in gross proceeds from the Offerings, before deducting placement agency fees and offering expenses of approximately $ 0.5 million. ​ Pursuant to the Founders Agreement, the Company did not issue any shares of its common stock to Fortress and recorded the value of 64,706 shares issuable to Fortress in connection with the Registered Direct Offering as of December 31, 2023. ​ Registration Statements ​ On December 12, 2023, we filed registration statement No. 333-275997 on Form S-1, which registered the offer and sale of common stock on behalf of the Selling Stockholders, of up to 2,743,530 shares of our common stock, issuable upon the exercise of certain warrants held by the Selling Stockholders. ​ On October 23, 2020, the Company filed a shelf registration statement No. 333-249657 on Form S-3 (the “2020 S-3”), which was declared effective on December 4, 2020. Under the 2020 S-3, the Company may sell up to a total of $ 100.0 million of its securities. The 2020 S-3 expired on October 23, 2023. ​ On April 23, 2021, the Company filed a shelf registration statement No. 333-255476 on Form S-3 (the “2021 S-3”), which was declared effective on May 24, 2021. Under the 2021 S-3, the Company may sell up to a total of $ 200.0 million of its securities. As of December 31, 2023, approximately $ 195.6 million of the 2021 S-3 remains available for sale of securities. ​ F-25 Table of Contents Stock Issuances to Fortress Under the terms of the Second Amended and Restated 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. Additionally, pursuant to the Amended and Restated Articles of Incorporation, Fortress receives and Annual Stock Dividend on January 1 st , representing 2.5 % of the fully-diluted outstanding equity of Mustang. For the year ended December 31, 2023, the Company recorded the value of 353,086 shares of common stock to Fortress for the Annual Stock Dividend, as Common stock issuable – Annual Stock Dividend in the Statement of Stockholders’ Equity. The Company recorded an expense of approximately $ 0.5 million in research and development – licenses acquired related to these issuable shares during the year ended December 31, 2023. For the year ended December 31, 2022, the Company recorded the value of 187,134 shares of common stock to Fortress for the Annual Stock Dividend, as Common stock issuable – Annual Stock Dividend in the Statement of Stockholders’ Equity. 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. For the year ended December 31, 2023, the Company did not issue any shares of common stock and recorded the value of 1,297 shares issuable to Fortress, which equaled 2.5 % of the gross proceeds of $ 0.2 million from the sale of shares of common stock under Mustang’s At-the-Market Offering. In connection with the Registered Direct Offering, the Company recorded 64,706 shares issuable to Fortress, which equaled 2.5 % of the gross proceeds of $ 4.4 million. For the year ended December 31, 2022, the Company issued 13,131 shares of common stock to Fortress at a weighted average price of $ 13.56 per share, the value of which equaled 2.5 % of the gross proceeds of $ 6.6 million from the sale of shares of common stock under the Mustang ATM. Equity Incentive Plan The Company has in effect the 2016 Incentive Plan (the “Incentive Plan”). The Incentive Plan was adopted in 2016 by our stockholders and the compensation committee of the Company’s board of directors and is authorized to grant stock-based awards to directors, officers, employees and consultants. The plan initially authorized grants to issue up to 133,333 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option to no more than 10 years from the date of grant. ​ In June 2018, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 333,333 shares. In June 2021, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 533,333 shares. In June 2022, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 200,000 shares, for a total of 733,333 shares ​ As of December 31, 2023, 282,334 shares are available for issuance of stock-based awards under the Incentive Plan. ​ Stock Options The following table summarizes stock option activities for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ Remaining ​ ​ ​ ​ Weighted Average ​ Contractual Life (in ​ ​ Stock Options ​ Exercise Price ​ years) Outstanding at December 31, 2021 76,112 ​ $ 85.95 5.31 Outstanding at December 31, 2022 76,112 ​ $ 85.95 4.31 Outstanding at December 31, 2023 76,112 ​ $ 85.95 3.31 Options vested and exercisable at December 31, 2023 47,570 ​ $ 85.95 3.31 ​ F-26 Table of Contents As of December 31, 2023, the Company had no unrecognized stock-based compensation expense related to options. The Company accounts for forfeited awards as they occur as permitted. Restricted Stock Awards Certain employees and directors have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted stock award activities for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date Fair ​ ​ Number of Shares ​ Value Nonvested at December 31, 2021 18,732 ​ $ 60.75 Granted ​ 23,888 ​ ​ 10.50 Vested ​ ( 8,604 ) ​ ​ 73.35 Nonvested at December 31, 2022 34,016 ​ $ 22.20 Granted 36,230 ​ 6.90 Vested ​ ( 5,540 ) ​ ​ 46.20 Nonvested at December 31, 2023 64,706 ​ $ 11.59 ​ As of December 31, 2023, the Company had unrecognized stock-based compensation expense related to restricted stock of $ 0.4 million, which is expected to be recognized over a weighted average period of approximately 2.1 years. Restricted Stock Units The following table summarizes restricted stock units’ activities for the year ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date Fair ​ ​ Number of Units ​ Value Nonvested at December 31, 2021 155,704 ​ $ 49.05 Granted 98,976 ​ 11.40 Forfeited ​ ( 34,333 ) ​ ​ 37.95 Vested ​ ( 54,435 ) ​ ​ 44.70 Nonvested at December 31, 2022 165,912 ​ $ 27.60 Granted 29,732 ​ 5.13 Forfeited ​ ( 51,366 ) ​ ​ 27.22 Vested ( 49,081 ) ​ 31.53 Nonvested at December 31, 2023 95,197 ​ $ 18.78 ​ As of December 31, 2023, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $ 0.5 million, which is expected to be recognized over a weighted average period of approximately 2.1 years. The following table summarizes stock-based compensation expense for the years ended December 31, 2023 and 2022 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 General and administrative ​ $ 436 ​ $ 700 Research and development ​ 132 ​ 1,583 Total stock-based compensation expense ​ $ 568 ​ $ 2,283 ​ F-27 Table of Contents Stock Warrants In connection with the Company’s Registered Direct Offering on October 26, 2023, the Company issued pre-funded warrants to purchase up to 1,668,236 shares of common stock, and in a concurrent private placement, the Company issued unregistered warrants to purchase up to 2,588,236 shares of common stock. In connection with these offerings, H.C. Wainwright received Placement Agent Warrants to purchase up to 155,294 shares of common stock. In connection with the Term Loan on March 4, 2022, the Company issued a warrant to the Lender to purchase 49,869 shares of the Company's common stock with an exercise price of $ 12.03 , see Note 8. A summary of warrant activities for years ended December 31, 2023 and 2022, is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ Remaining ​ ​ ​ ​ Weighted Average ​ Contractual Life (in ​ ​ Warrants ​ Exercise Price ​ years) Outstanding as of December 31, 2021 220,577 ​ $ 120.30 0.73 Expired ​ ( 200,251 ) ​ ​ 127.49 ​ — Granted 49,869 ​ 12.03 9.18 Outstanding as of December 31, 2022 70,195 ​ $ 22.80 8.29 Exercised ( 93 ) ​ — — Granted 4,411,766 ​ 1.00 5.29 Outstanding as of December 31, 2023 4,481,868 ​ $ 1.34 5.34 ​ Upon the exercise of warrants, the Company will issue new shares of Common Stock. ​ Employee Stock Purchase Plan In connection with our Employee Stock Purchase Plan (“ESPP”), eligible employees of Mustang and Fortress can purchase the Company’s Common Stock at the end of a predetermined offering period at 85 % of the lower of the fair market value at the beginning or end of the offering period. As of December 31, 2023, 86,578 shares have been purchased and 380,089 shares are available for future sale under the Company’s ESPP. ​ ​ ​ F-28 Table of Contents Note 10 - Income Taxes The Company has accumulated net losses since inception and has not recorded an income tax provision or benefit during the years ended December 31, 2023 and 2022. ​ A reconciliation of the statutory U.S. federal rate to the Company’s effective tax rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 Statutory federal income tax rate 21 % 21 % State taxes, net of federal tax benefit 16 % 16 % Non-deductible items — % ( 1 ) % Tax credits 4 % 5 % Other ( 3 ) % 1 % Change in valuation allowance ( 38 ) % ( 42 ) % Income taxes provision (benefit) — — ​ ​ The components of the net deferred tax asset as of December 31, 2023 and 2022 are the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ($ in thousands) 2023 2022 Deferred tax assets: ​ ​ Net operating loss carryovers ​ $ 84,651 ​ $ 75,011 Stock compensation and other ​ 1,946 ​ 2,399 Change in fair value of warrant liabilities ​ 59 ​ 59 Amortization of license ​ 11,856 ​ 13,375 Lease liability ​ ​ 929 ​ ​ 1,466 Accruals and reserves ​ 1,841 ​ 1,434 Startup costs ​ 5 ​ 6 Tax credits ​ ​ 18,189 ​ ​ 15,649 174 Capitalization ​ 28,800 ​ 19,787 Total deferred tax assets ​ ​ 148,276 ​ ​ 129,186 Less: valuation allowance ​ ( 147,694 ) ​ ( 128,101 ) Net deferred tax assets ​ $ 582 ​ $ 1,085 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Right of use asset ​ ​ ( 582 ) ​ ​ ( 1,085 ) Total deferred tax assets, net ​ $ — ​ $ — ​ The Company has determined, based upon available evidence, that it is more likely than not that the net deferred tax asset will not be realized and, accordingly, has provided a full valuation allowance against its net deferred tax assets as of December 31, 2023 and 2022. A valuation allowance of approximately $ 147.7 million and $ 128.1 million, respectively, was recorded for the years ended December 31, 2023 and 2022. As of December 31, 2023, the Company had federal and state net operating loss carryforwards of approximately $ 244.1 million and $ 514.9 million, respectively. Approximately $ 220.4 million and $ 0.4 million of the federal and state net operating loss carryforwards, respectively, can be carried forward indefinitely. As of December 31, 2023, the Company had federal and state income tax credits of approximately $ 14.1 million and $ 5.2 million, respectively, which will begin to expire in 2034 . Under the provisions of Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownership change”, as defined therein, is subject to limitations on its use of pre-change NOLs and income tax credits carryforwards to offset future tax liabilities. Certain tax attributes may be subject to an annual limitation as a result of the Company’s January 2017 capital raise, as it appears to constitute an ownership change under Section 382. Additionally, under Section 382, annual use of the Company’s net operating loss carryforwards to offset taxable income may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such F-29 Table of Contents limitations have been triggered as of December 31, 2023. The Company has no income tax effect due to the recognition of a full valuation allowance on all of its deferred tax assets as it believes that it is more likely than not that the deferred tax assets will not be realized regardless of whether an “ownership change” has occurred. There are no significant items determined to be unrecognized tax benefits taken or expected to be taken in a tax return, in accordance with ASC 740 “Income Taxes” (“ASC 740”), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements, that have been recorded on the Company’s financial statements for the periods ended December 31, 2023 and 2022. The Company does not anticipate a material change to unrecognized tax benefits in the next twelve months. Additionally, ASC 740 provides guidance on the recognition of interest and penalties related to income taxes. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the periods ended December 31, 2023 and 2022. The Company is subject to U.S. federal and various state taxes. As of December 31, 2023, the earliest federal tax year open for the assessment of income taxes under the applicable statutes of limitations is its 2020 tax year. ​ Beginning with the 2022 tax year, the Company is required to capitalize research and development expenses for tax purposes as defined under Internal Revenue Code Section 174. For expenses that are incurred for research and development in the U.S., the amounts will be amortized over 5 years, and for expenses that are incurred for research and development outside the U.S., the amounts will be amortized over 15 years. As a result of Section 174 capitalization, the Company recognized a deferred tax asset of $ 28.8 million. ​ In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer's social security payments, net operating loss utilization and carryback periods and modifications to the net interest deduction limitations. The CARES Act did not have a material impact on the Company’s income tax provision for 2023 and 2022. The Company will continue to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows. On December 27, 2020, the Consolidated Appropriations Act, 2021 (“Consolidated Appropriations Act”) was signed into law. The Consolidated Appropriations Act is intended to enhance and expand certain provisions of the CARES Act, allows for the deductions of expenses related to the Payroll Protection Program funds received by companies, and provides an update to meals and entertainment expensing for 2021. The Consolidated Appropriations Act did not have a material impact to the Company’s income tax provision for 2023 and 2022. Note 11 – Subsequent Events In connection with the sale of the Company’s leasehold interest in its cell processing facility located in Worcester, Massachusetts and associated assets relating to the manufacturing and production of cell and gene therapies at the Facility (the “Transaction”) to uBriGene (Boston) Biosciences, Inc., a Delaware corporation (“uBriGene”) and an indirect, wholly owned subsidiary of UBrigene (Jiangsu) Biosciences Co., Ltd., a Chinese contract development and manufacturing organization, the Company and uBriGene previously submitted a voluntary notice with the U.S. Committee on Foreign Investment in the United States (“CFIUS”) on August 10, 2023 to obtain clearance for the Transaction, although obtaining such clearance was not a condition to closing the Transaction. Following an initial 45-day review period and subsequent 45-day investigation period, on November 13, 2023, CFIUS requested that the Company and uBriGene withdraw and re-file our joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the Transaction. Upon CFIUS’s request, the Company and uBriGene submitted a request to withdraw and re-file our joint voluntary notice to CFIUS, and on November 13, 2023, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on November 14, 2023. CFIUS’s 45-day review ended on December 28, 2023. Since CFIUS had not concluded its review by December 28, 2023, the proceeding transitioned to a subsequent 45-day investigation period, which ended on February 12, 2024. F-30 Table of Contents Following the 45-day review period and subsequent 45-day investigation period described above, on February 12, 2024, the Company and uBriGene requested permission to withdraw and re-file their joint voluntary notice to allow more time for review and discussion regarding the nature and extent of national security risk posed by the Transaction. Upon the Company’s and uBriGene’s request to withdraw and re-file their joint voluntary notice to CFIUS, on February 12, 2024, CFIUS granted this request, accepted the joint voluntary notice and commenced a new 45-day review period on February 13, 2024. The new 45-day review period will conclude no later than March 28, 2024. If CFIUS does not conclude its review by March 28, 2024, the proceeding will transition to a second 45-day phase as CFIUS further investigates the Transaction. ​ ​ ​ ​ F-31 Table of Contents ​ SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ Mustang Bio, Inc. By: /s/ Manuel Litchman, M.D. Name: Manuel Litchman, M.D. Title: President and Chief Executive Officer ​ March 11, 2024 ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ Signature Title Date /s/ Manuel Litchman President and Chief Executive Officer Manuel Litchman, M.D. (Principal Executive Officer) March 11, 2024 ​ /s/ James Murphy ​ Interim Chief Financial Officer ​ ​ James Murphy (Principal Financial and Accounting Officer) ​ ​ March 11, 2024 /s/ Michael S. Weiss Chairman of the Board of Directors and Executive Michael S. Weiss Chairman March 11, 2024 ​ ​ ​ ​ ​ /s/ Adam Chill Adam Chill Director March 11, 2024 /s/ Neil Herskowitz Neil Herskowitz Director March 11, 2024 /s/ Lindsay A. Rosenwald Lindsay A. Rosenwald, M.D. Director March 11, 2024 /s/ Michael Zelefsky Michael Zelefsky, M.D. Director March 11, 2024 ​ ​ ​ ​ 96