What changed in this filing

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Item 1A. Risk Factors

2025-03-28 compared with 2024-03-11 · 142 added, 150 removed, 797 unchanged (27% of the section changed)

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Some of the statements in the following risk factors constitute forward-looking statements.

Please see the section titled “Special Note Regarding Forward-Looking Statements.”

Please see the section titled “Special Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Finances and Capital Requirements

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We will need to raise additional funding (which may not be available on acceptable terms to us, or at all) and/or delay, limit or terminate our product development efforts or other operations.

We are currently advancing our programs in hematologic cancers, solid tumors and rare genetic diseases through clinical development.

Developing and commercializing CAR T and gene therapy products is expensive, and we do not expect to generate meaningful product

revenues in the foreseeable future until we obtain marketing approval for products in the United States and following any potential commercial launch.

If we are unable to raise capital, we could be required to seek bankruptcy protection or other alternatives that would likely result in our securityholders losing some or all of their investment in us.

We are currently advancing our programs in hematologic cancers, autoimmune diseases and solid tumors through clinical development.

Developing and commercializing CAR T products is expensive, and we do not expect to generate meaningful product revenues in the foreseeable future until we obtain marketing approval for products in the United States and following any potential commercial launch.

As of December 31, 2024, our cash and cash equivalents were $6.8 million.

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The sale of additional equity or convertible securities would dilute all of our stockholders.

Potential indebtedness, if incurred, would result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

adversely impact our ability to conduct our business.

We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

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As a result, our business, financial condition, and results of operations could be materially affected.

Furthermore, if we are unable to raise capital, we could be required to seek bankruptcy protection or other alternatives that would likely result in our securityholders losing some or all of their investment in us.

Our short operating history makes it difficult to evaluate our business and prospects.

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In order to carry out our business plan and implement our strategy, we will need to obtain substantial additional financing and may choose to raise additional funds through strategic collaborations, licensing arrangements, public or private equity or debt financing, bank lines of credit, asset sales, government grants, or other arrangements.

We cannot be certain that additional funding will be available on acceptable

terms, or at all.

We cannot be certain that additional funding will be available on acceptable terms, or at all.

Additional funding may be more difficult to obtain, or may be more expensive, as a result of recent increases in inflation and interest rates in the U.S.

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and international financial banking systems, supply disruptions due to political unrest, conflict and war or other factors, and pandemics.

Under current SEC regulations, if at the time we file our Annual Report on Form 10-K our public float is less than $75 million, and for so long as our public float remains less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to an aggregate of one-third of our public float, which is referred to as the “baby shelf rules.” SEC regulations permit us to use the highest closing sales price of our common stock (or the average of the last bid and last ask prices of our common stock) on any day within 60 days of sales under the registration statement to calculate our public float.

Our inability to raise capital when needed would harm our business, financial condition and results of operations, and could cause our stock value to decline or require that we wind down our operations altogether.

SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to our shelf registration statement on Form S-3.

SEC regulations permit us to use the highest closing sales price of our common stock (or the average of the last bid and last ask prices of our common stock) on any day within 60 days of sales under the registration statement to calculate our public float.

As of the date of this Form 10-K, our public float was less than $75 million.

As a result, for sales following the date of this Form 10-K, and until we again have a public float with a value in exceeds of $75 million, if ever, we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.

If our public float decreases, the amount of securities we may sell under our Form S-3 shelf registration statements will also decrease.

If our public float decreases, the number of securities we may sell under our Form S-3 shelf registration statements will also decrease.

Furthermore, if we are required or choose to file a new registration statement on a form other than Form S-3, we may incur additional costs and be subject to delays due to review by the SEC staff.

Raising additional capital, including through lending arrangements, may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, grants and license and development agreements in connection with any collaborations.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder.

To the extent that we raise

additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder.

Debt financing, including through lending arrangements, and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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We will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we incur significant legal, accounting and other expenses under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as rules subsequently implemented by the SEC, and the rules of the Nasdaq Stock Exchange.

As a public company, we incur significant legal, accounting and other expenses under the Sarbanes-Oxley Act of 2002, (the “Sarbanes-Oxley Act”), as well as rules subsequently implemented by the SEC, and the rules of The Nasdaq Stock Market LLC (“Nasdaq”).

These rules impose various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and appropriate corporate governance practices.

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We may, from time to time, carry net operating loss carryforwards (“NOLs”) as deferred tax assets on our balance sheet.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50-percentage- point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.

period), the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.

We may experience ownership changes in the future as a result of shifts in our stock ownership, some of which changes are outside our control.

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● raising additional required capital on acceptable terms.

Our operations have historically been limited to organizing, acquiring, developing and securing our proprietary technology and identifying and obtaining preclinical data or clinical data for various product candidates.

These operations provide a limited basis to assess our ability to continue to develop our technology, identify product candidates, develop and commercialize any product candidates we are able to identify and enter into successful collaborative arrangements with other companies, as well as for you to assess the advisability of investing in our securities.

Our operations have historically been limited to organizing the Company, acquiring, developing and securing our proprietary technology and identifying and obtaining preclinical data or clinical data for various product candidates.

These operations provide a limited basis for you to assess our ability to continue to develop our technology, identify product candidates, develop and commercialize any product candidates we are able to identify and enter into successful collaborative arrangements with other companies, as well as for you to assess the advisability of investing in our securities.

Each of these requirements will require substantial time, effort and financial resources.

Each of our product candidates will require additional clinical development, management of clinical and manufacturing activities, regulatory approval in the jurisdictions in which we plan to market the product, obtaining manufacturing supply, building a commercial organization, and significant marketing efforts before we generate any revenues from product sales, which may not occur.

We are not permitted to market or promote any of our product candidates in the U.S.

We are not permitted to market

or promote any of our product candidates in the U.S.

or any other jurisdiction before we receive regulatory approval from the FDA or comparable foreign regulatory authority, respectively, and we may never receive such regulatory approval for any of our product candidates.

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One of the reasons for the lack of commercial viability could be our inability to obtain regulatory approval for such technologies.

CAR T is a new approach to cancer treatment that presents significant challenges .

CAR T is a relatively new approach to cancer treatment that presents significant challenges .

We have concentrated much of our research and development efforts on CAR T technology, and our future success is highly dependent on the successful development of T cell immunotherapies in general and our CAR T technology and product candidates in particular.

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● establishing sales and marketing capabilities after obtaining any regulatory approval to gain market acceptance, and obtaining adequate coverage, reimbursement and pricing by third-party payors and government authorities;

● developing therapies for types of cancers beyond those addressed by our current product candidates.

● developing therapies for indications beyond those addressed by our current product candidates.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

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Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us from commercializing our product candidates.

It is also unclear what actions will be taken by the current presidential administration or through legislative action that could impact the FDA and our ability to obtain regulatory approvals.

Regulatory approval for our product candidates by the FDA, or any similar regulatory authorities outside the United States, is limited to those specific indications and conditions for which clinical safety and efficacy have been demonstrated.

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Any failure to comply with applicable regulations may result in fines and civil penalties, suspension of production, restrictions on imports and exports, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval, and would limit the availability of our product and customer confidence in our product.

Any manufacturing defect or error discovered after products have been produced and distributed could result in even more significant consequences, including costly recalls, re-stocking costs, damage to our reputation and potential for product liability claims.

Any manufacturing

defect or error discovered after products have been produced and distributed could result in even more significant consequences, including costly recalls, re-stocking costs, damage to our reputation and potential for product liability claims.

If the contract manufacturers upon whom we may rely to manufacture one or more of our product candidates, and any future product candidate we may in-license, fails to deliver the required commercial quantities on a timely basis at commercially reasonable prices, we would likely be unable to meet demand for our approved product and we would lose potential revenues.

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The FDA, or other regulatory authorities, may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product.

The FDA and other applicable regulatory authorities closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling.

The FDA and other applicable regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use and if we do not market any approved product for only their approved indications, we may be subject to enforcement action for off-label marketing.

Violations of the Federal Food, Drug and Cosmetics Act (“FDCA”) relating to the promotion of prescription

drugs may lead to investigations, civil claims, and/or criminal charges alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

the approved labeling.

The FDA and other applicable regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use and if we market any approved product in a way which is not consistent with the approved labeling, we may be subject to enforcement action for off-label marketing.

Violations of the Federal Food, Drug and Cosmetics Act (“FDCA”) relating to the promotion of prescription drugs may lead to investigations, civil claims, and/or criminal charges alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

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The FDA’s policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates, or negatively affect those products for which we may have already received regulatory approval, if any.

There is added uncertainty in light of actions that may be taken by the current presidential administration or Congress with respect to the FDA.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to the various actions listed above, including losing any marketing approval that we may have obtained.

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The Food and Drug Administration Amendments Act of 2007, (“FDAAA”), grants significant expanded authority to the FDA, much of which is aimed at improving the safety of drug products before and after approval.

In particular, the new law authorizes the FDA to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety information and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.

It also significantly expands the federal government’s clinical trial registry and results databank, which we expect will result in significantly increased government oversight of clinical trials.

Under the FDAAA, companies that violate these and other provisions of the new law are subject to substantial civil monetary penalties, among other regulatory, civil and criminal penalties.

In particular, the law authorizes the FDA to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety information and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.

It also significantly expanded the federal government’s clinical trial registry and results databank, which we expect will result in significantly increased government oversight of clinical trials.

Under the FDAAA, companies that violate these and other provisions of the law are subject to substantial civil monetary penalties, among other regulatory, civil and criminal penalties.

The increased attention to drug safety issues may result in a more cautious approach by the FDA in its review of data from our clinical trials.

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Such third-party payors include government health programs such as Medicare, managed care providers, private health insurers and other organizations.

We intend to seek approval to market our product candidates in the U.S., the EU and other selected foreign jurisdictions.

We intend to seek approval to market our product candidates in the U.S., the European Union (“EU”) and other selected foreign jurisdictions.

Market acceptance and sales of our product candidates in both domestic and international markets will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for any of our product candidates and may be affected by existing and future health care reform measures.

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● unforeseen costs and expenses associated with creating our own sales and marketing organization.

We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate we may license or acquire and, if approved, may have to limit their commercialization.

We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate, if approved, we may license or acquire and may have to limit their commercialization.

The use of one or more of our product candidates and any future product candidate we may license or acquire in clinical trials and the sale of any products for which we obtain marketing approval expose us to the risk of product liability claims.

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Even if one or more of our product candidates, if approved, proves to be an effective treatment against a given type of cancer, the number of patients suffering from such cancer may be small, in which case potential sales from a therapy designed to combat such cancer would be limited.

Our gene therapy product candidates are based on a novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval .

We have concentrated a portion of our therapeutic product research and development efforts on our gene therapy platform, and our future success depends, in part, on the successful development of this therapeutic approach.

There can be no assurance that any development problems we experience in the future related to our gene therapy platform will not cause significant delays or unanticipated costs, or that such development problems can be solved.

We may also experience delays in developing a sustainable, reproducible and commercial-scale manufacturing process or transferring that process to commercial partners, which may prevent us from completing our clinical studies or commercializing our products on a timely or profitable basis, if at all.

In addition, the clinical study requirements of the FDA, the European Medicines Agency (“EMA”), and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential products.

The regulatory approval process for novel product candidates such as ours can be more expensive and take longer than for other, better known or more extensively studied pharmaceutical or other product candidates.

Currently, a limited number of gene therapy products, including CAR T therapies, have been approved by the FDA, the EMA and the European Commission.

Given the few precedents of approved gene therapy products, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the EU or other jurisdictions.

Approvals by the EMA and the European Commission may not be indicative of what the FDA may require for approval.

Regulatory requirements governing the development of gene therapy products have changed frequently and may continue to change in the future.

The FDA has established the Office of Tissues and Advanced Therapies within the Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and to advise the CBER on its review.

The FDA can put an IND on clinical hold if the information in an IND is not sufficient to assess the risks in pediatric patients.

Before a clinical study can begin at any institution, that institution’s IRB and its Institutional Biosafety Committee will have to review the proposed clinical study to assess the safety of the study.

Moreover, serious adverse events or developments in clinical trials of gene therapy product candidates conducted by others may cause the FDA or other regulatory bodies to initiate a clinical hold on our clinical trials or otherwise change the requirements for approval of any of our product candidates.

These regulatory review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and, if approved, commercialization of these treatment candidates or lead to significant post-approval studies, limitations or restrictions.

As we advance our product candidates, we will be required to consult with these regulatory and advisory groups and comply with applicable requirements and guidelines.

If we fail to do so, we may be required to delay or discontinue development of our product candidates.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.

Negative public opinion and increased regulatory scrutiny of the therapies that underpin many of our product candidates may damage public perception of our product candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.

Public perception may be influenced by claims that one or more of the therapies underpinning our product candidates, including without limitation gene therapy, is unsafe, and such therapy may not gain the acceptance of the public or the medical community.

In particular, the success of our gene therapy platforms will depend upon physicians specializing in the treatment of those diseases that our product candidates target prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are already familiar and for which greater clinical data may be available.

Public perception may be influenced by claims that one or more of the therapies underpinning our product candidates is unsafe, and such therapy may not gain the acceptance of the public or the medical community.

More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop.

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If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

We cannot assure you that upon inspection by a regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP regulations.

We cannot assure you that upon inspection by a regulatory authority, such regulatory authority will determine that any of our clinical trials

complies with GCP regulations.

In addition, our clinical trials must be conducted with product produced under cGMP regulations.

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As a result, delays could occur, which could compromise our ability to meet our desired development timelines.

We are currently reliant on COH, Fred Hutch, St.

Jude, the NIH, UAB, Mayo Clinic, and LUMC for a substantial portion of our research and development efforts and the early clinical testing of our product candidates.

A substantial portion of our research and development has been and will continue to be conducted by COH, Fred Hutch, St.

Jude, UAB, Mayo Clinic and LUMC pursuant to a sponsored research agreement and/or clinical trial agreements with each of those parties.

As a result, our future success is heavily dependent on the results of research and development efforts of Dr.

Stephen Forman and his team at COH, of Drs.

Brian Till and Mazyar Shadman and their team at Fred Hutch, of Drs.

Stephen Gottschalk and Ewelina Mamcarz and their team at St.

Markert and his team at UAB, of Dr.

Pease and his team at Mayo Clinic, and of Dr.

Staal and his team at LUMC.

We are currently reliant on COH, Fred Hutch, Nationwide and UAB for all of our research and development efforts and the early clinical testing of our product candidates.

A substantial portion of our research and development has been and will continue to be conducted by COH, Fred Hutch, Nationwide, and UAB pursuant to a sponsored research agreement and/or clinical trial agreements between Mustang Bio and each of COH and Fred Hutch, as well as a Memorandum of Understanding between Nationwide and UAB under which UAB is conducting its MB-108 Phase 1 clinical trials.

As a result, our future success is heavily dependent on the results of research and development efforts of these institutions and their personnel.

We have limited control over the nature or timing of their research and limited visibility into their day-to-day activities, and as a result can provide little assurance that their efforts will be successful.

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This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or any future product candidate or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We may rely on third-party manufacturers or third-party collaborators for the manufacture of commercial supply of one or more product candidates for which our collaborators or we obtain marketing approval.

Due to limited resources, and in light of our reduction in work force in April 2024, we may increase our reliance on third-party manufacturers or third-party collaborators for the manufacture of commercial supply of one or more product candidates for which our collaborators or we obtain marketing approval.

We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms.

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We rely on our third-party manufacturers to produce or purchase from third-party suppliers the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials.

Forces beyond our control, including the continuing effects of the COVID-19 pandemic, could disrupt the global supply chain and impact our or our third-party manufacturers’ ability to obtain raw materials or other products necessary to manufacture our product candidates.

There are a limited number of suppliers for raw materials and equipment that we use (or that are used on our behalf) to manufacture our product candidates, and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials, and if approved, ultimately for commercial sale.

Forces beyond our control could disrupt the global supply chain, including imposition of tariffs, and impact our or our third-party manufacturers’ ability to obtain raw materials or other products necessary to manufacture our product candidates.

of the manufacture of the materials and equipment necessary to produce our product candidates for our preclinical and clinical trials, and if approved, ultimately for commercial sale.

We do not have any control over the process or timing of the acquisition of these raw materials or equipment by our third-party manufacturers.

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If our manufacturers or we are unable to purchase these raw materials or equipment after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates.

The facilities used by contract manufacturers to potentially manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit an NDA or BLA to the FDA.

We are required by law to establish adequate oversight and control over raw materials, components and finished products furnished by our contract manufacturers, but we do not control the day-to-day manufacturing operations of, and are dependent on, the contract manufacturers for compliance with cGMP regulations for manufacture of our product candidates.

We are required by law to establish adequate oversight and control over raw materials, components and finished products furnished by our contract manufacturers, but we do not control the day-to-day manufacturing operations of, and are dependent on, the contract manufacturers for compliance with current Good Manufacturing Practices (“cGMP”) regulations for manufacture of our product candidates.

Third-party manufacturers may not be able to comply with the cGMP regulations or similar regulatory requirements outside the United States.

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Future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that may receive marketing approval on a timely and competitive basis.

We also expect to rely on other third parties to distribute drug supplies for our clinical trials.

We also expect to rely on third parties to distribute drug supplies for our clinical trials.

Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.

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Our reliance on these third parties for manufacturing LV vector reduces our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations and study protocols.

For products that we develop and commercialize, if approved, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies is conducted in accordance with the study plan and protocols, and that our LV vectors are manufactured in accordance with GMP as applied in the relevant jurisdictions.

For products that we develop and, if approved, commercialize, we will remain responsible for ensuring that each of our IND-enabling studies and clinical studies is conducted in accordance with the study plan and protocols, and that our LV vectors are manufactured in accordance with GMP as applied in the relevant jurisdictions.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines, conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, or manufacture our LV vectors in accordance with GMP, we will not be able to complete, or may be delayed in completing, the preclinical and clinical studies and manufacturing process validation activities required to support future IND, market authorization application and BLA submissions and approval of our product candidates, or to support commercialization of our products, if approved.

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In some cases, the technical skills required to manufacture LV vector for our drug product candidates may be unique or proprietary to the original manufacturer, and we may have difficulty or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.

Any of these events could lead to clinical study delays or failure to obtain marketing approval or impact our ability to successfully commercialize our product candidates or any future product candidates, if approved.

Any of these events could lead to clinical study delays or

failure to obtain marketing approval or impact our ability to successfully commercialize our product candidates or any future product candidates, if approved.

Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.

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A third party may hold intellectual property, including patent rights that are important or necessary to the development and commercialization of our products.

It may be necessary for us to use the patented or proprietary technology of third parties, who may or may not be interested

in granting such a license, to commercialize our products, in which case we would be required to obtain a license from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially.

It may be necessary for us to use the patented or proprietary technology of third parties, who may or may not be interested in granting such a license, to commercialize our products, in which case we would be required to obtain a license from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially.

Collaborative relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.

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Since its enactment, there have been executive, judicial, and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

Drug pricing continues to be a subject of debate at the executive and legislative levels of U.S.

The American Rescue Plan Act of 2021 signed into law by President Biden on March 14, 2021 includes a provision that will eliminated the statutory cap on rebates drug manufacturers pay to Medicaid beginning in January 2024.

Drug pricing continues to be a subject of debate at the executive

and legislative levels of U.S.

The American Rescue Plan Act of 2021 signed into law by President Biden on March 14, 2021 includes a provision that eliminated the statutory cap on rebates drug manufacturers pay to Medicaid beginning in January 2024.

With the elimination of the rebate cap, manufacturers may be required to compensate states in an amount greater than what the state Medicaid programs pay for the drug.

Additionally, the Inflation Reduction Act of 2022 contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.

Additionally, the Inflation Reduction Act of 2022 (“IRA”) contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.

Department of Health and Human Services that would require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on Part D drugs.

Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the Inflation Reduction Act of 2022.

The Inflation Reduction Act of 2022 could have the effect of reducing the prices we can charge and reimbursement we receive for our product candidates, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.

The effect of Inflation Reduction Act of 2022 on our business and the pharmaceutical industry in general is not yet known.

Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the IRA.

Although the IRA exempts orphan drugs that treat only one rare disease from the drug pricing negotiation provisions, we do not know if additional drug pricing reforms could eliminate this exemption.

The IRA could have the effect of reducing the prices we can charge and reimbursement we receive for our product candidates, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.

The effect of the IRA on our business and the pharmaceutical industry in general is not yet known.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance, or interpretations will be changed, or what the impact of such changes on the marketing approvals of any current or future product candidates, if any, may be.

In addition, increased Congressional scrutiny of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In addition, increased Congressional scrutiny and scrutiny by the current presidential administration of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business or the business of our partners.

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In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

There is added uncertainty in light of actions that may be taken by the current presidential administration or Congress with respect to the FDA.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business or the business of our partners.

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The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to:

● The federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either (1) the referral of an individual to a person for furnishing any item or service for which payment is available under a federal health care program,

or (2) the purchase, lease, order or recommendation thereof of any good, facility, service or item for which payment is available under a federal health care program;

The False Claims Act and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment from the federal government or making or using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;

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Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.

It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

It is possible that governmental authorities will conclude that our business practices may not comply with current or future

statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could have a material adverse effect on our business.

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We cannot eliminate the risk of contamination or injury from these materials.

Although we believe that the safety procedures for handling and disposing of these materials comply with the standards prescribed by these

laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.

Although we believe that the safety procedures for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials.

In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.

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In addition, U.S.

patent laws may change, which could prevent or limit us from filing patent applications or patent claims to

protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents.

patent laws may change, which could prevent or limit us from filing patent applications or patent claims to protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents.

We and our licensors also rely on trade secrets and proprietary know-how to protect product candidates.

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We might also become involved in derivation proceedings in an event that a third party misappropriates one or more of our inventions and files their own patent application directed to such one or more inventions.

The costs of these proceedings could be substantial, and it is possible that our efforts to establish priority of invention (or that a third party derived an invention from us) would be unsuccessful, resulting in a material adverse effect on our U.S.

The costs of these proceedings could be substantial, and it is possible that our efforts to establish priority of invention (or that a third party derived an invention from us) would be

unsuccessful, resulting in a material adverse effect on our U.S.

patent position.

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If we fail to comply with our obligations under our intellectual property licenses and third party funding arrangements, we could lose rights that are important to our business.

We are currently a party to license agreements with St.

Jude, COH, Fred Hutch, University of California at Los Angeles (“UCLA”), Nationwide and other institutions.

We are currently a party to license agreements with COH, Fred Hutch, Nationwide and other institutions.

In the future, we may become party to licenses that are important for product development and commercialization.

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patent protection for our product candidates or any future product candidate, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position, particularly where we do not believe patent protection is appropriate or obtainable.

believe patent protection is appropriate or obtainable.

However, trade secrets are difficult to protect.

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Any conflict of interest or pursuit by Fortress of such a corporate opportunity could expose us to claims by our investors and/or creditors and could harm our results of operations.

General Risks

General Risks and Risks Associated with Ownership of our Common Stock

Our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or third parties’ cybersecurity.

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In the ordinary course of business, we collect, store, and transmit confidential information, including, but not limited to, information related to our intellectual property and proprietary business information, personal information, and other confidential information.

It is critical that we maintain such

confidential information in a manner that preserves its confidentiality and integrity.

It is critical that we maintain such confidential information in a manner that preserves its confidentiality and integrity.

Furthermore, we have outsourced elements of our operations to third party vendors, who each have access to our confidential information, which increases our disclosure risk.

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In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all.

Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management

Furthermore, if the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.

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Geopolitical changes, including war or other conflicts (including the conflicts between Russia and Ukraine and Israel and Hamas), some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location.

Additionally, trade policies and geopolitical disputes and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures occur in regions where drug products are manufactured or raw materials are sourced.

Tensions between the United States and China have led to a series of tariffs being imposed by the United States on imports from China mainland, as well as other business restrictions.

Countries may also adopt other measures, such as controls on imports or exports of goods, technology or data, that could adversely impact our operations and supply chain.

As these tensions continue to rise, more targeted approaches by the U.S.

or Chinese governments on certain products, industries or companies could significantly impact our development and commercialization efforts.

The Trump administration may impose additional and higher tariffs and sanctions on goods imported from China and other countries which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.

Further, such actions by the U.S.

could result in retaliatory action by those countries which could impact our ability to profitably commercialize our products in those jurisdictions.

As a result, our business, operations, and financial condition could be materially harmed.

We may not be able to manage our business effectively if we are unable to attract and retain key personnel.

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Misconduct by employees, consultants, or third-party partners could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with cGMPs, comply with federal and state healthcare fraud and abuse laws and regulations, report financial information or data accurately, comply with internal procedures, policies or agreements to which such employees, consultants or partners are subject, or disclose unauthorized activities to us.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to

prevent fraud, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.

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and trigger effectiveness of “force majeure” clauses under agreements with respect to which we receive goods and services, or under which we are obligated to achieve developmental milestones on certain timeframes.

Disputes with third parties over the applicability of such “force majeure” clauses, or the enforceability of developmental milestones and related extension mechanisms in light of such business interruptions, may arise and may become expensive and time-consuming.

Our stock may be subject to substantial price and volume fluctuations due to a number of factors, many of which are beyond our control and may prevent our stockholders from reselling our common stock at a profit.

The market prices for securities of biotechnology and pharmaceutical companies have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:

● announcements concerning the progress of our efforts to obtain regulatory approval for and, if approved, commercialize our product candidates or any future product candidate, including any requests we receive from the FDA for additional studies or data that result in delays in obtaining regulatory approval or launching these product candidates, if approved;

● market conditions in the pharmaceutical and biotechnology sectors or the economy as a whole;

● price and volume fluctuations in the overall stock market;

● the failure of one or more of our product candidates or any future product candidate, if approved, to achieve commercial success;

● announcements of the introduction of new products by us or our competitors;

● developments concerning product development results or intellectual property rights of others;

● litigation or public concern about the safety of our potential products;

● actual fluctuations in our quarterly operating results, and concerns by investors that such fluctuations may occur in the future;

● deviations in our operating results from the estimates of securities analysts or other analyst comments;

● additions or departures of key personnel;

● health care reform legislation, including measures directed at controlling the pricing of pharmaceutical products, and third-party coverage and reimbursement policies;

● developments concerning current or future strategic collaborations;

● discussion of us or our stock price by the financial and scientific press and in online investor communities.

Disputes with third parties over the applicability of such “force majeure” clauses, or the

enforceability of developmental milestones and related extension mechanisms in light of such business interruptions, may arise and may become expensive and time-consuming.

The market price for our common stock has been volatile and may continue to fluctuate or may decline significantly in the future.

An active, liquid and orderly market for our common stock may not be sustained, which could depress the trading price of our common stock or cause it to continue to be highly volatile or subject to wide fluctuations.

Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include, among other things:

the commencement, enrollment, or results of our current and future preclinical studies and clinical trials, and the results of trials of our competitors or those of other companies in our market sector;

regulatory approval of our product candidates, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process;

manufacturing, supply or distribution delays or shortages;

our ability to identify and successfully acquire or in-license new product candidates on acceptable terms;

FDA, state or international regulatory actions, including actions on regulatory applications any of our product candidates;

legislative or regulatory changes;

judicial pronouncements interpreting laws and regulations;

changes in government programs;

announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;

market conditions in the pharmaceutical and biotechnology sectors;

fluctuations in stock market prices and trading volumes of similar companies;

changes in accounting principles;

litigation or public concern about the safety of our product candidates or similar product candidates;

sales of large blocks of our common stock, including sales by our executive officers, directors and significant shareholders;

our ability to obtain additional financing to advance our development operations.

These broad market and industry factors may decrease the market price of our common stock, regardless of our actual operating performance.

The stock market in general has from time to time experienced extreme price and volume fluctuations.

In addition, in the past, following periods of volatility in the overall market and decreases in the market price of a company’s securities, securities class action litigation has often been instituted against these companies.

This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

We may become involved in securities class action litigation that could divert management’s attention and harm our business.

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In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.

This risk is especially relevant for us because biotechnology and biopharmaceutical companies have experienced significant stock price volatility in recent years.

This risk is especially relevant for us because biotechnology and biopharmaceutical companies have experienced significant

stock price volatility in recent years.

We may become involved in this type of litigation in the future.

Litigation often is expensive and diverts management’s attention and resources, which could adversely affect our business.

Risks Relating to Sale of Our Manufacturing Facility

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments,” on May 18, 2023, we entered into an Asset Purchase Agreement, as amended on June 29, 2023, and July 28, 2023, and certain related agreements with uBriGene relating to the sale of our manufacturing facility and related assets (the “Transaction”).

The following discussion of risks relating to the Transaction uses certain capitalized terms that are defined in Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments, and the following discussion of risks should be read together with such discussion of the Transaction.

We may be unable to complete the Transaction as anticipated if the Committee on Foreign Investment in the United States (“CFIUS”) determines to implement mitigating measures, including the potential divestment of some or all of the Transferred Assets by uBriGene;

any such mitigating measures may limit our ability to realize the anticipated cost savings of the sale of the Facility and may have a material adverse effect on our financial condition.

Pursuant to the Amended Asset Purchase Agreement, we and uBriGene agreed to cause our respective affiliates to use their reasonable best efforts to obtain clearance for the Transaction from CFIUS, although obtaining such clearance was not a condition to closing the Transaction.

In accordance with the Amended Asset Purchase Agreement, together with uBriGene, we submitted a joint notice to CFIUS on August 10, 2023.

Following an initial 45-day review period and subsequent 45-day investigation period, on November 13, 2023, CFIUS requested that we 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, we 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.

Following the 45-day review period and subsequent 45-day investigation period described above, on February 12, 2024, we 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 our 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.

At the completion of its review and, if applicable, investigation, if CFIUS determines there are no unresolved national security concerns, it will apprise the parties of its determination and conclude all action on the matter.

Alternatively, CFIUS may identify and impose mitigation measures.

Depending on the nature and severity of perceived national security risks identified during its investigation, CFIUS may, among other mitigation measures, require suspension of the Transaction, require uBriGene to divest some or all of the Transferred Assets, forfeit contracts CFIUS deems to be sensitive, or require appointment of special compliance personnel or a proxy board consisting of U.S.

If CFIUS determines to require mitigating measures with respect to the Transaction, then uBriGene must comply with such measures although the Closing Date has already occurred.

If CFIUS requires uBriGene to divest the Transferred Assets, uBriGene is not required to sell the Transferred Assets back to us and could instead elect to sell the Transferred Assets to a third-party purchaser.

If uBriGene sells the Transferred Assets to a third-party purchaser, the manufacturing and production of our lead product candidate may be disrupted.

Under the terms of the MSA, uBriGene will manufacture our lead product candidate, including MB-106, upon the completion of the sale of the Facility.

Pursuant to the Sub-Contracting CDMO Agreement, we will perform the manufacturing services to be performed by uBriGene under the MSA until the sale of the Facility is completed in exchange for an amount equal to our operating costs associated with our CDMO Manufacturing Services.

If uBriGene sells the Transferred Assets to a third-party purchaser, there can be no assurance that such third-party purchaser will continue to contract with us for our CDMO Manufacturing Services.

Any third-party purchaser of the Transferred Assets may not be willing to contract with us to provide Company CDMO Manufacturing Services.

In addition, a third-party purchaser may not be able to comply with cGMP or similar regulatory requirements related to the production of our lead product candidates or otherwise may not be able to provide manufacturing services on quality and timeliness standards that are acceptable to us.

In either such case, the manufacturing of our lead product candidate may need to be transferred to an unknown CDMO and may be at risk of delays, disruptions or quality issues, any of which could significantly and adversely affect supplies of our lead product candidate and our ability to conduct clinical trials and receive regulatory approval.

If CFIUS requires uBriGene to divest the Transferred Assets and uBriGene sells the Transferred Assets back to us, we will incur significant costs associated with the repurchase and continued operation of the Facility.

In addition to the payment of the repurchase price of the Facility, we will cease to be reimbursed by uBriGene for our CDMO Manufacturing Services and, as a result, will experience substantially increased expenses in connection with operating the Facility and manufacturing our lead product candidate, which could materially adversely affect our results of operations, financial condition, prospects and ability to operate as a going concern.

Certain key personnel may depart the Company upon the completion of the sale of the facility, which may adversely affect our ability to realize the anticipated benefits of the transaction;

unfortunately, key personnel may also depart the Company in the event that we are unable to complete the facility transfer.

Our ability to receive the Contingent Amount from uBriGene is subject to receipt of the Landlord’s consent to the Proposed Lease Transfer and our ability to raise additional capital;

if we do not receive such consent from the Landlord and/or are unable to raise the requisite amount of capital, we will not receive the full purchase price for the Transaction which may have a material adverse effect on our financial condition.

Pursuant to the Asset Purchase Agreement, in addition to the base purchase price paid to us upon closing of the Transaction, uBriGene will also pay a Contingent Amount to us as consideration of the Transaction once we (i) complete an issuance of equity securities in an amount equal to or greater than $10,000,000 (the “Contingent Capital Raise”) and (ii) obtains the consent of the Landlord to the Proposed Lease Transfer.

As of December 31, 2023, we had completed issuances of equity securities for proceeds totaling approximately $4.6 million following the Closing Date.

If we are unable to close the full amount of the Contingent Capital Raise and/or do not receive the Landlord’s

consent to the Proposed Lease Transfer within two years from the Closing Date, uBriGene will no longer be obligated to pay the Contingent Amount to us.

If we do not receive the Contingent Amount our business, prospects, financial condition, results of operation and ability to operate as a going concern will be materially and adversely affected, and we may be required to implement further cost reduction strategies.

If we are unable to maintain compliance with all applicable continued listing requirements and standards of Nasdaq, our common stock may be delisted from Nasdaq.

Our common stock is listed on the Nasdaq Capital Market under the symbol “MBIO.” The Nasdaq Capital Market requires that listed companies satisfy continued listing standards to maintain their listing.

On March 13, 2024, we received a deficiency letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of Nasdaq notifying us that we were not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”).

The Equity Rule requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2.5 million (or, in the alternative, a market value of listed securities of $35 million or net income from continued operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years).

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, reported a stockholders’ deficit of $3.7 million.

The Letter had no immediate effect on our continued listing Nasdaq, subject to our compliance with the other continued listing requirements.

In accordance with the Nasdaq Listing Rules, we were provided 45 calendar days, or until April 29, 2024, to submit a plan to regain compliance with the Equity Rule (the “Compliance Plan”).

We submitted our Compliance Plan on April 29, 2024, and the Staff granted our request for an extension of 180 calendar days, through September 9, 2024, to regain compliance with the Equity Rule.

We were unable to demonstrate compliance with the Equity Rule by September 9, 2024.

On September 10, 2024, the Staff formally notified us that it had determined to delist our securities from Nasdaq based upon our continued non-compliance with Equity Rule unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”).

On September 17, 2024, we requested a hearing before the Panel, which stayed any further action by Nasdaq at least pending completion of the hearing and the expiration of any extension that may be granted by the Panel to us following the hearing.

The hearing took place on October 29, 2024, and we are currently awaiting the decision of the Panel.

On May 16, 2024, we received a notice (the “Second Letter”) from the Staff indicating that the bid price of our common stock had closed below $1.00 per share for 30 consecutive business days and, as a result, we were not in compliance with Nasdaq Listing Rule 5550(a)(2), which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market (the “Bid Price Rule”).

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were afforded a 180-calendar day grace period, or until November 12, 2024, to regain compliance with the Bid Price Rule, which necessitates a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days by November 12, 2024.

The hearing before the Panel occurred on October 29, 2024.

By decision dated November 8, 2024, the Panel granted our request for an extension to evidence compliance with all applicable criteria for continued listing on the Nasdaq Capital Market, including the Bid Price Rule, through January 31, 2025, and the Equity Rule through February 18, 2025.

On February 10, 2025, the Company completed a best-efforts public offering for net proceeds of approximately $6.9 million.

Following the closing, the Company provided an updated forecast to the Panel evidencing compliance with the Equity Rule.

On February 26, 2025, the Company was notified by the Staff that it had regained compliance with the Equity Rule and is subject to mandatory monitoring by the Panel for one year.

There can be no assurance that we will be able to maintain compliance with Nasdaq’s continued listing rules in the future.

If we are not able to maintain compliance, we may be delisted from Nasdaq.

In the event we are delisted from Nasdaq, there can be no assurance that our common stock will be eligible for trading on another stock exchange or quotation on an over-the-counter market.

If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their shares.

Additionally, if we are delisted from Nasdaq, but obtain a substitute listing or quotation service for our common stock, it will likely be on a market with less liquidity and our common stock may therefore experience potentially more price volatility than it has historically experienced on Nasdaq.

Stockholders may not be able to sell their shares of common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market.

As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock would likely be adversely affected.

A delisting of our common stock from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors