What changed in this filing

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Item 9A. Controls and Procedures

2025-03-28 compared with 2024-03-11 · 549 added, 447 removed, 1120 unchanged (47% of the section changed)

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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.

Under the supervision and with the participation of our management, including our principal executive and financial officer, we conducted an evaluation of the effectiveness, as of December 31, 2024, 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 and financial officer 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

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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:

Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive and 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;

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Manuel Litchman, M.D.

President, Chief Executive Officer, and Director

Interim Chief Financial Officer

President, Chief Executive Officer, Interim Chief Financial Officer and Director

Non-Employee Directors

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Manuel Litchman, M.D.

- President, Chief Executive Officer, and Director

- President, Chief Executive Officer, Interim Chief Financial Officer and Director

Litchman has served as our President and Chief Executive Officer, and as a member of our Board since April 2017.

He also became Interim Chief Financial Officer in November 2024.

Litchman joined us from Arvinas, LLC, where he served as President and Chief Executive Officer.

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Litchman has the appropriate set of skills to serve as a member of the Board.

James Murphy - Interim Chief Financial Officer

Murphy has served as our Interim Chief Financial Officer since January 2024.

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.

Murphy’s tenure at Danforth, he has served as interim Chief Financial Officer in both public and private life science companies since 2012.

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.

Murphy began his career in the life sciences sector in 1990 when he joined Sepracor Inc., a publicly traded specialty pharmaceutical and device company.

Murphy received his B.A.

in economics and accounting from the College of the Holy Cross.

Information about our Non-Employee Directors

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Herskowitz has the appropriate set of skills to serve as a member of the Board.

David Jin – Director

Jin has served as a member of our board of directors since October 2024.

Jin has served as the Chief Financial Officer since August 2022 and Head of Corporate Development since May 2020 of Fortress.

He also serves as Interim Chief Operating Officer, Chief Financial Officer and Corporate Secretary of Avenue Therapeutics, Inc.

(a Fortress partner company).

Since August 2022, Mr.

Jin has served as Treasurer of Fortress’ private subsidiaries, including Cyprium Therapeutics, Urica Therapeutics, Helocyte, and Cellvation.

From March 2022 to August 2022, he served as Interim Chief Executive Officer at Avenue Therapeutics Inc.

Prior to joining Fortress, Mr.

Jin was a member of the Private Equity group at Barings focused on control equity and asset-based investments in pharma and biotech.

Prior to that, he was Director of Corporate Development at Sorrento Therapeutics, and Vice President of Healthcare Investment Banking at FBR & Co.

Jin began his career in management consulting at IMS Health (now IQVIA).

Jin has a Bachelor of Science degree in Industrial Engineering & Management Sciences with a double-major in Mathematical Methods in the Social Sciences from Northwestern University.

Jin’s financial experience and knowledge of the biotechnology industry, we believe that Mr.

Jin has the appropriate set of skills to serve as a member of the board of directors.

Rosenwald, M.D.

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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

biotechnology and life sciences companies.

Rosenwald has acted as a biotechnology entrepreneur and has been involved in the founding and recapitalization of numerous public and private biotechnology and life sciences companies.

Rosenwald received his B.S.

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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 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.

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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.

Currently, we have seven 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 2024, our Board held twenty-one meetings.

During 2024, 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.

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Director Independence

We adhere to the corporate governance standards adopted by The Nasdaq Stock Market LLC (“Nasdaq”).

We adhere to the corporate governance standards adopted by Nasdaq.

Nasdaq rules require our Board to make an affirmative determination as to the independence of each director.

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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.

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.

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Herskowitz chairs the Compensation Committee.

The Compensation Committee held two meetings during the fiscal year ended December 31, 2023.

The Compensation Committee held one meeting during the fiscal year ended December 31, 2024.

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.

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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

offices located at 377 Plantation Street, Worcester, Massachusetts 01605.

A stockholder who wishes to recommend a candidate for nomination to our Board must submit such recommendation to our Corporate Secretary, at our offices located at 95 Sawyer Road, Suite 110, Waltham, MA 02453.

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.

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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

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We have posted a copy of the Code on our website, located at www.mustangbio.com.

Insider Trading Policy;

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.

We have adopted an Insider Trading Policy that governs the purchase, sale, and other dispositions of our securities on the basis of material non-public information by directors, officers, employees, consultants and contractors.

We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards.

A copy of our Insider Trading Policy is filed as an exhibit to this Form 10-K.

Pursuant to our Insider Trading Policy, our officers, directors, and employees are also prohibited from engaging in speculative trading, including hedging transactions or short sale transactions with respect to our securities.

Delinquent Section 16(a) Reports

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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, 2024, 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).

one Form 4 for Dr.

Litchman (covering a total of two transactions).

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;

● Eliot Lurier, our Interim Chief Financial Officer.

As determined in accordance with SEC rules, our named executive officers (“NEOs”), which includes all executive officers serving during 2024, are the individuals set forth below:

● Manuel Litchman, M.D., our President, Chief Executive Officer, and Interim Chief Financial Officer;

● James Murphy, our former 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, 2024, and 2023.

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Incentive Plan

Compensation (2)

Name and Principal Position

Manuel Litchman, M.D.

President and Chief Executive Officer

Eliot Lurier (3)

Interim Chief Financial Officer

President, Chief Executive Officer, and Interim Chief Financial Officer

Former Interim Chief Financial Officer

____________________

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The assumptions used in calculating these amounts are incorporated by reference to Note 10 to the financial statements included in this Form 10-K .

As of March 11, 2024, Dr.

Litchman’s 2023 annual cash incentive has not yet been approved by the Compensation Committee .

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.

In 2024, the Compensation Committee decided to not pay 2023 and 2024 annual cash incentive bonuses .

See the “Annual Cash Incentive Bonus” section below for additional details.

All other compensation for Dr.

Litchman is comprised of Company matching 401(k) contributions.

(3) Effective January 19, 2024, Mr.

Murphy 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 payable to Danforth in connection with the Chief Financial Officer services provided by Mr.

Murphy based on a negotiated hourly rate.

On November 12, 2024, Mr.

Murphy resigned as our Interim Chief Financial Officer.

Murphy’s resignation was not a result of any disagreement on any matter relating to our operations, policies or practices.

Narrative to Summary Compensation Table

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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.

Litchman, our President, Chief Executive Officer and Interim Chief Financial 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.

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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.

Litchman’s annual bonus for 2023 is described under “Annual Incentive Bonus” below.

The employment agreement provides that if we terminate Dr.

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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

such payment of COBRA premiums on behalf of 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 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.

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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.

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.

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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.

Lurier provided consulting services to us pursuant to a consulting agreement between us and Danforth Advisors, LLC and received no compensation directly from us.

Murphy 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

Litchman was eligible to earn a target annual cash incentive equal to 50% of his base salary per the terms of his Employment Agreement.

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.

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 as well as other corporate development goals, and his individual performance based upon subjective performance reviews.

In 2024, the Compensation Committee decided not to pay 2023 and 2024 annual cash incentive bonuses to preserve our limited cash resources.

Equity Awards

The Compensation Committee has granted Dr.

Litchman equity awards under our Mustang Bio, Inc.

2016 Incentive Plan (the “2016 Plan”).

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.

The Company maintains the Mustang Bio, Inc.

2016 Incentive Plan (the “2016 Plan”), pursuant to which it may, from time to time, grant equity awards to its service providers, including its executive officers and directors.

However, no equity awards were granted in 2024.

Outstanding Equity Awards at Fiscal Year-Ended December 31, 2024

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(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

service to the Company on the date of such occurrences:

Litchman’s continuous 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;

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(ii) 46 shares will vest on April 24, 2026;

(iii) 2,267 shares will vest on April 24, 2026;

and (iv) 1,250 shares will vest on April 24, 2027.

and (iii) 25 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.

Stock Option Grant Policy

We did not grant stock options or similar instruments to our NEOs during 2024.

We have no set policy or practice regarding the timing of stock option awards or similar instruments in relation to the disclosure of material nonpublic information.

In general, the timing of stock option awards is dictated by the event or circumstance giving rise to the award and the schedules of the directors responsible for approving the award.

If, in the future, a stock option grant is made at a time that material nonpublic information exists , the directors approving the award would be responsible for considering the anticipated effect of that information on our stock price and would take such effect into account when sizing and pricing the award.

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.

Each of our non-employee directors is eligible to receive cash and equity 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.

For 2024, our only employee director was Dr.

Litchman, and he is therefore not included in the Director Compensation Table below.

Director Compensation Program

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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) 200 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.

However, in 2024 the Board decided not to grant director equity awards due to timing of the annual shareholders meeting and the number of shares available for issuance under the 2016 Plan.

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.

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Neil Herskowitz

David Jin (4)

Rosenwald, M.D.

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Represents the cash retainer for serving on our Board and committees of the Board.

No stock awards were granted in 2024.

As of December 31, 2024, each of Mr.

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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.

Jin was appointed to our Board on October 23, 2024.

The amounts shown represent a prorated amounts of fees earned by Mr.

Jin under our director compensation program.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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Fortress Biotech, Inc (4)

Armistice Capital, LLC.

Intracoastal Capital, LLC (5)

_________________

* Less than 1% of our common stock outstanding

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.

The address of each of the directors and executive officers is c/o Mustang Bio, Inc., 95 Sawyer Road, Suite 110, Waltham, MA 02453, and the address of Fortress Biotech, Inc.

is c/o Fortress Biotech, Inc., 1111 Kane Concourse, Suite 301, Bay Harbor Island, FL 33154

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Rosenwald, and excludes 250,000 of Class A Preferred Stock, which are convertible into 333 shares of Common Stock.

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.

Based solely on information included in a Schedule 13G filed with the SEC on February 11, 2025.

The address of Intracoastal Capital, LLC is 245 Palm Trail, Delray Beach, Florida 33483.

The following table shows information, as of March 26, 2025, concerning the beneficial ownership of our Class A Common Stock:

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(1) The address of City of Hope is 1500 East Duarte Road, Duarte, California 91010.

(2) Converts into 1,127 shares of common stock.

The following table shows information, as of March 26, 2025, concerning the beneficial ownership of our Class A Preferred Stock:

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(1) The address of Fortress Biotech Inc.

is c/o Fortress Biotech, Inc., 1111 Kane Concourse, Suite 301, Bay Harbor Islands, FL 33154.

is c/o Fortress Biotech, Inc., 1111 Kane Concourse, Suite 301, Bay Harbor Island, FL 33154.

(2) Converts into 333 shares of common stock .

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.

Except as set forth below, since January 1, 2023, 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.

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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

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 9,333 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 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.

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.

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For the years ended December 31, 2024 and 2023, we recorded expense of $0.5 million and $0.5 million, respectively, related to this agreement.

For the year ended December 31, 2024, the Company issued 23,450 shares of common stock to Fortress, which equaled 2.5% of the sum of the gross proceeds of $2.6 million from the sale of shares of common stock under Mustang’s At-the-Market Offering, $4.0 million gross proceeds from the May 2024 Public Offering, $2.5 million from the June 2024 PIPE, and $4.0 million from the October 2024 warrant exercise.

The Company recorded an expense of approximately $0.3 million in general and administrative expenses related to these shares for the year ended December 31, 2024.

For the year ended December 31, 2023, we issued zero shares of common stock and recorded 1,319 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.

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.

Director Compensation

Pursuant to the terms of the Director Compensation Plan, Dr.

(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.

Rosenwald and David Jin

Pursuant to the terms of our Non-Employee Directors Compensation Plan, Dr.

Rosenwald and Mr.

Jin 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) 200 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 of directors on such date.

Rosenwald is Chairman, President and Chief Executive Officer of Fortress and Mr.

Jin is Chief Financial Officer and Head of Corporate Development of Fortress.

We are a controlled subsidiary of Fortress.

For the year ended December 31, 2024, we recognized $50,000 and $12,500 for Dr.

Rosenwald and Mr.

Jin, respectively, in expense related to the director compensation.

We issued Dr.

Rosenwald 7,246 and 4,777 restricted stock awards for the years ended December 31, 2023 and 2022, respectively.

Rosenwald 144 restricted stock awards for the year ended December 31, 2023.

No restricted stock awards were granted in 2024.

We recognized $12,500 in expense in our Statements of Operations related director compensation for Mr.

We have not yet granted any equity awards to Mr.

Weiss - Advisory Agreement with Caribe BioAdvisors, LLC

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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) 200 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, 2024, we recognized $60,000 in expense related to the Advisory Agreement.

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.

We issued Mr.

Weiss 7,246 and 4,777 shares of restricted stock for the years ended December 31, 2023 and 2022, respectively.

Weiss 144 shares of restricted stock for the year ended December 31, 2023.

No restricted stock awards were granted in 2024.

Principal Accounting Fees and Services

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001-38191) filed with the SEC on April 20, 2023).

At the Market Offering Agreement, dated May 31, 2024, between the Company, Band 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 June 6, 2024).

Asset Purchase Agreement, dated May 18, 2023, between the Company and uBriGene (Boston) Biosciences, Inc.

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001-38191) filed with the SEC on October 30, 2023).

Form of May 2024 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 May 2, 2024).

Form of May 2024 Series A-1, A-2, and A-3 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 May 2, 2024).

Form of May 2024 Placement Agent 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 May 2, 2024).

Form of June 2024 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 June 24, 2024).

Form of June 2024 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 June 24, 2024).

Form of June 2024 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 June 24, 2024).

Form of Series B-1 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 25, 2024).

Form of Series B-2 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 25, 2024).

Form of October 2024 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 25, 2024).

Second Amended and Restated Founders Agreement between Fortress Biotech, Inc.

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001-38191) filed with the SEC on June 24, 2022).

Form of Option Agreement **

Form of Restricted Stock Unit Agreement **

Form of Director Stock Award Agreement **

Form of Option Agreement (incorporated by reference to Exhibit 10.28 of the Registrant’s Annual Report on Form 10-K (File No.

001-38191) filed with the SEC on March 11, 2024).

Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.29 of the Registrant’s Annual Report on Form 10-K (File No.

001-38191) filed with the SEC on March 11, 2024).

Form of Director Stock Award Agreement (incorporated by reference to Exhibit 10.30 of the Registrant’s Annual Report on Form 10-K (File No.

001-38191) filed with the SEC on March 11, 2024).

Mustang Bio, Inc.

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001-38191) filed with the SEC on October 30, 2023).

Form of Securities Purchase Agreement, dated April 29, 2024, 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 May 2, 2024).

Warrant Agreement Amendment, dated April 29, 2024, by and between the Company and the holder thereto (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 May 2, 2024).

Form of Securities Purchase Agreement, dated June 19, 2024, 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 June 24, 2024).

Asset Purchase Agreement, dated June 27, 2024, by and 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 July 3, 2024).

Form of Investor Inducement Agreement (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 25, 2024).

Form of Indemnification Agreement (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 October 25, 2024).

Insider Trading Policy**

Consent of Independent Registered Public Accounting Firm, KPMG, LLP, Boston , Massachusetts.

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.

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.

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.

Certification of Principal Financial Officer, pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C.

Certification of Principal Executive and 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.

Certification of Principal Executive and 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.

Compensation Clawback Policy **

Compensation Clawback Policy (incorporated by reference to Exhibit 97 of the Registrant’s Annual Report on Form 10-K (File No.

001-38191) filed with the SEC on March 11, 2024).

The following financial information from Mustang Bio, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL):

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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.

# Confidential treatment has been requested with respect to omitted portions of this exhibit.

† Indicates management contract or compensatory plan or arrangement.

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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.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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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

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.

Accounting for and fair value of the Induced Warrant Exercise

As discussed in Notes 2 and 10 to the financial statements, in October 2024, the Company recorded a deemed dividend of $7.8 million for the issuance of warrants to purchase shares of Company common stock (New Warrants) in exchange for the exercise of certain existing warrants (the Induced Warrant Exercise), which was included in the net loss attributable to Class A common and common stockholders in the calculation of net loss per share.

The Company used the Black-Scholes Model to determine the estimated fair value of the New Warrants issued in the Induced Warrant Exercise.

We identified the evaluation of the Company’s accounting for the Induced Warrant Exercise and the determination of the fair value of the New Warrants as a critical audit matter.

Specifically, challenging and complex auditor judgment and specialized skills and knowledge were required in evaluating the application of the relevant accounting guidance, including the conclusion that the New Warrants are equity classified and that the fair value of the New Warrants should be considered a deemed dividend in determining net loss per share, and the estimated fair value of the New Warrants due to the degree of subjectivity associated with the expected volatility assumption.

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.

We involved individuals with specialized skills and knowledge, who assisted in inspecting the underlying agreements to understand the relevant terms and conditions of the transaction and evaluating whether the Company’s accounting for the transaction was in accordance with the relevant accounting guidance.

We also involved valuation professionals with specialized skills and knowledge, who assisted in:

● developing an independent expectation of the expected volatility assumption based on consideration of implied share price volatility information

● developing an independent range of the fair value of the New Warrants using publicly available market data and the independently developed expected volatility assumption

● comparing the independently developed ranges of the fair value to the respective fair value determined by the Company.

We have served as the Company’s auditor since 2021.

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Cash and cash equivalents

Other receivables - related party

Other receivables

Prepaid expenses and other current assets

Property, plant and equipment, held for sale

Total current assets

Property, plant and equipment, net

Fixed assets - construction in process

Restricted cash

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Deferred income

Note payable, long-term, net

Operating lease liabilities - long-term

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Research and development – licenses acquired

Asset impairment

Gain on the sale of property and equipment

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Total other income (expense)

Net loss per common share outstanding, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

Net loss per Class A common and common shares outstanding, basic and diluted

Weighted average number of Class A common and common shares outstanding, basic and diluted

See accompanying notes to financial statements.

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Balances at December 31, 2022

Common stock issuable - Annual Stock Dividend

Issuance of common shares - Annual Stock Dividend

Common stock issuable - Annual Stock Dividend to Fortress

Issuance of common shares - Annual Stock Dividend to Fortress

Issuance of common shares, net of offering shares -At-the-Market Offering

Issuance of common shares - Equity fee on At-the-Market Offering

Issuance of common shares, net of offering costs- Equity Offerings

Issuance of common shares - Equity fee on At-the-Market & Equity Offerings

Issuance of common shares under ESPP

Stock-based compensation expenses

Issuance of common shares - Equity fee on RWG debt

Issuance of warrants for RWG debt

Exercise of warrants

Reverse Split Adjustment

Balances at December 31, 2023

Common stock issuable - Annual Stock Dividend

Issuance of common shares - Annual Stock Dividend

Issuance of common shares, net of offering costs - At-the-Market Offering

Common stock issuable - Annual Stock Dividend to Fortress

Issuance of common shares - Annual Stock Dividend to Fortress

Issuance of common shares, equity fee on At-the-Market Offering

Issuance of common shares, net of offering costs - Registered Direct Offering

Issuance of common shares, equity fee on Registered Direct Offering

Issuance of common shares, net of offering costs - Equity Offerings

Issuance of common shares, net of offering costs - At-the-Market Offering

Issuance of common shares under ESPP

Stock-based compensation expenses

Abeyance Shares released

Exercise of warrants (1)

Reverse Split (15:1) adjustment

Reverse Split ( 1 -for-50) adjustment

Balances at December 31, 2024

(1) In connection with the induced warrant exercise in October 2024 (see Note 10), a certain warrant holder was induced to exercise for cash 337,552 shares of common stock related the Series A-3 warrants at the exercise price of $ 11.85 per share.

Of the 337,552 shares on the exercise date, 255,552 were held in abeyance and not considered outstanding.

The balance of the shares held in abeyance will be held in abeyance until notice from the shareholder that the balance, or portion thereof, may be issued in compliance with a beneficial ownership limitation provision in the warrants.

As of December 31, 2024, 185,880 shares remain held in abeyance.

See accompanying notes to financial statements.

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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

Issuance of common shares - Equity fee on Equity Offerings to Fortress Biotech

Common shares issuable - Equity fee on at-the-market offering to Fortress Biotech

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Common shares issuable - Annual Stock Dividend to Fortress Biotech

Issuance of common shares - Equity fee on note payable to Fortress Biotech

Research and development - licenses acquired

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Loss on disposal of property and equipment

Asset impairment

Gain on sale of property and equipment

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Payable and accrued expenses - related party

Deferred income

Lease liabilities

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Purchase of fixed assets

Net cash provided by (used in) investing activities

Net cash from investing activities

Cash Flows from Financing Activities:

Payment of debt

Proceeds from issuance of common shares - Equity Offerings

Offering costs for the issuance of common shares - Equity Offerings

Proceeds from issuance of common shares - At-the-Market Offering

Offering costs for the issuance of common shares - At-the-Market Offering

Proceeds from issuance of common shares - Registered Direct Offering

Offering costs for the issuance of common shares - Registered Direct Offering

Proceeds from debt issuance

Fees paid on the issuance of debt

Net proceeds from induced warrant exercise

Proceeds from issuance of common shares under ESPP

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

Net change in cash, cash equivalents and restricted cash

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Supplemental disclosure of noncash activities:

Issuance of common shares - Founders Agreement

Note payable final payment fee (incurred but not paid)

Issuance of warrants - note payable

Lease liabilities arising from obtaining right-of-use assets

Issuance of common shares - Founders Agreement and Equity fee to Fortress

Supplemental disclosure of noncash activities related to the uBriGene Repurchase Transaction (see Note 5):

Fair value of assets received

Fair value of supplies received expensed to research and development

Accounts receivable written off

Accounts payable written off

Deferred purchase consideration

See accompanying notes to financial statements.

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(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.

Mustang is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs into potential cures for difficult-to-treat cancers and autoimmune 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.

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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.

On January 15, 2025, the Company filed an amendment (the “Reverse Split Amendment”) to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the 1 -for-50 reverse stock split of the Company's shares of common stock ("Reverse Stock Split").

As a result of the Reverse Stock Split, every 50 shares of common stock outstanding immediately prior to effectiveness of the Reverse Stock Split were combined and converted into one share of common stock without any change in the par value per share.

The Reverse Stock Split became effective on January 15, 2025, and the common stock was quoted on the Nasdaq Stock Market on a post-split basis at the open of business on January 16, 2025.

No fractional shares were issued in connection with the Reverse Stock Split.

Stockholders who would have otherwise been entitled to a fraction of one share of common stock as a result of the Reverse Stock Split instead received a proportional cash payment .

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

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As of December 31, 2024, the Company had an accumulated deficit of $ 396.7 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.

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.

The Company has funded its operations to date primarily through the sale of equity.

During fiscal year 2024, the Company completed several financing transactions, including proceeds from the At-the-Market Offering (see Note 10), for aggregate net proceeds of approximately $ 11.2 million.

Additionally, in February 2025, the Company completed a public offering for net proceeds of approximately $ 6.9 million (see Note 13).

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

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.

In performing its evaluation, management excluded certain 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 cannot be considered probable at this time because these plans are not entirely within the Company’s control.

The Company's expectation to generate operating losses and negative operating cash flows in the future, the need for additional funding to support its planned operations, and the continued listing requirements for Nasdaq 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 financial statements are issued.

The Company made strategic decisions, including (i) a significant reduction in the workforce by approximately 81 % in April 2024, and included the reversal of accrued annual bonuses, (ii) the termination of certain license agreements with St.

Jude and Leiden University Medical Centre in April 2024, and with Mayo Clinic in June 2024, and (iii) closing the Mustang-sponsored Phase 1/2 study in Non-Hodgkin lymphoma and chronic lymphocytic leukemia (MB-106) to preserve capital and prioritize the allocation of resources.

The Company continues to pursue raising additional cash resources through public or private equity or debt financings.

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.

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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.

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.

Segment Reporting

The Company views its operations and manages its business in one segment, which reflects the research and development of potential cures for difficult-to-treat cancers and autoimmune diseases.

The Company’s chief operating decision maker (“CODM”) is its chief executive officer.

The CODM assesses performance for the research and development segment and decides how to allocate resources based on net loss, which is reported on the Statements of Operations.

The CODM uses net loss to evaluate costs to develop its pipeline.

The accounting policies of the segment are the same as those described in this Note 2.

See Note 12 for segment information.

Use of Estimates

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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.

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 Insured Cash Sweep (“ICS”) accounts to maximize FDIC insurance coverage across its holdings.

December 31, 2024, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risk on such accounts.

Other Receivables – Related Party

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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.

The Company had no restricted cash as of December 31, 2024, and $ 0.8 million in restricted cash as of December 31, 2023.

Property, plant and equipment, net

Property and equipment, net, which consists primarily of leasehold improvements, are carried at cost less accumulated depreciation.

Property, plant and equipment, net, 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.

Property, plant and equipment, held for sale

Property, plant and equipment, held for sale represent assets that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, “Long-lived Assets.” As of December 31, 2024, there were $ 1.2 million of lab and cell processing equipment, furniture and fixtures and computer equipment that are recorded as assets held for sale.

The effect of suspending depreciation on the assets held for sale is immaterial to the results of operations.

The assets held for sale were part of the repurchase of assets from uBriGene (see Note 5).

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including tangible assets and other intangible assets with definitive lives, for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable.

The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10, "Impairment or Disposal of Long-Lived Assets.

ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows.

If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals.

Research and Development Costs

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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.

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

Annual Stock Dividend to Fortress

In July 2016, in connection with the Amended and Restated Articles of Incorporation, the Company issued 250,000 Class A preferred shares to Fortress.

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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).

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.

The Company considers the Annual Stock Dividend as contingent consideration for the license contributed to Mustang by Fortress.

Since the ultimate amount of the Annual Stock Dividend is highly uncertain and cannot be reasonable estimable, in accordance with ASC 450-20, Loss Contingencies , the Company records the Annual Stock Dividend in Research and development expense – licenses acquired in the Company’s Statements of Operations, when the shares are issued.

Fair Value Measurement

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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 Company estimates the fair value of stock option grants using the Black-Scholes option pricing model.

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.

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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.

Basic and diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding, including prefunded warrants and shares held in abeyance, during the period, without consideration of potential dilutive securities.

For periods in which the Company generated a net loss, the Company does not include potential shares of common stock in diluted net loss per share when the impact of these items is anti-dilutive.

The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive.

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.

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Unvested restricted stock units

(1) Excludes 1,668,236 pre-funded warrants.

The shares underlying the pre-funded warrants are included in basic net loss per share.

(1) Class A Preferred Shares are reflected on an as-if converted basis.

In connection with the exercise of certain existing warrants in October 2024 (see Note 10), the Company recorded a deemed dividend of approximately $ 7.8 million for the issuance of new warrants.

For the year ended December 31, 2024, net loss attributable to common stockholders consisted of net loss, as adjusted for deemed dividends.

The Company considers Class A common stock and Class A preferred stock to be additional classes of common stock for the purpose of calculating net loss per share, as they do not have preferential rights when compared to the Company’s common stock, and therefore losses are allocated to these additional classes using the two-class method.

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.

At December 31, 2024, the Class A common stock and Class A preferred stock have rights to convert to a total of 1,461 common shares.

Comprehensive Loss

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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.

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Early adoption will be permitted.

The Company is currently evaluating the impact of this standard on its financial statements.

The Company adopted the ASU on its annual report on Form 10-K for the year ended December 31, 2024.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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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.

The Company is currently evaluating the impact that this guidance will have on our financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Topic 220-40).

The amendments in this update require new disclosures to disaggregate prescribed natural expenses underlying any income statement caption.

ASU 2024-03 is effective for annual periods in fiscal years beginning after December 15, 2026, and interim periods thereafter.

Early adoption is permitted.

ASU 2024-03 applies on a prospective basis for periods beginning after the effective date.

However, retrospective application to any or all prior periods presented is permitted.

The Company is currently assessing the impact ASU 2024-03 will have on the 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)

City of Hope National Medical Center

CSL Behring (Calimmune)

Fortress Annual Stock Dividend

License Agreements

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.

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.

Research and Development Expenses – Licenses

For the year ended December 31, 2024, the Company recorded $ 0.3 million in Research and development – licenses acquired related to a clinical development milestone achieved related to its license agreement with Nationwide Children’s.

For the year ended December 31, 2023, the Company recorded $ 50,000 in Research and development – licenses acquired in connection with Calimmune license.

On August 14, 2023, the Company notified Calimmune that it was terminating the Calimmune license, which took effect 60 days following notification.

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 years ended December 31, 2024 and 2023, the Company recorded the following expense in research and development for sponsored research and clinical trial agreements:

For the year ended December 31,

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Leiden University Medical Center - RAG1 SCID

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.

Mayo Clinic (3)

(1) Licenses and associated sponsored research agreements were terminated in May 2023.

(2) License and associated Data Transfer Agreement were terminated in April 2024.

(3) License and associated sponsored research agreement were terminated in June 2024.

Ongoing Clinical Trial and Sponsored Research Agreements

IL13Rα2 (MB-101) Clinical Research Support Agreements with City of Hope

Since February 2017, the Company has been party to a clinical research support agreement for the IL13Rα2-directed CAR T program (the “IL13Rα2 CRA”) with COH, whereby, the Company has agreed to contribute $ 0.1 million related to patient costs in connection with the on-going investigator-initiated study.

Since October 2020, the Company has been party to 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”) with COH, whereby the Company has agreed to contribute $ 0.1 million per patient in connection with the ongoing 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 program for this patient population.

Since October 2020, the Company has been party to a Sponsored Research Agreement (“SRA”) with COH to conduct combination studies of a potential IL13Rα2 CAR (MB-101) and herpes simplex-1 oncolytic virus therapy (MB-108).

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-

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.

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 November 2022, the SRA was amended and the Company funded an additional $ 0.6 million.

CD20 (MB-106) Clinical Trial Agreement with Fred Hutchinson Cancer Center

Since July 3, 2017, in conjunction with the CD20 Technology License from Fred Hutchinson Cancer Center (“Fred Hutch”), the Company has been party to an investigator-initiated clinical trial agreement (the “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 November 2020, the CD20 CTA was amended to include additional funding of approximately $ 1.8 million, which includes $ 0.8 million for the treatment of five patients with chronic lymphocytic leukemia.

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.

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.

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.

Terminated Clinical Trial and Sponsored Research Agreements

In May 2023, the Company determined to discontinue development of certain programs, including CS1 (MB-104) and PSCA (MB-105), and terminated the associated CRA and license with COH.

In April 2024, the Company terminated its license agreement and the associated Data Transfer Agreement with St.

Jude, in exchange for a mutual release of liability and forgiveness by St.

Jude of all amounts previously owed by the Company, which totaled approximately $ 0.6 million.

Additionally, in April 2024, the Company delivered a termination notice to LUMC, pursuant to which it terminated the license agreement underpinning the MB-110 product candidate;

the Company is currently in discussions with LUMC regarding the terms that will govern such termination In June 2024, the Company terminated its license agreement and associated SRA with the Mayo Clinic, in exchange for a mutual release of liability and forgiveness by Mayo Clinic of all amounts previously owed by the Company, which totaled approximately $ 0.3 million.

The forgiven amounts, totaling approximately $ 0.9 million, were recognized as a reduction of research and development expenses in the Statements of Operations.

Note 4 - Related Party Agreements

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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.

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 9,333 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).

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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.

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.

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 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.

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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, with the number of shares issuable based on the share price of the equity round or, in the instance of debt financing, the closing price of the Company’s common shares on the day prior to the closing;

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.

For the year ended December 31, 2024, the Company issued 23,450 shares of common stock to Fortress, which equaled 2.5 % of the sum of the gross proceeds of $ 2.6 million from the sale of shares of common stock under Mustang’s At-the-Market Offering, $ 4.0 million gross proceeds from the May 2024 Public Offering, $ 2.5 million from the June 2024 PIPE, and $ 4.0 million from the October 2024 warrant exercise.

The Company recorded an expense of approximately $ 0.3 million in general and administrative expenses related to these shares for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company did not issue any shares of common stock and recorded the value of 1,319 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 shares were subsequently issued on January 2, 2024.

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.

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.

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For the years ended December 31, 2024 and 2023, the Company recorded expense of $ 0.5 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.

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.

Such expenses are recorded as payables and accrued expenses - related party.

Director Compensation

Rosenwald and David Jin

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.

Rosenwald and Mr.

Jin 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) 200 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, 2024, the Company recognized $ 50,000 and $ 12,500 for Dr.

Rosenwald and Mr.

Jin, respectively, in expense in its Statements of Operations related to the director compensation.

The Company issued Dr.

Rosenwald 7,246 and 4,777 restricted stock awards for the years ended December 31, 2023 and 2022, respectively.

Rosenwald 144 restricted stock awards for the year ended December 31, 2023.

No restricted stock awards were granted in 2024.

We recognized $ 12,500 in expense in our Statements of Operations related director compensation for Mr.

We have not yet granted any equity awards to Mr.

Weiss - Advisory Agreement with Caribe BioAdvisors, LLC

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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) 200 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, 2024, the Company recognized $ 60,000 in expense in its Statements of Operations related to the advisory agreement.

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

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:

Weiss 144 shares of restricted stock for the year ended December 31, 2023.

No restricted stock awards were granted in 2024.

Note 5 – Asset Purchase Agreements

Agreements with uBriGene

On May 18, 2023, the Company entered into an Asset Purchase Agreement (the “Original Asset Purchase Agreement”) with uBriGene (Boston) Biosciences, Inc., a Delaware corporation (“uBriGene”), pursuant to which the Company agreed 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 (the “Transaction”).

The Company and uBriGene subsequently entered into Amendment No.

1 to the Original Asset Purchase Agreement, dated as of June 29, 2023 (“Amendment No.

1”), and Amendment No.

2 to the Original Asset Purchase Agreement, dated as of July 28, 2023 (“Amendment No.

2,” and together with the Original Asset Purchase Agreement and Amendment No.

1, the “Prior Asset Purchase Agreement”).

On July 28, 2023, pursuant to the Prior Asset Purchase Agreement, the Company completed the sale of all of its assets that primarily relate to the manufacturing and production of cell and gene therapies at the Facility (such operations, the “Transferred Operations” and such assets, the “Transferred Assets”) to uBriGene for upfront consideration of $ 6 million cash (the “Base Amount”).

The Transferred Assets included all of the Company’s assets, except for the Company’s lease and related leasehold improvements of the Facility and contracts that are primarily used in the Transferred Operations.

The Company recorded a gain of $ 1.4 million in connection with the sale of the Transferred Assets, and recorded approximately $ 0.3 million of the base consideration as deferred income, that was to be recognized upon the transfer of the lease.

In connection with the Prior Asset Purchase Agreement, the Company and uBriGene submitted a voluntary joint notice to the U.S.

Committee on Foreign Investment in the United States (“CFIUS”).

Following CFIUS’s review and subsequent investigation of the transactions related to the Prior Asset Purchase Agreement, on May 13, 2024, the Company, together with uBriGene and CFIUS, executed a National Security Agreement (the “NSA”), pursuant to which the Company and uBriGene agreed to abandon the transactions related to the Prior Asset Purchase Agreement and the agreements entered into in connection therewith.

The NSA obligated uBriGene and the Company to terminate agreements between the two parties, including the Manufacturing Services Agreement, Quality Services Agreement, and Subcontracting CDMO Agreement.

In addition, uBriGene must sell, or otherwise dispose of, the equipment assets purchased within 180 days after the execution of the NSA.

June 2024 Repurchase of Assets

On June 27, 2024 (the “Effective Date”), the Company entered into an Asset Purchase Agreement (the “Repurchase Agreement”) with uBriGene, pursuant to which the Company agreed, subject to the terms and conditions set forth therein, to repurchase the Transferred Assets, primarily lab equipment and supplies, (collectively, the “Repurchased Assets”).

Pursuant to the terms of the Repurchase Agreement, the Company and uBriGene also terminated existing manufacturing and services agreements.

As consideration for the Repurchase Agreement, the Company agreed to pay to uBriGene a total purchase price (the “Purchase Price”) of $ 1.4 million, consisting of (i) an upfront payment of $ 0.1 million due within five ( 5 ) business days of the Effective Date and a (ii) subsequent amount of $ 1.3 million due on the date that is twelve ( 12 ) months after the closing date (the “Deferred Amount”).

In the event that as of the original (or any extended) date on which the Deferred Amount is payable, the Company has, as of the date of the public reporting of its then-most recent quarterly audited or unaudited financial statements, net assets below $ 20 million, then the Company may, upon written notice to uBriGene, elect to delay its payment obligation of the Deferred Amount by an additional six ( 6 ) months, with no limit on the number of such extensions available to the Company.

Notwithstanding the foregoing, if the Company has not paid the Deferred Amount in full as of the date that is twelve ( 12 ) months after closing of the Repurchase Agreement, any amounts that remain outstanding will accrue interest at a rate of 5 % per annum beginning on the date that is twelve ( 12 ) months after closing and until the Deferred Amount is paid in full.

Additionally, in connection with the termination of the agreements described above under the Repurchase Agreement, the Company agreed to forgive a net receivable from uBriGene of approximately $ 3.3 million, comprised of outstanding receivables of $ 6.9 million and payables of $ 3.6 million, resulting in total purchase consideration in the Repurchase Transactions of approximately $ 4.7 million.

The upfront payment of $ 0.1 million was paid in July 2024, and as of December 31, 2024, the $ 1.3 million Deferred Amount was recorded in Accrued Other Expenses (see Note 7).

The Company allocated the total purchase consideration of $ 4.7 million to the Repurchased Assets on a relative fair value basis.

The Company used a third party to perform a valuation of the repurchased equipment, which resulted in a fair value less costs to sell of approximately $ 2.2 million.

The remaining purchase consideration of $ 2.5 million was allocated to the supplies repurchased.

The supplies repurchased with no alternative future use were recognized as research and development expense in an amount of $ 2.2 million.

Repurchased supplies with an alternative future use of $ 0.3 million were also recognized in research and development expense, as the Company does not have plans to resume operations in the facility, and it intends to dispose of the supplies in a single transaction with the equipment.

The Company concluded that the disposal group, which includes the repurchased equipment assets and associated supplies, with an aggregate fair value less costs to sell of approximately $ 2.2 million met the criteria to be classified as held for sale at the date of acquisition.

As of December 31, 2024, the disposal group had a fair value less costs to sell of approximately $ 1.2 million, based primarily on offers received by third parties for the equipment.

As such, the Company recorded an adjustment to the fair value less costs to sell of approximately $ 1.0 million.

Note 6 – Property, Plant and Equipment, and Asset Impairment

For the years ended December 31, 2024 and 2023, property, plant and equipment consisted of the following:

Estimated Useful

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Life (in years)

Computer equipment

Furniture and fixtures

Machinery and equipment

Leasehold improvements

Construction in process

Total property, plant and equipment

impairment loss

accumulated depreciation

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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.

Impairment of Long-Lived Assets

During the second quarter of fiscal year 2024, the Company concluded it had a triggering event requiring assessment of impairment for certain leasehold improvements and the related right-of-use asset.

The Company assessed the carrying value of the asset group consisting of the leasehold improvements and right-of-use asset in accordance with ASC 360, given the significant changes to the Company’s operations, operating cash and the repurchase of equipment.

The assessment of the recoverability of the asset group concluded that there was impairment on the carrying value of the asset group of approximately $ 2.6 million, which was allocated on a pro rata basis using the relative carrying amounts of the assets.

Approximately $ 2.2 million of the impairment loss was allocated to the leasehold improvements, with the remaining $ 0.4 million allocated to the right-of-use asset.

Note 7 - Accounts Payable and Accrued Expenses

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Total accounts payable and accrued expenses

(1) Other includes approximately $ 1.3 million of accrued consideration for the uBriGene Asset Purchase Agreement, see Note 5.

Note 8 - Commitments and Contingencies

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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 June 28, 2024, the Company terminated the lease of its Mercantile Street Facility for a termination fee of $ 40,000 .

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.

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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.

As of December 31, 2024, the letter of credit was cancelled.

The Company leases office space under an agreement classified as an operating lease that expires in October 2026.

The Company’s lease liabilities result from the lease of its Plantation Street Facility in Massachusetts, which expires in 2026.

Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

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The Company does not act as a lessor or have any leases classified as financing leases.

During the second quarter of fiscal year 2024, the Company identified triggering events that required an impairment of the asset group consisting of the right-of-use asset and associated leasehold improvements.

The assessment concluded that impairment existed, and the impairment loss was allocated to the leasehold improvements and right-of-use assets based on the relative carrying amounts of the assets (see Note 6).

At December 31, 2024, the Company had operating lease liabilities of $ 0.9 million and right of use assets of $ 0.1 million, which were included in the Balance Sheet.

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($ in thousands)

Year ended December 31, 2024

Year ended December 31, 2025

Year ended December 31, 2026

Future Lease Liability

Year ended December 31, 2025

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Note 9 – 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:

On April 11, 2023, the Company’s long-term debt facility (the “Term Loan”) with Runway Growth Finance Corp.

(“Runway”), originally entered into on March 4, 2022, 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 of $ 2.8 million was recorded in interest expense in the Statements of Operations.

For the years December 31, 2024, and 2023, the Company recorded the following components in interest expense:

For the year ended December 31,

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Total interest expense

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

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.

($ in thousands)

Discount on note payable

Long-term note payable

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 10 - Stockholders’ Equity

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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.

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.

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Riley FBR, Inc.), and Oppenheimer & Co.

(each an “Agent” and collectively, the “Agents”), relating to the sale of shares of common stock pursuant to the 2020 S-3.

(each an “Agent” and collectively, the “Agents”), relating to the sale of shares of common stock pursuant to a registration statement on Form S-3 (File No.

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.

Wainwright & Co., LLC (“Wainwright”) 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.

On May 31, 2024, the Company delivered notice to the Agents to terminate the Mustang ATM, which was effective June 5, 2024.

On May 31, 2024, the Company entered into an At-the-Market Offering Agreement (the “Offering Agreement”) with Wainwright (the “Manager”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock through or to the Manager pursuant to the 2024 S-3.

Under the Offering Agreement, the Company pays the Manager a commission of 3.0 % of the gross proceeds from the sales of any shares of common stock.

The Company will also reimburse the Manager for certain expenses incurred in connection with the Offering Agreement.

The Company and the Manager may each terminate the Sales Agreement at any time upon specified prior written notice.

During the year ended December 31, 2024, the Company issued approximately 140,000 shares of common stock at an average price of $ 18.78 per share for gross proceeds of $ 2.6 million under the Mustang ATM Agreement.

In connection with these sales, the Company paid aggregate fees of approximately $ 0.1 million for net proceeds of approximately $ 2.5 million.

During the year ended December 31, 2023, the Company issued approximately 1,034 shares of common stock at an average price of $ 158.07 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

The Pre-funded Warrants have an exercise price of $ 0.001 per share, became exercisable upon issuance and remain exercisable until exercised in full.

Pursuant to the Founders Agreement, the Company issued 3,509 shares of common stock to Fortress at a weighted average price of $ 18.78 per share for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company did not issue any shares of its common stock to Fortress, and recorded the value of 25 shares issuable to Fortress in connection with the Mustang ATM.

May 2024 Equity Offering

On April 29, 2024, the Company commenced a best efforts equity offering with an institutional investor (the “Investor”) (the “May 2024 Offering”) of an aggregate of (i) 23,200 shares of common stock, (ii) pre-funded warrants (the “May 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 314,352 shares of common stock (the “May 2024 Pre-Funded Warrant Shares”), (iii) Series A-1 warrants (the “Series A-1 Warrants”) to purchase up to an aggregate of 337,552 shares of common stock (the “Series A-1 Warrant Shares”), (iv) Series A-2 warrants (the “Series A-2 Warrants”) to purchase up to an aggregate of 337,552 shares of common stock (the “Series A-2 Warrant Shares”), and (v) Series A-3 warrants (the “Series A-3 Warrants,” and together with the Series A-1 Warrants and Series A-2 Warrants, the “Warrants”) to purchase up to an aggregate of 337,552 shares of common stock (the “Series A-3 Warrant Shares”).

Each share of common stock or May 2024 Pre-Funded Warrant was sold together with one Series A-1 Warrant to purchase one share of common stock, one Series A-2 Warrant to purchase one share of common stock, and one Series A-3 Warrant to purchase one share of common stock.

The public offering price for each share of common stock and accompanying Warrants was $ 11.85 , and

the public offering price for each May 2024 Pre-Funded Warrant and accompanying Warrants was $ 11.845 .

The May 2024 Pre-Funded Warrants have an exercise price of $ 0.005 per share, were exercisable immediately and will expire when exercised in full.

Each Warrant has an exercise price of $ 11.85 per share, will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the Warrants (the “Warrant Stockholder Approval”).

The Series A-1 Warrant will expire on the five-year anniversary of the Warrant Stockholder Approval.

The Series A-2 Warrant will expire on the twenty-four-month anniversary of the Warrant Stockholder Approval.

The Series A-3 Warrant will expire on the nine-month anniversary of the Warrant Stockholder Approval.

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.

The net proceeds of the May 2024 Offering, after deducting the fees and expenses of the Placement Agent (as defined below), described in more detail below, and other offering expenses payable by us, but excluding the net proceeds, if any, from the exercise of the Warrants, was approximately $ 3.2 million.

The May 2024 Offering closed on May 2, 2024.

In connection with the May 2024 Offering, the Company also entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with the Investor.

Under the Warrant Amendment Agreement, the Company agreed to amend certain existing warrants to purchase up to 51,764 shares of common stock that were previously issued in October 2023 to the Investor, with an exercise price of $ 79.00 per share (the “Existing Warrants”), in consideration for their purchase of the securities in the May 2024 Offering, as follows:

(i) lower the exercise price of the Existing Warrants to $ 11.85 per share, (ii) provide that the Existing Warrants, as amended, will not be exercisable until the receipt of Warrant Stockholder Approval for the exercisability of the Warrants in the May 2024 Offering, and (iii) extend the original expiration date of the Existing Warrants by five years following the receipt of such Warrant Stockholder Approval.

The Warrant Amendment Agreement became effective on May 2, 2024.

June 2024 Registered Direct Offering and Concurrent Private Placement of Warrants (the “June 2024 Offering”)

On June 19, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “June 2024 Investor”), pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of Nasdaq (the “Registered Direct Offering”), (i) 60,500 shares of common stock, at a price per Share of $ 20.50 and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 62,100 shares of our common stock, at a price per Pre-Funded Warrant equal to $ 20.495 , the price per share of common stock, less $ 0.005 .

The Pre-Funded Warrants were sold in lieu of shares of common stock to the June 2024 Investor .

The Pre-Funded Warrants have an exercise price of $ 0.005 per share, became exercisable upon issuance and remain exercisable until exercised in full.

The net proceeds from the June 2024 Offering, after deducting the fees and expenses of the Placement Agent and other offering expenses payable by us, but excluding the net proceeds, if any, from the exercise of the Warrants, was approximately $ 2.1 million.

The June 2024 Offering closed on June 21, 2024.

In a concurrent private placement, pursuant to the terms of the Purchase Agreement, the Company also agreed to issue and sell to the June 2024 Investor unregistered warrants (the “Private Placement Warrants”) to purchase up to 122,600 shares of common stock, at an offering price of $ 20.50 per Private Placement Warrant to purchase one share of common stock (the “Private Placement” and, together with the Registered Direct Offering, the “Offerings”) (which offering price was included in the purchase price per share of common stock or Pre-Funded Warrant).

The Private Placement Warrants have an exercise price of $ 0.41 per share (subject to customary adjustments as set forth in the Private Placement Warrants), were exercisable upon issuance and will expire five years from the date of issuance.

The Private Placement Warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions.

The resale of the shares of common stock issuable upon the exercise of the Private Placement Warrants was subsequently registered in July 2024 on a Form S-1 (File No.

Wainwright acted as the exclusive placement agent in connection with the Offerings under an Engagement Letter, dated as of June 18, 2024, between us and Wainwright (the “Engagement Letter”).

Pursuant to the Engagement Letter, the

Company issued to Wainwright (or its designees) warrants to purchase up to 7,355 shares of common stock (the “Wainwright Warrants” and, together with the Private Placement Warrants, the “2024 Warrants”).

The Wainwright Warrants have substantially the same terms as the Private Placement Warrants, except that the Wainwright Warrants will expire five years from the commencement of the sales of the Offerings and have an exercise price of $ 25.625 per share (subject to customary adjustment as set forth in the Wainwright Warrants), representing 125 % of the purchase price per share of common stock in the Registered Direct Offering.

Induced Warrant Exercise

On October 24, 2024, we entered into an inducement offer letter agreement (the “Inducement Letter”) with a certain investor (the “Holder”) that held outstanding Series A-3 warrants (the “Existing Warrants”) to purchase up to an aggregate of 337,552 shares of our common stock, originally issued to the Holder on May 2, 2024.

Pursuant to the Inducement Letter, the Holder agreed to exercise for cash the Series A-3 warrants at the exercise price of $ 11.85 per share in exchange for our agreement to issue in a private placement new Series B Common Stock purchase warrants to purchase up to (i) 337,552 shares of common stock (the “New Series B-1 Warrant Shares”) and (ii) 337,552 shares of common stock (the “New Series B-2 Warrant Shares” and collectively, the “New Warrants”).

Each Warrant has an exercise price of $ 13.50 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the Warrants (the “Warrant Stockholder Approval”).

The New Series B-1 Warrant will expire on the five-year anniversary of the Warrant Stockholder Approval.

The New Series B-2 Warrant will expire on the twelve-month anniversary of the Warrant Stockholder Approval.

The closing of the transaction contemplated pursuant to the Inducement Letter occurred on October 25, 2024 (the “Closing Date”).

We received aggregate gross proceeds of approximately $ 4.0 million from the exercise of the Existing Warrants by the Holder, before deducting placement agent fees and other expenses payable by us of approximately $ 0.4 million.

We engaged Wainwright to act as our exclusive agent in connection with the transaction summarized above and paid Wainwright a cash fee equal to 7.0 % of the aggregate gross proceeds from the exercise of the Existing Warrants.

In addition, we (i) reimbursed Wainwright for $ 50,000 of the fees and expenses of Wainwright’s legal counsel and other of its out-of-pocket expenses, (ii) reimbursed Wainwright for its non-accountable expenses in the amount of $ 25,000 , and (iii) paid a management fee equal to 1.0 % of the gross proceeds raised.

We also issued to Wainwright or its designees (“PA Warrant Holders”) placement agent warrants (the “Wainwright Warrants”) to purchase up to 20,251 shares of Common Stock (the “Wainwright Warrant Shares”).

The Wainwright Warrants have the same terms as the New Series B-1 Warrants, except that the Wainwright Warrants have an exercise price equal to $ 14.815 per share.

The issuance of the New Warrants was accounted for as an equity issuance cost associated with the exercise of the Existing Warrants, which had no net impact on equity as the New Warrants conveyed were determined to be equity classified.

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.

On April 23, 2021, the Company filed a shelf registration statement on Form S-3 (File No.

333-255476) (the “2021 S-3”), which was declared effective on May 24, 2021.

Under the 2021 S-3, the Company was able to sell up to a total of $ 200.0 million of its securities.

The 2021 S-3 expired on May 24, 2024.

The Company sold approximately $ 4.4 million of securities under the 2021 S-3.

On May 31, 2024, the Company filed a shelf registration statement on Form S-3 (File No.

333-279891) (the “2024 S-3”), which was declared effective on June 12, 2024.

Under the 2024 S-3, the Company may sell up to a total of $ 40.0 million of its securities.

As of December 31, 2023, approximately $ 195.6 million of the 2021 S-3 remains available for sale of securities.

As of December 31, 2024, approximately $ 34.8 million of the 2024 S-3 remains available for sales of securities.

As of the filing of this Form 10-K, the Company is subject to the General Instruction I.B.6 to Form S-3, known as the “baby shelf rules,” which limit the number of securities it can sell under its registration statements on Form S-3.

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.

During the year, the Company issues shares of common stock to Fortress in connection with the Founders Agreement, see Note 4.

Stock Warrants

A summary of warrant activities for the years ended December 31, 2024 and 2023, is presented below:

Weighted Average

Contractual Life (in

Exercise Price

Outstanding as of December 31, 2022

Outstanding as of December 31, 2023

Outstanding as of December 31, 2024

Upon the exercise of warrants, the Company will issue new shares of common stock.

In connection with the Company’s Registered Direct Offering on October 26, 2023, the Company issued pre-funded warrants to purchase up to 33,364 shares of common stock, and in a concurrent private placement, the Company issued unregistered warrants to purchase up to 51,764 shares of common stock, and the resale of the underlying shares of common stock were subsequently registered in April 2024 on Form S-1 (File No.

In connection with these offerings, Wainwright received Placement Agent Warrants to purchase up to 3,104 shares of common stock.

In connection with the Public Offering the Company completed in May 2024, the 51,764 unregistered warrants were repriced from the original exercise price of $ 79.00 per share to $ 11.85 per share.

In connection with the May 2024 Offering, the Company issued pre-funded warrants to purchase up to 314,352 shares of common stock and issued three series of warrants (the “Series A-1,” “Series A-2,” and “Series A-3”) to purchase up to 1,012,656 shares of common stock.

In connection with these offerings, Wainwright received Placement Agent Warrants to purchase up to 20,251 shares of common stock.

In connection with the Registered Direct Offering, the Company issued pre-funded warrants to purchase up to 62,100 shares of common stock, and in the concurrent Private Placement, the Company issued unregistered warrants to purchase up to 122,600 shares of common stock.

The resale of the underlying shares of common stock were subsequently registered in July 2024 on Form S-1 (File No.

In connection with these offerings, Wainwright received Placement Agent Warrants to purchase up to 7,355 shares of common stock.

In connection with the induced warrant exercise in October 2024, the holder of the Series A-3 warrants from the May 2024 Offering agreed to exercise for cash 337,552 warrants in partial consideration for the Company to issued two series of unregistered warrants (the “New Series B-1” and “New Series B-2”) to purchase up to 675,104 shares of common stock.

Upon exercise of the Series A-3 warrants, the Company issued to the holder 82,000 of the 337,552 shares of common stock.

Due to beneficial ownership limitation provisions in the inducement letter agreement, the remaining 255,552 shares were initially unissued and held in abeyance for the benefit of the holder until notice from the holder that the shares may be issued in compliance with the agreement.

As of December 31, 2024, 185,880 shares remained in abeyance.

In connection with the issuance of the New Series B-1 and New Series B-2 warrants, a pproximately $ 7.8 million of the aggregate fair value was deemed to be a dividend and recorded to additional paid-in-capital because the Company had an accumulated deficit on the exercise date.

The deemed dividend was included in the net loss attributable to Class A common and common stockholders in the calculation of net loss per share in the Statements of Operations (see Note 2).

The resale of the underlying shares of common stock were subsequently registered in November 2024 on Form S-3 (File No.

In connection with these offerings, Wainwright received Placement Agent Warrants to purchase up to 20,251 shares of common stock.

The key inputs used for the Black-Scholes Model calculation on October 25, 2024, to measure the fair value of the New Warrants, were as follows:

New Series B-1

New Series B-2

Risk-free interest rate

Expected dividend yield

Expected term in years

Expected volatility

As of December 31, 2024, all of the pre-funded warrants have been exercised.

Equity Incentive Plan

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Outstanding at December 31, 2024

Outstanding at December 31, 2023

Options vested and exercisable at December 31, 2024

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Nonvested at December 31, 2024

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.

As of December 31, 2024, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $ 25,000 , which is expected to be recognized over a weighted average period of approximately 1.5 years.

The following table summarizes stock-based compensation expense for the years ended December 31, 2024 and 2023 (in thousands).

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Total stock-based compensation expense

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

Contractual Life (in

Exercise Price

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

Outstanding as of December 31, 2023

Upon the exercise of warrants, the Company will issue new shares of Common Stock.

Employee Stock Purchase Plan

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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.

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

limitations have been triggered as of December 31, 2023.

The Company has not completed an analysis to determine whether any such limitations have been triggered as of December 31, 2024.

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.

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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.

The Consolidated Appropriations Act did not have a material impact on the Company’s income tax provision for 2024 and 2023.

Note 12 – Segment Information

The Company views its operations and manages its business in one reportable segment, which reflects the research and development of potential cures for difficult-to-treat cancers and autoimmune diseases.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The primary financial measure by which the CODM evaluates the business is net loss.

The CODM uses net loss to monitor budget versus actual results to assess performance of the segment.

The table below summarizes the significant segment expenses reported to the CODM for the years ended December 31, 2024 and 2023:

For the year ended December 31,

Operating expenses:

MB-106 program costs

MB-109 program costs

All other program costs

Research and development - stock-based compensation

Research and development - other costs (1)

Research and development - licenses acquired

General and administrative - stock-based compensation

General and administrative - other costs (2)

Segment operating loss

Reconciliation to net loss

Asset impairment

Gain on sale of property and equipment

Other income (expense), net

Interest income (expense), net

(1) Includes expenses primarily related to the repurchase of equipment from uBriGene and termination of existing manufacturing and service agreements with uBriGene, lab supplies and software licenses and subscriptions.

(2) Includes expenses primarily related to outside service costs, business insurance and board of director fees.

Note 13 – 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.

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.

Reverse stock split

On January 15, 2025, the Company filed the Reverse Split Amendment to its Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware to effect the Reverse Stock Split.

The Company’s stockholders previously approved the Reverse Stock Split within a range of between 1-for-10 and 1-for-50 , with the final ratio to be determined by the board of directors of the Company (the “Board”).

On January 6, 2025, the Board selected a final ratio of 1-for-50 .

As a result of the Reverse Stock Split, every 50 shares of the Company’s pre-Reverse Stock Split common stock were combined and reclassified as one share of common stock.

Proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split, other than as a result of the payment in lieu of issuance of fractional shares.

No fractional shares were issued in connection with the Reverse Stock Split.

Stockholders who would otherwise hold a fractional share of common stock received (upon surrender to the exchange agent of certificates representing such shares), a cash payment in lieu thereof, without interest or deduction, rounded to the nearest cent, in an amount equal to the product obtained by multiplying (a) the closing price per share of the Company’s common stock as reported on the Nasdaq Capital Market as of the effective date of the Reverse Stock Split, by (b) the fraction of one share owned by the stockholder.

The Reverse Stock Split became effective on January 15, 2025, and the common stock was quoted on the Nasdaq Capital Market on a post-Reverse Stock Split basis at the open of business on January 16, 2025.

The Company’s post-Reverse Stock Split common stock has a new CUSIP number, 62818Q302, but the par value and other terms of the common stock were not affected by the Reverse Stock Split.

February 2025 Public Offering

On February 5, 2025, the Company commenced a best efforts public offering (the “Offering”) of an aggregate of (i) 495,000 shares (the “Shares”) of its common stock, par value $ 0.0001 per share, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 2,162,807 shares of common stock (the “Pre-Funded Warrant Shares”), (iii) Series C-1 warrants (the “Series C-1 Warrants”) to purchase up to an aggregate of 2,657,807 shares of common stock (the “Series C-1 Warrant Shares”), and (iv) Series C-2 warrants (the “Series C-2 Warrants,” and together with the Series C-1 Warrants, the “Warrants”) to purchase up to an aggregate of 2,657,807 shares of common stock (the “Series C-2 Warrant Shares,” and together with the Series C-1 Warrant Shares, the “Warrant Shares”).

Each Share or Pre-Funded Warrant was sold together with one Series C-1 Warrant to purchase one share of common stock and one Series C-2 Warrant to purchase one share of common stock.

The combined public offering price for each Share and accompanying Warrants was $ 3.01 , and the combined public offering price for each Pre-Funded Warrant and accompanying Warrants was $ 3.0099 .

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately upon issuance and will expire when exercised in full.

Each Warrant has an exercise price of $ 3.01 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (the “Warrant Stockholder Approval”).

The Series C-1 warrants will expire five years from the Warrant Stockholder Approval and the Series C-2 warrants will expire twenty-four months from the Warrant Stockholder Approval.

The net proceeds of the Offering, after deducting the fees and expenses of the Placement Agent (as defined below), described in more detail below, and other offering expenses payable by the Company, but excluding the net proceeds, if any, from the exercise of the Warrants, is approximately $ 6.9 million.

The Offering closed on February 10, 2025.

Pursuant to an Engagement Letter (the “Engagement Letter”) with Wainwright (the “Placement Agent”), the Company agreed to pay the Placement Agent in connection with the Offering (i) a cash fee equal to 7.0 % of the aggregate gross proceeds raised in the Offering, (ii) a management fee equal to 1.0 % of the aggregate gross proceeds raised in the Offering, (iii) up to $ 100,000 for fees and expenses of the Placement Agent’s counsel and other out of pocket expenses, (iv) a non-accountable expense allowance of $ 25,000 , (v) up to $ 3,500 for road show expenses, and (vi) $ 15,950 for the clearing expenses.

Also pursuant to the Engagement Letter, the Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 159,468 shares of common stock (the “Placement Agent Warrant Shares”) (which represents 6.0 % of the Shares and Pre-Funded Warrants sold in the Offering).

The Placement Agent Warrants will become exercisable beginning on the effective date of the Warrant Stockholder Approval, have an exercise price of $ 3.7625 ( 125 % of the combined public offering price per share of common stock and accompanying Warrants) and will terminate on the five-year anniversary of commencement of sales in the Offering.

Termination of lease and sale of equipment

On February 10, 2025, the Company entered into a Bill of Sale and Surrender Agreement (the “Sale/Surrender Agreement”), effective as of January 31, 2025 (the “Effective Date”), with AbbVie Bioresearch Center Inc., a Delaware corporation (“AbbVie”).

The Company was the tenant in the leased premises located at 377 Plantation Street, Worcester, Massachusetts (the “Premises”) under a Lease Agreement, dated as of October 27, 2017 (the “Lease”) with WCS - 377 Plantation Street, Inc., a Massachusetts nonprofit corporation (the “Landlord”).

In connection with the entrance into the Sale/Surrender Agreement, the Company also entered into an Escrow Agreement, dated February 10, 2025 (the “Escrow Agreement”), with Bowditch & Dewey, LLP, as escrow agent (the “Escrow Agent”), pursuant to which the Escrow Agent would disburse the Purchase Price (defined herein) pursuant to the terms of the Escrow Agreement.

Pursuant to the terms of the Sale/Surrender Agreement, AbbVie agreed to purchase from the Company, and the Company agreed to sell and convey to AbbVie, certain furniture, fixtures and equipment (“FF&E”), which the Company classified as held for sale as of December 31, 2024, located in the Premises and other items as set forth in the Sale/Surrender Agreement for a purchase price of $ 1.0 million (the “Purchase Price”).

AbbVie also agreed to lease the Premises from the Landlord following the termination of the Lease pursuant to a First Amendment to Lease Agreement (the “Amendment”), dated as of February 7, 2025.

The closing of the transactions described above occurred on February 21, 2025 (the “Closing”), with AbbVie’s issuance of an Acceptance Notice (as defined in the Sale/Surrender Agreement) to the Company stating that a Sufficient Percentage (as defined in the Sale/Surrender Agreement) of the FF&E items listed in the Sale/Surrender Agreement are present in the Premises and functional for their intended purpose without the need for repair or replacement.

On February 25, 2025, as a result of the issuance of the Acceptance Notice, pursuant to the terms of the Escrow Agreement, the Escrow Agent released the Purchase Price to the Company.

Nasdaq Continued Listing Requirements

On May 16, 2024, the Company was notified by the Staff of the Listings Qualification Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company’s closing bid price was below $1.00 per share for 30 consecutive business days, and that, therefore, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), which is the minimum bid price requirement for continued listing on the Nasdaq Capital Market.

Under a decision by the Nasdaq Hearings Panel (the “Panel”), the Company was provided until January 31, 2025, to satisfy the Bid Price Rule for at least 10 consecutive trading days.

The Company effected a 1-for-50 reverse stock split on January 15, 2025, which was intended to bring the Company into compliance with Nasdaq’s Bid Price Rule.

On February 10, 2025, the Company was notified by the Staff that it had regained compliance with the Bid Price Rule.

On March 13, 2024, the Company was notified by the Staff that the Company was not in compliance with the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”) for continued listing on the Nasdaq Capital Market.

Under a decision by the Panel, the Company was provided until February 18, 2025, to evidence compliance with the Equity Rule.

The Company completed a best-efforts public offering for net proceeds of approximately $ 6.9 million, which closed on February 10, 2025.

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.

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.

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Manuel Litchman, M.D.

President and Chief Executive Officer

President, Chief Executive Officer and Interim Chief Financial Officer

March 28, 2025

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/s/ Manuel Litchman

President and Chief Executive Officer

President, Chief Executive Officer, Interim Chief Financial Officer and Director

Manuel Litchman, M.D.

(Principal Executive Officer)

March 11, 2024

/s/ James Murphy

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

(Principal Executive Officer and Principal Financial and Accounting Officer)

March 28, 2025

7 unchanged sentences

March 28, 2025

/s/ David Jin

March 28, 2025

/s/ Lindsay A.

5 unchanged sentences

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 9A. Controls and Procedures