Mustang Bio, Inc 10-Q for FY2020 Q2

Mustang Bio, Inc. (MBIO)

10-Q 2020-08-10 For: 2020-06-30

Added on April 06, 2026

About this 10-Q

Mustang Bio, Inc filed this 10-Q on August 10, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $14.6M; compared with a net loss of $10.4M a year earlier

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Delaware		47-3828760
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	MBIO	NASDAQ Global Market

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

Class of Common Stock		Outstanding Shares as of August 9, 2020
Class A Common Stock, $0.0001 par value		845,385
Common Stock, $0.0001 par value		55,728,325


PART I. FINANCIAL INFORMATION		3

Item 1.	Unaudited Condensed Financial Statements	3

	Condensed Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019	3

	Condensed Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	4

	Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	5

	Condensed Statements of Cash Flows for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	7

	Notes to the Condensed Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	27

Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION		28

Item 1.	Legal Proceedings	28

Item 1A	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72

Item 3.	Defaults Upon Senior Securities	72

Item 4.	Mine Safety Disclosures	72

Item 5.	Other Information	72

Item 6.	Exhibits	73

Signatures		74


	June 30,		December 31,
	2020		2019
ASSETS
Current Assets:
Cash and cash equivalents	$	85,361	$	61,413
Other receivables - related party		25		19
Prepaid expenses and other current assets		886		1,631
Total current assets		86,272		63,063

Property, plant and equipment, net		7,675		6,779
Fixed assets - construction in process		493		1,157
Restricted cash		1,000		1,000
Other assets		250		250
Operating lease right-of-use asset, net		1,140		1,196
Total Assets	$	96,830	$	73,445

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term notes payable	$	5,000	$	1,250
Accounts payable and accrued expenses		8,996		5,668
Payables and accrued expenses - related party		491		596
Operating lease liabilities - short-term		265		257
Total current liabilities		14,752		7,771

Notes payable		8,959		12,179
Operating lease liabilities - long-term		2,090		1,843
Total Liabilities		25,801		21,793

Commitments and Contingencies

Stockholders’ Equity
Preferred stock ($0.0001 par value), 2,000,000 shares authorized, 250,000 shares of Class A preferred stock issued and outstanding as of June 30, 2020 and December 31, 2019 respectively		—		—
Common Stock ($0.0001 par value), 85,000,000 shares authorized
Class A common shares, 845,385 shares issued and outstanding as of June 30, 2020 and December 31, 2019 respectively		—		—
Common shares, 54,826,243 and 39,403,519 shares issued and outstanding as of June 30, 2020 and December 31, 2019 respectively		5		4
Common stock issuable, 0 and 1,206,667 shares as of June 30, 2020 and December 31, 2019 respectively		—		4,923
Additional paid-in capital		222,938		172,184
Accumulated deficit		(151,914)		(125,459)
Total Stockholders’ Equity		71,029		51,652
Total Liabilities and Stockholders’ Equity	$	96,830	$	73,445


	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Operating expenses:
Research and development	$	9,830	$	6,823	$	19,144	$	13,783
Research and development – licenses acquired		1,300		200		1,550		650
General and administrative		2,991		3,189		4,947		5,533
Total operating expenses		14,121		10,212		25,641		19,966
Loss from operations		(14,121)		(10,212)		(25,641)		(19,966)

Other income (expense)
Interest income		142		387		405		539
Interest expense		(619)		(574)		(1,219)		(585)
Total other income (expense)		(477)		(187)		(814)		(46)
Net Loss	$	(14,598)	$	(10,399)	$	(26,455)	$	(20,012)

Net loss per common share outstanding, basic and diluted	$	(0.32)	$	(0.29)	$	(0.61)	$	(0.62)

Weighted average number of common shares outstanding, basic and diluted		45,023,030		36,306,710		43,497,173		32,149,352


	For the Three Months Ended June 30, 2020
										Common		Additional				Total
	Class A Preferred Stock			Class A Common Shares			Common Shares			Stock		Paid-in		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Issuable		Capital		Deficit		Equity
Balances at March 31, 2020	250,000	$	—	845,385	$	—	42,076,840	$	4	$	—	$	183,116	$	(137,316)	$	45,804
Issuance of common shares, net of offering costs - At-the-Market Offering	—		—	—		—	886,800		—		—		2,933		—		2,933
Issuance of common shares, equity fee on At-the-Market Offering	—		—	—		—	22,170		—		—		77		—		77
Issuance of common shares, net of offering costs - Public Offering	—		—	—		—	11,455,604		1		—		34,923		—		34,924
Issuance of common shares, equity fee on Public Offering	—		—	—		—	286,390		—		—		932		—		932
Stock-based compensation expenses	—		—	—		—	98,439		—		—		957		—		957
Exercise of warrants	—		—	—		—	—		—		—		—		—		—
Net loss	—		—	—		—	—		—		—		—		(14,598)		(14,598)
Balances at June 30, 2020	250,000	$	—	845,385	$	—	54,826,243	$	5	$	—	$	222,938	$	(151,914)	$	71,029


	For the Six Months Ended June 30, 2020
										Common		Additional				Total
	Class A Preferred Stock			Class A Common Shares			Common Shares			Stock		Paid-in		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Issuable		Capital		Deficit		Equity
Balances at December 31, 2019	250,000	$	—	845,385	$	—	39,403,519	$	4	$	4,923	$	172,184	$	(125,459)	$	51,652
Issuance of common shares - Founders Agreement	—		—	—		—	1,206,667		—		(4,923)		4,923		—		—
Issuance of common shares, net of offering costs - At-the-Market Offering	—		—	—		—	2,135,634		—		—		7,843		—		7,843
Issuance of common shares, equity fee on At-the-Market Offering	—		—	—		—	53,390		—		—		202		—		202
Issuance of common shares, net of offering costs - Public Offering	—		—	—		—	11,455,604		1		—		34,923		—		34,924
Issuance of common shares, equity fee on Public Offering	—		—	—		—	286,390		—		—		932		—		932
Issuance of common shares under ESPP	—		—	—		—	68,351		—		—		169		—		169
Stock-based compensation expenses	—		—	—		—	213,689		—		—		1,762		—		1,762
Exercise of warrants	—		—	—		—	2,999		—		—		—		—		—
Net loss	—		—	—		—	—		—		—		—		(26,455)		(26,455)
Balances at June 30, 2020	250,000	$	—	845,385	$	—	54,826,243	$	5	$	(0)	$	222,938	$	(151,914)	$	71,029


	For the Six Months Ended June 30, 2019
										Common		Additional				Total
	Class A Preferred Stock			Class A Common Shares			Common Shares			Stock		Paid-in		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Issuable		Capital		Deficit		Equity
Balances at December 31, 2018	250,000	$	—	1,000,000	$	—	26,610,183	$	3	$	2,085	$	113,378	$	(79,070)	$	36,396
Issuance of common shares - Founders Agreement	—		—	—		—	709,314		—		(2,085)		2,085		—		—
Issuance of common shares- Equity fee on Horizon Notes to Fortress Biotech	—		—	—		—	108,069		—		—		375		—		375
Issuance of warrants- Horizon Notes	—		—	—		—	—		—		—		888		—		888
Conversion of Class A Common shares to common shares	—		—	(137,608)		—	137,608		—		—		—		—		—
Issuance of common shares, net of offering shares -At-the-Market Offering	—		—	—		—	3,506,222		—		—		21,972		—		21,972
Issuance of common shares - Equity fee on At-the-Market Offering	—		—	—		—	87,656		—		—		495		—		495
Issuance of common shares, net of offering costs- Public Offering	—		—	—		—	7,906,250		1		—		29,484		—		29,485
Issuance of common shares- Equity fee on Public Offering	—		—	—		—	197,656		—		—		791		—		791
Stock-based compensation expenses	—		—	—		—	126,000		—		—		1,054		—		1,054
Exercise of warrants	—		—	—		—	65,358		—		—		—		—		—
Net loss	—		—	—		—	—		—		—		—		(20,012)		(20,012)
Balances at June 30, 2019	250,000	$	—	862,392	$	—	39,454,316	$	4	$	—	$	170,522	$	(99,082)	$	71,444


	For the three months ended June 30,				For the six months ended June 30,
($ in thousands)	2020		2019		2020		2019
City of Hope National Medical Center
CD123	$	334	$	—	$	334	$	250
CS1		—		200		—		200
IL13Rα2		333		—		333		—
Spacer		333		—		333		—
HER2		—		—		250		—
Fred Hutchinson Cancer Research Center - CD20		300		—		300		—
Nationwide Children's Hospital - C134		—		—		—		200
Total	$	1,300	$	200	$	1,550	$	650


	For the three months ended June 30,				For the six months ended June 30,
($ in thousands)	2020		2019		2020		2019
City of Hope National Medical Center		—		500		500		1,000
CD123		65		456		296		759
IL13Rα2		234		225		326		567
Manufacturing		—		115		—		229
CS1		770		—		770		—
Fred Hutchinson Cancer Research Center - CD20		189		374		716		641
St. Jude Children's Research Hospital - XSCID		1,558		—		1,558		—
Beth Israel Deaconess Medical Center - CRISPR		—		—		—		69
Total		2,816		1,670		4,166		3,265


	Estimated Useful	June 30,		December 31,
($ in thousands)	Life (in years)	2020		2019
Computer equipment	3	$	68	$	53
Furniture and fixtures	5		182		145
Machinery and equipment	5		5,014		4,594
Leasehold improvements	9		5,099		3,877
Construction in process	N/A		493		1,157
Total property and equipment			10,856		9,826
Less: accumulated depreciation			(2,688)		(1,890)
Property and equipment, net		$	8,168	$	7,936


	For the Six Months Ended
		June 30,		June 30,
($ in thousands)	2020		2019
Lease cost
Operating lease cost	$	161	$	157
Variable lease cost		234		363
Total	$	395	$	520


($ in thousands)
Six months ended June 30, 2020	$	232
Year ended December 31, 2021		467
Year ended December 31, 2022		475
Year ended December 31, 2023		489
Year ended December 31, 2024		503
Thereafter		955
Total		3,121
Less present value discount		(766)
Operating lease liabilities	$	2,355


	For the six months ended June 30,
	2020	2019
Warrants	5,402,671	5,433,524
Options	1,141,675	1,241,675
Class A Preferred Shares	250,000	250,000
Unvested restricted stock awards	219,059	552,636
Unvested restricted stock units	1,499,228	968,334
Total	8,512,633	8,446,169


				Weighted Average
				Remaining
		Weighted Average		Contractual Life (in
	Stock Options	Exercise Price		years)
Outstanding at December 31, 2019	1,241,675	$	5.73	7.31
Options forfeited	(100,000)		5.73	—
Outstanding at June 30, 2020	1,141,675		5.73	6.81
Options vested and exercisable at June 30, 2020	428,127	$	5.73	6.81


		Weighted Average
		Grant Date Fair
	Number of Shares	Value
Nonvested at December 31, 2019	299,060	$	5.66
Vested	(80,001)		5.73
Nonvested at June 30, 2020	219,059	$	5.63


		Weighted Average
		Grant Date Fair
	Number of Units	Value
Nonvested at December 31, 2019	1,112,417	$	5.11
Granted	642,500		2.73
Forfeited	(36,250)		3.58
Vested	(219,439)		5.21
Nonvested at December 31, 2020	1,499,228	$	4.11


	For the three months ended June 30,				Change
($in thousands)	2020		2019		$		%
Operating expenses:
Research and development	$	9,830	$	6,823	$	3,007	44	%
Research and development – licenses acquired		1,300		200		1,100	550	%
General and administrative		2,991		3,189		(198)	(6)	%
Total operating expenses		14,121		10,212		3,909	38	%
Loss from operations		(14,121)		(10,212)		(3,909)	38	%

Other income (expense)
Interest income		142		387		(245)	(63)	%
Interest expense		(619)		(574)		(45)	8	%
Total other income (expense)		(477)		(187)		(290)	155	%
Net Loss	$	(14,598)	$	(10,399)	$	(4,199)	40	%


Exhibit No.		Description

31.1		Certification of President and Chief Executive Officer (Principal Executive Officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification of Senior Vice President of Finance & Corporate Controller (Principal Financial Officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1		Certification of President and Chief Executive Officer (Principal Executive Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.2		Certification of Senior Vice President of Finance & Corporate Controller (Principal Financial Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020, formatted as Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statement of Stockholders’ Equity, (iv) the Condensed Statements of Cash Flows, and (v) Notes to the Condensed Financial Statements (filed herewith).

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101)


	MUSTANG BIO, INC.

August 10, 2020	By:	/s/ Manuel Litchman
		Manuel Litchman, M.D., President and
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Brian Achenbach
		Brian Achenbach
		Senior Vice President of Finance & Corporate Controller
		(Principal Financial Officer)