Mustang Bio(US:MBIO)2025-08-08 20:05PART I. FINANCIAL INFORMATION Unaudited Financial Statements Unaudited financials show reduced net loss, increased cash, and improved equity, despite persistent going concern doubts Condensed Balance Sheet Data (Unaudited) | Balance Sheet Items | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 12,657 | 6,839 | | Total current assets | 13,046 | 8,606 | | Total Assets | 13,046 | 9,308 | | Liabilities & Equity | | | | Accounts payable and accrued expenses | 7,500 | 9,486 | | Total current liabilities | 10,004 | 12,609 | | Total Liabilities | 10,154 | 13,181 | | Total Stockholders' Equity (Deficit) | 2,892 | (3,873) | Condensed Statements of Operations (Unaudited) | Income Statement Items | Three Months Ended June 30, 2025 ($ in thousands) | Three Months Ended June 30, 2024 ($ in thousands) | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Research and development | 98 | 4,360 | (866) | 8,164 | | General and administrative | 787 | 1,531 | 2,004 | 2,958 | | Total operating expenses | 885 | 8,540 | 1,138 | 13,771 | | Net Loss | (762) | (8,199) | (915) | (13,390) | | Net loss per share, basic and diluted | $(0.19) | $(18.36) | $(0.27) | $(40.83) | Condensed Statements of Cash Flows (Unaudited) | Cash Flow Items | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,728) | (7,656) | | Net cash from investing activities | 1,165 | — | | Net cash provided by financing activities | 7,381 | 5,315 | | Net change in cash | 5,818 | (2,341) | - The company executed a 1-for-50 reverse stock split on January 15, 2025. All share and per-share information has been retroactively adjusted to reflect this split3233 - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern for at least 12 months from the issuance date of the financial statements, due to recurring operating losses and the need for additional funding3738 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses improved financial performance from strategic cuts, but liquidity and going concern remain critical despite recent capital - The company is a clinical-stage biopharmaceutical firm focused on CAR T therapies for cancers and autoimmune diseases, with key partnerships with City of Hope, Fred Hutch, and Nationwide Children's Hospital9697 Comparison of Operating Results (in thousands) | Period | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Q2 | R&D Expense | $98 | $4,360 | $(4,262) | (98)% | | | G&A Expense | $787 | $1,531 | $(744) | (49)% | | | Net Loss | $(762) | $(8,199) | $7,437 | (91)% | | H1 | R&D Expense | $(866) | $8,164 | $(9,030) | (111)% | | | G&A Expense | $2,004 | $2,958 | $(954) | (32)% | | | Net Loss | $(915) | $(13,390) | $12,475 | (93)% | - The significant decrease in R&D expenses in Q2 2025 was primarily due to the non-repeat of costs related to the termination of the uBriGene transaction ($3.2 million), reduced outside service expenses ($0.6 million), and lower clinical trial costs ($0.5 million)124130 - The company raised net proceeds of approximately $6.8 million from an equity offering in February 2025 and an additional $7.1 million from warrant exercises in July 2025, bolstering its cash position108112 - As of June 30, 2025, the company had $12.7 million in cash and cash equivalents. However, due to its history of substantial operating losses and an accumulated deficit of $397.6 million, there remains substantial doubt about its ability to continue as a going concern138139 Quantitative and Qualitative Disclosures About Market Risks As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide quantitative and qualitative disclosures about market risks149 Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal control over financial reporting - Based on an evaluation as of June 30, 2025, the company's principal executive and financial officer concluded that disclosure controls and procedures are effective150 - No changes in internal control over financial reporting occurred during the most recent quarter that materially affected, or are reasonably likely to materially affect, internal controls151 PART II. OTHER INFORMATION Legal Proceedings The company reports no legal proceedings for the period - The company has no legal proceedings to report152 Risk Factors The company faces significant risks from its precarious financial state, unproven CAR T candidates, third-party reliance, and IP challenges Risks Related to Finances and Capital Requirements - The company has incurred significant losses since inception, with an accumulated deficit of $397.6 million as of June 30, 2025, and expects to incur losses for the foreseeable future155 - There is substantial doubt about the company's ability to continue as a going concern. It will need to raise additional funding, which may not be available, or be forced to delay or terminate product development159160 - As of the 2024 Form 10-K filing, the company is subject to SEC "baby shelf rules," limiting the amount of funds it can raise via its Form S-3 registration statement to one-third of its public float in any 12-month period171172 Risks Inherent in Drug Development and Commercialization - The company's CAR T technology is a relatively new approach and faces significant challenges, including regulatory uncertainty, complex manufacturing processes, and potential for severe side effects189194 - Clinical trials are expensive, lengthy, and uncertain. Delays in commencement, patient enrollment, or completion could increase costs and jeopardize regulatory approval193197223 - Even if approved, product candidates may not achieve market acceptance due to factors like efficacy, safety, pricing, reimbursement, and competition from other treatments229231 Risks Related to Reliance on Third Parties - The company relies heavily on third parties, including licensors (COH, Fred Hutch), CROs, and contract manufacturers, to conduct preclinical studies, clinical trials, and manufacturing. Poor performance by these parties could delay or derail development245252253 - Reliance on third-party manufacturers increases risks related to supply sufficiency, cost, regulatory compliance (cGMP), and potential for manufacturing delays or disruptions253256 - The company relies on third parties for all aspects of its LV vector production, a critical component of its therapies. Any failure or delay from these suppliers could halt clinical studies and commercialization262265 Risks Relating to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries - The company is subject to healthcare reform measures like the ACA and the Inflation Reduction Act (IRA), which could increase compliance costs, introduce pricing pressures, and adversely affect its ability to market products profitably272273 - Future business arrangements may be subject to anti-kickback, fraud and abuse, and other healthcare laws, which could expose the company to criminal sanctions, civil penalties, and reputational harm280281 Risks Related to Intellectual Property and Potential Disputes Thereof - The company's success depends on its ability to obtain and maintain patent protection for its technology. The patent process is uncertain, and issued patents may be challenged, invalidated, or circumvented286287 - The company depends on its licensors to maintain and enforce the intellectual property covering its product candidates and has limited control over their actions, which could jeopardize its rights297298 - The company may become involved in costly and time-consuming lawsuits to protect its patents or defend against infringement claims from third parties, which could have a material adverse effect on the business301302 Risks Relating to Our Control by Fortress - Fortress Biotech controls a voting majority of the company's common stock, allowing it to influence all matters requiring stockholder approval, which may create conflicts of interest315 - Under existing agreements, Fortress receives an annual stock dividend and a percentage of equity or debt financings, which results in significant dilution to other stockholders316 General Risks and Risks Associated with Ownership of our Common Stock - The company's business is vulnerable to computer system failures, cyber-attacks, and security breaches, which could disrupt operations and lead to the loss of confidential information320321 - The company's stock price has been volatile and may continue to fluctuate. It has previously failed to meet Nasdaq's continued listing requirements and may be subject to delisting if it fails to maintain compliance in the future335338340 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities for the period - None reported342 Defaults Upon Senior Securities The company reports no defaults upon senior securities for the period - None reported343 Mine Safety Disclosures This item is not applicable to the company - None reported344 Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - During the quarter, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading arrangement345 Exhibits This section provides an index of exhibits filed or furnished with the Form 10-Q - An index of exhibits filed with the report is provided, including certifications from the CEO/CFO and financial data formatted in iXBRL347349351