Fortress Biotech, Inc.

Previous wording

Fortress Biotech, Inc. (“Fortress” or the “Company”) is a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holding and dividend and royalty revenue streams. Fortress works in concert with its extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition. We have executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, Dr. Reddy’s Laboratories, Ltd., and Sun Pharmaceutical Industries Limited (“Sun Pharma”).

Current wording

Fortress Biotech, Inc. (“Fortress” or the “Company”) is a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holding and dividend and royalty revenue streams. Fortress works in concert with its extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition. We have executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, Dr. Reddy’s Laboratories, Ltd., and Sun Pharmaceutical Industries Limited (“Sun Pharma”).

Previous wording

Following the exclusive license or other acquisition of the intellectual property underpinning a product or product candidate, Fortress leverages its business, scientific, regulatory, legal and finance expertise to help its subsidiaries and partner companies achieve their goals. Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, three partner companies are publicly-traded, and four subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc. (“AstraZeneca”), Sentynl Therapeutics, Inc. (“Sentynl”), and Sun Pharma.

Current wording

Following the exclusive license or other acquisition of the intellectual property underpinning a product or product candidate, Fortress leverages its business, scientific, regulatory, legal and finance expertise to help its subsidiaries and partner companies achieve their goals. Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, three partner companies are publicly-traded, and four subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc. (“AstraZeneca”), Sentynl Therapeutics, Inc. (“Sentynl”), Axsome Therapeutics, Inc. (“Axsome”), and Sun Pharma.

Previous wording

Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic,” a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc. (“Checkpoint”), previously a partner company of ours, was acquired by Sun Pharma in May 2025.

Current wording

Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc. (“Checkpoint”), previously a partner company of ours, was acquired by Sun Pharma in May 2025. Baergic Bio, Inc. (“Baergic”), previously a subsidiary of Avenue, was acquired by Axsome in November 2025.

Previous wording

For a discussion of our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2025 (the “2024 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024.

Current wording

For a discussion of our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2025 (the “2024 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024 other than the addition of the “Investment in Equity Securities” policy.

Previous wording

For the three months ended June 30, 2025 we generated $15.0 million of net product revenue related to the sale of Journey’s branded and generic products as compared to $14.9 million for the three months ended June 30, 2024. The second quarter of 2025 includes $2.8 million of net product revenue related to the U.S. commercial launch of Emrosi, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the three months ended June 30, 2025 consists of revenue recognized by Avenue related to the AnnJi license termination and program transfer.

Current wording

For the three months ended September 30, 2025 we generated $17.0 million of net product revenue related to the sale of Journey’s branded and generic products as compared to $14.6 million for the three months ended September 30, 2024. This includes $4.9 million of net product revenue related to the U.S. commercial launch of Emrosi for the three months ended September 30, 2025, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the three months ended September 30, 2025 consists of revenue recognized by Journey related to the supply of Amzeeq to Cutia.

Previous wording

We incurred $4.9 million and $5.7 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the quarters ended June 30, 2025 and 2024, respectively. Cost of goods sold decreased by $0.8 million, or 14% quarter-over-quarter, related to product sales mix, driven mainly by the decrease in Accutane revenue, which has a higher cost to Journey than Emrosi.

Current wording

We incurred $5.8 million and $4.5 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the quarters ended September 30, 2025 and 2024, respectively. Cost of goods sold increased by $1.3 million, or 29% quarter-over-quarter, due to an increase in product-related cost of goods, including royalties, related to the incremental revenue from Emrosi.

Previous wording

For the six months ended June 30, 2025 we generated $28.1 million of net revenue related to the sale of Journey’s branded and generic products as compared to $27.9 million for the six months ended June 30, 2024. The six months of 2025 includes $4.9 million of net product revenue related to the U.S. commercial launch of Emrosi, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the six months ended June 30, 2025 consists of revenue recognized by Avenue related to the AnnJi license termination and program transfer.

Current wording

For the nine months ended September 30, 2025 we generated $45.2 million of net revenue related to the sale of Journey’s branded and generic products as compared to $42.5 million for the nine months ended September 30, 2024. The nine months of 2025 includes $9.7 million of net product revenue related to the U.S. commercial launch of Emrosi, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the nine months ended September 30, 2025 consists of revenue recognized by Avenue related to the AnnJi license termination and program transfer of $1.4 million and revenue recognized by Journey related to the supply of Amzeeq to Cutia for $0.6 million.

Previous wording

We incurred $9.7 million and $11.7 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the six months ended June 30, 2025 and 2024, respectively. Cost of goods sold decreased by $2.0 million, or 17% year-over-year, related to product sales mix, driven mainly by the decrease in Accutane revenue, which has a higher cost to Journey than Emrosi, as well as lower inventory obsolescence costs in the six month period ended June 30, 2025.

Current wording

We incurred $15.5 million and $16.2 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the nine months ended September 30, 2025 and 2024, respectively. Cost of goods sold decreased by $0.7 million, or 4%, year-over-year, related to product sales mix, driven mainly by the decrease in Accutane revenue, which has a higher cost to Journey than Emrosi, as well as lower inventory obsolescence costs in the nine month period ended September 30, 2025.

Previous wording

Amortization of acquired intangible assets increased by $0.5 million, or 31%, to $2.1 million for the six-month period ended June 30, 2025, from $1.6 million for the six-month period ended June 30, 2024, driven by the addition of the Emrosi acquired intangible asset upon Journey’s payment to DRL of the milestone payment triggered by the FDA’s approval of Emrosi in November 2024.

Current wording

Amortization of acquired intangible assets increased by $0.8 million, or 31%, to $3.2 million for the nine-month period ended September 30, 2025, from $2.4 million for the nine-month period ended September 30, 2024, driven by the addition of the Emrosi acquired intangible asset upon Journey’s payment to DRL of the milestone payment triggered by the FDA’s approval of Emrosi in November 2024.

Previous wording

For the six months ended June 30, 2025, the decrease in R&D expenses of $25.4 million, or 68%, is attributable to a decrease of $9.0 million at Mustang attributed to actions taken in 2024, including the reduction in the workforce, closing the MB-106 clinical trial, and the termination of Mustang’s transaction with uBriGene. These activities resulted in decreased expenses of $3.2 million related to the termination of the transaction with uBriGene and the repurchase of the assets, a $2.2 million decrease in expenses related to outside services, a $1.9 million reduction in clinical trial related costs, a $1.0 million decrease in sponsored research and license related expenses, offset slightly by a $1.4 million increase in personnel-related costs due to stock compensation expense credits and reversal of accrued bonus due to the April 2024 reduction in workforce. Journey R&D expense decreased $8.8 million due to the Emrosi pre-approval expenses, milestones and fees incurred in the six months ended June 30, 2024. R&D expense at Avenue decreased $3.1 million due to a $2.9 million decrease in pre-clinical and clinical development costs for AJ201 prior to its sale to AnnJi, a $1.0 million decrease in IV tramadol supply costs, and a $0.1 million decrease in personnel-related costs. R&D expense at Checkpoint decreased $2.2 million due to decreased product development and clinical trial costs of $4.7 million, primarily for cosibelimab, offset by the $3.7 million increase in stock compensation costs due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma. The decrease at Fortress of R&D expenses of $2.3 million is primarily related to the transition of the dotinurad development program at Urica to Crystalys in July 2024.

Current wording

For the nine months ended September 30, 2025, the decrease in R&D expenses of $34.7 million, or 74%, is attributable to a decrease of $9.4 million, or 115%, at Mustang attributed to actions taken in 2024, including the reduction in the workforce, closing the MB-106 clinical trial, and the termination of Mustang’s transaction with uBriGene. These activities resulted in decreased expenses of $3.2 million related to the termination of the transaction with uBriGene and the repurchase of the assets, a $2.4 million decrease in expenses related to outside services, including assay development costs; a $1.4 million reduction in clinical trial related costs, a $1.3 million decrease in sponsored research and license related expenses, a $0.7 million decrease in consulting expenses; a $0.6 million decrease in depreciation expense; offset slightly by a $1.3 million increase in personnel-related costs due to stock compensation expense credits and reversal of accrued bonus due to the April 2024 reduction in workforce, and the $0.4 million gain recognized on the termination of the Worcester facility lease. Additionally Mustang recognized savings of approximately $1.4 million on the settlement of aged payables, which resulted in a credit to research and development expenses during the nine months ended September 30, 2025. This credit is not indicative of Mustang’s research and development expense going forward. Journey R&D expense decreased $9.3 million, or 97%, due to the Emrosi pre-approval expenses, milestones and fees incurred in the nine months ended September 30, 2024. R&D expense at Checkpoint decreased $8.6 million, or 44%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. R&D expense at Avenue decreased $5.3 million, or 87%, due to a $5.0 million decrease in pre-clinical and clinical development costs for AJ201 prior to entering into the termination agreement with AnnJi, a $0.1 million decrease in IV tramadol supply costs, and a $0.2 million decrease in personnel-related costs. The decrease at Fortress in R&D expenses of $2.1 million, or 57%, is primarily related to the transition of the dotinurad development program at Urica to Crystalys in July 2024.

Previous wording

The increase in stock-based compensation of $4.4 million, or 253%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is primarily attributed to the increase at Checkpoint of $3.7 million due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma. Stock compensation expense at Mustang reflects the expense credits due to forfeited grants from the reduction in workforce that occurred in April 2024.

Current wording

The increase in stock-based compensation of $3.3 million, or 112%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily attributed to the increase at Checkpoint of $3.2 million, or 194%, due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma. Stock compensation expense at Mustang reflects the expense credits due to forfeited grants from the reduction in workforce that occurred in April 2024. The decrease in stock compensation at Journey of $0.5 million, or 100%, is due to employee grants becoming fully vested in the prior year.

Previous wording

For the six months ended June 30, 2025, the increase in selling, general and administrative expenses of $25.6 million, or 66%, is primarily attributable to an increase of $22.6 million at Checkpoint due to primarily to an increase in increased stock compensation expense of $8.5 million related to the vesting of all outstanding equity awards due to the change of control that occurred with the sale to Sun Pharma, an increase in legal and accounting fees of $4.9 million and an increase of $9.7 million in other costs, including costs related to the transaction with Sun Pharma, such as fees to financial advisors. The increase at Journey of $3.8 million is due to the costs incurred related to the launch and commercialization of Emrosi.

Current wording

For the nine months ended September 30, 2025, the increase in selling, general and administrative expenses of $20.8 million, or 34%, is primarily attributable to an increase of $19.2 million, or 239%, at Checkpoint due primarily to an increase in increased stock compensation expense of $7.5 million related to the vesting of all outstanding equity awards due to the change of control that occurred with the sale to Sun Pharma, an increase in legal fees of $4.3 million and an increase of $9.5 million in other costs, which includes costs related to the transaction with Sun Pharma, such as fees to financial advisors. The increase at Journey of $4.4 million, or 14%, is due to the costs incurred related to the launch and commercialization of Emrosi. The decrease at Mustang of $1.4 million, or 32%, is due to a $0.4 million decrease inpersonnel costs, a $0.5 million decrease in legal and patent protection expenses, a $0.4 million decrease in consulting expenses, and a $0.3 million decrease across various other general and administrative expenses, offset by a $0.2 million increase innon-cash stock-based compensation expenses, consisting primarily of the equity fee paid to Fortress.

Previous wording

The increase in stock-based compensation of $7.7 million, or 174%, for the quarter ended June 30, 2025 as compared to the quarter ended June 30, 2024 is primarily due to the increase at Checkpoint of $7.5 million due to the vesting of all outstanding equity awards related to the change of control that occurred with the sale to Sun Pharma.

Current wording

The increase in stock-based compensation of $6.6 million, or 49%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily attributed to the increase at Checkpoint of $7.5 million, or 400%, due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma, partially offset by the decrease at Fortress of $1.0 million, or 15%, due to the vesting in July 2025 of a series of grants made under the Fortress Biotech, Inc. Long Term Incentive Plan.

Previous wording

Total other income (expense) increased $25.9 million, or 742%, from expense of $3.5 million for the six months ended June 30, 2024 to income of $22.4 million for the six months ended June 30, 2025. As a result of the merger of Checkpoint with Sun Pharma, we deconsolidated Checkpoint in May 2025, and recognized a gain from deconsolidation of approximately $27.1 million during the six months ended June 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements), offset by interest expense and financing fee expenses related to Fortress’ debt outstanding with Oaktree and Journey’s debt outstanding with SWK. The $0.6 million increase in interest expense and financing fees is due to the supplemental payment made to Oaktree related to the Checkpoint monetization event (see Note 9 to the unaudited condensed consolidated financial statements).

Current wording

Total other income (expense) increased $46.1 million, or 538%, from expense of $8.0 million for the nine months ended September 30, 2024 to income of $35.2 million for the nine months ended September 30, 2025. As a result of the merger of Checkpoint with Sun Pharma, we deconsolidated Checkpoint in May 2025, and recognized a gain from deconsolidation of approximately $27.1 million during the nine months ended September 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements). We also recognized an increase in the fair value of Urica’s equity interest in Crystalys of $15.1 million and reversed the liability associated with the repurchase obligation of $2.6 million during the nine months ended September 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements). These gains were partially offset by interest expense and financing fee expenses related to Fortress’ debt outstanding with Oaktree and Journey’s debt outstanding with SWK. The $2.9 million, or 26%, decrease in interest expense and financing fees is attributable to a loss on extinguishment of debt of $3.6 million recognized in the nine months ended September 30, 2024 related to the Company’s extinguishment of the 2020 Oaktree Note in 2024 offset by an increase of $0.4 million in interest and fees recognized in the nine months ended September 30, 2025 associated with the additional payments made to Oaktree for the Checkpoint monetization event.

Previous wording

At June 30, 2025, we had an accumulated deficit of $736.0 million, primarily as a result of R&D expenses, purchases of in-process research and development and selling, general and administrative expenses.

Current wording

At September 30, 2025, we had an accumulated deficit of $730.1 million, primarily as a result of R&D expenses, purchases of in-process research and development and selling, general and administrative expenses.

Previous wording

We fund our operations through cash on hand, the sale of debt and equity securities, third-party financings, out-licensing of drug product and drug product candidates and the sale of subsidiaries and partner companies. At June 30, 2025, we had cash and cash equivalents of $74.4 million, of which $38.1 million relates to Fortress and private subsidiaries primarily funded by Fortress, $12.7 million relates to Mustang, $20.3 million relates to Journey, and $3.3 million relates to Avenue. Restricted cash at June 30, 2025, was $1.2 million, which relates to certain office leases held by Fortress.

Current wording

We fund our operations through cash on hand, the sale of debt and equity securities, third-party financings, out-licensing of drug product and drug product candidates and the sale of subsidiaries and partner companies. At September 30, 2025, we had cash and cash equivalents of $86.2 million, of which $38.6 million relates to Fortress and private subsidiaries primarily funded by Fortress, $19.0 million relates to Mustang, $24.9 million relates to Journey, and $3.7 million relates to Avenue. Restricted cash at September 30, 2025, was $1.2 million, which relates to certain office leases held by Fortress.

Previous wording

During the six months ended June 30, 2025, the Company issued and sold approximately 0.5 million shares at an average price of $1.94 per share for gross proceeds of approximately $1.0 million under the Company’s at-the-market offering program.

Current wording

During the nine months ended September 30, 2025, the Company issued and sold approximately 0.5 million shares at an average price of $1.94 per share for gross proceeds of approximately $1.0 million under the Company’s at-the-market offering program.

Previous wording

On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “Journey 2022 S-3”), which was declared effective on January 26, 2023. The Journey 2022 S-3 covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units. In connection with the Journey 2022 S-3, Journey entered into a sales agreement relating to the sale of shares of Journey’s common stock in an at-the-market offering (the “Journey ATM Sales Agreement”). In accordance with the terms of the Journey ATM Sales Agreement, Journey may offer and sell up to 4,900,000 shares of its common stock, par value $0.0001 per share, from time to time. For the six months ended June 30, 2025, Journey issued and sold approximately 0.8 million shares of common stock for gross proceeds of $4.1 million under the Journey ATM Sales Agreement. At June 30, 2025, 1.8 million shares remain available for issuance under the Journey ATM Sales Agreement.

Current wording

On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “Journey 2022 S-3”), which was declared effective on January 26, 2023. The Journey 2022 S-3 covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units. In connection with the Journey 2022 S-3, Journey entered into a sales agreement relating to the sale of shares of Journey’s common stock in an at-the-market offering (the “Journey ATM Sales Agreement”). In accordance with the terms of the Journey ATM Sales Agreement, Journey may offer and sell up to 4,900,000 shares of its common stock, par value $0.0001 per share, from time to time. For the nine months ended September 30, 2025, Journey issued and sold approximately 1.8 million shares of common stock for net proceeds of $10.9 million under the Journey ATM Sales Agreement.

Previous wording

On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3. During the six months ended June 30, 2025, Mustang issued and sold approximately 54,000 shares through the Mustang ATM for net proceeds of approximately $0.6 million.

Current wording

On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3. During the nine months ended September 30, 2025, Mustang issued and sold approximately 54,000 shares through the Mustang ATM for net proceeds of approximately $0.6 million.

Previous wording

In February 2025, Mustang closed on an equity offering of (i) 495,000 shares of its common stock, par value $0.0001 per share (the “Shares”), (ii) 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 to purchase up to 2,657,807 shares of common stock, and (iv) Series C-2 warrants to purchase up to 2,657,807 shares of common stock. 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, were exercisable immediately upon issuance and will expire when exercised in full. Each Warrant has an exercise price of $3.01 per share and became 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 date of stockholder approval and the Series C-2 warrants will expire twenty-four months from the date of stock holder approval. The warrants contain customary anti-dilution adjustments to the exercise price, including share splits, share dividends, rights offerings and pro rata distributions. The net proceeds of the offering, after deducting the fees and expenses of the placement agent in the transaction, and other offering expenses payable by Mustang, but excluding the net proceeds, if any, from the exercise of the Warrants, was approximately $6.8 million. All of the 2,162,807 pre-funded warrants and 2,373,355 of the 2,657,807 Series C-2 warrants have since been exercised as of the date of the filing of this Form 10-Q.

Current wording

In February 2025, Mustang closed on an equity offering of (i) 495,000 shares of its common stock, par value $0.0001 per share (the “Shares”), (ii) 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 2,657,807 shares of common stock, and (iv) Series C-2 warrants (the “Series C-2 Warrants”)to purchase up to 2,657,807 shares of common stock. 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 had an exercise price of $0.0001 per share, were exercisable immediately upon issuance and expired when exercised in full. Each Warrant has an exercise price of $3.01 per share and became 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 expire five years from the date of stockholder approval and the Series C-2 Warrants expire twenty-four months from the date of stock holder approval. The warrants contain customary anti-dilution adjustments to the exercise price, including share splits, share dividends, rights offerings and pro rata distributions. The net proceeds of the offering, after deducting the fees and expenses of the placement agent in the transaction, and other offering expenses payable by Mustang, but excluding the net proceeds from the exercise of the Warrants, was approximately $6.8 million.

Previous wording

In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue may offer and sell, from time to time at its sole discretion, up to $3.9 million of shares of its common stock. The offers and sales of the shares are made pursuant the Avenue 2021 S-3, and the related prospectus supplement dated May 10, 2024. During the six months ended June 30, 2025, Avenue issued 0.9 million shares through the Avenue ATM for net proceeds of $2.1 million. Avenue is no longer able to utilize the Avenue ATM as a result of the delisting of its stock from trading on the Nasdaq.

Current wording

In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue may offer and sell, from time to time at its sole discretion, up to $3.9 million of shares of its common stock. The offers and sales of the shares are made pursuant the Avenue 2021 S-3, and the related prospectus supplement dated May 10, 2024. During the nine months ended September 30, 2025, Avenue issued 0.9 million shares through the Avenue ATM for net proceeds of $2.1 million. Avenue is no longer able to utilize the Avenue ATM as a result of the delisting of its stock from trading on the Nasdaq.

Previous wording

Note 2: Checkpoint cash flows are for the five-month period ending May 30, 2025, due to the deconsolidation of Checkpoint on May 30, 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).

Current wording

Note 2: Checkpoint cash flows are for the five-month period ending May 2025, due to the deconsolidation of Checkpoint as of May 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).

Previous wording

Net cash used in operating activities decreased $0.1 million from the six months ended June 30, 2024, as compared to the six months ended June 30, 2025. The decrease is due to the decrease in net loss of $31.5 million and an increase in stock-based compensation expense of $13.2 million offset by the $27.1 million gain on deconsolidation recognized related to Checkpoint, as well as the $12.9 million decrease resulting from changes in operating assets and liabilities.

Current wording

Net cash used in operating activities decreased $14.1 million from the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2025. The decrease is due to the decrease in net loss of $67.0 million and an increase in stock-based compensation expense of $9.9 million offset by the $27.1 million gain on deconsolidation recognized related to Checkpoint, and the $15.1 million increase in the fair value of investments, as well as the $11.9 million increase resulting from changes in operating assets and liabilities.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 increased by $7.3 million, due to the net cash increase of $6.1 million related to the sale of Checkpoint to Sun Pharma, and Mustang’s $1.2 million proceeds from the sale of its held-for-sale assets related to the exit of its manufacturing facility.

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 increased by $10.1 million, due to the net cash increase of $9.0 million related to the sale of Checkpoint to Sun Pharma, and Mustang’s $1.2 million proceeds from the sale of its held-for-sale assets related to the exit of its manufacturing facility.

Previous wording

Net cash provided by financing activities was $42.1 million for the six months ended June 30, 2024, compared to $56.7 million of net cash provided by financing activities for the six months ended June 30, 2025, an increase of $14.5 million. The increase is attributable to proceeds from partner companies’ equity offerings and warrant exercises of $28.1 million, partially offset by decreased proceeds from the issuance of common stock for equity offerings of the Company in the current period of $10.1 million and the $4.9 million payment made to Oaktree.

Current wording

Net cash provided by financing activities was $44.8 million for the nine months ended September 30, 2024, compared to $71.7 million of net cash provided by financing activities for the nine months ended September 30, 2025, an increase of $26.9 million. The increase is attributable to an increase in proceeds from partner companies’ equity offerings and warrant exercises of $24.5 million and the decrease in the payments made to Oaktree of $45.5 million, partially offset by decreased proceeds from the issuance of common stock for equity offerings of the Company in the current period of $17.5 million and the decrease in proceeds from long-term debt of $33.8 million.

Previous wording

During the six months ended June 30, 2025, there were no material changes in our contractual obligations and commitments, including our lease obligations, as described in our 2024 Form 10-K.

Current wording

During the nine months ended September 30, 2025, there were no material changes in our contractual obligations and commitments, including our lease obligations, as described in our 2024 Form 10-K.