MUSTANG BIO, INC.

Balance Sheets** (Unaudited)**

(in thousands, except share and per share amounts)

Statements of Operations** (Unaudited)**

(in thousands, except share and per share amounts)

Statements of Stockholders’ Equity (Deficit) (Unaudited)

(in thousands, except share amounts)

Statements of Cash Flows (Unaudited)

(in thousands)

Notes to Unaudited Financial Statements

Note 1 - Organization, Description of Business and Liquidity and Capital Resources

Mustang Bio, Inc. (the “Company” or “Mustang”) was incorporated in Delaware on March 13, 2015. Mustang is a clinical-stage biopharmaceutical company focused on translating medical breakthroughs into potential cures for difficult-to-treat cancers. 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.

The Company is a majority-controlled subsidiary of Fortress Biotech, Inc. (“Fortress” or “Parent”).

Liquidity and Capital Resources

The Company has incurred substantial operating losses and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. To date, the Company has funded its operations primarily with the proceeds from offerings of equity securities. As of March 31, 2026, the Company had an accumulated deficit of $399.6 million, and cash and cash equivalents of $16.3 million.

The Company expects to incur substantial expenses for the foreseeable future relating to research, development and commercialization of our potential products and may never achieve profitability. The Company does not have any products that are approved for commercial sale and, therefore, it does not expect to generate any revenues from product sales in the foreseeable future, if ever. Additionally, there can be no assurance that it will be successful in securing additional resources when needed, on terms acceptable to the Company, if at all.

The Company is currently not in compliance with certain standards for continued listing on the Nasdaq Capital Market, namely, the minimum bid price requirement, see Note 9 – Subsequent Events. There can be no assurance that the Company will be able to regain compliance with the continued listing rules of the Nasdaq Stock Market LLC (“Nasdaq”), which could adversely affect the value and liquidity of its common stock.

The Company expects to continue generating operating losses and negative operating cash flows as it develops its products through to potential approval. As of March 31, 2026, the Company believes it has sufficient cash and cash equivalents to fund its operations for at least twelve months from the issuance date of these financial statements.

Note 2 - Significant Accounting Policies

Basis of Presentation

The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the interim unaudited financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Therefore, these financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2025, which were included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2026 (the “2025 Form 10-K”). The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.

Use of Estimates

The Company’s unaudited financial statements include certain amounts that are based on management’s best estimates and judgments. The Company’s significant estimates include, but are not limited to, assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Due to the uncertainty inherent in such estimates, actual results could differ from those estimates.

Segment Reporting

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 in assessing performance. The Company views its operations and manages its business inone segment, which reflects the research and development of potential cures for difficult-to-treat cancers. The Company’s chief operating decision maker (“CODM”) is its chief executive officer.

The CODM assesses performance and decides how to allocate resources based on net loss, which is reported on the Unaudited Statements of Operations. The CODM uses net loss to assess performance, make operating decisions, allocate resources, and plan and forecast for future periods. The measure of segment assets is reported on the unaudited balance sheet as total assets. The accounting policies of the segment are the same as those described in this Note 2.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies previously disclosed in the 2025 Form 10-K.

Recently Issued Accounting Standards

As of March 31, 2026, there were no new accounting pronouncements or updates to recently issued accounting pronouncements disclosed in the 2025 Form 10-K that affect the Company’s present or future results of operations, overall financial condition, liquidity, or disclosures upon adoption.

Note 3 - Related Party Agreements

Founders Agreement and Management Services Agreement with Fortress

With respect to the Company’s Management Services Agreement (the “Management Services Agreement”) with Fortress for the three months ended March 31, 2026 and 2025, expenses related to the Management Services Agreement are recorded 50% in research and development expenses and 50% in general and administrative expenses in the Unaudited Statements of Operations. For the three months ended March 31, 2026 and 2025, the Company recorded expense of $0.1 million and $0.1 million, respectively, related to the Management Services Agreement.

Under the terms of the Second Amended and Restated Founders Agreement (the “Founders Agreement”), which became effective July 22, 2016, Fortress will receive a grant of shares of the Company’s common stock equal to two and one-half percent (2.5%) of the gross amount of any equity or debt financing.

For the three months ended March 31, 2026, the Company did not have any equity or debt financing activities and therefore, did not issue any shares to Fortress.

For the three months ended March 31, 2025, the Company issued 67,806 shares to Fortress in connection with equity financings and recorded expense of approximately $0.2 million in general and administrative expenses related to these shares.

Annual Stock Dividend

Pursuant to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Company issued 278,385 shares of common stock to Fortress as the Annual Stock Dividend on January 1, 2026 (as such term is defined in the Certificate of Incorporation), representing 2.5% of the fully-diluted outstanding equity of the Company on December 31, 2025. The value of these shares was recorded as Common stock issuable – Annual Stock Dividend to Fortress in the Statement of Stockholders’ Equity (Deficit) at December 31, 2025. The Company recorded an expense of approximately $0.3 million in research and development expenses related to these issuable shares during the year ended December 31, 2025.

Payables and Accrued Expenses Related Party

In the normal course of business Fortress pays certain expenses on behalf of the Company. Such expenses are recorded as payables and accrued expenses - related party and are recorded at the invoiced amount and reimbursed to Fortress in the normal course of business. The Company believes that the difference, if any, between the amounts invoiced and the amounts that would have been incurred if the Company operated as an unaffiliated entity is not material.

Note 4 - Accounts Payable and Accrued Expenses

At March 31, 2026, and December 31, 2025, accounts payable and accrued expenses consisted of the following:

(1) Includes approximately $1.3 million of accrued consideration, including approximately $50,000 of accrued interest, related to the repurchase of assets from uBriGene (Boston) Biosciences, Inc. (“uBriGene”) in 2024. The asset repurchase consisted of purchase consideration of an upfront payment of $0.1 million, and a deferred amount of approximately $1.3 million duetwelve months after closing; however, the Company can elect to delay its payment obligation for the deferred amount for additional 6 month periods, upon written notice to uBriGene, if the Company’s net assets are below $20 million. Additionally, beginning in June 2025, the deferred amount began accruing interest at a rate of 5% per annum. In December 2025, the Company’s net assets were below $20 million, and it elected to delay the payment.

Note 5 - Stockholders’ Equity

Registration Statements

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 March 31, 2026, approximately $34.2 million of the 2024 S-3 remains available for sales of securities.

As of the filing of this Quarterly Report on Form 10-Q (this “Form 10-Q”), the Company is subject to the General Instruction I.B.6 to Form S-3, known as the “baby shelf rules,” which limit the amount of securities it can sell under its registration statements on Form S-3 in any 12-month period.

February 2025 Equity Offering

On February 5, 2025, the Company commenced a best efforts public offering (the “February 2025 Equity 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 withone Series C-1 Warrant to purchaseone share of common stock andone Series C-2 Warrant to purchaseone 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 Warrant 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”), which was obtained on March 23, 2025. The Series C-1 Warrants expire five years from the Warrant Stockholder Approval and the Series C-2 Warrants expire twenty-four months from the Warrant Stockholder Approval.

The net proceeds of the February 2025 Equity 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, were approximately $6.8 million. The February 2025 Equity Offering closed on February 10, 2025.

Pursuant to an Engagement Letter (the “Engagement Letter”) with H.C. Wainwright & Co., LLC (“Wainwright” or the “Placement Agent”), the Company agreed to pay the Placement Agent in connection with the February 2025 Equity Offering (i) a cash fee equal to 7.0% of the aggregate gross proceeds raised in the February 2025 Equity Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds raised in the February 2025 Equity 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 February 2025 Equity 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 represented 6.0% of the Shares and Pre-Funded Warrants sold in the February 2025 Equity Offering). The Placement Agent Warrants became 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 thefive-year anniversary of commencement of sales in the Offering.

At-the-Market Offering

On May 31, 2024, the Company entered into an At-the-Market Offering Agreement (the “ATM 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 ATM 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 ATM Agreement. The Company and the Manager may each terminate the ATM Agreement at any time upon specified prior written notice.

During the three months ended March 31, 2026, the Company didnot issue any shares in connection with the ATM Agreement. During the three months ended March 31, 2025, the Company issued approximately 54,000 shares of common stock at an average price of $11.55 per common share for gross proceeds of $0.6 million under the ATM Agreement. In connection with these sales, the Company paid aggregate fees of approximately $27,000.

Warrants

A summary of warrant activities for the three months ended March 31, 2026, is presented below:

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

Equity Incentive Plan

The Company has in effect the Mustang Bio, Inc. 2016 Incentive Plan (the “Incentive Plan”). The Incentive Plan was adopted in 2016 by the Company’s stockholders and the compensation committee of the Company’s board of directors (the “Board”) and is authorized to grant stock-based awards to directors, officers, employees and consultants. The Incentive Plan initially authorized grants to issue up to 2,666 shares of authorized but unissued common stock and had an initial term of 10 years. The Incentive Plan stipulates, however,

that, in the event of any stockholder-approved amendment that increases the number of shares subject to the Incentive Plan, the expiration date of the Incentive Plan extends until the tenth anniversary of such approval. In June 2018, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 4,000 shares, for a total of 6,666 shares. In June 2021, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 4,000 shares, for a total of 10,666 shares. In June 2022, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 4,000 shares, for a total of 14,666 shares. In December 2025, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares of common stock issuable by 2,500,000 shares, for a total of 2,514,666 shares of common stock.

As of March 31, 2026,2,506,958 shares were available for future issuance under the Incentive Plan.

Stock Options

The following table summarizes stock option activities for the three months ended March 31, 2026:

As of March 31, 2026, the Company hadno unrecognized stock-based compensation expense related to options. The Company accounts for forfeited awards as they occur.

Restricted Stock

The following table summarizes restricted stock award activities for the three months ended March 31, 2026:

As of March 31, 2026, the Company had unrecognized stock-based compensation expense related to restricted stock of approximately $22,000 which is expected to be recognized over the remaining weighted average vesting period of less thanone year.

Restricted Stock Units

Certain employees and consultants have been awarded restricted stock units with time-based vesting. The following table summarizes restricted stock units activity for the three months ended March 31, 2026:

As of March 31, 2026, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $2,000, which is expected to be recognized over the remaining weighted average vesting period of approximatelyone year.

The following table summarizes stock-based compensation expense for the three months ended March 31, 2026 and 2025 (in thousands):

(1) Credit reflects the forfeitures of restricted stock units and the reversal of previously incurred stock-based compensation expense.

Employee Stock Purchase Plan

Eligible employees can purchase the Company’s common stock at the end of a predetermined offering period at 85% of the lower of the fair market value at the beginning or end of the offering period.

As of March 31, 2026,2,762 shares have been purchased, and 256,571 shares are available for future sale under the Company’s Employee Stock Purchase Plan.

Note 6 – Net Loss per Share

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, 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.

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. Earnings allocated to the Class A preferred stock and Class A common stock are not material for the three months ended March 31, 2026 and 2025. At March 31, 2026, the Class A common stock and Class A preferred stock have rights to convert to a total of 1,460 common shares.

Note 7 – Income Taxes

The Company incurred net operating losses and recorded a full valuation allowance against net deferred tax assets for all periods presented. Accordingly, the Company has not recorded a provision for federal or state income taxes.

Note 8 – Commitments and Contingencies

Indemnification

In accordance with its Certificate of Incorporation, amended and restated bylaws and indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. The Company has director and officer insurance to address such claims. The Company also provides indemnification of contractual counterparties in certain situations, including without limitation to clinical sites, service providers and licensors.

Leases

In February 2025, the Company entered into the First Amendment to the Lease Agreement with WCS – 377 Plantation Street, Inc. (the “Landlord”), pursuant to which the Company’s lease of its Plantation Street Facility was terminated. Following the termination of the lease, the Company is no longer party to any leases for office space or equipment. Upon termination of the lease, the Company wrote off the remaining right of use assets, operating lease liabilities, and associated leasehold improvements and recorded a net gain of approximately $0.4 million in research and development expenses in the Unaudited Statements of Operations.

Upon termination of the lease, the Company moved its headquarters to 95 Sawyer Road, Suite 110, Waltham, MA, which is office space leased by Fortress. Fortress allocates a small portion of its rent and office related costs to the Company on a monthly basis which is recorded in general and administrative expenses in the Unaudited Statements of Operations. During the three months ended March 31, 2026 and 2025, the Company recorded approximately $12,000 and $13,000, respectively, of rent expense allocated from Fortress.

Note 9 – Subsequent Events

On April 15, 2026, the Company received a notice from the Listing Qualifications Department (the “Staff”) of Nasdaq indicating that the bid price of the Company’s common stock had closed below $1.00 per share for 30 consecutive business days and, as a result, the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market. The Staff notice has no immediate effect on the listing of the Company’s Common Stock on Nasdaq.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was afforded a 180-calendar day grace period, or until October 12, 2026, to regain compliance with the Bid Price Rule. Compliance can be achieved by evidencing a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days (but generally not more than 20 consecutive business days) during the 180-calendar day grace period.

If the Company does not regain compliance with the Bid Price Rule by October 12, 2026, the Company may be eligible for an additional 180-calendar day compliance period so long as it satisfies the criteria for initial listing on the Nasdaq Capital Market and the continued listing requirement for market value of publicly held shares and the Company provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. In the event the Company is not eligible for the second grace period, the Staff will provide written notice to the Company that its common stock is subject to delisting; however, the Company may request a hearing before the Nasdaq Hearings Panel (the “Panel”), which request, if timely made, would stay any further suspension or delisting action by the Staff pending the conclusion of the hearing process and expiration of any extension that may be granted by the Panel. There can be no assurance that the Company would be successful in its efforts to maintain the Nasdaq listing.

The Company intends to closely monitor the closing bid price of its Common Stock and consider all available options to remedy the bid price deficiency, but no decision regarding any action has yet been made.