Company: MBIO
Filing Date: 2025-04-01
Form Type: 424B3
Source: 0001104659-25-030657
Chunk: 190

Company: MUSTANG BIO, INC.
Filing Date: 2025-04-01
Form: 424B3
Chunk 190
---
 future research and development activities are expensed when the
activity has been performed or when the goods have been received rather than when the payment is made. Upfront and milestone payments
due to third parties that perform research and development services on the Company’s behalf will be expensed as services are rendered
or when the milestone is achieved.

Research and development costs primarily consist
of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made
to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract
research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring
and manufacturing clinical trial materials, costs associated with regulatory filings, laboratory costs and other supplies.

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

<div align='center'>F-10</div>

Table of Contents

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 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. The Class A preferred
shares entitle the holder to a stock dividend equal to 2.5% of the fully diluted outstanding equity of the Company (the “Annual
Stock Dividend”). 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). 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

The Company follows accounting guidance