Mustang Bio Announces Reverse Stock Split

Rhea-AI Summary

Mustang Bio (NASDAQ: MBIO) has announced a 1-for-50 reverse stock split of its issued and outstanding common stock, scheduled to take effect on January 16, 2025. The move, approved by the Board of Directors and stockholders representing approximately 56% of voting power on June 27, 2024, aims to bring the company into compliance with Nasdaq's $1.00 per share minimum bid price requirement.

The reverse split will reduce outstanding shares from approximately 64.8 million to 1.3 million. The company will continue trading under the symbol 'MBIO' with a new CUSIP number (62818Q302). No fractional shares will be issued, and affected stockholders will receive proportional cash payments. VStock Transfer, will serve as the exchange and paying agent, managing the physical share certificate exchange process.

Positive

• None.

Negative

• Implementation of 1-for-50 reverse stock split indicates serious share price deterioration
• Company forced to execute reverse split to maintain Nasdaq listing compliance
• Significant reduction in outstanding shares from 64.8M to 1.3M may impact stock liquidity

Insights

Financial Markets Expert

This reverse stock split represents a critical financial maneuver for Mustang Bio, reducing outstanding shares from 64.8 million to approximately 1.3 million through a 1-for-50 ratio. The primary motivation is maintaining Nasdaq compliance, specifically the $1.00 minimum bid price requirement. For a micro-cap company with just an $11 million market capitalization, this is essentially a survival move.

The mechanics are straightforward - if you own 500 shares at $0.17 (current price), you'll end up with 10 shares at approximately $8.50. However, historical patterns show that reverse splits often lead to continued downward pressure on stock prices. This is particularly concerning given the company's small market cap and the biotech sector's current challenging environment. The fact that this decision required only 56% shareholder approval, barely above the minimum threshold, suggests confidence from the investor base.

For retail investors: While your ownership percentage remains unchanged, reverse splits typically signal financial distress. The real test will come in the weeks following the split - maintaining the new price level will be important for avoiding a potential delisting scenario. Think of this like reducing the slices of a pizza - you still own the same portion, but each slice is bigger.

WORCESTER, Mass., Jan. 14, 2025 (GLOBE NEWSWIRE) -- Mustang Bio, Inc. (“Mustang” or the “Company”) (Nasdaq: MBIO), a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell therapies into potential cures for difficult-to-treat cancers, today announced that it will effect a 1-for-50 reverse stock split of its issued and outstanding common stock. Mustang expects its common stock to begin trading on a split-adjusted basis on The Nasdaq Stock Market as of the commencement of trading on January 16, 2025.

The reverse stock split was approved on June 27, 2024 by Mustang’s Board of Directors and stockholders representing approximately 56% of the voting power of Mustang’s outstanding capital stock, with the authorization to determine the final ratio having been granted to the Company’s Board of Directors. The reverse stock split is intended to bring the Company into compliance with Nasdaq’s $1.00 per share minimum bid price requirement for continued listing.

Mustang’s common stock will continue to trade on The Nasdaq Stock Market under the symbol “MBIO” following the reverse stock split, with a new CUSIP number of 62818Q302. After the effectiveness of the reverse stock split, the number of outstanding shares of common stock will be reduced from approximately 64.8 million to approximately 1.3 million, subject to adjustment to give effect to the treatment of any fractional shares that stockholders would have received in the reverse stock split. No fractional shares will be issued in connection with the reverse stock split, and stockholders who would otherwise be entitled to a fractional share will receive a proportional cash payment.

Mustang’s transfer agent, VStock Transfer, LLC, is acting as the exchange and paying agent for the reverse stock split. VStock Transfer, LLC will provide instructions to stockholders regarding the process for exchanging physical share certificates. Mustang does not expect that stockholders holding their shares in book-entry form or through a bank, broker or other nominee need to take any action in connection with the reverse stock split. Beneficial holders are encouraged to contact their bank, broker or other nominee with any procedural questions. Additional information concerning the reverse stock split can be found in Mustang’s Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission on July 10, 2024.

About Mustang Bio
Mustang Bio, Inc. is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell therapies into potential cures for difficult-to-treat cancers. Mustang aims to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest, to fund research and development, and to outlicense or bring the technologies to market. Mustang has partnered with top medical institutions to advance the development of CAR-T therapies. Mustang’s common stock is registered under the Securities Exchange Act of 1934, as amended, and Mustang files periodic reports with the U.S. Securities and Exchange Commission (“SEC”). Mustang was founded by Fortress Biotech, Inc. (Nasdaq: FBIO). For more information, visit www.mustangbio.com.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Such statements, which are often indicated by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “look forward to,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions. The Company’s forward-looking statements, include, but are not limited to, any statements relating to our growth strategy and product development programs, including the timing of and our ability to make regulatory filings such as INDs and other applications and to obtain regulatory approvals for our product candidates, statements concerning the potential of therapies and product candidates and any other statements that are not historical facts. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. Risks and uncertainties include, among other things, our need for substantial additional funds in the immediate future; risks that any actual or potential clinical trials may not initiate or complete in sufficient timeframes to advance the Company’s corporate objectives, or at all, or that any promising early results obtained therefrom may not be replicable; risks related to the satisfaction of the conditions necessary to transfer the lease of the Company’s manufacturing facility to a potential transferee and receive the contingent payment in connection with the sale of such facility in the anticipated timeframe or at all; disruption from the sale of the Company’s manufacturing facility making it more difficult to maintain business and operational relationships; negative effects of Company announcements on the market price of the Company’s common stock; the development stage of the Company’s primary product candidates; our ability to obtain, perform under, and maintain financing and strategic agreements and relationships; risks relating to the results of research and development activities; risks relating to the timing of starting and completing clinical trials; uncertainties relating to preclinical and clinical testing; our dependence on third-party suppliers; our ability to attract, integrate and retain key personnel; the early stage of products under development; government regulation; patent and intellectual property matters; competition; as well as other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K filed on March 11, 2024, subsequent Quarterly Reports on Form 10-Q, and our other filings we make with the SEC. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Company Contacts:
Jaclyn Jaffe and Nicole McCloskey
Mustang Bio, Inc.
(781) 652-4500
ir@mustangbio.com

FAQ

When will Mustang Bio's (MBIO) reverse stock split take effect?

Mustang Bio's 1-for-50 reverse stock split will take effect and begin trading on a split-adjusted basis on January 16, 2025.

What is the ratio of Mustang Bio's (MBIO) reverse stock split?

Mustang Bio announced a 1-for-50 reverse stock split of its issued and outstanding common stock.

How many shares will MBIO have outstanding after the reverse split?

After the reverse split, MBIO's outstanding shares will be reduced from approximately 64.8 million to approximately 1.3 million shares.

Why is Mustang Bio (MBIO) implementing a reverse stock split?

MBIO is implementing the reverse stock split to comply with Nasdaq's $1.00 per share minimum bid price requirement for continued listing.

What happens to fractional shares in MBIO's reverse stock split?

Stockholders entitled to fractional shares will receive a proportional cash payment instead of fractional shares.