Mustang Bio, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 5 - Stockholders’ Equity

Stock Issuances to Fortress

Pursuant to the Founders Agreement, the Company issued 834,756 shares of common stock to Fortress for the Annual Equity Fee, representing 2.5% of the fully diluted outstanding equity of the Company on March 12, 2018.

Stock Awards

Stock Options

The Company has in effect the 2016 Incentive Plan (the “Incentive Plan”). The Incentive Plan was adopted in 2016 by our stockholders and the compensation committee of the Company’s board of directors and is authorized to grant stock-based awards to directors, officers, employees and consultants. The plan authorizes grants to issue up to 2,000,000 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option to no more than 10 years from the date of grant. Total shares available for the issuance of stock-based awards under the Incentive Plan was 169,325 shares at March 31, 2018.

The following table summarizes stock option activities for the three months ended March 31, 2018:

	Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Nonvested at December 31, 2017		1,241,675	$	5.73		9.31
Options granted		-	$	-		-
Options outstanding		1,241,675	$	5.73		9.06
Options vested and exercisable at March 31, 2018	$	-	$	-	$	-

As of March 31, 2018, the Company had unrecognized stock-based compensation expense related to options of $1.5 million with a weighted average vesting period of 1.24 years.

Restricted Stock

The following table summarizes restricted stock award activities for the three months ended March 31, 2018:

	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2017		180,000	$	5.73
Granted		-		-
Nonvested at March 31, 2018		180,000	$	5.73

As of March 31, 2018, the Company had unrecognized stock-based compensation expense related to restricted stock of $0.8 million with a weighted average vesting period of 3.03 years.

Restricted Stock Units

During the three months ended March 31, 2018, the Company granted 75,000 restricted stock units to two employees and 200,000 restricted stock units to two consultants. The grants to the employees vest over 4 years on the anniversary date of the grant. The grants to the consultants vest over 5 years on the anniversary date of the grant.

The following table summarizes restricted stock units activities for the three months ended March 31, 2018:

	Number of Units		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2017		134,000	$	6.53
Granted		275,000		10.55
Vested		(100,000)		10.29
Nonvested at March 31, 2018		309,000	$	8.89

As of March 31, 2018, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $1.3 million with a weighted average vesting period of 2.1 years.

The following table summarizes stock-based compensation expense for the three months ended March 31, 2018 (in thousands).

	For the three months ended March 31,
	2018
Employee	$	705
Non-employee		1,290
Total stock-based compensation expense	$	1,995

Warrants

A summary of warrant activities for three months ended March 31, 2018 is presented below:

	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2017		5,253,318	$	8.28		3.89
Granted		-		-		-
Exercised		(30,543)		3.15		-
Outstanding as of March 31, 2018		5,222,775	$	8.31		3.85

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