8-K 1 tv518144_8k.htm FORM 8-K















Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934


Date of report (Date of earliest event reported): March 29, 2019


Mustang Bio, Inc.

(Exact Name of Registrant as Specified in Charter)


(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)


2 Gansevoort Street, 9th Floor

New York, New York 10014

(Address of Principal Executive Offices)


(781) 652-4500

(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


¨ Written communications pursuant to Rule 425 under the Securities Act.
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
¨ Pre-commencement communications pursuant to Rule 14d-2b under the Exchange Act.
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company x


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    x







Item 1.01 Entry into a Material Definitive Agreement.


Debt Financing


On March 29, 2019 (the “Closing Date”), Mustang Bio, Inc. (the “Company”) entered into a $20.0 million venture debt financing agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation (“Horizon”), the proceeds of which will provide the Company with additional working capital to continue development of its gene and cell therapies. In accordance with the Loan Agreement, $15.0 million of the $20.0 million loan was funded on the Closing Date, with the remaining $5.0 million fundable upon Mustang achieving certain predetermined milestones.


Each advance of the loan will mature 42 months from the first day of the month following the funding of the advance. The first three advances will mature on October 1, 2022 (the “Loan Maturity Date”). Each advance accrues interest at a per annum rate of interest equal to 9.00% plus the amount by which the one month LIBOR Rate, as reported in the Wall Street Journal, exceeds 2.50%. The Loan Agreement provides for interest-only payments commencing May 1, 2019 through and including October 1, 2020. The interest-only period may be extended to April 1, 2021 if the Company satisfies the Interest Only Extension Milestone (as defined in the Loan Agreement). Thereafter, commencing May 1, 2021, amortization payments will be payable monthly in eighteen installments of principal and interest. At its option, upon ten business days’ prior written notice to Horizon, the Company may prepay all or any portion greater than or equal to $500,000 of each of the outstanding advances by paying the entire principal balance (or portion thereof) and all accrued and unpaid interest, subject to a prepayment charge of 4.0% of the then outstanding principal balance of each advance if such advance is prepaid on or before the Loan Amortization Date (as defined in the Loan Agreement), 3% if such advance is prepaid after the Loan Amortization Date applicable to such Loan, but on or prior to twelve months following the Loan Amortization Date, and 2% thereafter. In addition, a final payment equal to $250,000 for each advance (i.e., $750,000 in aggregate with respect to the initial $15.0 million) is due on the maturity date or other date of payment in full. Amounts outstanding during an event of default shall be payable on demand and shall accrue interest at an additional rate of 5.0% per annum of the past due amount outstanding.


Each advance of the loan is secured by a lien on substantially all of the assets of the Company, other than Intellectual Property and Excluded Collateral (in each case as defined in the Loan Agreement), and contains customary covenants and representations, including a liquidity covenant, financial reporting covenant and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries.


The events of default under the Loan Agreement include, among other things, without limitation, and subject to customary grace periods, (1) the Company’s failure to make any payments of principal or interest under the Loan Agreement, promissory notes or other loan documents, (2) the Company’s breach or default in the performance of any covenant under the Loan Agreement, (3) the occurrence of a material adverse change, (4) the Company making a false or misleading representation or warranty in any material respect, (5) the Company’s insolvency or bankruptcy, (6) certain attachments or judgments on the Company’s assets, or (7) the occurrence of any material default under certain agreements or obligations of the Company involving indebtedness in excess of $250,000. If an event of default occurs, Horizon is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement.


The Loan Agreement also contains warrant coverage of 5% of the total amount funded. Four warrants (the “Warrants”) were issued by the Company to Horizon to purchase a combined 288,184 shares of the Company’s common stock with an exercise price of $3.47. The Warrant is exercisable for ten years from the date of issuance. Horizon may exercise the Warrant either by (a) cash or check or (b) through a net issuance conversion. The shares of the Company’s common stock will, upon request by Horizon, be registered and freely tradeable following a period of six months after issuance.





Item 9.01.Financial Statements and Exhibits.


(d) Exhibits.


The following exhibits are furnished herewith:


4.1   Warrant to Purchase Common Stock (Loan A) issued March 29, 2019 by the Company to Horizon Technology Finance Corporation.
4.2   Warrant to Purchase Common Stock (Loan B) issued March 29, 2019 by the Company to Horizon Technology Finance Corporation.
4.3   Warrant to Purchase Common Stock (Loan C) issued March 29, 2019 by the Company to Horizon Technology Finance Corporation.
4.4   Warrant to Purchase Common Stock (Loan D) issued March 29, 2019 by the Company to Horizon Technology Finance Corporation.
10.1   Venture Loan and Security Agreement, dated March 29, 2019, by and between the Company and Horizon Technology Finance Corporation.







Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: April 4, 2019    
  By: /s/ Manuel Litchman, M.D.
  Name: Manuel Litchman, M.D.
  Title: President and Chief Executive Officer