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Mustang Bio , Inc. (NASDAQ:MBIO), a pharmaceutical company with a market capitalization of $6.25 million, announced on Monday that it has received approval from its shareholders to issue over 5 million shares under certain outstanding warrants. This move aligns with Nasdaq’s Listing Rule 5635(d) requirements. According to InvestingPro analysis, the company’s stock is currently trading below its Fair Value, though investors should note its weak financial health score and challenging liquidity position with a current ratio of 0.4.
On February 19, 2025, a majority of Mustang Bio’s capital stock voting power, through a written consent, authorized the issuance of up to 5,475,082 shares of common stock. These shares are related to warrants issued pursuant to an engagement letter dated October 23, 2024, with H.C. Wainwright & Co., LLC, and a Securities Purchase Agreement from February 5, 2025, with accredited investors. The issuance may exceed 20% of the common stock outstanding prior to the warrants being issued, a transaction referred to as the "Warrant Share Issuance."
The consent was provided by shareholders holding 131,052 common shares and 250,000 Class A Preferred shares, which, based on the voting power on February 19, represents approximately 56% of the company’s capital stock voting power.
Mustang Bio’s common stock and Class A Preferred stock entitle holders to one vote per share on all stockholder matters. Each Class A Preferred share carries approximately 8.4 votes, considering the conversion ratio and outstanding shares as of the consent date.
Following this approval, Mustang Bio will proceed with the necessary regulatory steps. In accordance with SEC rules, the company will file a definitive information statement on Schedule 14C with the SEC and distribute it to the stockholders.
This development, as disclosed in the company’s recent SEC filing, marks a significant step for Mustang Bio in its capital-raising efforts. The additional shares will support the company’s ongoing operations and strategic initiatives within the pharmaceutical industry. InvestingPro subscribers have access to 15 additional key insights about Mustang Bio, including detailed financial health metrics, profitability analysis, and future growth indicators that can help investors make more informed decisions about this pharmaceutical company’s prospects.
In other recent news, Mustang Bio, Inc. has finalized a significant transaction with AbbVie (NYSE:ABBV) Bioresearch Center Inc., selling certain assets and terminating its lease ahead of schedule. The agreement involves the sale of furniture, fixtures, and equipment for $1.0 million, with the lease originally set to expire in 2026 now ending early. This move is expected to save Mustang Bio approximately $2.0 million in lease-related payments. Additionally, Mustang Bio has secured shareholder approval to issue over 34 million shares of common stock, a decision linked to outstanding warrants and part of a strategic effort to comply with Nasdaq Listing Rule 5635(d). This issuance could potentially raise capital to support the company’s research and development initiatives. Furthermore, the company announced the re-election of seven directors during its annual stockholders meeting and the ratification of KPMG LLP as its independent auditor for the fiscal year ending December 31, 2024. The meeting saw significant support for these decisions, with a substantial majority of votes in favor. These developments reflect Mustang Bio’s ongoing strategic and operational adjustments.
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