MUSTANG BIO, INC. Management’s Discussion and Analysis of Operating Results (Form 10-K)

Statements in the following discussion and throughout this report that are not
historical in nature are "forward-looking statements." You can identify
forward-looking statements by the use of words such as "expect," "anticipate,"
"estimate," "may," "will," "should," "intend," "believe," and similar
expressions. Although we believe the expectations reflected in these
forward-looking statements are reasonable, such statements are inherently
subject to risk and we can give no assurances that our expectations will prove
to be correct. Actual results could differ from those described in this report
because of numerous factors, many of which are beyond our control. These factors
include, without limitation, those described under Item 1A "Risk Factors." We
undertake no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this report or to reflect actual
outcomes. Please see "Forward-Looking Statements" at the beginning of this
Form 10-K.

The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the related
notes thereto and other financial information appearing elsewhere in this
Form 10-K. We undertake no obligation to update any forward-looking statements
in the discussion of our financial condition and results of operations to
reflect events or circumstances after the date of this report or to reflect
actual outcomes.

Overview

Mustang Bio, Inc. ("Mustang," "We," "Us" or the "Company") is a clinical-stage
biopharmaceutical company focused on translating today's medical breakthroughs
in cell and gene therapies into potential cures for hematologic cancers, solid
tumors and rare genetic diseases. We aim to acquire rights to these technologies
by licensing or otherwise acquiring an ownership interest in the technologies,
funding their research and development and eventually either out-licensing or
bringing the technologies to market.

Our pipeline is currently focused in three core areas: gene therapies for rare
genetic disorders, chimeric antigen receptor ("CAR") engineered T cell ("CAR T")
therapies for hematologic malignancies and CAR T therapies for solid tumors. For
each therapy we have partnered with world class research institutions. For our
gene therapies, we have partnered with St. Jude Children's Research Hospital
("St. Jude") in the development of a first-in-class ex vivo lentiviral treatment
of X-linked severe combined immunodeficiency ("XSCID") and with Leiden
University Medical Centre ("LUMC") for RAG1 severe combined immunodeficiency
("RAG1-SCID"). For our CAR T therapies we have partnered with the City of Hope
National Medical Center ("COH"), Fred Hutchinson Cancer Research Center ("Fred
Hutch"), Nationwide Children's Hospital ("Nationwide") and the Mayo Foundation
for Medical Education and Research ("Mayo Clinic").

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Gene Therapies

In partnership with St. Jude, our XSCID gene therapy programs (MB-107 and
MB-207) are being conducted under an exclusive license to develop a potentially
curative treatment for XSCID, a rare genetic immune system condition in which
affected patients do not live beyond infancy without treatment. This
first-in-class ex vivo lentiviral gene therapy is currently in two Phase 1/2
clinical trials involving two different autologous cell products: a multicenter
trial of the MB-107 product in newly diagnosed infants sponsored by St. Jude and
a single-center trial of the MB-207 product in previously transplanted patients
sponsored by the National Institutes of Health ("NIH"). In January 2021 we
received approval to proceed with our Investigational New Drug ("IND")
application with the U.S. Food and Drug Administration ("FDA") to initiate a
pivotal non-randomized multicenter Phase 2 clinical trial of MB-107 in newly
diagnosed infants with XSCID who are under the age of two. We expect to enroll
the first patient in a pivotal multicenter Phase 2 clinical trial in the second
half of 2022. In January 2022, the FDA issued a hold, pending Chemistry,
Manufacturing and Controls ("CMC") clearance, on our IND application to conduct
a pivotal non-randomized multicenter Phase 2 clinical trial of MB-207 in
previously transplanted XSCID patients. In order to lift this hold and receive
FDA clearance for the IND, we believe the most critical activities will be to
(1) perform process validation manufacturing runs using healthy donor material
and (2) ensure qualification of all assays related to the product release. We
estimate that these activities will take 3-6 months to complete, and we
therefore expect to enroll the first patient in a pivotal multicenter Phase 2
clinical trial in the first quarter of 2023.

CAR T therapies

Our pipeline of CAR T therapies is being developed under exclusive licenses from
several world class research institutions. Our strategy is to license these
technologies, support preclinical and clinical research activities by our
partners and transfer the underlying technology to our cell processing facility
located in Worcester, Massachusetts, in order to conduct our own clinical
trials.

We are developing CAR T therapies for hematologic malignancies in partnership
with COH targeting CD123 (MB-102) and CS1 (MB-104) and with Fred Hutch targeting
CD20 (MB-106). Phase 1 clinical trials sponsored by COH for MB-102 and MB-104
and by Fred Hutch for MB-106 are underway. In the third quarter of 2019 the FDA
approved our IND application to initiate a multi-center Phase 1/2 clinical trial
of MB-102, and our clinical trial began enrollment in 2020 for the treatment of
patients with blastic plasmacytoid dendritic cell neoplasm. In May 2021, the FDA
approved our IND application to initiate a multi-center Phase 1/2 clinical trial
of MB-106, and we expect to begin the treatment of patients with non-Hodgkin
lymphoma and chronic lymphocytic leukemia in the first half of 2022. We plan to
file an IND for a multicenter Phase 1/2 trial for MB-104 for the treatment of
patients with multiple myeloma once COH has established a safe and effective
dose.

We are also developing CAR T therapies for solid tumors in partnership with COH
targeting IL13R?2 (MB-101), HER2 (MB-103) and PSCA (MB-105). In addition, we
have partnered with Nationwide for the C134 oncolytic virus (MB-108) in order to
enhance the activity of MB-101 for the treatment of patients with glioblastoma
multiforme ("GBM"). Phase 1 clinical trials sponsored by COH for MB-101, MB-103
and MB-105 are underway. A Phase 1 clinical trial sponsored by the University of
Alabama at Birmingham ("UAB") for MB-108 began during the third quarter of 2019
and, in the second half of 2022, we plan to file an IND for the combination of
MB-101 and MB-108 - which is referred to as MB-109 - for the treatment of
patients with relapsed or refractory GBM and anaplastic astrocytoma. We also
plan to file INDs and initiate our own clinical trials for MB-103 for the
treatment of patients with metastatic breast cancer to brain and for MB-105 for
the treatment of patients with prostate and pancreatic cancer. The Company is
also collaborating with the Mayo Clinic to develop a novel technology that may
be able to transform the administration of CAR T therapies and potentially be
used as an off-the-shelf therapy. Mustang plans to file an IND application for a
multicenter Phase 1 clinical trial once a lead construct has been identified.

Recent Events

Leiden University Medical Center License

On November 10, 2021, the Company announced that it has executed an exclusive
license agreement with Leiden University Medical Centre ("LUMC") for a
first-in-class ex vivo lentiviral gene therapy for the treatment of RAG1 severe
combined immunodeficiency ("RAG1-SCID"). The therapy, which includes low-dose
conditioning prior to reinfusion of the patients' own gene-modified blood stem
cells, is currently being evaluated in a Phase 1/2 multicenter clinical trial in
Europe. The ongoing clinical trial recently enrolled its first patient, and
additional clinical sites are expected to be added in the near future. The
RAG1-SCID program has been granted Orphan Drug Designation by the European
Medicines Agency.

The Company also established an ongoing partnership with Frank J. Staal, Ph.D.,
professor of Molecular Stem Cell Biology and molecular immunologist at LUMC,
whose laboratory developed the therapy. Dr. Staal will continue the development
of additional lentiviral gene therapies in his lab, to which we have rights
under the agreement.

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The RAG1-SCID therapy expands the pipeline of ex vivo lentiviral gene therapies
we are currently developing. The lead programs, MB-107 and MB-207, are being
investigated for the treatment of XSCID. A pivotal multicenter trial studying
MB-107 is expected to enroll its first patient in the first quarter of 2022.
Combined, XSCID and RAG1-SCID make up almost 60% of all SCID cases combined.

MB-106 (CAR T targeting CD20 for non-Hodgkin’s lymphoma and chronic lymphocytic leukemia)

On November 4, 2021, the Company announced that interim Phase 1/2 data on MB-106
have been selected for a poster presentation at the 63rd American Society of
Hematology Annual Meeting ("ASH2021"), which was held from December 11-14, 2021.

The abstract posted on the ASH2021 website reported on 16 patients [12
follicular lymphoma (FL), 2 mantle cell lymphoma (MCL), 1 CLL and 1 diffuse
large B-cell lymphoma (DLBCL)] treated following a major cell manufacturing
process modification. CAR T cells are administered at one of 4 dose levels (DL):
DL1: 3.3x105, DL2: 1x106, DL3: 3.3x106, DL4: 1x107 CAR T cells/kg. All DLs were
reached, with no dose-limiting toxicities observed to date.

The overall response rate (ORR) was 94% (15/16) with a complete response (CR)
rate of 62% (10/16). In patients with FL (n=12), ORR was 92% (11/12) and CR rate
was 75% (9/12). Among patients with FL who received DL 3 or 4, the CR rate was
86%. The patient with CLL had a PET-negative CR and undetectable measurable
residual disease in peripheral blood and bone marrow by flow cytometry at a
sensitivity of 10-4 (uMRD4) on day 28. The patient with DLBCL achieved a partial
response (PR) on day 28, and a repeat PET on day ~90 showed deepening of the PR.
Among patients who achieved a CR, only one patient with FL relapsed after 9
months. All other CRs are ongoing (range: 3-18 months). CAR T persistence was
lost at day 95 in one patient who had progression and proceeded to other
anti-lymphoma treatment; 2 other patients lost CAR T engraftment by day 181 and
201 with B-cell recovery. All other patients continue to have detectable CAR T
cells as of last follow-up (maximum of 13 months post-infusion).

Among the 16 total patients reported in the abstract, there were seven
occurrences of cytokine release syndrome (4 patients with Grade 1 and 3 patients
with Grade 2) and one occurrence of Grade 2 immune effector cell-associated
neurotoxicity syndrome. One patient with CLL developed Grade 3 temporary
neuropathic pain which, in the absence of other explanation, was attributed to
CAR T therapy. No patients had tumor lysis syndrome or Grade 3-4 infections.
Thrombocytopenia (Grade 3-4: 19%) and neutropenia (Grade 3-4: 94%) were common,
but there were no bleeding complications, and the rate of febrile neutropenia
was 19%.

NIH Grant for Targeted CAR-T Cell Therapy MB-106 CD20

On November 1, 2021, we announced that the Company was awarded a grant of
approximately $2 million from the National Cancer Institute. This two-year grant
will partially fund the Phase 1, Open Label, Multicenter Trial to Assess the
Safety, Tolerability and Efficacy of MB-106, a CD20-targeted, autologous CAR T
cell therapy for patients with relapsed or refractory NHL or CLL.

Mayo Clinic License

In August 2021, we announced an exclusive license agreement with the Mayo
Foundation for Medical Education and Research (the "Mayo Clinic") for a novel
technology that may be able to transform the administration of CAR T therapies
and has the potential to be used as an off-the-shelf therapy.

The technology, developed by Larry R. Pease, Ph.D., principal investigator and
former director of the Center for Immunology and Immune Therapies at Mayo
Clinic, is a new platform to administer CAR T therapy using a two-step approach.
First, a peptide is administered to the patient to drive the proliferation of
the patient's resident T cells. This is followed by the administration of a
viral CAR construct directly into the lymph nodes of the patient. In turn, the
viral construct infects the activated T cells and effectively forms CAR T cells
in vivo in the patient. Successful implementation may lead to an off-the-shelf
product with no need to isolate and expand patient T cells ex vivo.

Preclinical proof-of-concept has been established, and the ongoing development
of this technology will take place at Mayo Clinic. Mustang plans to file an
Investigational New Drug ("IND") application for a multicenter Phase 1 clinical
trial once a lead construct has been identified.

MB-107 and MB-207 (ex vivo lentiviral therapy for X-linked severe combined immunodeficiency (XSCID))

In August 2021, we announced that the European Medicines Agency ("EMA") granted
Priority Medicines ("PRIME") designation to MB-107, a lentiviral gene therapy
for the treatment of XSCID in newly diagnosed infants. In addition to PRIME
designation, the EMA granted Advanced Therapy Medicinal Product ("ATMP")
classification to MB-107 in April 2020 and Orphan Drug designation in November
2020.

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MB-107 has also received orphan drug, rare pediatric disease, and advanced regenerative medicine (“RMAT”) designations from the US Food and Drug Administration (“FDA”).

The FDA grants Rare Pediatric Disease Designation for serious and
life-threatening diseases that primarily affect children ages 18 years or
younger and affect fewer than 200,000 people in the United States. If Mustang's
BLA for MB-107 is approved, the Company may be eligible to receive a priority
review voucher, which can be redeemed to obtain priority review for any
subsequent marketing application and may be sold or transferred. This program is
intended to encourage development of new drugs and biologics for the prevention
and treatment of rare pediatric diseases.

The FDA has also granted Rare Pediatric Disease Designation for MB-207. If
Mustang's BLA for MB-207 is approved, the Company may be eligible to receive a
priority review voucher for this product as well, which can also be redeemed to
obtain priority review for any subsequent marketing application and may be sold
or transferred. MB-207 has also received Orphan Drug designation from the FDA
and has received Orphan Drug designation and ATMP classification from the EMA.

Registration statements

On April 23, 2021, the Company filed a shelf registration statement No.
333-255476 on Form S-3 (the "2021 S-3"), which was declared effective on May 24,
2021. Under the 2021 S-3, the Company may sell up to a total of $200.0 million
of its securities. As of December 31, 2021, there have been no sales of
securities under the 2021 S-3.

At October 23, 2020the Company has filed a Shelf Registration Statement No. 333-249657 on Form S-3 (the “2020 S-3”), which was declared effective on
December 4, 2020. Under S-3 2020, the Company may sell up to a total of
$100.0 million of his titles. From December 31, 2021approximately
$14.6 million du S-3 2020 remains available for the sale of securities.

term loan

On March 29, 2019 (the "Closing Date"), the Company entered into a $20.0 million
Loan Agreement with Horizon (the "Loan Agreement"), the proceeds of which were
used to 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 the Company achieving
certain predetermined milestones. On September 30, 2020, the Company repaid in
full all amounts that were outstanding under the Loan Agreement.

Offer on the market

On July 13, 2018, the Company filed a shelf registration statement
No. 333-226175 on Form S-3, as amended on July 20, 2018 (the "2018 S-3"), which
was declared effective in August 2018. Under the 2018 S-3, the Company may sell
up to a total of $75.0 million of its securities. In connection with the 2018
S-3, the Company entered into an At-the-Market Issuance Sales Agreement (the
"ATM Agreement") with B. Riley Securities, Inc. (formerly B. Riley FBR, Inc.),
Cantor Fitzgerald & Co., National Securities Corporation, and Oppenheimer &
Co. Inc. (each an "Agent" and collectively, the "Agents"), relating to the sale
of shares of common stock. Under the ATM Agreement, the Company pays the Agents
a commission rate of up to 3.0% of the gross proceeds from the sale of any
shares of common stock. On December 31, 2020, the ATM Agreement was amended to
add H.C. Wainwright & Co., LLC as an Agent.

During the year ended December 31, 2021, the Company issued approximately 19.4
million shares of common stock at an average price of $3.70 per share for gross
proceeds of $71.9 million under the ATM Agreement. In connection with these
sales, we paid aggregate fees of approximately $1.3 million for net proceeds of
approximately $70.6 million.

During the year ended December 31, 2020, the Company issued approximately 17.6
million shares of common stock at an average price of $3.40 per share for gross
proceeds of $59.8 million under the ATM Agreement. In connection with these
sales, we paid aggregate fees of approximately $1.1 million for net proceeds of
approximately $58.7 million.

Authorized actions

On June 17, 2021, the stockholders of the Company voted at the 2021 Annual
Meeting to approve an amendment to Mustang's Amended and Restated Certificate of
Incorporation to increase the number of shares of common stock authorized for
issuance by 25 million shares, bringing the total number of authorized shares of
common stock to 150 million shares.

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To date, we have not received approval for the sale of our product candidates in
any market and, therefore, have not generated any product sales from our product
candidates. In addition, we have incurred substantial operating losses since our
inception, and expect to continue to incur significant operating losses for the
foreseeable future and may never become profitable. As of December 31, 2021, we
have an accumulated deficit of $251.8 million.

We are a majority-controlled subsidiary of Fortress Biotech, Inc. ("Fortress").
As a "Controlled Company" we rely on the exemption provided by Nasdaq Listing
Rule 5615(c)(2), which permits us to maintain less than a majority of
independent directors on our board.

Significant Accounting Policies and Use of Estimates

The Company's financial statements include certain amounts that are based on
management's best estimates and judgments. The Company's significant estimates
include, but are not limited to, useful lives assigned to long-lived assets and
amortizable intangible assets, fair value of stock options and warrants,
stock-based compensation, accrued expenses, provisions for income taxes and
contingencies. Due to the uncertainty inherent in such estimates, actual results
may differ from these estimates. Our estimates are based on our historical
experience and on various other factors that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources.

Actual results may differ from these estimates under different assumptions or
conditions. We believe that the accounting policies discussed below are critical
to understanding our historical and future performance, as these policies relate
to the more significant areas involving management's judgments and estimates.

Although our significant accounting policies are described in the notes to our financial statements included elsewhere in this report, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

Research and development

Research and development costs are expensed as incurred. Advance payments for
goods and services that will be used in 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, and costs associated with regulatory
filings, laboratory costs and other supplies.

In accordance with 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. In each case, we evaluate if the license agreement
results in the acquisition of an asset or a business. Such licenses purchased by
the Company require substantial completion of research and development,
regulatory and marketing approval efforts in order to reach commercial
feasibility and has no alternative future use. Accordingly, the total purchase
price for the licenses acquired during the period was reflected as research and
development - licenses acquired on the Statements of Operations for the years
ended December 31, 2021 and 2020.

Accumulated research and development costs

We record accruals for estimated costs of research, preclinical, clinical and
manufacturing development within accrued expenses which are significant
components of research and development expenses. A substantial portion of our
ongoing research and development activities is conducted by third-party service
providers. We accrue the costs incurred under agreements with these third
parties based on estimates of actual work completed in accordance with the
respective agreements. We determine the estimated costs through discussions with
internal personnel and external service providers as to the progress, or stage
of completion or actual timeline (start-date and end-date) of the services and
the agreed-upon fees to be paid for such services. Payments made to third
parties under these arrangements in advance of the performance of the related
services are recorded as prepaid expenses until the services are rendered.

If the actual schedule of service delivery or level of effort differs from the estimate, we adjust accrued expenses or prepaid expenses accordingly, which impacts research and development costs. . Although we do not expect our estimates to be materially different

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from amounts actually incurred, our understanding of the status and timing of
services performed relative to the actual status and timing of services
performed may vary and may result in reporting amounts that are too high or too
low in any particular period.

Fair value measurement

The Company follows accounting guidance on fair value measurements for financial
assets and liabilities measured at fair value on a recurring basis. Under the
accounting guidance, fair value is defined as an exit price, representing the
amount that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
As such, fair value is a market-based measurement that should be determined
based on assumptions that market participants would use in pricing an asset or a
liability.

Accounting guidelines require fair value measurements to be classified and disclosed in one of three categories:

Level 1: quoted prices in active markets for identical assets or liabilities.

Level 2: observable data other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the market.

Level 3:  Unobservable inputs which are supported by little or no market
activity and that are financial instruments whose values are determined using
pricing models, discounted cash flow methodologies, or similar techniques, as
well as instruments for which the determination of fair value requires
significant judgment or estimation.

The fair value hierarchy also requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value. Assets and liabilities measured at fair value are classified in
their entirety based on the lowest level of input that is significant to the
fair value measurement. The Company's assessment of the significance of a
particular input to the fair value measurement in its entirety requires
management to make judgments and consider factors specific to the asset or
liability.

Certain of the Company's financial instruments are not measured at fair value on
a recurring basis but are recorded at amounts that approximate their fair value
due to their liquid or short-term nature, such as accounts payable, accrued
expenses and other current liabilities.

Stock-based compensation

The Company expenses stock-based compensation to employees and non-employees
over the requisite service period based on the estimated grant-date fair value
of the awards and forfeitures, which are recorded upon occurrence. The Company
estimates the fair value of stock option grants using the Black-Scholes option
pricing model. The assumptions used in calculating the fair value of stock-based
awards represent management's best estimates and involve inherent uncertainties
and the application of management's judgment.

We will continue to use judgment in evaluating the expected volatility, expected
terms and interest rates utilized for our stock-based compensation expense
calculations on a prospective basis.  The assumptions underlying these
valuations represent our management's best estimate, which involve inherent
uncertainties and the application of management judgment. As a result, if
factors or expected outcomes change and we use significantly different
assumptions or estimates, our stock-based compensation expense could be
materially different. We expect to continue to grant options and other
stock-based awards in the future, and to the extent that we do, our stock-based
compensation expense recognized in future periods will likely increase.

Income taxes

The Company accounts for income taxes under ASC 740, Income Taxes ("ASC 740").
ASC 740 requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the financial statement and tax basis
of assets and liabilities and for the expected future tax benefit to be derived
from tax loss and tax credit carry forwards. ASC 740 additionally requires a
valuation allowance to be established when it is more likely than not that all
or a portion of deferred tax assets will not be realized.  Judgments concerning
the recognition and measurement of a tax benefit might change as new information
becomes available. Our unrecognized tax benefits, if recognized, would not have
an impact on our effective tax rate assuming we continue to maintain a full
valuation allowance position. We do not expect our unrecognized tax benefits to
change significantly over the next 12 months.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized
in an enterprise's financial statements and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. ASC 740 also provides guidance on
de-recognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. Based on the Company's evaluation, it has
been concluded that there are no significant uncertain tax positions

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requiring recognition in the Company's financial statements. The 2018 through
2020 tax years are the only periods subject to examination upon filing of
appropriate tax returns. The Company believes that its income tax positions and
deductions would be sustained on audit and does not anticipate any adjustments
that would result in a material change to its financial position.

The Company's policy for recording interest and penalties associated with audits
is to record such expense as a component of income tax expense. There were no
amounts accrued for penalties or interest as of or during the years ended
December 31, 2021 and 2020. Management is currently unaware of any issues under
review that could result in significant payments, accruals or material
deviations from its position.

Recent accounting pronouncements

See note 2 to the financial statements.

Small reporting company status

We are a "smaller reporting company," meaning that the market value of our
shares held by non-affiliates is less than $700 million and our annual revenue
was less than $100 million during the most recently completed fiscal year. We
may continue to be a smaller reporting company if either (i) the market value of
our shares held by non-affiliates is less than $250 million or (ii) our annual
revenue was less than $100 million during the most recently completed fiscal
year and the market value of our shares held by non-affiliates is less than $700
million. As a smaller reporting company, we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Report on
Form 10-K , have reduced disclosure obligations regarding executive
compensation, and smaller reporting companies are permitted to delay adoption of
certain recent accounting pronouncements discussed in Note 2 to our consolidated
financial statements located in "Part IV, Item 15., Exhibits and Financial
Statement Schedules" in this Annual Report on Form 10-K.

Operating results

Comparison of the years ended December 31, 2021 and 2020

                                                     For the year ended December 31,              Change
($in thousands)                                         2021                  2020              $          %
Operating expenses:
Research and development                          $         49,864      $         37,237    $  12,627       34 %
Research and development - licenses acquired                 5,842                10,064      (4,222)     (42) %
General and administrative                                  11,017                 9,505        1,512       16 %
Total operating expenses                                    66,723                56,806        9,917       17 %
Loss from operations                                      (66,723)         

(56,806) (9,917) 17%

Other income (expense)
Interest income                                                368                   708        (340)     (48) %
Interest expense                                              (15)               (3,917)        3,902    (100) %
Total other income (expense)                                   353         
     (3,209)        3,562    (111) %
Net Loss                                          $       (66,370)      $       (60,015)    $ (6,355)       11 %

Research and development costs

Research and development expenses primarily consist of personnel related
expenses, including salaries, benefits, travel, and other related expenses,
stock-based compensation, payments made to third parties for license, sponsored
research 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.

Research and development expense increased by approximately $12.6 million from
$37.2 million for the year ended December 31, 2020 to $49.8 million for the year
ended December 31, 2021. The increase in research and development expense for
the year ended December 31, 2021 was primarily attributable to the following:

$4.5 million for an increase in the remuneration of research and development employees

? costs, including equity compensation, as we continue to increase research and

   development headcount to support development of our clinical programs;
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? $3.9 million for increased laboratory supply costs;

? $2.3 million for the increase in consulting fees mainly to support

Mustang sponsored clinical trials;

approximately $3.0 million for increased other costs, including third party costs

? contract research organizations, field services, vector manufacturing and

depreciation; and

? compensated by approximately $1.1 million for a decrease in the costs of subsidized research

and clinical trial agreements.


Research and development expenses - licenses acquired decreased by $4.2 million
from $10.1 million for the year ended December 31, 2020 to $5.9 million for the
year ended December 31, 2021. The decrease in research and development
expenses - licenses acquired for the year ended December 31, 2021 was primarily
attributable to the following:

? Approximately $3.4 million for the annual stock dividend from Fortress;

? $1.4 million related to our licenses with COH;

? $0.3 million linked to our CD20 license with Fred Hutch;

? $0.1 million related to our CSL Behring (calimmune);

? $0.1 million linked to our LentiBOOSTTM license with SIRION; and

? compensated by approximately $1.1 million for the increased costs associated with our

licenses with Mayo Clinic and Leiden University Medical Center.

We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increased costs associated with the following:

? employee-related expenses, which include salaries and benefits;

? license fees and milestone payments related to licensed products and

Technology;

expenses incurred under agreements with research organizations under contract,

? investigational sites and consultants who conduct our clinical trials and our

preclinical activities;

? facility expenses, which include rent, utilities and maintenance costs;

? the cost of acquiring and manufacturing clinical trial materials; and

? costs associated with non-clinical activities and regulatory approvals.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related
expenses, including stock-based compensation, for executives and other
administrative personnel, recruitment expenses, professional fees and other
corporate expenses, including investor relations, legal activities including
patent fees, and facilities-related expenses.

General and administrative expense increased by approximately $1.5 million from
$9.5 million for the year ended December 31, 2020 to $11.0 million for the year
ended December 31, 2021. The increase in general and administrative expense for
the year ended December 31, 2021 was primarily attributable to the following:

$0.6 million for an increase in the general and administrative remuneration of employees

 ? costs due primarily to additional headcount to support the Company's continued
   growth;


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? $0.8 million for raising state taxes;

? $0.3 million for increased auditing and accounting costs;

? $0.9 million for increased other costs, including advice and professional fees

fees, external services and insurance; and

? compensated by approximately $1.1 million to reduce inventory costs.

We expect general and administrative expenses to increase in future periods, reflecting the ongoing and growing costs associated with:

? supporting our expanded research and development activities, including

additional product candidates entering the clinic;

? stock-based compensation granted to key employees and non-employees;

? support for business development activities; and

increased professional fees and other regulatory costs

? requirements and increased compliance associated with being a publicly traded company

   company.


Other Income (Expense)

Other income (expense) consists primarily of interest income earned on cash
balances and short-term investments and interest expense on the Company's notes
payable. For the year ended December 31, 2021 and 2020, total other income
(expense) were approximately $0.4 million of income and $3.2 million of expense,
respectively. The $3.6 million increase in other income (expense) for the year
ended December 31, 2021 was primarily attributable to lower interest expense of
$3.9 million partially offset by lower interest income of $0.3 million.

Cash and capital resources

The Company has incurred substantial operating losses and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. From December 31, 2021the Company had an accumulated deficit of $251.8 million.

The Company has funded its operations to date primarily through the sale of
equity, its Loan Agreement with Runway and its venture debt financing agreement
(the "Horizon Loan Agreement") with Horizon Technology Finance Corporation
("Horizon"), herein referred to as the "Horizon Notes." In September 2020, we
repaid the Horizon Notes in full all amounts that were outstanding under the
Horizon Loan Agreement, which was comprised of $15.0 million face value of the
outstanding notes, $112,500 accrued and unpaid interest, a $750,000 loan
termination fee and prepayment penalties of $550,000. The Company expects to
continue to use the proceeds from previous financing transactions primarily for
general corporate purposes, including financing the Company's growth, developing
new or existing product candidates, and funding capital expenditures,
acquisitions and investments. The Company currently anticipates that its cash
and cash equivalents balances at December 31, 2021, are sufficient to fund its
anticipated operating cash requirements for at least one year from the date of
this Form 10-K.

From January 1, 2022 through March 18, 2022, the Company issued approximately
2.4 million shares of common stock at an average price of $0.99 per share for
gross proceeds of $2.4 million under the ATM Agreement.

The Company will be required to expend significant funds in order to advance the
development of its product candidates. The Company will require additional
financings through equity and debt offerings, collaborations and licensing
arrangements or other sources to fully develop, prepare regulatory filings,
obtain regulatory approvals and commercialize its existing and any new product
candidates. If the Company is unable to arrange for such financings, or unable
to arrange for them on terms acceptable to the Company, the Company's current
development plans and plans for expansion of its facility and general and
administrative infrastructure will be curtailed.

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Cash flow for the years ended December 31, 2021 and 2020

                                                                For the year ended December 31,
($in thousands)                                                    2021                  2020
Statement of cash flows data:
Total cash (used in) provided by:
Operating activities                                         $       (53,667)      $       (37,319)
Investing activities                                                  (5,366)               (4,412)
Financing activities                                                   70,847                78,122

Net change in cash, cash equivalents and restricted cash $11,814 $36,391


Operating Activities

Net cash used in operating activities was $53.7 million for the year ended
December 31, 2021, compared to $37.3 million for the year ended December 31,
2020. Net cash used in operating activities for the year ended December 31,
2021, was primarily due to approximately $66.4 million in net loss, partially
offset by $4.2 million of common shares issuable for Founders shares, $3.3
million of non-cash stock compensation expenses, $2.2 million of depreciation
expense, $1.9 million of equity fee on issuance of common shares to Fortress and
$1.6 million of research and development-licenses acquired.

Net cash used in operating activities for the year ended December 31, 2020, was
primarily due to approximately $60.0 million in net loss, partially offset by
$7.6 million of common shares issuable for Founders shares, $3.1 million change
in operating assets and liabilities, $3.0 million of non-cash stock compensation
expenses, $2.5 million of research and development-licenses acquired, $2.4
million of equity fee on issuance of common shares to Fortress, $2.3 million of
accretion of debt discount and $1.7 million of depreciation expense.

Investing activities

Net cash used in investing activities was $5.4 million for the year ended
December 31, 2021representing $4.0 million in capital purchases and
$1.4 million in purchases of research and development licenses.

Net cash from investing activities was $4.4 million for the year ended
December 31, 2020representing $2.5 million in purchases of research and development licenses and $1.9 million in capital purchases.

Fundraising activities

Net cash provided by financing activities was $70.8 million during the year
ended December 31, 2021, representing gross proceeds of $71.9 million, net of
offering costs of $1.4 million, from the Mustang ATM and $0.3 million raised
from the issuance of the Company's common shares in connection with the ESPP.

Net cash provided by financing activities was $78.1 million during the year
ended December 31, 2020, representing gross proceeds of $59.8 million, net of
offering costs of $1.1 million, from the Mustang ATM; gross proceeds of $37.2
million, net of offering costs of $2.4 million, from our June 2020 underwritten
public offering and $0.3 million raised from the issuance of the Company's
common shares in connection with the ESPP, partially offset by the prepayment of
the Horizon Notes of $15.7 million.

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