UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Amendment No. 2)

Under the Securities Exchange Act of 1934

MUSTANG BIO, INC.

(Name of Issuer)

Common Stock, $0.0001 Par Value

(Title of Class of Securities)

62818Q104

(CUSIP Number)

Fortress Biotech, Inc.

c/o Lindsay A. Rosenwald, M.D.

1111 Kane Concourse, Suite 301

Bay Harbor Islands, FL 33154

(781) 652-4500

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

January 6, 2023

(Date of Event which Requires Filing of this Statement)

Explanatory Note:  

This Amendment No. 2 (the “Amendment No. 2”) amends and supplements the statement on Schedule 13D and Amendment No. 1 to such Schedule 13D filed respectively on May 26, 2017 and May 17, 2019 (collectively, the “Schedule 13D”) with the U.S. Securities and Exchange Commission relating to the Common Stock of Mustang Bio, Inc. (the “Issuer”), by Fortress Biotech, Inc. (the “Reporting Person”). Except as specifically provided herein, this Amendment No. 2 does not modify any of the information previously reported on the Schedule 13D. Capitalized terms used but not defined herein shall have the same meanings as are ascribed to them in the Schedule 13D, as applicable.

This statement on Schedule 13D relates to the common stock of the Issuer. The Issuer’s principal executive office is located at 377 Plantation Street, Worcester, Massachusetts 01605.

The Reporting Person is filing this Schedule 13D as a result of the acquisition by the Reporting Person of an Offering Equity Grant (as defined below) of 6,987 shares of the Issuer’s common stock on December 19, 2022 and 2,807,008 shares of the Issuer’s common stock on January 6, 2023 (the “2023 PIK Dividend”). The Issuer issued the 2023 PIK Dividend pursuant to the terms of the Class A preferred stock and the Founders Agreement, entered into by the Reporting Person and the Issuer on March 13, 2015, and amended and restated on May 17, 2016 and again on July 26, 2016 (the “Founders Agreement”). As holders of Class A preferred stock, the Reporting Person will receive PIK Dividends on each January 1 (see Footnote 1) such that the aggregate number of shares of common stock issued pursuant to such PIK Dividend is equal to two and one-half percent (2.5%) of the Issuer’s fully-diluted outstanding capitalization on the date that is one (1) business day prior to any PIK Dividend Payment Date. As additional consideration under the Founders Agreement, the Issuer will also pay an equity fee in shares of common stock, payable within five (5) business days of the closing of any equity or debt financing for the Issuer or any of its respective subsidiaries that occurs after the effective date of the Founders Agreement and ending on the date when the Reporting Person no longer has majority voting control in the Issuer’s voting equity, equal to two and one-half percent (2.5%) of the gross amount of any such equity or debt financing (an “Offering Equity Grant”).

The foregoing description of the Founders Agreement is qualified in its entirety by reference to the full text of the Founders Agreement which is incorporated herein by reference as Exhibit 7.03.

The Reporting Person does not have any present plans or proposals that relate to or would result in: (i) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer, except for 1,000,000 shares underlying the Warrants described in Footnote 1 and any additional PIK Dividends or Offering Equity Grants that may be made pursuant to the Founders Agreement and the terms of the Class A preferred stock as further described in Item 3 above; (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of the Issuer’s subsidiaries; (iii) a sale or transfer of a material amount of assets of the Issuer or any of the Issuer’s subsidiaries; (iv) any change in the present board of directors or management of the Issuer; (v) any material change in the present capitalization or dividend policy of the Issuer; (vi) any other material change in the Issuer’s business or corporate structure; (vii) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (viii) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (x) any action similar to any of those enumerated above.

(a) – (c) The Reporting Person is the beneficial owner of 22,880,620 shares of the Issuer’s common stock (including 250,000 shares of Class A preferred stock, which are convertible into common stock), representing beneficial ownership of 20.7% of all outstanding shares of the Issuer’s common stock based upon 107,304,206 shares of the Issuer’s common stock as reported by the Issuer on its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2022 and the conversion of the Class A preferred stock.

(d) Except with respect to the Warrants described in Footnote 1, no person has the power to direct the receipt of dividends on or the proceeds of sales of, the shares of common stock owned by the Reporting Person.

(e) Not Applicable.

Reference is made to the Founders Agreement in Item 3 and the Warrants in Footnote 1 above.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.