UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The accompanying unaudited pro forma condensed combined financial statement of Fortress Biotech, Inc. ("Fortress", "FBIO" or the "Company") is presented to illustrate the

UNAUDITED PRO FORMA COMBINED FINANCIAL

The accompanying unaudited pro forma condensed combined financial

statement of Fortress Biotech, Inc. ("Fortress", "FBIO" or the "Company") is presented to illustrate

the estimated effects of the acquisition of a majority equity stake in, National Holdings Corporation ("National" or

"NHLD"), which closed on September 9, 2016 (the "acquisition" or the "transaction") on

the historical financial position and results of operations of the Company.

The unaudited pro forma condensed combined statement of operations

is based upon and derived from and should be read in conjunction with the historical audited financial statements for the year

ended December 31, 2015 and historical unaudited financial statements for the nine months ended September 30, 2016 of

the Company, and the historical audited financial statements for the year ended September 30, 2015 and the historical unaudited

financial statements for the nine months ended June 30, 2016 of National.

The unaudited pro forma condensed combined statement of operations

for the nine months ended September 30, 2016 assumes that the acquisition was completed on January 1, 2015.

The Company has determined that the acquisition of a majority

equity stake in National constitutes a business combination as defined by Accounting Standards Codification 805, Business Combinations

("ASC 805"). Under ASC 805, the assets acquired and liabilities assumed are recorded at their acquisition date fair

values. Any excess of the purchase price over the fair value of assets acquired and liabilities assumed is recognized as goodwill.

Fair values of assets acquired and liabilities assumed are determined based on the requirements of ASC 820, Fair Value Measurements

and Disclosures. The fair values of assets acquired and liabilities assumed are based on the preliminary estimates of fair

values as of the acquisition date.

The pro forma adjustments are preliminary and are based upon

available information and certain assumptions described in the accompanying notes to the unaudited pro forma combined financial

information that management believes are reasonable under the circumstances. Actual results may differ materially from the assumptions

within the accompanying unaudited pro forma combined financial information. Management believes the fair values recognized

for the assets acquired and liabilities assumed are based on reasonable estimates and assumptions. Preliminary fair value estimates

may change as additional information becomes available. There can be no assurance that the final determination will not result

in material changes from these preliminary amounts.

As of the effective time of the acquisition, identifiable intangible

assets are required to be measured at fair value and these acquired assets could include assets that are not intended to be used

or sold or that are intended to be used in a manner other than their highest and best use. For purposes of the unaudited pro forma

combined financial statement that follows, it is assumed that all assets will be used in a manner that represents the highest and

best of those assets, but it is not assumed that any market synergies will be achieved. The consideration of synergies has been

excluded because they are not considered to be factually supportable, which is a required condition for these pro forma adjustments.

The fair value of identifiable assets is determined primarily

using the "income method," which starts with a forecast of all expected future cash flows. Some of the more significant

assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the

amount and timing of projected future cash flows as well as estimated contributory asset charges; the discount rate selected to

measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends

impacting the asset, among other factors.

The unaudited pro forma condensed combined financial statement

includes estimated identifiable intangible assets representing customer list intangibles and a tradename. The identifiable intangible

assets and the tradename will be amortized on a straight line basis over a weighted average of 5 years. These estimates will be

adjusted accordingly if the final identifiable intangible asset valuation generates results, including corresponding useful lives

and related amortization methods, that differ from the pro forma estimates, or if the above scope of intangible assets is modified.

The final valuation is expected to be completed within 12 months from the completion of the acquisition. The Company preliminarily

recognized goodwill and does not expect goodwill be deductible for tax purposes. Preliminarily, given the change in ownership and

other factors, the Company has not recognized National's deferred tax asset.

The unaudited pro forma condensed combined financial statements

have been prepared by management in accordance with the Article 11 of Regulation S-X, and are not necessarily indicative of

the combined financial position or results of operations that would have been realized had the acquisition occurred as of the dates

indicated, nor are they meant to be indicative of any anticipated combined financial position or future results of operations that

the Company will experience after the acquisition. In addition, the accompanying unaudited pro forma combined statement of operations

does not include any pro forma adjustments to reflect operational efficiencies, expected cost savings or economies of scale which

may be achievable or the impact of any non-recurring charges and one-time transaction related costs that result directly from the

transaction. The historical consolidated financial information has been adjusted to give effect to pro forma events that are

(1) directly attributable to the acquisitions, (2) factually supportable, and (3) with respect to the unaudited

pro forma condensed combined statement of operations, expected to have continuing impact on the combined results of operations.

This unaudited pro forma condensed combined financial information

should be read in conjunction with:

Description of Transaction

On April 27, 2016, the Company entered into an Agreement

and Plan of Merger with National and a wholly-owned subsidiary of the Company, providing for the acquisition of National (the "Merger

Agreement"). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions described therein, the

Company agreed to cause its wholly-owned subsidiary to commence a tender offer for all the issued and outstanding shares of National's

common stock, par value $0.02 per share, at a purchase price of $3.25 per share (the "Offer"). Upon expiration of the

Offer on September 9, 2016 (and the subsequent settlement period), a total of approximately 7 million shares were validly

tendered, representing approximately 56% of the outstanding shares of National on a fully-diluted basis. The aggregate consideration

paid by Fortress in the Offer was approximately $22.9 million, without giving effect to related transaction fees and expenses.

Fortress funded the payment with cash on hand. The number of shares tendered pursuant to the Offer did not satisfy the condition

to complete the merger as set forth in the Merger Agreement.

The following table summarizes the preliminary fair value of

assets acquired and liabilities assumed at the date of the acquisition:

The estimated fair values of the assets acquired and liabilities

assumed will be finalized as further information is received regarding these items and analysis of this information is completed.

National's results of operations have been included in

the following consolidated financial statement prospectively from the date of acquisition. The following unaudited pro forma financial

data assumes the acquisition had occurred at the beginning of January 1, 2015. Pro forma results have been prepared by adjusting

its historical results to include National's results of operations. The unaudited pro forma results presented do not necessarily

reflect the results of operations that would have resulted had the acquisition been completed at the beginning of January 1,

2015, nor does it indicate the results of operations in future periods. Additionally, the unaudited pro forma results do not include

the impact of possible business model changes, nor does it consider any potential impacts of current market conditions on revenues,

reduction of expenses, asset dispositions, or other factors. The impact of these items could alter the following pro forma results:

FORTRESS BIOTECH, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED

STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

(in thousands, except per share amounts)