UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-36019 TONIX PHARMACEUTICALS HOLDING CORP. (Exact name of registrant as specified in its charter) Nevada 26-1434750 (State or other jurisdiction of incorporation or organi ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements and detailed notes for periods ended September 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20consolidated%20balance%20sheets%20as%20of%20September%2030%2C%202022%20%28unaudited%29%20and%20December%2031%2C%202021) Summarizes the company's financial position, detailing changes in cash, property, and equity from December 2021 to September 2022 Key Balance Sheet Metrics | Metric | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $139,978 | $178,660 | | Total current assets | $151,139 | $189,049 | | Property and equipment, net | $90,307 | $50,558 | | Total assets | $242,646 | $240,900 | | Total current liabilities | $13,340 | $21,716 | | Total liabilities | $13,722 | $22,183 | | Common stock shares outstanding | 53,321,511 | 15,638,274 | | Additional paid in capital | $667,389 | $578,613 | | Accumulated deficit | $(438,358) | $(359,820) | | Total stockholders' equity | $228,924 | $218,717 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20consolidated%20statements%20of%20operations%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021%20%28unaudited%29) Highlights increased R&D and G&A expenses, resulting in a higher net loss for the three and nine months ended September 30, 2022 Key Operating Results | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $22,201 | $13,082 | $57,202 | $46,542 | | General and administrative | $7,390 | $5,453 | $22,161 | $16,291 | | Operating loss | $(29,591) | $(18,535) | $(79,363) | $(62,833) | | Net loss | $(28,981) | $(18,528) | $(78,538) | $(62,734) | | Net loss per common share, basic and diluted | $(0.69) | $(1.60) | $(3.06) | $(6.02) | - Net loss available to common stockholders increased to **$(29.0) million** for the three months ended September 30, 2022, from **$(18.5) million** in the prior year, and to **$(82.8) million** for the nine months ended September 30, 2022, from **$(62.7) million** in the prior year[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20consolidated%20statements%20of%20comprehensive%20loss%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021%20%28unaudited%29) Shows increased comprehensive loss for the three and nine months ended September 30, 2022, driven by net loss and foreign currency translation Comprehensive Loss Summary | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(28,981) | $(18,528) | $(78,538) | $(62,734) | | Foreign currency translation loss | $(17) | $(10) | $(68) | $(19) | | Comprehensive loss | $(28,998) | $(18,538) | $(78,606) | $(62,753) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20stockholders%27%20equity%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021%20%28unaudited%29) Stockholders' equity increased from December 2021 to September 2022, driven by common stock issuances, offset by net losses and preferred dividends Stockholders' Equity Changes | Metric (in thousands) | Dec 31, 2021 | Sep 30, 2022 | | :-------------------- | :----------- | :----------- | | Common stock shares | 15,638,274 | 53,321,511 | | Common stock amount | $16 | $53 | | Additional Paid in Capital | $578,613 | $667,389 | | Accumulated Deficit | $(359,820) | $(438,358) | | Total Stockholders' Equity | $218,717 | $228,924 | - Issuance of common stock under At-the-market offerings and 2021/2022 Purchase agreements significantly increased Additional Paid in Capital[14](index=14&type=chunk) - A preferred stock dividend of **$(4,255) thousand** was recorded during the nine months ended September 30, 2022[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows%20for%20the%20nine%20months%20ended%20September%2030%2C%202022%20and%202021%20%28unaudited%29) Details increased cash usage in operating and investing activities, with decreased financing cash, leading to a net cash decrease for 9M 2022 Cash Flow Summary | Cash Flow Activity (in thousands) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(75,752) | $(53,112) | | Net cash used in investing activities | $(43,476) | $(9,685) |\ | Net cash provided by financing activities | $80,615 | $168,720 | | Net (decrease) increase in cash | $(38,682) | $105,902 | | Cash, cash equivalents and restricted cash end of period | $140,218 | $183,210 | - Operating cash outflows increased by **$22.64 million**, primarily due to higher research and development activities[19](index=19&type=chunk) - Investing cash outflows significantly increased by **$33.79 million**, mainly due to purchases of property and equipment[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20condensed%20consolidated%20financial%20statements%20%28unaudited%29) Provides detailed information on the company's business, accounting policies, and specific financial statement line items, including going concern uncertainty and equity transactions [NOTE 1 – BUSINESS](index=11&type=section&id=NOTE%201%20%E2%80%93%20BUSINESS) Tonix Pharmaceuticals Holding Corp. is a clinical-stage biopharmaceutical company facing going concern uncertainty due to recurring losses, despite having cash for operations into Q3 2023 - Tonix is a clinical-stage biopharmaceutical company developing therapeutics and vaccines[21](index=21&type=chunk) - The company has suffered recurring losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[23](index=23&type=chunk)[25](index=25&type=chunk) Key Financial Metrics | Metric | Sep 30, 2022 (in millions) | | :---------------- | :------------------------- | | Working capital | $137.8 | | Accumulated deficit | $(438.4) | | Cash and cash equivalents | $140.0 | - Current cash resources, plus **$2.1 million** from equity offerings post-Q3 2022, are expected to fund operations into Q3 2023, but not beyond[24](index=24&type=chunk) [NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Details significant accounting policies, including a 1-for-32 reverse stock split, interim financial statement preparation, and policies for cash, R&D, and stock-based compensation - A **1-for-32 reverse stock split** was effected on May 17, 2022, and applied retrospectively to all periods presented[26](index=26&type=chunk) - Interim financial statements are prepared in accordance with GAAP for interim information and do not include all footnotes required for complete financial statements[27](index=27&type=chunk) - Cash equivalents primarily consist of money market funds, totaling **$121.2 million** at September 30, 2022[33](index=33&type=chunk) - Research and development costs, including manufacturing for testing and licensing fees, are expensed as incurred[39](index=39&type=chunk) - Stock-based payments are measured at fair value on the grant date and recognized as compensation expense over the service period[43](index=43&type=chunk) Potentially Dilutive Securities | Potentially Dilutive Securities | Sep 30, 2022 | Sep 30, 2021 | | :------------------------------ | :----------- | :----------- | | Warrants to purchase common stock | 19,970 | 20,156 | | Options to purchase common stock | 2,455,280 | 805,742 | | Totals | 2,475,250 | 825,898 | [NOTE 3 – PROPERTY AND EQUIPMENT, NET](index=16&type=section&id=NOTE%203%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) Property and equipment, net, significantly increased to **$90.3 million** at September 30, 2022, driven by investments in R&D facilities in Frederick, MD, Dartmouth, MA, and Hamilton, MT Property and Equipment Breakdown | Asset Category (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :---------------------------- | :----------- | :----------- | | Land | $8,011 | $7,911 | | Buildings | $15,030 | — | | Construction in progress | $58,723 | $41,921 | | Laboratory equipment | $8,313 | $347 | | Total Property and equipment, net | $90,307 | $50,558 | - The Frederick, MD R&D facility (acquired Oct 2021 for **$17.5 million**) and Dartmouth, MA Advanced Development Center (acquired Sep 2020 for **$4.0 million**, with **$32.6 million** additional costs in 9M 2022) were placed in service during or subsequent to Q3 2022[53](index=53&type=chunk)[54](index=54&type=chunk) - A 44-acre site in Hamilton, MT, purchased for **$4.5 million** for a vaccine facility, was not yet ready for its intended use as of September 30, 2022[55](index=55&type=chunk) [NOTE 4 – FAIR VALUE MEASUREMENTS](index=16&type=section&id=NOTE%204%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) The company uses Level 1 quoted prices to value its cash equivalents, totaling **$121.2 million** at September 30, 2022, with no Level 2 or Level 3 assets or liabilities - Cash equivalents of **$121.2 million** (Sep 30, 2022) and **$120.4 million** (Dec 31, 2021) are valued using Level 1 quoted prices[56](index=56&type=chunk) - The company had no Level 2 or Level 3 assets or liabilities at September 30, 2022, or December 31, 2021[56](index=56&type=chunk) [NOTE 5 – STOCKHOLDERS' EQUITY](index=17&type=section&id=NOTE%205%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) A 1-for-32 reverse stock split was effective May 17, 2022, reducing authorized common stock to 50 million shares, later increased to 150 million shares on August 5, 2022 - A **1-for-32 reverse stock split** was effective May 17, 2022, reducing outstanding shares and authorized common stock from **800 million** to **50 million**[58](index=58&type=chunk) - On August 5, 2022, authorized common stock was increased from **50 million** to **150 million** shares[58](index=58&type=chunk) - The reverse stock split helped regain compliance with NASDAQ's minimum bid price requirement[58](index=58&type=chunk) [NOTE 6 – TEMPORARY EQUITY](index=17&type=section&id=NOTE%206%20%E2%80%93%20TEMPORARY%20EQUITY) In June 2022, the company issued Series A and B Convertible Redeemable Preferred Stock for **$28.5 million** gross proceeds, classified as temporary equity, and subsequently redeemed in August 2022 for **$31.5 million** - Issued **2.5 million** Series A and **0.5 million** Series B Convertible Redeemable Preferred Stock in June 2022 for **$28.5 million** gross proceeds[59](index=59&type=chunk) - Preferred Stock was classified as temporary equity due to a holder redemption feature[64](index=64&type=chunk) - All outstanding Preferred Stock was redeemed in August 2022 at 105% of stated value, totaling **$31.5 million**[64](index=64&type=chunk) [NOTE 7 – ASSET PURCHASE AGREEMENT WITH KATANA](index=18&type=section&id=NOTE%207%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20KATANA) In December 2020, Tonix acquired assets related to insulin resistance and obesity from Katana Pharmaceuticals for **$0.7 million**, expensed as R&D costs, with no milestone payments accrued or paid as of September 30, 2022 - Acquired Katana assets for insulin resistance and obesity for **$0.7 million** in December 2020, expensed as R&D[65](index=65&type=chunk) - Secured an exclusive license from the University of Geneva for related patents[66](index=66&type=chunk) - No milestone payments have been accrued or paid under this agreement as of September 30, 2022[67](index=67&type=chunk) [NOTE 8 – ASSET PURCHASE AGREEMENT WITH TRIGEMINA](index=18&type=section&id=NOTE%208%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20TRIGEMINA) In June 2020, Tonix acquired Trigemina's migraine and pain treatment assets for **$0.82 million** cash and **62,500** common shares (totaling **$2.4 million**), expensed as R&D, with only annual maintenance fees paid as of September 30, 2022 - Acquired Trigemina assets for migraine and pain treatment in June 2020 for **$0.82 million** cash and **62,500** common shares (totaling **$2.4 million**), expensed as R&D[68](index=68&type=chunk)[69](index=69&type=chunk) - Obtained an exclusive license from Stanford University for related patents[71](index=71&type=chunk) - Only annual maintenance fees have been paid; no milestone payments accrued or paid as of September 30, 2022[72](index=72&type=chunk) [NOTE 9 – ASSET PURCHASE AGREEMENT WITH TRIMARAN](index=20&type=section&id=NOTE%209%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20TRIMARAN) In August 2019, Tonix acquired TRImaran's pyran-based compound assets for **$0.1 million** cash and assumed **$68.5 thousand** in liabilities, expensed as R&D, with potential milestone payments of **$3.4 million** - Acquired TRImaran assets for pyran-based compounds in August 2019 for **$0.1 million** cash and assumed **$68.5 thousand** liabilities, expensed as R&D[73](index=73&type=chunk) - Potential future payments include **$3.4 million** in development, regulatory, and sales milestones to TRImaran and Selling Shareholders[73](index=73&type=chunk) - Secured an exclusive license from Wayne State University (WSU) for related technology, with potential milestone payments totaling **$3.4 million** and single-digit royalties on net sales[74](index=74&type=chunk)[75](index=75&type=chunk) - No milestone payments have been accrued or paid under this agreement as of September 30, 2022[75](index=75&type=chunk) [NOTE 10 – LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA](index=21&type=section&id=NOTE%2010%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20UNIVERSITY%20OF%20ALBERTA) In May 2022, Tonix entered an exclusive license agreement with the University of Alberta for broad-spectrum antiviral drugs, paying a low-five digit license fee, with no milestone payments accrued or paid as of September 30, 2022 - Entered exclusive license with University of Alberta in May 2022 for broad-spectrum antiviral drugs[77](index=77&type=chunk) - Paid a low-five digit license fee upfront; no milestone payments accrued or paid as of September 30, 2022[77](index=77&type=chunk)[78](index=78&type=chunk) [NOTE 11 – LICENSE AGREEMENT WITH OYAGEN](index=21&type=section&id=NOTE%2011%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20OYAGEN) In April 2021, Tonix licensed antiviral technology for SARS-CoV-2 from OyaGen, paying a low-seven digit fee and issuing **$3.0 million** in common stock; the agreement was terminated effective September 20, 2022 - Licensed antiviral inhibitor technology from OyaGen in April 2021 for a low-seven digit fee and **$3.0 million** in common stock[79](index=79&type=chunk)[80](index=80&type=chunk) - The license agreement was terminated effective September 20, 2022[81](index=81&type=chunk) - No milestone payments were accrued or paid under this agreement[81](index=81&type=chunk) [NOTE 12 – LICENSE AGREEMENT WITH INSERM](index=21&type=section&id=NOTE%2012%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20INSERM) In February 2021, Tonix licensed oxytocin-based therapeutics for Prader-Willi syndrome from Inserm, with potential milestone payments totaling **$0.4 million**, none accrued or paid as of September 30, 2022 - Licensed oxytocin-based therapeutics from Inserm in February 2021 for Prader-Willi syndrome[82](index=82&type=chunk) - Agreement includes annual fees, potential milestone payments of approximately **$0.4 million**, and royalties[82](index=82&type=chunk) - No milestone payments have been accrued or paid as of September 30, 2022[83](index=83&type=chunk) [NOTE 13 – LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY](index=21&type=section&id=NOTE%2013%20%E2%80%93%20LICENSE%20AGREEMENTS%20WITH%20COLUMBIA%20UNIVERSITY) Tonix holds two exclusive license agreements with Columbia University for TFF2 Technology and a double-mutant cocaine esterase, involving upfront fees, commercial development obligations, royalties, and contingent milestone payments totaling **$4.1 million** and **$3 million** respectively, with no milestone payments accrued or paid as of September 30, 2022 - Exclusive license for TFF2 Technology (recombinant Trefoil Family Factor 2) from Columbia University, with a five-digit license fee paid[83](index=83&type=chunk)[84](index=84&type=chunk) - TFF2 agreement includes potential milestone payments of **$4.1 million** and single-digit royalties on net sales[88](index=88&type=chunk) - Exclusive license for double-mutant cocaine esterase from Columbia University, with a six-digit license fee paid[90](index=90&type=chunk)[91](index=91&type=chunk) - Cocaine esterase agreement includes potential milestone payments of **$3 million** and single-digit royalties on net sales[93](index=93&type=chunk) - No milestone payments have been accrued or paid under either Columbia agreement as of September 30, 2022[89](index=89&type=chunk)[94](index=94&type=chunk) [NOTE 14 – SALE OF COMMON STOCK](index=23&type=section&id=NOTE%2014%20%E2%80%93%20SALE%20OF%20COMMON%20STOCK) Tonix engaged in multiple common stock sales agreements and ATM offerings, generating significant net proceeds but also facing NASDAQ restrictions on further sales without shareholder approval - Entered a **$50 million** purchase agreement with Lincoln Park in August 2022, issuing **625,000** commitment shares valued at **$1 million**[95](index=95&type=chunk)[96](index=96&type=chunk) - Sold **1.0 million** shares under the 2022 Purchase Agreement for **$0.5 million** net proceeds subsequent to September 30, 2022[98](index=98&type=chunk) - Under a December 2021 agreement with Lincoln Park, sold **2.9 million** shares for **$8.7 million** net proceeds during the nine months ended September 30, 2022; further sales are restricted without shareholder approval[99](index=99&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Under a May 2021 agreement with Lincoln Park, sold **1.3 million** shares for **$29.5 million** gross proceeds during the nine months ended September 30, 2021; further sales are restricted without shareholder approval[103](index=103&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - ATM offerings generated **$76.2 million** net proceeds from **34.2 million** shares sold during the nine months ended September 30, 2022, and **$37.2 million** from **1.3 million** shares in the same 2021 period[110](index=110&type=chunk) [NOTE 15 – STOCK-BASED COMPENSATION](index=26&type=section&id=NOTE%2015%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Tonix operates stock incentive and employee stock purchase plans, with stock-based compensation expense increasing to **$8.1 million** for the nine months ended September 30, 2022, and **$14.3 million** in unrecognized compensation cost remaining - The Amended and Restated 2020 Stock Incentive Plan allows for various equity awards and includes an 'evergreen provision' for annual share increases[115](index=115&type=chunk) Stock Option Activity | Stock Option Activity | Shares Outstanding (Dec 31, 2021) | Shares Outstanding (Sep 30, 2022) | | :-------------------- | :-------------------------------- | :-------------------------------- | | Outstanding | 805,762 | 2,455,280 | | Grants | - | 1,695,608 | | Forfeitures or expirations | - | (46,090) | Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :---------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total | $2,700 | $2,300 | $8,100 | $5,600 | | General and Administration | $2,000 | $1,600 | $5,900 | $3,900 | | Research and Development | $700 | $700 | $2,200 | $1,700 | - As of September 30, 2022, **$14.3 million** of unrecognized compensation cost remains, to be recognized over a weighted average period of 1.9 years[123](index=123&type=chunk) [NOTE 16 – STOCK WARRANTS](index=29&type=section&id=NOTE%2016%20%E2%80%93%20STOCK%20WARRANTS) As of September 30, 2022, Tonix had **19,970** outstanding warrants to purchase common stock with exercise prices ranging from **$16.00** to **$1,120.00**, with no exercises during the nine months ended September 30, 2022 Outstanding Stock Warrants | Exercise Price | Number Outstanding (Sep 30, 2022) | Expiration Date | | :------------- | :-------------------------------- | :-------------- | | $16.00 | 779 | November 2024 | | $18.24 | 3,860 | February 2025 | | $1,120.00 | 15,331 | December 2023 | | Total | 19,970 | | - No warrants were exercised during the nine months ended September 30, 2022[131](index=131&type=chunk) [NOTE 17 – LEASES](index=29&type=section&id=NOTE%2017%20%E2%80%93%20LEASES) Tonix holds operating lease agreements, primarily for office space, with right-of-use assets of **$0.8 million** and total lease liabilities of **$0.9 million** as of September 30, 2022, and decreased operating lease expense - As of September 30, 2022, operating lease ROU assets were **$0.8 million** and total lease liabilities were **$0.9 million**[132](index=132&type=chunk) Future Minimum Lease Payments | Year Ending December 31 (in thousands) | Future Minimum Lease Payments | | :------------------------------------- | :---------------------------- | | 2022 | $135 | | 2023 | $438 | | 2024 | $163 | | 2025 | $159 | | 2026 and beyond | $11 | | Total | $906 | | Included interest | $(20) | | Present Value of Lease Liabilities | $886 | Operating Lease Expense | Operating Lease Expense (in millions) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease expense | $0.1 | $0.2 | $0.4 | $0.5 | [NOTE 18 – COMMITMENTS](index=30&type=section&id=NOTE%2018%20%E2%80%93%20COMMITMENTS) Tonix has significant outstanding commitments, including **$61.4 million** for contract research organizations and **$3.3 million** for a construction contract as of September 30, 2022, and contributes to a 401(k) plan - Outstanding commitments of approximately **$61.4 million** for contract research organizations as of September 30, 2022[138](index=138&type=chunk) - Outstanding commitments of approximately **$3.3 million** for a construction contract as of September 30, 2022[138](index=138&type=chunk) 401(k) Contributions | 401(k) Contributions (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Company contributions | $122 | $38 | $428 | $149 | [NOTE 19 – SUBSEQUENT EVENTS](index=30&type=section&id=NOTE%2019%20%E2%80%93%20SUBSEQUENT%20EVENTS) Subsequent to September 30, 2022, Tonix raised **$2.1 million** net proceeds from common stock sales, entered a new private placement for **$14.3 million** in preferred stock, and received a NASDAQ non-compliance notice - Subsequent to September 30, 2022, sold **3.2 million** common shares under ATM for **$1.6 million** net proceeds and **1.0 million** shares under 2022 Purchase Agreement for **$0.5 million** net proceeds[140](index=140&type=chunk) - On October 25, 2022, entered a private placement for **$14.3 million** gross proceeds from Series A and B Convertible Redeemable Preferred Stock, expected to be redeemed in 2022[141](index=141&type=chunk) - Received a NASDAQ notice on October 25, 2022, for non-compliance with the **$1** minimum bid price requirement, with 180 calendar days to regain compliance[142](index=142&type=chunk)[143](index=143&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=32&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's perspective on the company's financial condition, operational results, liquidity, capital resources, and critical accounting policies for the three and nine months ended September 30, 2022 [Business Overview](index=32&type=section&id=Business%20Overview) Tonix is a clinical-stage biopharmaceutical company with a diverse portfolio across CNS, rare disease, immunology, and infectious disease, including lead candidates TNX-102 SL, TNX-1300, and TNX-801 - Tonix is a clinical-stage biopharmaceutical company focused on CNS, rare disease, immunology, and infectious disease product candidates[147](index=147&type=chunk) - Lead CNS candidate, TNX-102 SL, is in mid-Phase 3 for fibromyalgia and Phase 2 for Long COVID, with interim data expected in Q2 2023 for both[148](index=148&type=chunk) - TNX-1300 (cocaine esterase) has FDA Breakthrough Therapy designation, with a Phase 2 study expected in Q1 2023, supported by a NIDA grant[148](index=148&type=chunk) - Infectious disease pipeline includes TNX-801 (smallpox/monkeypox vaccine, Phase 1 in H1 2023) and next-generation COVID-19 vaccines[151](index=151&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company's operating results for the three and nine months ended September 30, 2022, show increased research and development and general and administrative expenses, leading to a higher net loss compared to the same periods in 2021 [Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021](index=34&type=section&id=Three%20Months%20Ended%20September%2030%2C%202022%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202021) Research and development expenses increased by **69%** to **$22.2 million**, and general and administrative expenses rose by **35%** to **$7.4 million**, leading to a **$29.0 million** net loss Operating Results - 3 Months | Expense Category (in millions) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change (in millions) | Change (%) | | :----------------------------- | :-------------------------- | :-------------------------- | :------------------- | :--------- | | Research and development | $22.2 | $13.1 | $9.1 | 69% | | General and administrative | $7.4 | $5.5 | $1.9 | 35% | | Net loss | $(29.0) | $(18.5) | $(10.5) | 57% | - R&D increase primarily due to increased clinical expenses (**$2.4 million**), manufacturing expenses (**$1.0 million**), non-clinical expenses (**$1.4 million**), employee-related expenses (**$2.5 million**), and laboratory expenses (**$0.9 million**)[154](index=154&type=chunk) - G&A increase primarily due to employee-related expenses (**$0.9 million**), legal fees (**$0.3 million**), and financial reporting expenses (**$0.7 million**)[157](index=157&type=chunk) [Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021](index=34&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202022%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202021) Research and development expenses increased by **23%** to **$57.2 million**, and general and administrative expenses rose by **36%** to **$22.2 million**, resulting in a **$78.5 million** net loss Operating Results - 9 Months | Expense Category (in millions) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change (in millions) | Change (%) | | :----------------------------- | :-------------------------- | :-------------------------- | :------------------- | :--------- | | Research and development | $57.2 | $46.5 | $10.7 | 23% | | General and administrative | $22.2 | $16.3 | $5.9 | 36% | | Net loss | $(78.5) | $(62.7) | $(15.8) | 25% | - R&D increase primarily due to employee-related expenses (**$6.7 million**), clinical expenses (**$1.0 million**), lab supplies (**$1.9 million**), and rent/office expenses (**$1.0 million**)[159](index=159&type=chunk) - G&A increase primarily due to employee-related expenses (**$3.8 million**), technology/software expenses (**$0.5 million**), travel/entertainment (**$0.3 million**), and financial reporting expenses (**$0.6 million**)[163](index=163&type=chunk) [License Agreements](index=36&type=section&id=License%20Agreements) Details various license agreements, including those with the University of Alberta, OyaGen (terminated), Inserm, and Columbia University, all involving upfront fees, potential milestones, and royalties, with no milestone payments accrued or paid as of September 30, 2022 - Exclusive License Agreement with University of Alberta (May 2022) for antiviral drugs, with a low-five digit upfront fee[166](index=166&type=chunk) - Exclusive License Agreement with OyaGen (April 2021) for SARS-CoV-2 antiviral, terminated effective September 20, 2022[167](index=167&type=chunk)[168](index=168&type=chunk) - License agreement with Inserm (February 2021) for oxytocin-based therapeutics, with potential milestone payments of **$0.4 million**[169](index=169&type=chunk) - Two exclusive License Agreements with Columbia University for TFF2 Technology (potential **$4.1 million** milestones) and double-mutant cocaine esterase (potential **$3 million** milestones)[170](index=170&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[177](index=177&type=chunk) - No milestone payments have been accrued or paid for any of these license agreements as of September 30, 2022[166](index=166&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[173](index=173&type=chunk)[177](index=177&type=chunk) [Asset Purchase Agreements](index=37&type=section&id=Asset%20Purchase%20Agreements) Details asset purchase agreements with Katana, Trigemina, and TRImaran, involving cash/stock consideration, exclusive university licenses, and potential future milestone payments, none accrued or paid as of September 30, 2022 - Katana Asset Purchase Agreement (Dec 2020) for insulin resistance assets, **$0.7 million** cash consideration, expensed as R&D[178](index=178&type=chunk) - Trigemina Asset Purchase Agreement (June 2020) for migraine/pain treatment assets, **$0.82 million** cash and **62,500** common shares (total **$2.4 million**), expensed as R&D[180](index=180&type=chunk)[181](index=181&type=chunk) - TRImaran Asset Purchase Agreement (Aug 2019) for pyran-based compounds, **$0.1 million** cash and **$68.5 thousand** assumed liabilities, expensed as R&D, with potential **$3.4 million** milestone payments[183](index=183&type=chunk) - All asset acquisitions included exclusive licenses from universities (Geneva, Stanford, Wayne State), with obligations for commercial development and potential royalties/milestones[179](index=179&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) - No milestone payments have been accrued or paid for any of these asset purchase agreements as of September 30, 2022, other than annual maintenance fees where applicable[179](index=179&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Tonix's working capital was **$137.8 million** at September 30, 2022, with **$140.0 million** in cash; the company used **$75.8 million** in operating and **$43.5 million** in investing activities, while financing provided **$80.6 million**, raising substantial doubt about its ability to continue as a going concern beyond Q3 2023 Working Capital and Cash | Metric (in millions) | Sep 30, 2022 | | :------------------- | :----------- | | Working capital | $137.8 | | Cash and cash equivalents | $140.0 | Cash Flow Summary | Cash Flow Activity (in millions) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(75.8) | $(53.1) | | Net cash used in investing activities | $(43.5) | $(9.7) | | Net cash provided by financing activities | $80.6 | $168.7 | - Cash resources are expected to meet operating and capital expenditure requirements into Q3 2023, but not beyond, raising substantial doubt about going concern[188](index=188&type=chunk)[189](index=189&type=chunk) - Future capital requirements depend on R&D progress, regulatory approvals, intellectual property costs, competition, and financing availability[191](index=191&type=chunk) [Future Liquidity Requirements](index=39&type=section&id=Future%20Liquidity%20Requirements) Tonix expects continued losses and increasing R&D expenses, requiring additional capital beyond the current year, which may involve equity, debt, or collaborative arrangements, potentially leading to shareholder dilution or loss of product rights - Expects losses and increasing R&D expenses, including facility build-outs, and will not have enough resources for one year from the filing date[190](index=190&type=chunk) - Future capital requirements are dependent on R&D progress, regulatory approvals, IP costs, competitive landscape, and financing availability[191](index=191&type=chunk) - May need to issue equity or debt, obtain credit facilities, or enter collaborative arrangements, which could lead to shareholder dilution or loss of product rights[192](index=192&type=chunk)[193](index=193&type=chunk) [Convertible Redeemable Preferred Stock](index=41&type=section&id=Convertible%20Redeemable%20Preferred%20stock) In June 2022, Tonix issued Series A and B Preferred Stock for **$28.5 million** gross proceeds, held in escrow, and fully redeemed in August 2022 for **$31.5 million** - Issued **2.5 million** Series A and **0.5 million** Series B Preferred Stock in June 2022 for **$28.5 million** gross proceeds[195](index=195&type=chunk) - All outstanding Preferred Stock was redeemed in August 2022 at 105% of stated value, totaling **$31.5 million**[196](index=196&type=chunk) [2022 Lincoln Park Transaction](index=41&type=section&id=2022%20Lincoln%20Park%20Transaction) In August 2022, Tonix entered a purchase agreement with Lincoln Park Capital Fund, LLC to sell up to **$50 million** of common stock, issuing **625,000** commitment shares valued at **$1 million**, with **$0.5 million** net proceeds raised subsequently - Entered a **$50 million** purchase agreement with Lincoln Park in August 2022[197](index=197&type=chunk) - Issued **625,000** common shares as commitment consideration, valued at **$1 million**[198](index=198&type=chunk) - No shares sold under this agreement during 9M 2022; **$0.5 million** net proceeds from **1.0 million** shares sold subsequent to Sep 30, 2022[199](index=199&type=chunk) [Purchase Agreement with Lincoln Park](index=41&type=section&id=Purchase%20Agreement%20with%20Lincoln%20Park) Under a December 2021 purchase agreement with Lincoln Park, Tonix sold **2.9 million** shares of common stock for **$8.7 million** net proceeds during the nine months ended September 30, 2022, with further sales restricted without shareholder approval due to NASDAQ rules - Sold **2.9 million** common shares for **$8.7 million** net proceeds under a December 2021 purchase agreement with Lincoln Park during 9M 2022[202](index=202&type=chunk) - Further sales under this agreement are restricted without shareholder approval due to NASDAQ rules, having reached the 19.99% threshold at less than the required average price[203](index=203&type=chunk) [2021 Lincoln Park Transaction](index=42&type=section&id=2021%20Lincoln%20Park%20Transaction) Under a May 2021 purchase agreement with Lincoln Park, Tonix sold **1.3 million** shares of common stock for **$29.5 million** gross proceeds during the nine months ended September 30, 2021, with further sales restricted without shareholder approval due to NASDAQ rules - Sold **1.3 million** common shares for **$29.5 million** gross proceeds under a May 2021 purchase agreement with Lincoln Park during 9M 2021[206](index=206&type=chunk) - Further sales under this agreement are restricted without shareholder approval due to NASDAQ rules, having reached the 19.99% threshold at less than the required average price[207](index=207&type=chunk) [February 2021 Financing](index=43&type=section&id=February%202021%20Financing) In February 2021, Tonix completed a registered direct public offering, selling **1.8 million** shares of common stock at **$38.40** per share, generating **$65.0 million** in net proceeds - Sold **1.8 million** common shares at **$38.40** per share in a February 2021 registered direct public offering[208](index=208&type=chunk) - Generated **$65.0 million** in net proceeds after deducting **$4.9 million** in agent fees and **$0.1 million** in other expenses[208](index=208&type=chunk) [January 2021 Financing](index=43&type=section&id=January%202021%20Financing) In January 2021, Tonix completed a registered direct public offering, selling **1.6 million** shares of common stock at **$25.60** per share, generating **$36.9 million** in net proceeds - Sold **1.6 million** common shares at **$25.60** per share in a January 2021 registered direct public offering[209](index=209&type=chunk) - Generated **$36.9 million** in net proceeds after deducting **$2.8 million** in agent fees and **$0.3 million** in other expenses[209](index=209&type=chunk) [At-the-Market Offerings](index=43&type=section&id=At-the-Market%20Offerings) Through ATM sales, Tonix sold **34.2 million** common shares for **$76.2 million** net proceeds during 9M 2022, and **1.3 million** shares for **$37.2 million** net proceeds in 9M 2021, with an additional **$1.6 million** net proceeds raised post-Q3 2022 - Sold **34.2 million** common shares for **$76.2 million** net proceeds via ATM during 9M 2022[210](index=210&type=chunk) - Sold **1.3 million** common shares for **$37.2 million** net proceeds via ATM during 9M 2021[210](index=210&type=chunk) - Subsequent to September 30, 2022, sold **3.2 million** common shares for **$1.6 million** net proceeds via ATM[210](index=210&type=chunk) [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Outlines critical accounting policies and estimates requiring significant management judgment, including those for research and development expenses, stock-based compensation, and redeemable convertible preferred stock, which impact financial statement preparation - Research and development costs are expensed as incurred, including manufacturing for testing, licensing fees, and clinical trial costs[228](index=228&type=chunk) - Accrued R&D expenses are estimated based on contract terms, trial progress, and services completed, with adjustments made if actual results differ[229](index=229&type=chunk) - Stock-based payments are measured at fair value on the grant date and recognized as compensation expense over the vesting period[230](index=230&type=chunk) - Conditionally redeemable preferred shares are classified as temporary equity until redemption conditions are removed or lapse[231](index=231&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) Tonix has no off-balance sheet financing arrangements, liabilities, guarantee contracts, or contingent interests in transferred assets, other than contractual obligations incurred in the normal course of business - The company has no off-balance sheet financing arrangements or liabilities, guarantee contracts, or contingent interests in transferred assets[233](index=233&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not required for smaller reporting companies under Regulation S-K - Not required under Regulation S-K for 'smaller reporting companies'[235](index=235&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that Tonix's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of September 30, 2022[236](index=236&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2022[237](index=237&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Tonix Pharmaceuticals Holding Corp. is not currently a party to any material legal proceedings or claims - The company is not a party to any material legal proceedings or claims[239](index=239&type=chunk) [ITEM 1A. RISK FACTORS](index=37&type=section&id=ITEM%201A.%20RISK%20FACTORS) There were no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[240](index=240&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=38&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) On October 25, 2022, Tonix issued **1.4 million** Series A and **0.1 million** Series B Preferred Stock in a private placement for **$14.3 million** gross proceeds, held in escrow and expected to fund redemption - On October 25, 2022, issued **1.4 million** Series A and **0.1 million** Series B Preferred Stock in a private placement[242](index=242&type=chunk) - Gross proceeds of **$14.3 million** from the sale are held in escrow, expected to fund the redemption of the Preferred Stock in 2022[242](index=242&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=38&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities - None[243](index=243&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) There are no mine safety disclosures - None[244](index=244&type=chunk) [ITEM 5. OTHER INFORMATION](index=38&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Tonix received a NASDAQ notice on October 25, 2022, for non-compliance with the **$1** minimum bid price requirement, with 180 calendar days to regain compliance - Received NASDAQ notice on October 25, 2022, for non-compliance with the **$1** minimum bid price requirement[245](index=245&type=chunk) - Has 180 calendar days (until April 24, 2023) to regain compliance, potentially eligible for an additional 180-day period[245](index=245&type=chunk) [ITEM 6. EXHIBITS](index=38&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, certifications, and XBRL interactive data files - Includes forms of Securities Purchase Agreements, Registration Rights Agreements, and Side Letters[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Contains corporate documents such as Articles of Incorporation, Bylaws, and Certificates of Change/Amendment[246](index=246&type=chunk)[247](index=247&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer are included[248](index=248&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) The report is duly signed on behalf of Tonix Pharmaceuticals Holding Corp. by Seth Lederman, Chief Executive Officer, and Bradley Saenger, Chief Financial Officer, on November 7, 2022 - Report signed by Seth Lederman (CEO) and Bradley Saenger (CFO) on November 7, 2022[252](index=252&type=chunk)

Pipeline Highlights - TNX-102 SL is in development for Fibromyalgia (FM), Posttraumatic Stress Disorder (PTSD), and Long COVID (PASC), with Phase 2 studies for PTSD and Long COVID targeted to start in Q3 2022[11] - TNX-1300 for Cocaine Intoxication has FDA Breakthrough Designation and is in Mid-Phase 2, with a new Phase 2 study planned for Q4 2022[11, 55] - TNX-1900 for Migraine, Craniofacial Pain, and Binge Eating Disorder has a Phase 2 start targeted for 1H 2023[11] - TNX-601 ER for Depression, PTSD, and Neurocognitive Dysfunction from Steroids has a Phase 2 start targeted for 1Q 2023[11] - TNX-801 for Smallpox and monkeypox vaccine and TNX-1850 for COVID-19 Vaccine are both targeted to start Phase 1 trials in 1H 2023 and 2H 2023 respectively[16] TNX-102 SL for Fibromyalgia - A Phase 3 study, RESILIENT (F307), comparing TNX-102 SL 56 mg and placebo, enrolled its first patient in April 2022, with interim analysis results expected in 1Q 2023[26] - A previous Phase 3 study, RALLY (F306), missed its primary endpoint due to an unexpected ~80% increase in adverse event-related discontinuations in both drug and placebo arms[26] TNX-102 SL for Long COVID (PASC) - Long COVID can occur in approximately 30% of recovered COVID-19 patients[30] - The National Institutes of Health was awarded $115 billion to study Long COVID[30] - A Phase 2 study for treating a subset of Long COVID patients whose symptoms overlap with fibromyalgia is planned to start in Q3 2022[31] Opioid Use in Long COVID Patients - Data indicates that 501% to 511% of patients with Long COVID symptoms are taking opioids[45]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the reported period [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201%2E%20Financial%20Statements) This section presents Tonix Pharmaceuticals' unaudited condensed consolidated financial statements and related notes, covering financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20consolidated%20balance%20sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :--------------------------- | :----------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $145,478 | $178,660 | $(33,182) | -18.57% | | Restricted cash | $31,500 | — | $31,500 | N/A | | Total current assets | $191,747 | $189,049 | $2,698 | 1.43% | | Property and equipment, net | $83,099 | $50,558 | $32,541 | 64.36% | | Total assets | $276,165 | $240,900 | $35,265 | 14.64% | | Total current liabilities | $15,909 | $21,716 | $(5,807) | -26.74% | | Total liabilities | $16,383 | $22,183 | $(5,800) | -26.15% | | Redeemable Convertible Preferred Stock | $31,500 | — | $31,500 | N/A | | Total stockholders' equity | $228,282 | $218,717 | $9,565 | 4.37% | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20consolidated%20statements%20of%20operations) This statement details the company's revenues, expenses, and net loss over specific reporting periods Statements of Operations – Three Months Ended June 30 (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (in thousands) | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Research and development | $16,579 | $18,133 | $(1,554) | -8.57% | | General and administrative | $6,757 | $5,429 | $1,328 | 24.46% | | Operating loss | $(23,336) | $(23,562) | $226 | -0.96% | | Net loss | $(23,140) | $(23,553) | $413 | -1.75% | | Net loss per common share, basic and diluted | $(1.22) | $(2.25) | $1.03 | -45.78% | | Weighted average common shares outstanding | 22,404,371 | 10,483,112 | 11,921,259 | 113.72% | Statements of Operations – Six Months Ended June 30 (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Research and development | $35,001 | $33,460 | $1,541 | 4.61% | | General and administrative | $14,771 | $10,838 | $3,933 | 36.29% | | Operating loss | $(49,772) | $(44,298) | $(5,474) | 12.36% | | Net loss | $(49,557) | $(44,206) | $(5,351) | 12.10% | | Net loss per common share, basic and diluted | $(2.76) | $(4.49) | $1.73 | -38.53% | | Weighted average common shares outstanding | 19,462,280 | 9,843,309 | 9,618,971 | 97.72% | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20comprehensive%20loss) This statement presents the net loss and other comprehensive income or loss components for the reporting periods Statements of Comprehensive Loss – Three Months Ended June 30 (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (in thousands) | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Net loss | $(23,140) | $(23,553) | $413 | -1.75% | | Foreign currency translation loss | $(25) | $(8) | $(17) | 212.50% | | Comprehensive loss | $(23,165) | $(23,561) | $396 | -1.68% | Statements of Comprehensive Loss – Six Months Ended June 30 (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net loss | $(49,557) | $(44,206) | $(5,351) | 12.10% | | Foreign currency translation loss | $(51) | $(9) | $(42) | 466.67% | | Comprehensive loss | $(49,608) | $(44,215) | $(5,393) | 12.20% | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20consolidated%20statements%20of%20stockholders%27%20equity) This statement tracks changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Stockholders' Equity (in thousands) | Metric (in thousands) | December 31, 2021 | March 31, 2022 | June 30, 2022 | Change (Dec 2021 to Jun 2022) | | :-------------------- | :---------------- | :------------- | :------------ | :---------------------------- | | Common stock shares | 15,638,274 | 17,406,468 | 31,692,024 | 16,053,750 | | Common stock amount | $16 | $18 | $32 | $16 | | Additional Paid in Capital | $578,613 | $594,294 | $637,770 | $59,157 | | Accumulated Deficit | $(359,820) | $(386,237) | $(409,377) | $(49,557) |\ | Total Stockholders' Equity | $218,717 | $207,957 | $228,282 | $9,565 | - Issuance of common stock from At-the-market offering and 2021 Purchase Agreement significantly increased **common stock shares** and **additional paid-in capital** during the six months ended June 30, 2022[16](index=16&type=chunk) - A preferred stock deemed dividend of **$4.255 million** was recorded in the second quarter of 2022[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net cash used in operating activities | $(52,217) | $(40,166) | $(12,051) | 30.00% | | Net cash used in investing activities | $(34,656) | $(1,934) | $(32,722) | 1691.93% |\ | Net cash provided by financing activities | $85,240 | $130,759 | $(45,519) | -34.81% | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(1,682) | $88,651 | $(90,333) | -101.90% |\ | Cash, cash equivalents and restricted cash end of period | $177,218 | $165,959 | $11,259 | 6.78% | - The significant increase in cash used in investing activities is primarily due to a substantial increase in the **purchase of property and equipment in 2022**[20](index=20&type=chunk) - Financing activities in 2022 included proceeds from the sale of convertible redeemable preferred stock (**$27.2 million**) and common stock (**$57.9 million**), while 2021 saw higher proceeds from common stock sales[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20condensed%20consolidated%20financial%20statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [NOTE 1 – BUSINESS](index=11&type=section&id=NOTE%201%20%E2%80%93%20BUSINESS) This note describes the company's operations, its clinical-stage focus, and the going concern assessment - Tonix Pharmaceuticals Holding Corp. is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring, and developing therapeutics for human diseases, with all product candidates currently in development and none approved or marketed[22](index=22&type=chunk) - The Company's financial statements are prepared under a going concern assumption, but recurring losses and negative cash flows raise substantial doubt about its ability to continue as a going concern beyond **Q2 2023** without additional funding[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) Key Financial Metrics (approximate) | Metric | June 30, 2022 (approx.) | | :---------------- | :---------------------- | | Working Capital | $144.3 million | | Restricted Cash | $31.5 million | | Accumulated Deficit | $409.4 million | | Cash and Cash Equivalents | $145.5 million | [NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements - A **1-for-32 reverse stock split** was effected on May 17, 2022, and all share and per share data in the financial statements have been retrospectively adjusted[27](index=27&type=chunk) - The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue, with no commercial products or revenues generated to date[32](index=32&type=chunk) Cash and Restricted Cash (in thousands) | Cash Type | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------ | :--------------------------- | :----------------------------- | | Cash and cash equivalents | $145,478 | $178,660 | | Restricted cash – short term | $31,500 | — | | Restricted cash – long term | $240 | $240 | | Total | $177,218 | $178,900 | [NOTE 3 – PROPERTY AND EQUIPMENT, NET](index=16&type=section&id=NOTE%203%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) This note details the composition and changes in the company's property and equipment assets Property and Equipment, Net (in thousands) | Category (in thousands) | June 30, 2022 | December 31, 2021 | | :---------------------- | :------------ | :---------------- | | Land | $8,011 | $7,911 | | Construction in progress | $69,094 | $41,921 | | Office furniture and equipment | $908 | $756 | | Laboratory Equipment | $5,628 | $347 | | Leasehold improvements | $23 | $23 | | Total | $83,664 | $50,958 | | Less: Accumulated depreciation and amortization | $(565) | $(400) | | Property and equipment, net | $83,099 | $50,558 | - The Company acquired a **45,000 sq ft R&D facility** in Frederick, MD, and a **45,000 sq ft facility** in Dartmouth, MA, for vaccine development and manufacturing, both expected to be ready for intended use by **Q3 2022**[55](index=55&type=chunk)[56](index=56&type=chunk) - An additional **44-acre site** in Hamilton, Montana, was purchased for a vaccine development and commercial scale manufacturing facility, which was not ready for its intended use as of June 30, 2022[57](index=57&type=chunk) [NOTE 4 – FAIR VALUE MEASUREMENTS](index=16&type=section&id=NOTE%204%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) This note describes the fair value hierarchy and measurements for financial assets and liabilities Fair Value Measurements (in thousands) | Asset Category | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------- | :--------------------------- | :----------------------------- | | Cash equivalents (Level 1) | $120,600 | $120,400 | - The Company did not have any **Level 2 or Level 3 assets or liabilities** as of June 30, 2022, and December 31, 2021[58](index=58&type=chunk) [NOTE 5 – STOCKHOLDERS' EQUITY](index=17&type=section&id=NOTE%205%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) This note provides details on changes in common stock, including reverse stock splits and authorized share adjustments - A **1-for-32 reverse stock split** was effective May 17, 2022, reducing outstanding common stock from **599,679,596 to 18,740,141 shares** and authorized shares from **800 million to 50 million**[60](index=60&type=chunk) - The reverse stock split helped the Company regain compliance with **NASDAQ's minimum bid price requirement**[60](index=60&type=chunk) - Subsequent to June 30, 2022, on August 5, 2022, the authorized common stock was further increased from **50,000,000 to 150,000,000 shares**[60](index=60&type=chunk) [NOTE 6 – TEMPORARY EQUITY](index=17&type=section&id=NOTE%206%20%E2%80%93%20TEMPORARY%20EQUITY) This note explains the accounting for convertible redeemable preferred stock classified as temporary equity - On June 24, 2022, the Company closed a private placement offering of **2,500,000 Series A** and **500,000 Series B Convertible Redeemable Preferred Stock** at **$9.50 per share** (5% OID to $10.00 stated value), raising gross proceeds of **$28.5 million**[61](index=61&type=chunk) - The Preferred Stock is convertible into common stock at **$4.00 per share** and includes a holder's right to redeem for cash at **105% of stated value** through September 22, 2022[63](index=63&type=chunk) - Gross proceeds of **$28.5 million** plus an additional **$3.0 million** from the Company are held in an escrow account to cover OID and the 105% redemption price[64](index=64&type=chunk) Redeemable Convertible Preferred Stock (in thousands) | Preferred Stock Type (in thousands) | Gross Proceeds | Issuance Costs | Accretion to Redemption Value | Redemption Value (June 30, 2022) | | :---------------------------------- | :------------- | :------------- | :---------------------------- | :------------------------------- | | Series A | $23,750 | $(1,046) | $3,546 | $26,250 | | Series B | $4,750 | $(209) | $709 | $5,250 | [NOTE 7 – ASSET PURCHASE AGREEMENT WITH KATANA](index=18&type=section&id=NOTE%207%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20KATANA) This note details the acquisition of Katana assets for insulin resistance and related licensing obligations - On December 22, 2020, Tonix acquired Katana assets related to insulin resistance and obesity for **$0.7 million**, expensed as R&D costs due to no alternative future use prior to FDA approval[68](index=68&type=chunk) - The acquisition included an exclusive license from the **University of Geneva** for related patents, with obligations for diligent development and annual maintenance fees[69](index=69&type=chunk) - As of June 30, 2022, no milestone payments have been accrued or paid under this agreement[70](index=70&type=chunk) [NOTE 8 – ASSET PURCHASE AGREEMENT WITH TRIGEMINA](index=18&type=section&id=NOTE%208%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20TRIGEMINA) This note describes the acquisition of Trigemina assets for migraine and pain treatment technologies - On June 11, 2020, Tonix acquired Trigemina assets for migraine and pain treatment technologies, paying **$824,759 cash** and issuing **62,500 common shares** (valued at $21.76/share), plus **$250,241 to Stanford**[71](index=71&type=chunk) - Total consideration of **$2.4 million** was expensed as R&D costs because the intellectual property was acquired prior to FDA approval and had no alternative future use[72](index=72&type=chunk) - The agreement includes an exclusive license from **Stanford University** for related patents, requiring diligent development and annual maintenance fees, with no milestone payments accrued or paid as of June 30, 2022[74](index=74&type=chunk)[75](index=75&type=chunk) [NOTE 9 – ASSET PURCHASE AGREEMENT WITH TRIMARAN](index=20&type=section&id=NOTE%209%20%E2%80%93%20ASSET%20PURCHASE%20AGREEMENT%20WITH%20TRIMARAN) This note outlines the acquisition of TRImaran's pyran-based compound assets and associated milestone payments - On August 19, 2019, Tonix acquired TRImaran's pyran-based compound assets for **$100,000 cash** and assumed **$68,500 in liabilities**, expensed as R&D costs[76](index=76&type=chunk) - The agreement includes potential future payments of approximately **$3.4 million** in restricted stock or cash upon achievement of specified development, regulatory, and sales milestones[76](index=76&type=chunk) - An exclusive license from **Wayne State University (WSU)** for related technology requires diligent efforts for regulatory approval and marketing, annual maintenance fees, and potential milestone payments totaling **$3.4 million**, plus single-digit royalties on net sales[77](index=77&type=chunk)[78](index=78&type=chunk) [NOTE 10 – LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA](index=21&type=section&id=NOTE%2010%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20UNIVERSITY%20OF%20ALBERTA) This note describes the exclusive license for broad-spectrum antiviral drugs from the University of Alberta - On May 18, 2022, Tonix entered an exclusive License Agreement with the **University of Alberta** for broad-spectrum antiviral drugs against SARS-CoV-2 variants and other emerging viruses[80](index=80&type=chunk) - The agreement involved a **low-five digit upfront license fee** and provides for single-digit royalties and contingent milestone payments, none of which have been accrued or paid as of June 30, 2022, beyond the upfront fee[80](index=80&type=chunk)[81](index=81&type=chunk) [NOTE 11 – LICENSE AGREEMENT WITH OYAGEN](index=21&type=section&id=NOTE%2011%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20OYAGEN) This note details the license agreement with OyaGen for an antiviral inhibitor and its subsequent termination - On April 14, 2021, Tonix licensed technology from **OyaGen** for an antiviral inhibitor of SARS-CoV-2 (sangivamycin), paying a **low-seven digit license fee** and issuing **86,010 common shares** valued at **$3.0 million**, expensed as R&D[82](index=82&type=chunk)[83](index=83&type=chunk) - The OyaGen License also included single-digit royalties and contingent milestone payments, with no milestones accrued or paid as of June 30, 2022[83](index=83&type=chunk)[84](index=84&type=chunk) - In July 2022, Tonix notified OyaGen of its intent to terminate the License Agreement, effective **September 20, 2022**[84](index=84&type=chunk) [NOTE 12 – LICENSE AGREEMENT WITH INSERM](index=21&type=section&id=NOTE%2012%20%E2%80%93%20LICENSE%20AGREEMENT%20WITH%20INSERM) This note outlines the license agreement with Inserm for oxytocin-based therapeutics and associated fees - On February 11, 2021, Tonix licensed oxytocin-based therapeutics technology from **Inserm** for Prader-Willi syndrome and non-organic failure to thrive disease[85](index=85&type=chunk) - The agreement provides for annual fees, milestone payments totaling approximately **$0.4 million** upon specified sales milestones, and royalties on net sales[85](index=85&type=chunk) - As of June 30, 2022, no milestone payments have been accrued or paid under this agreement[86](index=86&type=chunk) [NOTE 13 – LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY](index=21&type=section&id=NOTE%2013%20%E2%80%93%20LICENSE%20AGREEMENTS%20WITH%20COLUMBIA%20UNIVERSITY) This note details multiple license agreements with Columbia University for TFF2 Technology and cocaine esterase - On September 16, 2019, Tonix entered an exclusive license with **Columbia University** for TFF2 Technology, paying a **five-digit license fee** expensed as R&D[86](index=86&type=chunk)[87](index=87&type=chunk) - This TFF2 license includes single-digit royalties on net sales and contingent milestone payments to Columbia totaling **$4.1 million** upon achievement of development, approval, and sales milestones[88](index=88&type=chunk)[91](index=91&type=chunk) - On May 20, 2019, Tonix also licensed double-mutant cocaine esterase technology from Columbia, paying a **six-digit license fee**, with potential milestone payments totaling **$3 million** and single-digit royalties on net sales[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - As of June 30, 2022, no milestone payments have been accrued or paid under either Columbia agreement[92](index=92&type=chunk)[97](index=97&type=chunk) [NOTE 14 – SALE OF COMMON STOCK](index=23&type=section&id=NOTE%2014%20%E2%80%93%20SALE%20OF%20COMMON%20STOCK) This note describes various common stock sales agreements, including At-the-Market offerings and Lincoln Park agreements - The Company has two purchase agreements with **Lincoln Park Capital Fund, LLC** (2021 and 2021 Purchase Agreements) for up to **$80 million** of common stock each[98](index=98&type=chunk)[102](index=102&type=chunk) Common Stock Sales and Proceeds (approximate) | Financing Activity | Period | Shares Sold (approx.) | Net Proceeds (approx.) | | :----------------- | :----- | :-------------------- | :--------------------- | | Lincoln Park (Dec 2021) | 6 months ended Jun 30, 2022 | 1.1 million | $6.5 million | | Lincoln Park (Dec 2021) | Subsequent to Jun 30, 2022 | 1.8 million | $2.2 million | | Lincoln Park (May 2021) | 6 months ended Jun 30, 2021 | 86,000 | $3.3 million | | February 2021 Financing | Feb 2021 | 1.8 million | $65.0 million | | January 2021 Financing | Jan 2021 | 1.6 million | $36.9 million | | At-the-Market (ATM) Offerings | 6 months ended Jun 30, 2022 | 15.0 million | $51.5 million | | At-the-Market (ATM) Offerings | 6 months ended Jun 30, 2021 | 0.8 million | $25.5 million | | At-the-Market (ATM) Offerings | Subsequent to Jun 30, 2022 | 9.6 million | $16.2 million | - Under the December 2021 Lincoln Park agreement, the Company cannot sell additional shares without shareholder approval, having issued approximately **3 million shares** at less than the NASDAQ threshold[192](index=192&type=chunk) [NOTE 15 – STOCK-BASED COMPENSATION](index=25&type=section&id=NOTE%2015%20%E2%80%93%20STOCK-BASED%20COMPENSATION) This note outlines the company's stock incentive plan and the accounting for stock-based compensation expenses - The Company operates under the **Amended and Restated 2020 Stock Incentive Plan**, which allows for various stock-based awards and includes an 'evergreen provision' for annual share increases[111](index=111&type=chunk)[112](index=112&type=chunk) Stock Option Activity | Metric | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :---------------- | | Shares Outstanding | 2,474,549 | 805,762 | | Weighted Average Exercise Price | $29.54 | $78.02 | | Weighted Average Remaining Contractual Term | 9.23 years | 8.83 years | | Shares Exercisable | 469,600 | N/A | | Weighted Average Exercise Price (Exercisable) | $83.90 | N/A | Weighted Average Fair Value of Options Granted | Period | Weighted Average Fair Value of Options Granted | | :----- | :------------------------------------------- | | 3 months ended June 30, 2022 | $3.78 per share | | 6 months ended June 30, 2022 | $5.25 per share | | 3 months ended June 30, 2021 | $30.62 per share | | 6 months ended June 30, 2021 | $34.45 per share | Stock-Based Compensation Expense (in thousands) | Period | Total Stock-Based Compensation Expense (in thousands) | | :----- | :-------------------------------------------------- | | 3 months ended June 30, 2022 | $2,800 | | 6 months ended June 30, 2022 | $5,400 | | 3 months ended June 30, 2021 | $2,100 | | 6 months ended June 30, 2021 | $3,300 | - As of June 30, 2022, the Company had approximately **$17.3 million** of unrecognized compensation cost related to non-vested awards, expected to be recognized over a weighted average period of **2.09 years**[122](index=122&type=chunk) [NOTE 16 – STOCK WARRANTS](index=27&type=section&id=NOTE%2016%20%E2%80%93%20STOCK%20WARRANTS) This note provides information on outstanding stock warrants, their exercise prices, and expiration dates Outstanding Stock Warrants (June 30, 2022) | Exercise Price | Number Outstanding (June 30, 2022) | Expiration Date | | :------------- | :--------------------------------- | :-------------- | | $16.00 | 779 | November 2024 | | $18.24 | 3,860 | February 2025 | | $1,120.00 | 15,331 | December 2023 | | Total | 19,970 | | - No warrants were exercised during the six months ended June 30, 2022[126](index=126&type=chunk) - During the six months ended June 30, 2021, **107 warrants** with an exercise price of **$18.24** were exercised, generating approximately **$2,000** in proceeds[127](index=127&type=chunk) [NOTE 17 – LEASES](index=28&type=section&id=NOTE%2017%20%E2%80%93%20LEASES) This note details the company's lease liabilities, right-of-use assets, and future lease payment obligations Lease Metrics (in thousands) | Metric (in thousands) | June 30, 2022 | | :-------------------- | :------------ | | Right-of-use assets | $0.9 million | | Total lease liability | $1.0 million | | Current lease liability | $0.5 million | | Long-term lease liability | $0.5 million | Future Minimum Lease Payments (in thousands) | Year Ending December 31, (in thousands) | Future Minimum Lease Payments | | :------------------------------------ | :---------------------------- | | 2022 | $275 | | 2023 | $409 | | 2024 | $154 | | 2025 | $159 | | 2026 and beyond | $11 | | Total | $1,008 | | Included interest | $(23) | | Present Value of Lease Payments | $985 | Lease Cash Flow and Terms | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Operating cash flow from operating leases (in thousands) | $309 | $314 | | Weighted Average Remaining Lease Term | 2.49 years | 3.13 years | | Weighted Average Discount Rate | 2.31% | 1.36% | [NOTE 18 – COMMITMENTS](index=28&type=section&id=NOTE%2018%20%E2%80%93%20COMMITMENTS) This note discloses the company's outstanding commitments for contract research and construction activities - As of June 30, 2022, the Company had outstanding commitments of approximately **$62.5 million** for future work with contract research organizations[135](index=135&type=chunk) - A construction contract had outstanding commitments of approximately **$8.4 million** at June 30, 2022[135](index=135&type=chunk) 401(k) Company Contributions (in thousands) | 401(k) Contributions (in thousands) | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | | :---------------------------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Company Contributions | $115 | $306 | $41 | $111 | [NOTE 19 – SUBSEQUENT EVENTS](index=30&type=section&id=NOTE%2019%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Subsequent to June 30, 2022, the Company sold **9.6 million shares** of common stock under the ATM Sales Agreement for net proceeds of approximately **$16.2 million**[139](index=139&type=chunk) - Additionally, **1.8 million shares** of common stock were sold under the Purchase Agreement with Lincoln Park for net proceeds of approximately **$2.2 million** after June 30, 2022[139](index=139&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=ITEM%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity, and capital resources, emphasizing its clinical-stage pipeline and funding needs [Business Overview](index=31&type=section&id=Business%20Overview) This section provides an overview of Tonix Pharmaceuticals' clinical-stage biopharmaceutical focus and key product candidates - Tonix Pharmaceuticals is a clinical-stage biopharmaceutical company developing therapeutics across infectious disease, central nervous system (CNS), rare disease, and immunology[143](index=143&type=chunk) - Key infectious disease candidates include **TNX-801** (smallpox/monkeypox vaccine, Phase 1 in H1 2023) and **TNX-1850** (COVID-19 vaccine, Phase 1 in H2 2023)[143](index=143&type=chunk) - Lead CNS candidate **TNX-102 SL** is in mid-Phase 3 for fibromyalgia (interim data Q1 2023) and entering Phase 2 for Long COVID (Q3 2022) and PTSD (Q3 2022); **TNX-1300** (cocaine intoxication) is in mid-Phase 2 with FDA Breakthrough Therapy Designation[143](index=143&type=chunk) - The Company operates infectious disease R&D facilities in Frederick, MD, and Dartmouth, MA, expected to be fully functional in **Q3 2022**[143](index=143&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's research and development, general and administrative expenses, and net loss Operating Expenses and Net Loss – Three Months Ended June 30 (in thousands) | Expense Category (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (in thousands) | % Change | | :------------------------------ | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Research and Development | $16,579 | $18,133 | $(1,554) | -8.57% | | General and Administrative | $6,757 | $5,429 | $1,328 | 24.46% | | Net Loss | $(23,140) | $(23,553) | $413 | -1.75% | Operating Expenses and Net Loss – Six Months Ended June 30 (in thousands) | Expense Category (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (in thousands) | % Change | | :------------------------------ | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Research and Development | $35,001 | $33,460 | $1,541 | 4.61% | | General and Administrative | $14,771 | $10,838 | $3,933 | 36.29% | | Net Loss | $(49,557) | $(44,206) | $(5,351) | 12.10% | - The decrease in **Q2 2022 R&D expenses** was primarily due to decreased clinical (**$0.4M**), non-clinical (**$4.3M**), and manufacturing (**$0.9M**) expenses, partially offset by increased employee-related (**$2.2M**) and lab supplies (**$0.8M**)[146](index=146&type=chunk) - The increase in **YTD 2022 R&D expenses** was mainly driven by increased employee-related (**$4.1M**), regulatory/legal (**$0.3M**), and lab supplies (**$1.0M**), partially offset by decreases in non-clinical (**$3.3M**), clinical (**$1.4M**), and manufacturing (**$0.7M**)[151](index=151&type=chunk) [License Agreements](index=34&type=section&id=License%20Agreements) This section discusses various exclusive license agreements for drug candidates and associated financial terms - Tonix entered an exclusive license with the **University of Alberta** in May 2022 for broad-spectrum antiviral drugs, involving a **low-five digit upfront fee** and future royalties/milestones[157](index=157&type=chunk) - The exclusive license with **OyaGen** for a SARS-CoV-2 antiviral, initiated in April 2021 with a **low-seven digit fee** and **$3.0 million in common stock**, was terminated by Tonix in July 2022, effective **September 20, 2022**[158](index=158&type=chunk)[159](index=159&type=chunk) - Agreements with **Inserm** (February 2021) for oxytocin-based therapeutics and **Columbia University** (September 2019 for TFF2 Technology, May 2019 for cocaine esterase) involve annual fees, single-digit royalties, and contingent milestone payments totaling **$0.4 million**, **$4.1 million**, and **$3 million** respectively[160](index=160&type=chunk)[161](index=161&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[169](index=169&type=chunk) [Asset Purchase Agreements](index=36&type=section&id=Asset%20Purchase%20Agreements) This section details asset acquisitions for various therapeutic technologies and their accounting treatment - Tonix acquired **Katana assets** for insulin resistance in December 2020 for **$0.7 million**, expensed as R&D, including an exclusive license from the **University of Geneva**[170](index=170&type=chunk)[171](index=171&type=chunk) - **Trigemina assets** for migraine and pain were acquired in June 2020 for **$824,759 cash**, **62,500 common shares**, and **$250,241 to Stanford**, totaling **$2.4 million** expensed as R&D, with an exclusive Stanford license[172](index=172&type=chunk)[173](index=173&type=chunk) - **TRImaran's pyran-based compound assets** were acquired in August 2019 for **$100,000 cash** and **$68,500 in assumed liabilities**, expensed as R&D, with potential future milestone payments of **$3.4 million** and an exclusive WSU license[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet short-term obligations and its need for future funding Liquidity Metrics (in thousands) | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :-------------------- | :------------ | :---------------- | | Working Capital | $144,300 | N/A | | Cash and Cash Equivalents | $145,500 | N/A | | Restricted Cash | $31,500 | N/A | Cash Flow Summary (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(52,217) | $(40,166) | | Net cash used in investing activities | $(34,656) | $(1,934) | | Net cash provided by financing activities | $85,240 | $130,759 | - The Company anticipates its cash resources at June 30, 2022, plus subsequent equity offerings, will meet operating and capital expenditure requirements into **Q2 2023**, but not beyond, raising substantial doubt about its going concern ability[180](index=180&type=chunk)[181](index=181&type=chunk) - Financing activities included a June 2022 private placement of **$28.5 million** in convertible redeemable preferred stock (escrowed for redemption) and ongoing sales of common stock through Lincoln Park agreements and At-the-Market (ATM) offerings[187](index=187&type=chunk)[191](index=191&type=chunk)[199](index=199&type=chunk) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights key accounting policies and estimates that significantly impact the financial statements - **Research and Development costs** are expensed as incurred, including manufacturing for testing, licensing fees, and clinical trial costs, with acquired intellectual property expensed if no alternative future use[217](index=217&type=chunk) - **Stock-Based Compensation** for employees and nonemployee directors is measured at fair value on the grant date and recognized as compensation expense over the vesting period[219](index=219&type=chunk) - **Redeemable Convertible Preferred Stock** is classified as temporary equity and measured at redemption value due to holder-controlled redemption features[220](index=220&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=ITEM%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the Company for the reported period - Not applicable[223](index=223&type=chunk) [ITEM 4. Controls and Procedures](index=46&type=section&id=ITEM%204%2E%20Controls%20and%20Procedures) This section details management's evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20disclosure%20controls%20and%20procedures%2E) Management concluded that the company's disclosure controls and procedures were effective as of the reporting date - As of June 30, 2022, management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures are designed at a reasonable assurance level and are **effective**[225](index=225&type=chunk) [Changes in Internal Control Over Financial Reporting](index=46&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting%2E) No material changes in internal control over financial reporting occurred during the quarter - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[226](index=226&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II%2E%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings and equity sales [ITEM 1. Legal Proceedings](index=46&type=section&id=ITEM%201%2E%20Legal%20Proceedings) The Company is not currently a party to any material legal proceedings or claims - The Company is not a party to any material legal proceedings or claims as of the reporting date[228](index=228&type=chunk) [ITEM 1A. Risk Factors](index=46&type=section&id=ITEM%201A%2E%20Risk%20Factors) This section states that there were no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[229](index=229&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=ITEM%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the unregistered sale of Series A and Series B Preferred Stock in June 2022 and the intended use of the proceeds - On June 24, 2022, the Company issued **2,500,000 shares of Series A Preferred Stock** and **500,000 shares of Series B Preferred Stock** in a private placement to institutional investors[231](index=231&type=chunk) - The Preferred Stock has an aggregate stated value of **$30,000,000**, with a purchase price of **$9.50 per share**[231](index=231&type=chunk) - The **$28.5 million** in gross proceeds from the sale is held in escrow and is expected to be used to fund the redemption of the Preferred Stock in 2022[231](index=231&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=47&type=section&id=ITEM%203%2E%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - None[232](index=232&type=chunk) [ITEM 4. Mine Safety Disclosures](index=47&type=section&id=ITEM%204%2E%20Mine%20Safety%20Disclosures) The Company reported no mine safety disclosures - None[233](index=233&type=chunk) [ITEM 5. Other Information](index=47&type=section&id=ITEM%205%2E%20Other%20Information) The Company reported no other information - None[234](index=234&type=chunk) [ITEM 6. Exhibits](index=47&type=section&id=ITEM%206%2E%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including various agreements, corporate documents, certifications, and XBRL data files - Exhibits include Securities Purchase Agreement, Registration Rights Agreement, Side Letter, Articles of Incorporation, Bylaws, Certificates of Change/Amendment, Specimen Common Stock Certificates, Description of Securities, CEO/CFO Certifications (Sections 302 and 906), and XBRL Interactive Data Files[235](index=235&type=chunk)[237](index=237&type=chunk) [SIGNATURES](index=49&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers - The report is signed by **Seth Lederman, Chief Executive Officer**, and **Bradley Saenger, Chief Financial Officer**, on **August 8, 2022**[241](index=241&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Tonix Pharmaceuticals reported a net loss of $26.4 million for Q1 2022, with assets decreasing and going concern uncertainty due to limited cash [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet highlights a decrease in total assets and cash, alongside a reduction in total liabilities and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $140,435 | $178,660 | | Total current assets | $152,989 | $189,049 | | Property and equipment, net | $69,588 | $50,558 | | **Total assets** | **$223,716** | **$240,900** | | **Liabilities & Equity** | | | | Total current liabilities | $15,354 | $21,716 | | Total liabilities | $15,759 | $22,183 | | Total stockholders' equity | $207,957 | $218,717 | | **Total liabilities and stockholders' equity** | **$223,716** | **$240,900** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows an increased operating and net loss for Q1 2022 compared to the prior year, driven by higher expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $18,422 | $15,327 | | General and administrative | $8,014 | $5,409 | | **Operating loss** | **($26,436)** | **($20,736)** | | **Net loss** | **($26,417)** | **($20,653)** | | Net loss per common share, basic and diluted | ($0.05) | ($0.07) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate increased cash usage in operating and investing activities, with significantly reduced financing proceeds Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($31,046) | ($21,058) | | Net cash used in investing activities | ($20,217) | ($505) | | Net cash provided by financing activities | $13,063 | $108,710 | | **Net (decrease) increase in cash** | **($38,225)** | **$87,146** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's clinical-stage status, going concern uncertainty, facility investments, equity financing, and contractual commitments - The company is a clinical-stage biopharmaceutical firm with all drug candidates still in development and a history of recurring losses and negative cash flows[20](index=20&type=chunk)[22](index=22&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, with cash resources expected to meet requirements only through the end of 2022[23](index=23&type=chunk)[24](index=24&type=chunk) - Property and equipment, net, increased to **$69.6 million** from **$50.6 million**, largely due to ongoing construction and development of facilities[49](index=49&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - In Q1 2022, the company sold **22.0 million shares** to Lincoln Park for **$4.5 million** and **34.5 million shares** via its ATM offering for **$8.5 million**[89](index=89&type=chunk)[93](index=93&type=chunk) - As of March 31, 2022, the company had outstanding commitments of approximately **$62.7 million** for contract research organizations and **$18.1 million** for construction contracts[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's therapeutic development focus, increased Q1 2022 net loss to $26.4 million due to rising expenses, and critical liquidity issues raising going concern doubts [Business Overview](index=25&type=section&id=Business%20Overview) The company is a clinical-stage biopharmaceutical firm focused on CNS, rare disease, immunology, and infectious disease candidates, including key Phase 2/3 programs - Tonix is a clinical-stage biopharmaceutical company with a portfolio of candidates for central nervous system (CNS), rare disease, immunology, and infectious disease[122](index=122&type=chunk) - Key CNS programs include TNX-102 SL for fibromyalgia (Phase 3) and Long COVID (Phase 2), TNX-1300 for cocaine intoxication (Phase 2), and TNX-1900 for chronic migraine (Phase 2)[122](index=122&type=chunk) - The infectious disease pipeline includes vaccines for smallpox/monkeypox (TNX-801) and COVID-19 (TNX-1840/1850), while development of the TNX-2100 diagnostic skin test in the US has been terminated[122](index=122&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Net loss increased by 28% to $26.4 million in Q1 2022, driven by significant rises in R&D and G&A expenses - Net loss increased by **28%** to **$26.4 million** in Q1 2022, compared to **$20.7 million** in Q1 2021[129](index=129&type=chunk) - Research and Development (R&D) expenses increased by **20%** to **$18.4 million** in Q1 2022 from **$15.3 million** in Q1 2021, mainly due to higher non-clinical and employee-related expenses[125](index=125&type=chunk) - General and Administrative (G&A) expenses rose **48%** to **$8.0 million** in Q1 2022 from **$5.4 million** in Q1 2021, driven by increased employee-related, legal, and financial reporting costs[128](index=128&type=chunk) Direct R&D Expenses by Program (in thousands) | Program | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | TNX - 102 SL | $3,523 | $4,587 | ($1,064) | | TNX - 1300 | $1,343 | $3,060 | ($1,717) | | TNX - 1800 | $2,976 | $2,416 | $560 | | TNX - 1500 | $1,852 | $1,176 | $676 | | Other programs | $3,336 | $1,859 | $1,477 | | Internal staffing, overhead and other | $5,128 | $2,229 | $2,899 | | **Total R&D** | **$18,422** | **$15,327** | **$3,095** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is critical, with $140.4 million cash expected to last only through 2022, raising substantial doubt about its going concern ability - As of March 31, 2022, the company had working capital of **$137.6 million**, including **$140.4 million** in cash and cash equivalents[151](index=151&type=chunk) - The company believes its cash resources will only meet operating and capital expenditure requirements through the end of 2022, raising substantial doubt about its ability to continue as a going concern[153](index=153&type=chunk)[154](index=154&type=chunk) - Net cash used in operating activities increased to **$31.1 million** in Q1 2022 from **$21.1 million** in Q1 2021, while net cash from financing activities decreased significantly to **$13.1 million** from **$108.7 million**[152](index=152&type=chunk) - The company will need to obtain additional capital to fund future R&D, and if financing is unavailable, it may be forced to delay, reduce, or eliminate research programs[157](index=157&type=chunk)[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable to the company - The company states that this item is not applicable[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective to provide reasonable assurance that required information is recorded, processed, and reported in a timely manner[186](index=186&type=chunk) - No changes occurred during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[187](index=187&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings or claims - As of the filing date, the company is not a party to any material legal proceedings[189](index=189&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes were reported from the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2021[190](index=190&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[191](index=191&type=chunk)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 Commission File Number 001-36019 TONIX PHARMACEUTICALS HOLDING CORP. (Exact name of registrant as specified in its charter) Nevada 26-1434750 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 26 Main Street, Suite 101 Chatham, New Jersey 07928 (Address o ...

Product Development - Tonix's lead candidate for COVID-19, TNX-1800, is a live virus vaccine based on the recombinant pox vaccine platform, aiming to elicit a T cell response for long-lasting protection [145]. - The most advanced CNS product candidate, TNX-102 SL, is in mid-Phase 3 development for fibromyalgia, with positive results reported from the Phase 3 RELIEF study [152]. - TNX-2100, an in vivo diagnostic skin test for measuring SARS-CoV-2 exposure and T cell immunity, is expected to initiate a first-in-human clinical study in Q4 2021 [146]. - The company plans to develop TNX-102 SL as a potential treatment for Long COVID, with a Phase 2 study expected to begin in H1 2022 following IND clearance [154]. - Tonix has expanded its research collaboration with Columbia University to understand immune responses to SARS-CoV-2, which will aid in tailoring vaccines and therapeutics [151]. - TNX-1300, a treatment for cocaine intoxication, has received Breakthrough Therapy designation from the FDA and is expected to initiate a Phase 2 safety study in Q4 2021 [155]. - The Advanced Development Center in Dartmouth, Massachusetts, is under renovation and expected to be operational in H1 2022, focusing on clinical scale manufacturing of live-virus vaccines [160]. - Tonix's immunology portfolio includes a small molecule antiviral for acute COVID-19 and biologics for organ transplant rejection and autoimmune diseases [144]. Financial Performance - Research and development expenses for Q3 2021 were $13.1 million, a 49% increase from $8.8 million in Q3 2020 [164]. - General and administrative expenses for Q3 2021 were $5.5 million, a 72% increase from $3.2 million in Q3 2020 [165]. - Net loss for Q3 2021 was $18.5 million, compared to a net loss of $12 million in Q3 2020 [166]. - Research and development expenses for the nine months ended September 30, 2021, were $46.5 million, a 93% increase from $24.1 million in the same period of 2020 [167]. - General and administrative expenses for the nine months ended September 30, 2021, were $16.3 million, a 73% increase from $9.4 million in the same period of 2020 [168]. - Net loss for the nine months ended September 30, 2021, was $62.7 million, compared to a net loss of $33.4 million in the same period of 2020 [169]. - The company anticipates fluctuations in results of operations due to the progress of research and development efforts and regulatory submission outcomes [163]. Funding and Capital Management - As of September 30, 2021, the company had working capital of $183.1 million, primarily consisting of cash and cash equivalents of $183.0 million [191]. - For the nine months ended September 30, 2021, the company used approximately $53.1 million in operating activities, an increase from $34.7 million in the same period of 2020, primarily due to increased research and development activities [191]. - The company raised net proceeds of $168.7 million from financing activities for the nine months ended September 30, 2021, compared to $83.2 million in the same period of 2020 [191]. - The company has the ability to obtain additional funding through public or private financing or collaborative arrangements with strategic partners [193]. - The company sold approximately 42.8 million shares of common stock under the 2021 Purchase Agreement for gross proceeds of approximately $29.5 million during the nine months ended September 30, 2021 [200]. Milestone Payments and Agreements - The company entered into an exclusive License Agreement with OyaGen for an antiviral inhibitor of SARS-CoV-2, with a license fee in the low-seven digits and 2,752,294 shares valued at $3.0 million [171][172]. - The company has agreed to pay Columbia $4.1 million in milestone payments related to TFF2 Products upon achieving certain milestones [178]. - The company has agreed to pay approximately $3.4 million in milestone payments to WSU upon achieving specified development, regulatory, and sales milestones [189]. - As of September 30, 2021, no milestone payments have been accrued or paid in relation to the agreements with TRImaran or WSU [187][189]. Stock and Compensation - Stock-based compensation expense for the three-month period ended September 30, 2021, was $2.3 million, with $1.6 million related to General and Administration and $0.7 million to Research and Development [225]. - The company had approximately $16.5 million of total unrecognized compensation cost related to non-vested awards as of September 30, 2021, expected to be recognized over a weighted average period of 2.11 years [227]. - The company recognized stock-based compensation expense of $5.6 million for the nine-month period ended September 30, 2021, compared to $2.0 million for the same period in 2020 [226]. Operational Infrastructure - The company is establishing infrastructure to support pandemic preparedness, including an infectious disease R&D Center and a Commercial Manufacturing Center, with the R&D Center operational since October 2021 [160]. - The company has outstanding commitments of approximately $41.2 million for future work with various contract research organizations as of September 30, 2021 [231]. - A contingent non-binding Purchase and Sales Agreement for a property in Maryland was entered into for $17.5 million, closing on October 1, 2021 [231]. - The 2020 Employee Stock Purchase Plan allows eligible employees to purchase up to 300,000 shares, with 129,048 shares available for future sales as of September 30, 2021 [229]. Expense Trends - Total research and development expenses for the nine months ended September 30, 2021, were $46,542,000, an increase of $22,482,000 (93.5%) compared to $24,060,000 in 2020 [238]. - Direct expenses for TNX-1800 increased by $3,815,000 (166.9%) from $2,285,000 in 2020 to $6,100,000 in 2021 [238]. - Direct expenses for TNX-1300 increased by $4,011,000 (363.5%) from $1,105,000 in 2020 to $5,116,000 in 2021 [238]. - Direct expenses for TNX-1500 increased by $2,268,000 (422.0%) from $536,000 in 2020 to $2,804,000 in 2021 [238]. - Direct expenses for TNX-3500 increased by $4,986,000 (3640.1%) from $137,000 in 2020 to $5,123,000 in 2021 [238]. - Internal staffing, overhead, and other expenses rose by $4,764,000 (124.7%) from $3,820,000 in 2020 to $8,584,000 in 2021 [238]. Compliance and Controls - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2021 [248]. - The company concluded that its disclosure controls and procedures are effective as of September 30, 2021, providing reasonable assurance of compliance with SEC rules [247].

| --- | --- | --- | --- | --- | --- | |---------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INVESTOR | | | | | | | PRESENTATION NASDAQ: TNXP | | | | | | | Version P0322 September 27, 2021 (Doc 0903) | | | | | | © 2021 Tonix Pharmaceuticals Holding Corp. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS 2 Certain statements in this presentation regarding strategic plans, expectations and objectives for future operations o ...

1 Investor Presentation NASDAQ:TNXP P H A R M A C E U T I C A L S September 2021 Version P0318 9-7-2021 (Doc 0892) © 2021 Tonix Pharmaceuticals Holding Corp. 2 Cautionary Note on Forward-Looking Statements Certain statements in this presentation regarding strategic plans, expectations and objectives for future operations or results are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such a ...