PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Tonix Pharmaceuticals' unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed notes for the periods ended June 30, 2025 Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, reflects increased cash and equity, and decreased liabilities due to term loan repayment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $125,331 | $98,776 | +$26,555 | | Total current assets | $143,535 | $119,002 | +$24,533 | | Total assets | $187,359 | $162,890 | +$24,469 | | Term loan payable (short & long term) | $0 | $7,487 | -$7,487 | | Total liabilities | $19,358 | $23,332 | -$3,974 | | Total stockholders' equity | $168,001 | $139,558 | +$28,443 | Condensed Consolidated Statements of Operations Net loss significantly decreased for the three and six months ended June 30, 2025, primarily due to the absence of a 2024 asset impairment charge Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | $1,998 | $2,208 | $4,427 | $4,690 | | Research and development | $10,820 | $9,698 | $18,256 | $22,561 | | Selling, general and administrative | $16,202 | $7,502 | $26,306 | $16,812 | | Asset impairment charges | $0 | $58,957 | $0 | $58,957 | | Operating loss | $(28,296) | $(77,316) | $(44,350) | $(98,667) | | Net loss | $(28,272) | $(78,776) | $(45,101) | $(93,715) | | Net loss per share | $(3.86) | $(1,920.85) | $(6.80) | $(2,720.40) | Condensed Consolidated Statements of Cash Flows Net cash increased by $26.6 million for the six months ended June 30, 2025, driven by $60.5 million in financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(31,412) | $(27,494) | | Net cash used in investing activities | $(2,545) | $(108) | | Net cash provided by financing activities | $60,526 | $6,813 | | Net increase (decrease) in cash | $26,556 | $(20,792) | Notes to Condensed Consolidated Financial Statements These notes detail business operations, accounting policies, and financial items, including a going concern warning, equity transactions, and subsequent events - The company's priority is advancing TNX-102 SL for fibromyalgia, with a PDUFA goal date of August 15, 2025, and Fast Track designation21 - Recurring losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern, though current cash is expected to fund operations into Q3 2026252627 - The company effected a 1-for-100 reverse stock split on February 5, 2025, and a 1-for-32 reverse stock split on June 10, 2024, with all share data retrospectively adjusted32 - In Q1 2025, the company fully repaid its term loan, incurring a $2.1 million loss on extinguishment of debt for the six-month period116 - Subsequent to June 30, 2025, the company raised approximately $49.8 million in net proceeds from ATM common stock sales180 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, liquidity, and operational developments, highlighting the TNX-102 SL program, decreased net loss, increased SG&A, and ongoing financing efforts Results of Operations Operating results show a significant decrease in net loss due to the absence of 2024 impairment charges, alongside increased SG&A and fluctuating R&D expenses Comparison of Operating Results (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | $1,998 | $2,208 | -9.5% | $4,427 | $4,690 | -5.6% | | R&D Expenses | $10,820 | $9,698 | +11.6% | $18,256 | $22,561 | -19.1% | | SG&A Expenses | $16,202 | $7,502 | +116.0% | $26,306 | $16,812 | +56.5% | | Asset Impairment | $0 | $58,957 | N/A | $0 | $58,957 | N/A | | Net Loss | $(28,272) | $(78,776) | -64.1% | $(45,101) | $(93,715) | -51.9% | - The increase in SG&A expenses is primarily due to higher sales and marketing costs ($5.3 million in Q2), employee-related expenses, and professional fees for migraine assets and TNX-102 SL launch preparation197206 - Significant 2024 asset impairment charges included $48.8 million for the decommissioned ADC facility, $1.0 million for goodwill, and $9.2 million for developed technology intangible assets198207 Liquidity and Capital Resources As of June 30, 2025, the company had $125.3 million in cash, with financing activities expected to fund operations into Q3 2026, despite ongoing going concern doubts - The company's cash resources, supplemented by Q3 2025 equity offerings, are expected to fund operations into the third quarter of 2026215 - Recurring losses and future funding needs raise substantial doubt about the company's ability to continue as a going concern, despite recent financing216 Recent Financing Activities (2024-2025) | Program | Total Facility Size | Net Proceeds (YTD 2025) | Status | | :--- | :--- | :--- | :--- | | 2024 ATM Offering | $250.0M | $75.4M | Completed/Fully Utilized | | 2025 ATM Offering | $150.0M | $0 (in Q2) | Active | | 2025 Lincoln Park Agreement | $75.0M | N/A | Active | - During the six months ended June 30, 2025, the company repurchased 400,000 shares of common stock for approximately $5.9 million under its 2024 share repurchase program245 Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is noted as not applicable for the company - The company states that this item is not applicable275 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level277 - No material changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2025278 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports no involvement in any material legal proceedings or claims - As of the filing date, the company is not involved in any material legal proceedings280 Item 1A. Risk Factors No material changes to risk factors from the 2024 Form 10-K, except for a new risk concerning the 'One Big Beautiful Bill Act' (OBBBA) - A new risk factor relates to the 'One Big Beautiful Bill Act' (OBBBA), enacted on July 4, 2025, which could adversely affect the company's business and financial condition, with impact currently being assessed282 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section discloses the issuance of 48,708 shares to Lincoln Park as a commitment fee and details the repurchase of 150,000 shares during Q2 2025 - On June 11, 2025, the company issued 48,708 shares of common stock to Lincoln Park as a commitment fee for a purchase agreement283 Share Repurchase Activity for Q2 2025 | Month | Total Shares Purchased | Average Price Paid Per Share | Total Cost (in thousands) | | :--- | :--- | :--- | :--- | | April 2025 | 0 | N/A | $0 | | May 2025 | 150,000 | $19.31 | $2,902 | | June 2025 | 0 | N/A | $0 | | Q2 Total | 150,000 | $19.31 | $2,902 | Item 5. Other Information The company discloses the adoption of Rule 10b5-1 trading plans by two executive officers for the sale of common stock, with sales commencing in February 2026 - On June 20, 2025, CFO Bradley Saenger adopted a Rule 10b5-1 plan for selling up to 51,584 shares287 - On June 18, 2025, COO Jessica Morris adopted a Rule 10b5-1 plan for selling up to 19,520 shares288
Tonix Pharmaceuticals (TNXP) - 2025 Q2 - Quarterly Report