NOTE 1 – BUSINESS 

Tonix Pharmaceuticals Holding Corp., through its wholly owned subsidiary Tonix Pharmaceuticals, Inc. (“Tonix Sub”), is a fully-integrated biopharmaceutical company focused on developing and commercializing therapeutics to treat and prevent human disease and alleviate suffering. Tonix aims to transform therapies for pain management and modernize solutions for public health challenges.  

Tonix’s development portfolio is focused on central nervous system (“CNS”) disorders. Tonix’s priority is to submit a New Drug Application (“NDA”) to the FDA in the second half of 2024 for TNX-102 SL for the management of fibromyalgia. The FDA has granted Fast Track designation to TNX-102 SL for fibromyalgia. TNX-102 SL is also expected to be tested by the University of North Carolina under a physician IND for Acute Stress Reaction in a trial funded by the U.S. Department of Defense (DoD), Congressionally Directed Medical Research Program, or CDMRP for approximately $3 million. Tonix’s CNS portfolio also includes TNX-1300 (cocaine esterase), a biologic designed to treat cocaine intoxication that has FDA Breakthrough Therapy designation, in Phase 2 development that is funded by the U.S. National Institute of Drug Abuse or NIDA. Tonix’s immunology development portfolio consists of biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. Tonix also has product candidates in development in the areas of rare disease and infectious disease. Tonix is developing a broad-spectrum antiviral termed TNX-4200 under a contract for up to $34 million from the DoD Defense Threat Reduction Agency. Tonix’s development candidates are investigational drugs or biologics and are not approved for any indication. Tonix Medicines, our commercial subsidiary, markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg for the treatment of acute migraine with or without aura in adults. 

The consolidated financial statements include the accounts of Tonix Pharmaceuticals Holding Corp. and its wholly owned subsidiaries, Tonix Sub, Krele LLC, Tonix Pharmaceuticals (Canada), Inc., Tonix Medicines, Inc., Jenner Institute LLC, Tonix R&D Center LLC, Tonix Pharma Holdings Limited and Tonix Pharma Limited (collectively, the “Company” or “Tonix”). All intercompany balances and transactions have been eliminated in consolidation.

Going Concern

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and negative cash flows from operating activities. At June 30, 2024, the Company had working capital of approximately $3.2 million. At June 30, 2024, the Company had an accumulated deficit of approximately $694.4 million. The Company held cash and cash equivalents of approximately $4.2 million as of June 30, 2024. During the fourth quarter of 2023, the Company engaged CBRE, an international real estate brokerage firm, to potentially find a strategic partner for, or buyer of, its Advanced Development Center in North Dartmouth, Massachusetts (“ADC”), to align with the Company’s current business objectives and priorities. As of June 30, 2024, the Company does not have a commitment in place to sell the ADC.

The Company believes that its cash resources at June 30, 2024 and the gross proceeds of $4.4 million that it raised from an equity offering in the third quarter of 2024 (See Note 18), will not meet its operating and capital expenditure requirements through the third quarter of 2024.

These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to face significant challenges and uncertainties and must obtain additional funding through public and private financing and collaborative arrangements with strategic partners to increase the funds available to fund operations. However, the Company may not be able to raise capital on terms acceptable to the Company, or at all. Without additional funds, it may be forced to delay, scale back or eliminate some or all of its research and development activities or other operations, and potentially delay product development in an effort to maintain sufficient funds to continue operations. If any of these events occurs, the Company’s ability to achieve development and commercialization goals will be adversely affected and the Company may be forced to cease operations. Moreover, the Company may default under the terms of its existing indebtedness. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.