Tonix Pharmaceuticals Holding Corp. Quarterly report pursuant to sections 13 or 15(d)

Quarterly report pursuant to sections 13 or 15(d)

STOCK WARRANTS

STOCK WARRANTS

9 Months Ended

Sep. 30, 2013

NOTE 6 – STOCK WARRANTS

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2013:

Exercise		Number		Number		Expiration
Price		Outstanding		Vested		Date
$	4.25		3,189,200		3,189,200	August 2018
	8.00		406,875		406,875	December 2013
	12.00		456,009		453,309	December 2017 to January 2018
	20.00		15,288		15,288	January 2014 to January 2015
	25.00		354,228		354,228	January 2017 to March 2019
			4,421,600		4,418,900

On January 1, 2013, the Company issued warrants to non-employees to purchase 10,800 shares of the Company's common stock at an exercise price of $12.00 per share expiring five years from the date of issuance vesting ratably over twelve months beginning January 1, 2013 in connection with services.

On April 26, 2013, the Company issued an aggregate of 38,334 shares of its common stock upon the exercise of warrants at $8.00 per share.

The Company measures the fair value of the vested portion of the issued warrants based on a Binomial option pricing model using certain assumptions discussed in the following paragraph, and the closing market price of the Company's common stock on the date of the fair value determination.

The assumptions used in the valuation of warrants, which vested during the three and nine months ended September 30, 2013, were as follows:

	Three Months Ended			Weighted Average Nine Months
	September 30, 2013			Ended September 30, 2013
Risk-free interest rate		1.38	%		0.94	%
Life of warrant		4.25 years			4.50 years
Expected stock price volatility		91.31	%		96.69	%
Expected dividend yield	$	0.0			0.0

The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the life of the warrants as of the grant date. The expected stock price volatility is based on comparable companies’ historical stock price volatility since the Company does not have sufficient historical volatility data because its equity shares have been publicly traded for only a limited period of time.

Compensation of $6,099 and $30,172 related to vested warrants was recognized for the three and nine month periods ended September 30, 2013, respectively.

As of September 30, 2013, unrecognized compensation related to unvested warrants based on the market price of the Company’s common stock on such date was $6,099.

In connection with the August 2013 Financing, the Company issued to investors warrants to purchase 2,680,000 shares of the Company's common stock. The warrants are exercisable at $4.25 per share, expire five years from the date of issuance, and may be exercised on a cashless basis under certain circumstances. In addition, the Company issued to the Underwriters warrants to purchase 509,200 shares of the Company's common stock. The warrants are exercisable at $4.25 per share, expire five years from the date of issuance, and may be exercised on a cashless basis.