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Item 1. Financial Statements

2022-08-08 compared with 2022-05-09 · 656 added, 468 removed, 415 unchanged (73% of the section changed)

FINANCIAL STATEMENTS

TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Par Value and Share Amounts)

PHARMACEUTICALS HOLDING CORP.

CONSOLIDATED BALANCE SHEETS

Thousands, Except Par Value and Share Amounts)

Current assets:

Cash and cash equivalents

Restricted cash

Prepaid expenses and other

3 unchanged sentences

Other non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES, REDEEMBABLE CONVERTIBLE PREFERRED STOCK AND

STOCKHOLDERS’ EQUITY

Current liabilities:

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Total current liabilities

Lease liability, net of current

Lease liability, net of current portion

Total liabilities

Commitments (See Note 18)

Stockholders’ equity:

Preferred stock, $ 0.001 par value;

Redeemable Convertible Preferred stock, $ 0.001 par value;

5,000,000 shares authorized:

Series B Convertible Preferred stock, $ 0.001 par value;

0 shares designated as of both March 31, 2022 and December 31, 2021;

issued and outstanding - None

Series A Convertible Preferred stock, $ 0.001 par value;

0 shares designated as of both March 31, 2022 and December 31, 2021;

issued and outstanding - None

Series A Convertible Redeemable Preferred stock, $ 0.001

2,500,000 and 0 shares designated as of June 30, 2022 and December 31, 2021, respectively;

and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Series B Convertible Redeemable Preferred stock, $ 0.001 par value;

500,000 and 0 shares designated as of June 30, 2022 and December 31, 2021, respectively;

500,000 and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Stockholders’ equity:

Common stock, $ 0.001 par value;

1,600,000,000 and 800,000,000 shares authorized as of March 31, 2022 and December 31, 2021, respectively;

552,827,431 and 496,245,564 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively, and 129,041 shares to be issued as of December 31, 2021

50,000,000 and 25,000,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively;

31,692,024 and 15,638,274 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid in capital

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Total stockholders’ equity

Total liabilities and stockholders’ equity

See the accompanying notes to the condensed

consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Share and Per Share Amounts)

Three Months Ended March 31,

Total liabilities, redeemable convertible preferred stock and stockholders’ equity

the accompanying notes to the condensed consolidated financial statements

PHARMACEUTICALS HOLDING CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

Thousands, Except Share and Per Share Amounts)

Three Months Ended June 30,

Six Months Ended June 30,

COSTS AND EXPENSES:

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Interest and other income, net

Preferred stock deemed dividend

Net loss available to common stockholders

Net loss per common share, basic and diluted

Weighted average common shares outstanding, basic and diluted

See the accompanying notes to the condensed

consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In Thousands)

Three Months Ended March 31,

the accompanying notes to the condensed consolidated financial statements

PHARMACEUTICALS HOLDING CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive loss:

Foreign currency translation loss

Total other comprehensive loss

Comprehensive loss

See the accompanying notes to the condensed

consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(In Thousands, Except Share and Per Share

the accompanying notes to the condensed consolidated financial statements

PHARMACEUTICALS HOLDING CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Thousands, Except Share and Per Share Amounts)

Comprehensive

1 unchanged sentence

$ ( 359,820 )

Issuance of common stock in January and March 2022, net of transactional expenses of $ 507

Issuance of common stock under Purchase agreement with Lincoln Park

Issuance of common stock in January and March 2022 under At-the-market offering, net of transactional expenses of $ 507

Issuance of common stock under 2021 Purchase agreement

Employee stock purchase plan

2 unchanged sentences

Balance, March 31, 2022

Issuance of common stock in April, May and June 2022 under At-the-market offering, net of transactional expenses of $ 1,426

Issuance of common stock under 2021 Purchase Agreement

Preferred stock deemed dividend

Stock-based compensation

Foreign currency transaction gain

Balance, June 30, 2022

$ ( 409,377 )

See the accompanying notes to the condensed

consolidated financial statements

the accompanying notes to the condensed consolidated financial statements

PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(In Thousands, Except Share and Per Share Amounts)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Thousands, Except Share and Per Share Amounts)

Comprehensive

1 unchanged sentence

$ ( 267,533 )

Issuance of common stock upon exercise of warrants in March 2021 ($ 0.57 per share)

Issuance of common stock in exchange for exercise of warrants in March 2021 ($ 18.24 per share)

Issuance of common stock in January 2021 ($ 25.60 per share), net of transactional expenses of $ 3,096

Issuance of common stock in February 2021 ($ 38.40 per share), net of transactional expenses of $ 5,002

Issuance of common stock under at-the-market offering, net of transactional expenses of $ 230

Issuance of common stock in January 2021 under At-the-market offering, net of transactional expenses of $ 230

Employee stock purchase plan

2 unchanged sentences

Balance, March 31, 2021

Issuance of common stock in April and June 2021 under At-the-market offering, net of transactional expenses of $ 612

Issuance of commitment shares under 2021 Purchase Agreement

Issuance of common stock under 2021 Purchase Agreement

Issuance of common stock in the acquisition of the OyaGen license

Stock-based compensation

Foreign currency transaction gain

Balance, June 30, 2021

$ ( 311,739 )

1 unchanged sentence

PHARMACEUTICALS HOLDING CORP .

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

Three Months Ended March 31,

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Depreciation and amortization

Common stock issued to acquire in-process research and development

Stock-based compensation

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CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the exercise of warrants

Proceeds from exercise of warrants

Proceeds from ESPP

Proceeds, net of expenses of $ 507 and $ 8,328 , from sale of common stock and warrants

Proceeds, net of $ 4,255 , from sale of convertible redeemable preferred stock

Proceeds, net of $ 1,933 and $ 8,940 expenses, from sale of common stock and warrants

Net cash provided by financing activities

Effect of currency rate change on cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash beginning of the period

1 unchanged sentence

Supplemental disclosures of cash flow information:

Non-cash financing activities:

Non-cash financing and investing activities:

Purchases of property and equipment included in accounts payable and accrued liabilities

Preferred stock deemed dividend

the accompanying notes to the condensed consolidated financial statements

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(“Tonix Sub”), is a

clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering.

The therapeutics include small molecules and biologics and all drug

product candidates are still in development.

clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and

prevent human disease and alleviate suffering.

The therapeutics include small molecules and biologics and all drug product candidates

are still in development and none are approved or marketed.

condensed 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 LLC, Tonix R&D Center

LLC, Tonix Pharma Holdings Limited and Tonix Pharma Limited (collectively hereafter referred to as the “Company” or

and its wholly owned subsidiaries,

Tonix Sub, Krele LLC, Tonix Pharmaceuticals (Canada), Inc., Tonix Medicines, Inc., Jenner LLC, Tonix R&D Center LLC, Tonix

Pharma Holdings Limited and Tonix Pharma Limited (collectively hereafter referred to as the “Company” or “Tonix”).

All intercompany balances and transactions have been eliminated in consolidation.

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The Company has suffered recurring losses from operations and negative cash flows from operating activities.

At March 31, 2022,

the Company had working capital of approximately $ 137.6 million .

At March 31, 2022, the Company had an accumulated deficit of

approximately $ 386.2 million .

The Company held cash and cash equivalents of approximately $ 140.4 million as of March 31, 2022.

Company believes that its cash resources at March 31, 2022 and the proceeds that it raised from equity offerings in the second

quarter of 2022 (See Note 17), will meet its operating and capital expenditure requirements through the end of 2022, but not beyond.

At June 30, 2022,

the Company had working capital of approximately $ 144.3 million , which excludes restricted cash of $ 31.5 million .

At June 30, 2022, the Company had an accumulated deficit of approximately

$ 409.4 million .

The Company held cash and cash equivalents of approximately $ 145.5 million as of June 30, 2022.

Company believes that its cash resources at June 30, 2022, and the gross proceeds of approximately $ 18.9 million , that it raised from equity offerings subsequent to the end of the second quarter of 2022 (See Note 19), will meet its

operating and capital expenditure requirements into the second quarter of 2023, but not beyond.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

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2 – SIGNIFICANT ACCOUNTING POLICIES

Reverse Stock Split

16, 2022, the Company filed a Certificate of Change with the Nevada Secretary of State, effective May 17, 2022.

Pursuant to the Certificate

of Change, the Company effected a 1-for-32 reverse stock split of its issued and outstanding shares of common stock.

The Company accounted

for the reverse stock split on a retrospective basis pursuant to ASC 260, Earnings Per Share.

All authorized, issued and outstanding common

stock, common stock warrants, stock option awards, exercise prices and per share data have been adjusted in these condensed consolidated

financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented.

Authorized preferred stock

was not adjusted because of the reverse stock split.

financial statements

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condensed consolidated balance sheet as of December 31, 2021 contained herein has been derived from audited financial statements.

results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the year

ending December 31, 2022.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated

financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form

10-K, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022.

results for the three and six months ended June 30, 2022 are not necessarily indicative of results that may be expected for the

year ending December 31, 2022.

These condensed consolidated financial statements should be read in conjunction with the audited

consolidated financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual

Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022.

PHARMACEUTICALS HOLDING CORP.

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maturity of three months or less when purchased.

At March 31, 2022 and December 31, 2021, cash equivalents, which consisted of

At June 30, 2022 and December 31, 2021, cash equivalents, which consisted of

money market funds, amounted to $ 120.6 million and $ 120.4 million , respectively.

Restricted cash, which is reported within other non-current assets, at both March 31, 2022 and

December 31, 2021 of approximately $ 240,000 collateralizes a letter of credit issued in connection with the lease of office space

in Chatham, New Jersey and New York, New York (see Note 15).

The following table provides a reconciliation of cash, cash equivalents

and restricted cash reported within the condensed consolidated balance sheets that amount to the total shown in the condensed consolidated

statement of cash flows:

(in thousands)

Cash and cash equivalents

Restricted cash

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation.

Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which is 20 years for buildings and laboratory equipment, three years for computer assets, five years for furniture and all other equipment and term of lease for leasehold improvements.

Depreciation on assets begin when the asset is placed in service.

Depreciation and amortization expense for the quarters ended March 31, 2022, and 2021 was $ 63,000 and $ 6,000 , respectively.

The Company’s property and equipment is located in the United States.

Intangible assets with indefinite lives

During the year ended December 31, 2015, the Company purchased certain internet domain rights, which were determined to have an indefinite life.

Identifiable intangibles with indefinite lives are not amortized but are tested for impairment annually or whenever events or changes in circumstances indicate that their carrying amount may be less than fair value.

As of March 31, 2022, the Company believed that no impairment existed.

Restricted cash – short term, at June 30,

2022, was $ 31.5 million, to fund a preferred stock redemption (see Note 6).

Restricted cash – long term, which is included in Other non-current assets on the condensed consolidated balance sheet,

at both June 30, 2022, and December 31, 2021 of approximately $ 240,000 collateralizes a letter of credit issued in connection

with the lease of office space in Chatham, New Jersey and New York, New York (see Note 17).

following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated

balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows:

and cash equivalents

cash – short term

cash – long term

and equipment

and equipment are stated at cost, less accumulated depreciation.

Depreciation is calculated using the straight-line method over

the asset’s estimated useful life, which is 20 years for buildings and laboratory equipment, three years for computer assets,

five years for furniture and all other equipment and term of lease for leasehold improvements.

Depreciation on assets begin when

the asset is placed in service.

Depreciation and amortization expense for the three and six months ended June 30, 2022, was $ 102,000

and $ 165,000 , respectively, and $ 7,000 and $ 13,000 , respectively, for the three and six months ended June 30, 2021.

and equipment are located in the United States.

assets with indefinite lives

the year ended December 31, 2015, the Company purchased certain internet domain rights, which were determined to have an indefinite

Identifiable intangibles with indefinite lives are not amortized but are tested for impairment annually or whenever events

or changes in circumstances indicate that their carrying amount may be less than fair value.

As of June 30, 2022, the Company

believed that no impairment existed.

PHARMACEUTICALS HOLDING CORP.

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on a straight-line basis over the lease term.

Preferred Stock

shares subject to mandatory redemption are classified as liability instruments and are measured at fair value.

The Company classifies

conditionally redeemable preferred shares, which includes preferred shares that feature redemption rights that are either within

the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s

control, as temporary equity (“mezzanine”) until such time as the conditions are removed or lapse.

and Development Costs

The Company outsources certain of its research and development efforts

and expenses these costs as incurred, including the cost of manufacturing products for testing, as well as licensing fees and costs associated

with planning and conducting clinical trials.

The value ascribed to patents and other intellectual property acquired has been expensed

as research and development costs, as such property is related to particular research and development projects and had no alternative

Company outsources certain of its research and development efforts and expenses these costs as incurred, including the cost of

manufacturing products for testing, as well as licensing fees and costs associated with planning and conducting clinical trials.

The value ascribed to patents and other intellectual property acquired has been expensed as research and development costs, as

such property is related to particular research and development projects and had no alternative future uses.

Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and

25 unchanged sentences

sheet date and income statement accounts were translated at the average rate of exchange prevailing during the period.

adjustments resulting from this process were included in accumulated other comprehensive loss on the consolidated condensed balance

adjustments resulting from this process were included in accumulated other comprehensive loss on the condensed consolidated balance

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30, 2022 AND 2021 (UNAUDITED)

Comprehensive

1 unchanged sentence

Comprehensive

income (loss) is defined as the change in equity of a business during a period from transactions and other events and

circumstances from non-owners sources.

It includes all changes in equity during a period except those resulting from investments

by owners and distributions to owners.

income (loss) is defined as the change in equity of a business during a period from transactions and other events and circumstances

from non-owners sources.

It includes all changes in equity during a period except those resulting from investments by owners and

distributions to owners.

Other comprehensive income (loss) represents foreign currency translation adjustments.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards

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than 50% likelihood of being realized upon ultimate settlement.

As of March 31, 2022, the Company has not recorded any unrecognized

As of June 30, 2022, the Company has not recorded any unrecognized

tax benefits.

1 unchanged sentence

component of income tax expense.

computation of basic and diluted loss per share for the quarters ended March 31, 2022 and 2021 excludes potentially dilutive securities

computation of basic and diluted loss per share for the quarters ended June 30, 2022 and 2021 excludes potentially dilutive securities

when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common

stock during the period.

warrants issued participate on a one-for-one basis with common stock in the distribution of dividends, if and when declared by

the Board of Directors, on the Company’s common stock.

For purposes of computing EPS, these warrants are considered to participate

with common stock in earnings of the Company.

All warrants and preferred stock issued participate on a one-for-one basis

with common stock in the distribution of dividends, if and when declared by the Board of Directors, on the Company’s common stock.

For purposes of computing EPS, these warrants and preferred stock are considered to participate with common stock in earnings of the Company.

Therefore, the Company calculates basic and diluted EPS using the two-class method.

Under the two-class method, net income for the period is allocated between common stockholders and participating securities according

to dividends declared and participation rights in undistributed earnings.

No income was allocated to the warrants for the three

months ended March 31, 2022 and March 31, 2021, as results of operations were a loss for the period.

dilutive securities (See Note 13 and Note 14) excluded from the computation of basic and diluted net loss per share, as of March

31, 2022 and 2021, are as follows:

Under the two-class method, net income for the period

is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed

No income was allocated to the warrants and preferred stock for the three and six months ended June 30, 2022, and 2021, as results

of operations were a loss for the periods.

dilutive securities excluded from the computation of basic and diluted net loss per share, as of June 30, 2022 and 2021, are as

Warrants to purchase common stock

Series A convertible redeemable preferred stock

Series B convertible redeemable preferred stock

Options to purchase common stock

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30, 2022 AND 2021 (UNAUDITED)

3 – PROPERTY AND EQUIPMENT, NET

6 unchanged sentences

Accumulated depreciation and amortization

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

October 1, 2021, the Company completed the acquisition of a research and development facility in Maryland totaling $ 17.5

October 1, 2021, the Company completed the acquisition of its approximately 45,000

square foot research and development facility

in Frederick, Maryland totaling $ 17.5

million , to process development activities.

Of the total purchase price, $ 2.1

million was allocated to the value of land acquired, and $ 13.9

million was allocated to Construction in progress, as the building was not ready for its intended use, and approximately

million was allocated to Office furniture and equipment and Laboratory equipment.

Of the $1.5 million, $ 0.8

million , as of March 31, 2022, is included in Construction in progress as those assets were not ready for their intended use.

Additionally, as of March 31, 2022, the Company has incurred approximately $ 0.4

the total purchase price, $ 2.1

million was allocated to the value of land acquired,

million was allocated to Construction in progress,

as the building was not ready for its intended use, and approximately $ 1.5

million was allocated to Office furniture and

equipment and Laboratory equipment, of which $ 0.6

million , as of June 30, 2022, is included in Construction in progress as those assets were not ready for their intended use.

Additionally,

as of June 30, 2022, the Company has incurred approximately $ 0.6

million in work-in-process, which is included in construction in progress.

As of March 31, 2022, the asset was operational,

but the asset was not ready for its intended use.

September 28, 2020, the Company completed the purchase of its 40,000

square foot facility in Massachusetts for $ 4 .0

As of June 30, 2022, the asset was operational, but

the asset was not ready for its intended use.

The Company expects the asset to be ready for its intended use by the third quarter of 2022.

September 28, 2020, the Company completed the purchase of its approximately 45,000

square foot facility in Dartmouth, Massachusetts for $ 4 .0

million, to house its new Advanced Development Center for the development and manufacturing of vaccines.

3 unchanged sentences

Additionally, the

Company incurred approximately $ 17.4 million of costs during the quarter ended March 31, 2022, bringing total costs incurred-to-date

million , of which the majority relates to the build-out of the facility, which is included in construction in

progress as of March 31, 2022.

As of March 31, 2022, the asset was not ready for its intended use.

Company incurred approximately $ 27.4

million of costs during the six months ended June 30, 2022, bringing total costs incurred-to-date to $ 50.2

million , of which the majority relates to the build-out of the facility, which is included in construction in progress as of

June 30, 2022.

As of June 30, 2022, the asset was operational, but the asset was not ready for its intended use.

The Company expects the asset to be ready for its intended use by the third quarter of 2022.

December 23, 2020, the Company completed the purchase of its approximately 44 -acre site in Hamilton, Montana for $ 4.5 million ,

for the construction of a vaccine development and commercial scale manufacturing facility.

As of March 31, 2022, the asset was

As of June 30, 2022, the asset was

not ready for its intended use.

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inputs in which there is little or no market data.

of March 31, 2022, and December 31, 2021, the Company used Level 1 quoted prices in active markets to value cash equivalents of

of June 30, 2022, and December 31, 2021, the Company used Level 1 quoted prices in active markets to value cash equivalents of

$ 120.6 million and $ 120.4 million , respectively.

The Company did not have any Level 2 or Level 3 assets or liabilities as of both

March 31, 2022 and December 31, 2021.

June 30, 2022 and December 31, 2021.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30, 2022 AND 2021 (UNAUDITED)

5 – STOCKHOLDERS’ EQUITY

March 26, 2021, the Company filed an amendment to its articles of incorporation, as amended, to increase the number of shares

of common stock authorized from 400,000,000 to 800,000,000 .

September 3, 2021, the Company received a letter (the “Notice”) from the Listing Qualifications staff of The Nasdaq

Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock

for the last 30 consecutive business days, the Company no longer meets the requirement to maintain a minimum bid price of $ 1 per

share, as set forth in Nasdaq Listing Rule 55450(a)(1) (the “Minimum Bid Price Requirement”).

accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was initially provided with a 180 calendar day period, or until

March 2, 2022, in which to regain compliance.

In order to regain compliance with the Minimum Bid Price Requirement, the closing

bid price of the Company’s common stock must be at least $ 1 per share for a minimum of ten consecutive business days during

this 180 -day period.

As the Company did not regain compliance within this 180 -day period, the Company requested and received an

additional compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement, and provided written

notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split,

if necessary.

However, if it appears to the Nasdaq Staff that the Company will not be able to cure the deficiency, or if the Company

is otherwise not eligible, Nasdaq will provide notice to the Company that its common stock will be subject to delisting.

May 16, 2022, the Company filed a Certificate of Change with the Nevada Secretary of State, effective May 17, 2022.

Pursuant to the Certificate

of Change, the Company effected a 1-for-32 reverse stock split of its issued and outstanding

shares of common stock, whereby 599,679,596

outstanding shares of the Company’s common

stock were exchanged for 18,740,141

shares of the Company’s common stock.

connection with the reverse stock split, the Company issued an additional 130,462

shares of the Company’s common stock due

to fractional shares.

Furthermore, pursuant to the Certificate of Change, the number of authorized shares of common stock was reduced from 800 million to 50

All per share amounts and number of shares in the condensed consolidated financial statements and related notes have been

retroactively restated to reflect the reverse stock split.

As a result of the reverse-stock-split, on June 1, 2022, the Company’s

stock regained compliance with the minimum bid price requirement of $ 1.00 per share for continued listing on the NASDAQ Capital Market,

as set forth in NASDAQ Listing Rule 5550(a)(2).

On August 5, 2022, the Company filed an amendment to its articles of incorporation,

as amended, to increase the number of shares of common stock authorized from 50,000,000

to 150,000,000 .

6 – TEMPORARY EQUITY

June 24, 2022, the Company closed on an offering (“the Offering”) with certain institutional investors (the “Investors”),

pursuant to which the Company issued and sold, in a private placement, 2,500,000

shares of the Company’s Series A Convertible

Redeemable Preferred Stock, par value $ 0.001

per share (the “Series A Preferred Stock”),

shares of the Company’s Series B Convertible

Redeemable Preferred Stock, par value $ 0.001

per share (the “Series B Preferred Stock,”

and together with the Series A Preferred Stock, the “Preferred Stock”), at an offering price of $ 9.50

per share, representing a 5 %

original issue discount (“OID) to the stated

value of $ 10.00

per share, for gross proceeds of $ 28.5

million in the aggregate for the Offering, before the deduction of fees and offering expenses.

The shares of Preferred Stock

are convertible, at a conversion price of $ 4.00

per share (subject in certain circumstances to

adjustments), into shares of the Company’s common stock, at the option of the holders and, in certain circumstances, by the Company.

On August 5, 2022, an amendment (the “Amendment”) to the

Company’s Articles of Incorporation, as amended, to increase the Company’s authorized shares of common stock from 50,000,000

to 150,000,000 , was approved at a special meeting of shareholders.

The Series A Preferred Stock had the right to vote on such Amendment on an as-converted to common stock basis.

The shares of the

Series B Preferred Stock were automatically voted in a manner that “mirrored” the proportions on which the shares of

Common Stock (excluding any shares of Common Stock that were not voted) and Series A Preferred Stock were voted to increase the

Authorized Shares.

The Amendment required the approval of the majority of the votes associated with the Company’s outstanding stock entitled to vote on the proposal.

Because the Series B Preferred Stock

were automatically and without further action of the purchaser voted in a manner that “mirrored” the proportions on

which the shares of Common Stock (excluding any shares of Common Stock that were not voted) and Series A Preferred

Stock were voted on the Amendment, abstentions by common stockholders did not have any effect on the votes cast

by the holders of the Series B Preferred Stock.

The Certificates of Designation for the Preferred Stock provides that the Preferred

Stock have no voting rights other than the right to vote on the Amendment and as a class on certain other specified matter s,

and, with respect to the Series B Certificate of Designation, the

right to cast 2,500 votes per share of Series B Preferred Stock on the Amendment .

holders of Preferred Stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on

shares of Common Stock.

The Preferred Stock is convertible, at the option of the holders and, in certain circumstances, by the

Company, into shares of Common Stock at a conversion price of $ 4.00

The conversion price can be adjusted pursuant to the Certificates of Designation for stock dividends and stock splits,

subsequent rights offering, pro rata distributions of dividends or the occurrence of a fundamental transaction (as defined in the

applicable Certificate of Designation).

The holders of the Preferred Stock have the right to require the Company to redeem their

shares of preferred stock for cash at 105 %

of the stated value of such shares through September 22, 2022.

The Company has the option to redeem the

Preferred Stock for cash at 105 %

of the stated value, subject to the holders’ rights to convert the shares prior to such redemption.

million in gross proceeds of the Offering are held in an escrow account, along with an additional $ 3 .0

million deposited by the Company to cover the aggregate OID as well as the additional amount that would be necessary to fund the 105 %

redemption price until the expiration of the

redemption period for the Preferred Stock, as applicable, subject to the earlier payment to redeeming holders.

Upon expiration of the

redemption period, any proceeds remaining in the escrow account will be disbursed to the Company.

PHARMACEUTICALS HOLDING CORP.

1 unchanged sentence

30, 2022 AND 2021 (UNAUDITED)

February 10, 2022, the Company filed an amendment to its articles of incorporation, as amended, to increase the number of shares

of common stock authorized from 800,000,000 to 1,600,000,000 .

connection with the Offering, the Company and the Investors entered into a Registration Rights Agreement (the “Registration

Rights Agreement”), pursuant to which the Company is required to file a registration statement with the Securities and

Exchange Commission to register for resale the shares that are issued upon the potential conversion of shares of Preferred Stock.

The registration statement will be filed with the Securities and Exchange Commission on or before the later of 10 calendar days

following the date of the shareholder meeting held on August 5, 2022, to seek approval of the Amendment and the 70 th calendar

day following the date of the Registration Rights Agreement.

the Preferred stock has a redemption feature at the option of the holder, it is classified as temporary equity.

As of June 30,

2022, the Series A Preferred stock and Series B Preferred Stock has been recorded on the balance sheet at redemption value of approximately $ 26.3

million and $ 5.2 million , respectively.

June 30, 2022, Series A and Series B preferred shares reflected on the balance sheet is reconciled on the following table (in thousands):

Series A Preferred Stock

Series B Preferred Stock

Gross Proceeds

Preferred stock issuance costs

Accretion of carrying value to redemption value

Preferred stock subject to possible redemption

7 – ASSET PURCHASE AGREEMENT WITH KATANA

12 unchanged sentences

the Katana intellectual property was acquired prior to U.S.

Food and Drug Administration (FDA) approval, the cash consideration totaling $ 0.7 million , was expensed

as research and development costs since there is no alternative future use and the acquired intellectual property does not constitute

Food and Drug Administration (FDA) approval, the cash consideration

totaling $ 0.7 million , was expensed as research and development costs since there is no alternative future use and the acquired

intellectual property does not constitute a business.

to the terms of the Geneva Assignment and Assumption Agreement, Geneva has granted to Tonix an exclusive license, with the right

5 unchanged sentences

which such milestones must be completed and provides for an annual maintenance fee payable to Geneva.

of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

of June 30, 2022, no milestone payments have been accrued or paid in relation to this agreement.

8 – ASSET PURCHASE AGREEMENT WITH TRIGEMINA

18 unchanged sentences

as research and development costs since there is no alternative future use and the acquired intellectual property does not constitute

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30, 2022 AND 2021 (UNAUDITED)

to the terms of the Assignment and Assumption Agreement, Stanford has granted to Tonix an exclusive license, with the right to

7 unchanged sentences

which such milestones must be completed and provides for an annual maintenance fee payable to Stanford.

of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

of June 30, 2022, other than the annual maintenance fee, no milestone payments have been accrued or paid in relation to this

9 – ASSET PURCHASE AGREEMENT WITH TRIMARAN

47 unchanged sentences

confidentiality and other customary matters for an agreement of this kind.

of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

9 – LICENSE AGREEMENT WITH OYAGEN

April 14, 2021, the Company and OyaGen, Inc.

(“OyaGen”) entered into an exclusive License Agreement (the “OyaGen

License Agreement”) pursuant to which OyaGen granted to Tonix an exclusive license to certain patents and technical information

related to an antiviral inhibitor of SARS-CoV-2, sangivamycin, and to develop and commercialize products thereunder, and to acquire

rights to any technology based thereon for the prevention or treatment of COVID-19 developed by OyaGen during the term of the

License Agreement.

consideration for entering into the License Agreement, Tonix paid a low-seven digit license fee to OyaGen, and issued to OyaGen

and an affiliated entity an aggregate of 2,752,294 shares of the Company’s common stock, which are unregistered and subject

to a six-month lock-up and a voting agreement, pursuant to which OyaGen and the affiliated entity have agreed to vote the common

stock on any matter put to a vote of the shareholders of the Company in accordance with management’s recommendations.

shares were valued at $ 3 .0 million, which was recorded as research and development expense.

The OyaGen License also provides for

single-digit royalties and contingent milestone payments.

As of March 31, 2022, no milestone payments have been accrued or

paid in relation to this agreement.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

10 – LICENSE AGREEMENT WITH INSERM

February 11, 2021, the Company entered into a license agreement (the “Inserm License Agreement”) pursuant to which

it licensed technology using oxytocin-based therapeutics for the treatment of Prader-Willi syndrome and non-organic failure to

thrive disease from Inserm (the French National Institute of Health and Medical Research), Aix-Marseille Université and

Centre Hospitalier Universitaire of Toulouse.

The Inserm License Agreement provides for the payment of annual fees and milestone

payments upon the occurrence of specified sales milestones totaling approximately $ 0.4 million , as well royalties on net sales

of products based on the licensed technology, and assignment/transfer and sublicense royalties.

of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

11 – LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY

September 16, 2019, the Company entered into an exclusive License Agreement (the “Columbia License Agreement”) with

the Trustees of Columbia University in the City of New York (“Columbia”) pursuant to which Columbia granted to Tonix

an exclusive license, with the right to sublicense, certain patents and technical information (collectively, the “TFF2 Technology”)

related to a recombinant Trefoil Family Factor 2 (TFF2), and to develop and commercialize products thereunder (each, a “TFF2

Pursuant to the terms of the Columbia License Agreement, Columbia reserved for itself the right to practice the

TFF2 Technology for academic research and educational purposes.

Company paid a five-digit license fee to Columbia as consideration for entering into the Columbia License Agreement, which was

previously recorded to research and development expenses in the statement of operations.

As of June 30, 2022, no milestone payments have been

accrued or paid in relation to this agreement.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2022 AND 2021 (UNAUDITED)

NOTE 10 – LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA

On May 18, 2022, the

Company entered into an exclusive License Agreement with the University of Alberta focused on identifying and testing broad-spectrum

antiviral drugs against future variants of SARS-CoV-2 and other emerging viruses.

As consideration for entering into the License

Agreement, Tonix paid a low-five digit license fee to University of Alberta.

The License Agreement also provides for single-digit

royalties and contingent milestone payments.

As of June 30, 2022,

other than the upfront fee, no milestone payments have been accrued or paid in relation to this agreement.

NOTE 11 – LICENSE AGREEMENT WITH OYAGEN

On April 14, 2021,

the Company and OyaGen, Inc.

(“OyaGen”) entered into an exclusive License Agreement (the “OyaGen License Agreement”)

pursuant to which OyaGen granted to Tonix an exclusive license to certain patents and technical information related to an antiviral

inhibitor of SARS-CoV-2, sangivamycin, and to develop and commercialize products thereunder, and to acquire rights to any technology

based thereon for the prevention or treatment of COVID-19 developed by OyaGen during the term of the License Agreement.

As consideration for

entering into the License Agreement, Tonix paid a low-seven digit license fee to OyaGen, and issued to OyaGen and an affiliated

entity an aggregate of 86,010 shares of the Company’s common stock, which are unregistered and subject to a six-month lock-up

and a voting agreement, pursuant to which OyaGen and the affiliated entity have agreed to vote the common stock on any matter put

to a vote of the shareholders of the Company in accordance with management’s recommendations.

The shares were valued at $ 3 .0

million, which was recorded as research and development expense.

The OyaGen License also provides for single-digit royalties and

contingent milestone payments.

As of June 30, 2022,

no milestone payments have been accrued or paid in relation to this agreement.

In July 2022, the Company

notified OyaGen of its intent to terminate the License Agreement, with an effective date of September 20, 2022.

NOTE 12 – LICENSE AGREEMENT WITH INSERM

On February 11, 2021,

the Company entered into a license agreement (the “Inserm License Agreement”) pursuant to which it licensed technology

using oxytocin-based therapeutics for the treatment of Prader-Willi syndrome and non-organic failure to thrive disease from Inserm

(the French National Institute of Health and Medical Research), Aix-Marseille Université and Centre Hospitalier Universitaire

The Inserm License Agreement provides for the payment of annual fees and milestone payments upon the occurrence of

specified sales milestones totaling approximately $ 0.4 million , as well royalties on net sales of products based on the licensed

technology, and assignment/transfer and sublicense royalties.

As of June 30, 2022,

no milestone payments have been accrued or paid in relation to this agreement

NOTE 13 – LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY

On September 16, 2019,

the Company entered into an exclusive License Agreement (the “Columbia License Agreement”) with the Trustees of Columbia

University in the City of New York (“Columbia”) pursuant to which Columbia granted to Tonix an exclusive license, with

the right to sublicense, certain patents and technical information (collectively, the “TFF2 Technology”) related to

a recombinant Trefoil Family Factor 2 (TFF2), and to develop and commercialize products thereunder (each, a “TFF2 Product”).

Pursuant to the terms of the Columbia License Agreement, Columbia reserved for itself the right to practice the TFF2 Technology

for academic research and educational purposes.

The Company paid a

five-digit license fee to Columbia as consideration for entering into the Columbia License Agreement, which was recorded to research

and development expenses in the statement of operations for the year ended December 31, 2019.

The Company is obligated to use Commercially

1 unchanged sentence

specified developmental milestones.

Company agreed to pay Columbia single-digit royalties on net sales of (i) TFF2 Products sold by Tonix or a sublicensee and (ii)

any other products that involve material or technical information related to the TFF2 Product and transferred to Tonix pursuant

to the Columbia License Agreement (“Other Products”) sold by Tonix or a sublicensee.

Royalties on each particular

TFF2 Product are payable on a country-by-country and Product-by-Product basis until the latest of (i) the date of expiration of

the last valid claim in the last to expire of the issued patents covered by the Columbia License Agreement, and (ii) a specified

period of time after the first commercial sale of a TFF2 Product in the country in question.

Royalties on each particular Other

Product are payable on a country-by-country and product-by-product basis until a specified period of time after the first commercial

sale of such particular Other Product in such country.

Royalties payable on net sales of the TFF2 Product and Other Products may

be reduced by 50 % of the royalties payable by Tonix to any third party for intellectual property rights which are necessary for

the practice of the rights licensed to Tonix under the Columbia License Agreement, provided that the royalty payable on a Product

or Other Product may not be reduced by more than 50 %.

Company is also obligated to make contingent milestone payments to Columbia totaling $ 4.1 million on a Product-by-Product basis

upon the achievement of certain development, approval and sales milestones related to a TFF2 Product.

In addition, the Company

shall pay Columbia 5 % of consideration, other than royalty payments and certain other categories of consideration, payable to

the Company by a sublicensee.

As of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

May 20, 2019, the Company entered into an exclusive License Agreement (the “License Agreement”) with Columbia pursuant

to which Columbia, for itself and on behalf of the University of Kentucky and the University of Michigan (collectively, the “Institutions”)

The Company paid Columbia single-digit royalties on net sales of (i) TFF2 Products sold by Tonix or a sublicensee and (ii) any other products

that involve material or technical information related to the TFF2 Product and transferred to Tonix pursuant to the Columbia License

Agreement (“Other Products”) sold by Tonix or a sublicensee.

Royalties on each particular TFF2 Product are payable on a country-by-country and Product-by-Product

basis until the latest of (i) the date of expiration of the last valid claim in the last to expire of the issued patents covered

by the Columbia License Agreement, and (ii) a specified period of time after the first commercial sale of a TFF2 Product in the

country in question.

Royalties on each particular Other Product are payable on a country-by-country and product-by-product basis

until a specified period of time after the first commercial sale of such particular Other Product in such country.

Royalties payable

on net sales of the TFF2 Product and Other Products may be reduced by 50 % of the royalties payable by Tonix to any third party

for intellectual property rights which are necessary for the practice of the rights licensed to Tonix under the Columbia License

Agreement, provided that the royalty payable on a Product or Other Product may not be reduced by more than 50 %.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2022 AND 2021 (UNAUDITED)

The Company is also

obligated to make contingent milestone payments to Columbia totaling $ 4.1 million on a Product-by-Product basis upon the achievement

of certain development, approval and sales milestones related to a TFF2 Product.

In addition, the Company shall pay Columbia 5 %

of consideration, other than royalty payments and certain other categories of consideration, payable to the Company by a sublicensee.

As of June 30, 2022,

no milestone payments have been accrued or paid in relation to this agreement.

On May 20, 2019, the

Company entered into an exclusive License Agreement (the “License Agreement”) with Columbia pursuant to which Columbia,

for itself and on behalf of the University of Kentucky and the University of Michigan (collectively, the “Institutions”)

granted to the Company an exclusive license, with the right to sublicense, certain patents, technical information and material

3 unchanged sentences

the Institutions the right to practice the Technology for academic research and educational purposes.

Company paid a six-digit license fee to Columbia as consideration for entering into the License Agreement.

The Company is obligated

to use Commercially Reasonable Efforts, as defined in the License Agreement, to develop and commercialize the Product, and to

achieve specified developmental milestones.

The first 50 % of the license fee was paid by June 30, 2019, while the remaining 50 %

license fee, was paid during the second quarter of 2020.

Both installments of the license fee were previously recorded to research

and development expenses.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

Company agreed to pay Columbia single-digit royalties on net sales of (i) Products sold by the Company or a sublicensee and (ii)

any other products that involve material or technical information related to the Product and transferred to the Company pursuant

to the License Agreement (“Other Products”) sold by the Company or a sublicensee.

Royalties on each particular Product

are payable on a country-by-country and Product-by-Product basis until the latest of (i) the date of expiration of the last valid

claim in the last to expire of the issued patents covered by the License Agreement, (ii) a specified period of time after the

first commercial sale of a Product in the country in question, or (iii) expiration of any market exclusivity period granted by

a regulatory agency.

Royalties on each particular Other Product are payable on a country-by-country and product-by-product basis

until the later of (i) a specified period of time after the first commercial sale of such particular Other Product in such country

or (ii) expiration of any market exclusivity period granted by a regulatory agency.

Royalties payable on net sales of the Product

and Other Products may be reduced by 50 % of the royalties payable by the Company to any third party for intellectual property

rights which are necessary for the practice of the rights licensed to the Company under the License Agreement, provided that the

royalty payable on a Product or Other Product may not be reduced by more than 50 %.

Company is also obligated to make contingent milestone payments to Columbia totaling $ 3 million on a Product-by-Product basis

upon the achievement of certain development, approval and sales milestones related to a Product.

In addition, the Company shall

pay Columbia 5 % of consideration, other than royalty payments and certain other categories of consideration, payable to the Company

by a sublicensee.

As of March 31, 2022, no milestone payments have been accrued or paid in relation to this agreement.

12 – SALE OF COMMON STOCK

Agreement with Lincoln Park

December 3, 2021, the Company entered into a purchase agreement (the “Purchase Agreement with Lincoln Park”) and a

registration rights agreement (the “Lincoln Park Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC

(“Lincoln Park”).

Pursuant to the terms of the Purchase Agreement with Lincoln Park, Lincoln Park has agreed to purchase

from the Company up to $ 80,000,000 of the Company’s common stock (subject to certain limitations) from time to time during

the term of the Purchase Agreement with Lincoln Park.

Pursuant to the terms of the Lincoln Park Registration Rights Agreement,

the Company filed with the SEC a registration statement to register for resale under the Securities Act the shares that have been

or may be issued to Lincoln Park under the Purchase Agreement with Lincoln Park.

to the terms of the Purchase Agreement with Lincoln Park, at the time the Company signed the Purchase Agreement with Lincoln Park

and the Lincoln Park Registration Rights Agreement, the Company issued 2,909,091 shares of common stock to Lincoln Park as consideration

for its commitment to purchase shares of our common stock under the Purchase Agreement with Lincoln Park.

The Company paid a six-digit

license fee to Columbia as consideration for entering into the License Agreement.

The Company is obligated to use Commercially Reasonable

Efforts, as defined in the License Agreement, to develop and commercialize the Product, and to achieve specified developmental milestones.

The Company agreed

to pay Columbia single-digit royalties on net sales of (i) Products sold by the Company or a sublicensee and (ii) any other products

that involve material or technical information related to the Product and transferred to the Company pursuant to the License Agreement

(“Other Products”) sold by the Company or a sublicensee.

Royalties on each particular Product are payable on a country-by-country

and Product-by-Product basis until the latest of (i) the date of expiration of the last valid claim in the last to expire of the

issued patents covered by the License Agreement, (ii) a specified period of time after the first commercial sale of a Product in

the country in question, or (iii) expiration of any market exclusivity period granted by a regulatory agency.

Royalties on each

particular Other Product are payable on a country-by-country and product-by-product basis until the later of (i) a specified period

of time after the first commercial sale of such particular Other Product in such country or (ii) expiration of any market exclusivity

period granted by a regulatory agency.

Royalties payable on net sales of the Product and Other Products may be reduced by 50 % of

the royalties payable by the Company to any third party for intellectual property rights which are necessary for the practice of

the rights licensed to the Company under the License Agreement, provided that the royalty payable on a Product or Other Product

may not be reduced by more than 50 %.

The Company is also

obligated to make contingent milestone payments to Columbia totaling $ 3 million on a Product-by-Product basis upon the achievement

of certain development, approval and sales milestones related to a Product.

In addition, the Company shall pay Columbia 5 % of consideration,

other than royalty payments and certain other categories of consideration, payable to the Company by a sublicensee.

As of June 30, 2022,

no milestone payments have been accrued or paid in relation to this agreement.

NOTE 14 – SALE OF COMMON STOCK

Purchase Agreement with Lincoln Park

On December 3, 2021,

the Company entered into a purchase agreement (the “Purchase Agreement with Lincoln Park”) and a registration rights

agreement (the “Lincoln Park Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”).

Pursuant to the terms of the Purchase Agreement with Lincoln Park, Lincoln Park agreed to purchase from the Company up to $ 80,000,000

of the Company’s common stock (subject to certain limitations) from time to time during the term of the Purchase Agreement

with Lincoln Park.

Pursuant to the terms of the Lincoln Park Registration Rights Agreement, the Company filed with the SEC a registration

statement to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the

Purchase Agreement with Lincoln Park.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2022 AND 2021 (UNAUDITED)

Pursuant to the terms

of the Purchase Agreement with Lincoln Park, at the time the Company signed the Purchase Agreement with Lincoln Park and the Lincoln

Park Registration Rights Agreement, the Company issued 90,910 shares of common stock to Lincoln Park as consideration for its commitment

to purchase shares of our common stock under the Purchase Agreement with Lincoln Park.

The commitment shares were valued at $ 1.6

million and recorded as an addition to equity for the issuance of the common stock and treated as a reduction to equity as a cost

of capital to be raised under the Purchase Agreement with Lincoln Park.

During the six months

ended June 30, 2022, the Company sold 1.1 million shares of common stock under the Purchase Agreement with Lincoln Park, for

net proceeds of approximately $ 6.5 million .

Subsequent to June 30, 2022, the Company sol d

1.8 million shares of common stock under the Purchase Agreement with Lincoln Park,

for net proceeds of approximately $ 2.2 million .

2021 Lincoln Park Transaction

May 14, 2021, the Company entered into a purchase agreement (the “2021 Purchase Agreement”) and a registration rights

agreement (the “2021 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”).

Pursuant to the terms of the 2021 Purchase Agreement, Lincoln Park agreed to purchase from the Company up to $ 80,000,000 of

the Company’s common stock (subject to certain limitations) from time to time during the term of the 2021 Purchase Agreement.

Pursuant to the terms of the 2021 Registration Rights Agreement, the Company filed with the SEC a registration statement to register

for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the 2021 Purchase Agreement.

to the terms of the 2021 Purchase Agreement, at the time the Company signed the 2021 Purchase Agreement and the 2021 Registration

Rights Agreement, the Company issued 40,000 shares of common stock to Lincoln Park

as consideration for its commitment to purchase shares of our common stock under the 2021 Purchase Agreement.

The commitment shares

were valued at $ 1.6 million and recorded as an addition to equity for the issuance of the common stock and treated as a reduction

to equity as a cost of capital to be raised under the Purchase Agreement with Lincoln Park.

the quarter ended March 31, 2022, the Company has sold 22 .0 million shares of common stock under the Purchase Agreement with

Lincoln Park, for net proceeds of approximately $ 4.5 million .

Subsequent to March 31, 2022, the Company has sol d 13 .0 million

shares of common stock under the Purchase Agreement with Lincoln Park, for net proceeds of approximately $ 2 .0

2021 Financing

February 8, 2021, the Company entered into a securities purchase agreement with certain institutional investors relating to the issuance

and sale of 58,333,334

shares of its common stock, in a registered direct

public offering (the “February 2021 Financing”), with A.G.P/Alliance Global Partners (“AGP”), acting as placement

The public offering price for each share of common stock was $ 1.20 .

to equity as a cost of capital to be raised under the 2021 Purchase Agreement.

the six months ended June 30, 2021, the Company sold an aggregate of approximately 86,000 shares of common stock under the 2021

Purchase Agreement, for gross proceeds of approximately $ 3.3 million .

February 2021 Financing

On February 8, 2021,

the Company entered into a securities purchase agreement with certain institutional investors relating to the issuance and sale

of 1.8 million shares of its common stock, in a registered direct public offering (the “February 2021 Financing”),

with A.G.P/Alliance Global Partners (“AGP”), acting as placement agent.

The public offering price for each share of

common stock was $ 38.40 .

The February 2021 Financing closed on February 9, 2021.

AGP received a cash fee of 7 % of the gross proceeds, for an aggregate amount

of $ 4.9 million .

AGP received a cash fee of 7 % of the gross proceeds,

for an aggregate amount of $ 4.9 million .

The Company incurred other offering expenses of approximately $ 0.1 million .

The Company received net proceeds of approximately

$65.0 million, after deducting the fees and other offering expenses.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

2021 Financing

January 11, 2021, the Company entered into a securities purchase agreement with certain institutional investors relating to the

issuance and sale of 50,000,000

shares of its common stock in a registered direct public offering (the “January 2021 Financing”), with AGP as placement

received net proceeds of approximately $ 65 .0 million, after deducting the fees and other offering expenses.

January 2021 Financing

On January 11, 2021,

the Company entered into a securities purchase agreement with certain institutional investors relating to the issuance and sale

of 1.6 million shares of its common stock in a registered direct public offering (the “January 2021 Financing”), with

AGP as placement agent.

The public offering price for each share of common stock was $ 25.60 .

The January 2021 Financing closed on January 13, 2021.

AGP received a cash fee of 7 %

of the gross proceeds, for an aggregate of $ 2.8

The Company incurred other offering expenses of approximately $ 0.3

The Company received net proceeds of approximately $ 36.9

million , after deducting the fees and other offering expenses.

At-the-Market

April 8, 2020, the Company entered into a sales agreement (the “Sales Agreement”) with AGP pursuant to which the Company

may issue and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to

$ 240 .0 million in at-the-market offerings (“ATM”) sales.

AGP will act as sales agent and will be paid a 3 % commission

on each sale under the Sales Agreement.

The Company’s common stock will be sold at prevailing market prices at the time

of the sale, and, as a result, prices will vary.

During the quarter ended March 31, 2022, the Company sold approximately 34.5

million shares of common stock under the Sales Agreement, for net proceeds of approximately $8.5 million.

During the quarter ended

March 31, 2021, the Company sold approximately 9.5 million shares of common stock under the Sales Agreement, for net proceeds

of approximately $ 6.8 million .

Subsequent to March 31, 2022, the Company has sold 33.9 million shares of common stock under the

Sales Agreement, for net proceeds of approximately $ 6.8 million .

13 – STOCK-BASED COMPENSATION

Incentive Plans

May 3, 2019, the Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp.

2019 Stock Incentive Plan (the

“2019 Plan”).

The January 2021 Financing closed

on January 13, 2021.

AGP received a cash fee of 7 % of the gross proceeds, for an aggregate of $ 2.8 million .

The Company incurred

other offering expenses of approximately $ 0.3 million .

The Company received net proceeds of approximately $ 36.9 million , after

deducting the fees and other offering expenses.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2022 AND 2021 (UNAUDITED)

At-the-Market Offerings

On April 8, 2020,

the Company entered into a sales agreement (the “Sales Agreement”) with AGP pursuant to which the Company may issue

and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to $ 240 .0 million

in at-the-market offerings (“ATM”) sales.

AGP will act as sales agent and will be paid a 3 % commission on each sale

under the Sales Agreement.

The Company’s common stock will be sold at prevailing market prices at the time of the sale, and,

as a result, prices will vary.

During the six months ended June 30, 2022, the Company sold approximately 15 .0 million shares of

common stock under the Sales Agreement, for net proceeds of approximately $ 51.5 million .

During the six months ended June 30, 2021,

the Company sold approximately 0.8 million shares of common stock under the Sales Agreement, for net proceeds of approximately

$ 25.5 million .

Subsequent to June 30, 2022, the Company has sold 9.6 million shares of common stock under the Sales Agreement,

for net proceeds of approximately $ 16.2 million .

NOTE 15 – STOCK-BASED COMPENSATION

Stock Incentive Plans

On May 3, 2019, the

Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp.

2019 Stock Incentive Plan (the “2019 Plan”).

The 2019 Plan provided for the issuance of up to 4,375 shares of common stock.

With the adoption of

the 2020 Plan (as defined below), no further grants may be made under the 2019 Plan.

On January 16, 2020, the Company’s

stockholders approved the Tonix Pharmaceuticals Holding Corp.

With the adoption of the 2020 Plan (as defined below),

no further grants may be made under the 2019 Plan.

On January 16, 2020, the Company’s stockholders approved the Tonix Pharmaceuticals

Holding Corp.

2020 Stock Incentive Plan (the “2020 Plan”).

Plan provided for the issuance of up to 600,000 shares of common stock.

With the adoption of the Amended and Restated 2020 Plan

(as defined below), no further grants may be made under the 2020 Plan.

May 1, 2020, the Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp.

Amended and Restated 2020 Stock

Incentive Plan (“Amended and Restated 2020 Plan”), and together with the 2020 Plan and the 2019 Plan, the “Plans”).

the terms of the Amended and Restated 2020 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted

stock, (3) stock appreciation rights (“SARs”), (4) RSUs, (5) other stock-based awards, and (6) cash-based awards.

The Amended and Restated 2020 Plan initially provided for the issuance of up to 10,000,000 shares of common stock, which amount will

be increased to the extent that awards granted under the Plans are forfeited, expire or are settled for cash (except as otherwise

provided in the Amended and Restated 2020 Plan).

In addition, the Amended and Restated 2020 Plan contains an “evergreen

provision” providing for an annual increase in the number of shares of our common stock available for issuance under the

Amended and Restated 2020 Plan on January 1 of each year for a period of ten years, commencing on January 1, 2021 and ending on

(and including) January 1, 2030, in an amount equal to the difference between (x) twenty percent ( 20 %) of the total number of

shares of common stock outstanding on December 31st of the preceding calendar year, and (y) the total number of shares of common

stock reserved under the Amended and Restated 2020 Plan on December 31st of such preceding calendar year (including shares subject

to outstanding awards, issued pursuant to awards or available for future awards).

The Board of Directors determines the exercise

price, vesting and expiration period of the grants under the Amended and Restated 2020 Plan.

However, the exercise price of an

incentive stock option may not be less than 110 % of fair value of the common stock at the date of the grant for a 10% or more

shareholder and 100 % of fair value for a grantee who is not a 10% shareholder.

The fair value of the common stock is determined

based on quoted market price or in absence of such quoted market price, by the Board of Directors in good faith.

Additionally,

the expiration period of grants under the Amended and Restated 2020 Plan may not be more than ten years .

As of March 31, 2022,

32,808,160 shares were available for future grants under the Amended and Restated 2020 Plan.

PHARMACEUTICALS HOLDING CORP.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021 (UNAUDITED)

summary of the stock option activity and related information for the Plans for the three months ended March 31, 2022 is as follows:

The 2020 Plan provided for the issuance of up to 18,750

shares of common stock.

With the adoption of the Amended and Restated 2020 Plan (as defined below), no further grants may be made

under the 2020 Plan.

On May 1, 2020, the

Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp.

Amended and Restated 2020 Stock Incentive Plan (“Amended

and Restated 2020 Plan”), and together with the 2020 Plan and the 2019 Plan, the “Plans”).

Under the terms of

the Amended and Restated 2020 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted stock,

(3) stock appreciation rights (“SARs”), (4) RSUs, (5) other stock-based awards, and (6) cash-based awards.

and Restated 2020 Plan initially provided for the issuance of up to 312,500 shares of common stock, which amount will be increased

to the extent that awards granted under the Plans are forfeited, expire or are settled for cash (except as otherwise provided in

the Amended and Restated 2020 Plan).

In addition, the Amended and Restated 2020 Plan contains an “evergreen provision”

providing for an annual increase in the number of shares of our common stock available for issuance under the Amended and Restated

2020 Plan on January 1 of each year for a period of ten years, commencing on January 1, 2021 and ending on (and including) January

1, 2030, in an amount equal to the difference between (x) twenty percent ( 20 %) of the total number of shares of common stock outstanding

on December 31st of the preceding calendar year, and (y) the total number of shares of common stock reserved under the Amended

and Restated 2020 Plan on December 31st of such preceding calendar year (including shares subject to outstanding awards, issued

pursuant to awards or available for future awards).

The Board of Directors determines the exercise price, vesting and expiration

period of the grants under the Amended and Restated 2020 Plan.

However, the exercise price of an incentive stock option may not

be less than 110 % of fair value of the common stock at the date of the grant for a 10% or more shareholder and 100 % of fair value

for a grantee who is not a 10% shareholder.

The fair value of the common stock is determined based on quoted market price or in

absence of such quoted market price, by the Board of Directors in good faith.

Additionally, the expiration period of grants under

the Amended and Restated 2020 Plan may not be more than ten years .

As of June 30, 2022, 606,227 shares were available for future

grants under the Amended and Restated 2020 Plan.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2022 AND 2021 (UNAUDITED)

A summary of the stock option activity and

related information for the Plans for the six months ended June 30, 2022 is as follows:

Weighted-Average

4 unchanged sentences

Forfeitures or expirations

Outstanding at March 31, 2022

Exercisable at March 31, 2022

aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise

price less than the Company’s closing stock price at the respective dates.

weighted average fair value of options granted for the three-month periods ended March 31, 2022 and 2021 was $ 0.18 and $ 1.10 per

share, respectively.

Company measures the fair value of stock options on the date of grant, based on the Black Scholes option pricing model using certain

assumptions discussed below, and the closing market price of the Company’s common stock on the date of the grant.

value of the award is measured on the grant date.

One-third of most stock options granted pursuant to the Plans vest 12 months

from the date of grant and 1/36th each month thereafter for 24 months and expire ten years from the date of grant.

the Company issues options to directors which vest over a one-year period.

The Company also issues premium options to executive

officers which have an exercise price greater than the grant date fair value and has issued performance-based options which vest

when target parameters are met or probable of being met, subject in each case to a one year minimum service period prior to vesting.

Stock-based compensation expense related to awards is amortized over the applicable service period using the straight-line method.

assumptions used in the valuation of stock options granted during the three months ended March 31, 2022 and 2021 were as follows:

March 31, 2022

March 31, 2021

interest rate

Expected term

Outstanding at June 30, 2022

Exercisable at June 30, 2022

The aggregate intrinsic

value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the

Company’s closing stock price at the respective dates.

The weighted average

fair value of options granted during the three and six months ended June 2022 was $ 3.78 per share and $ 5.25 per share, respectively.

The weighted average fair value of options granted during the three and six months ended June 2021 was $ 30.62 per share and $ 34.45

per share, respectively.

The Company measures

the fair value of stock options on the date of grant, based on the Black Scholes option pricing model using certain assumptions

discussed below, and the closing market price of the Company’s common stock on the date of the grant.

The fair value of the

award is measured on the grant date.

One-third of most stock options granted pursuant to the Plans vest 12 months from the date

of grant and 1/36th each month thereafter for 24 months and expire ten years from the date of grant.

In addition, the Company issues

options to directors which vest over a one-year period.

The Company also issues premium options to executive officers which have

an exercise price greater than the grant date fair value and has issued performance-based options which vest when target parameters

are met or probable of being met, subject in each case to a one year minimum service period prior to vesting.

Stock-based compensation

expense related to awards is amortized over the applicable service period using the straight-line method.

The assumptions used

in the valuation of stock options granted during the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

Risk-free interest rate

1.67 % to 3.05

0.80 % to 1.63

Expected term of option

5.5 to 10 years

Expected stock

price volatility

Expected dividend

risk-free interest rate is based on the yield of Daily U.S.

Treasury Yield Curve Rates with terms equal to the expected term of

the options as of the grant date.

The expected term of options is determined using the simplified method, as provided in an SEC

Staff Accounting Bulletin, and the expected stock price volatility is based on the Company’ historical stock price volatility.

compensation expense relating to options granted of $ 2.6 million , of which $ 1.9 million and $ 0.7 million , related to General and

Administration and Research and Development, respectively was recognized for the quarter ended March 31, 2022.

compensation expense relating to options granted of $ 1.2 million , of which $ 0.8 million and $ 0.4 million , related to General and

Administration and Research and Development, respectively was recognized for the quarter ended March 31, 2021.

of March 31, 2022, the Company had approximately $ 18.9 million of total unrecognized compensation cost related to non-vested awards

granted under the Plans, which the Company expects to recognize over a weighted average period of 2.38 years.

TONIX PHARMACEUTICALS

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

MARCH 31, 2022 AND 2021 (UNAUDITED)

5.5 to 10 years

Expected stock price volatility

120.32 % - 133.22

124.40 % - 137.74

Expected dividend yield

The risk-free interest

rate is based on the yield of Daily U.S.

Treasury Yield Curve Rates with terms equal to the expected term of the options as of

the grant date.

The expected term of options is determined using the simplified method, as provided in an SEC Staff Accounting

Bulletin, and the expected stock price volatility is based on the Company’ historical stock price volatility.

Stock-based compensation

expense relating to options granted of $ 2.8 million , of which $ 2.0 million and $ 0.8 million , related to General and Administration

and Research and Development, respectively was recognized for the quarter ended June 30, 2022.

Stock-based compensation expense

relating to options granted of $ 2.1 million , of which $ 1.5 million and $ 0.6 million , related to General and Administration and

Research and Development, respectively was recognized for the quarter ended June 30, 2021.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022 AND 2021 (UNAUDITED)

Stock-based compensation

expense relating to options granted of $ 5.4 million , of which $ 3.9 million and $ 1.5 million , related to General and Administration

and Research and Development, respectively was recognized for the six-month period ended June 30, 2022.

Stock-based compensation

expense relating to options granted of $ 3.3 million , of which $ 2.3 million and $ 1.0 million , related to General and Administration

and Research and Development, respectively was recognized for the six-month period ended June 30, 2021.

As of June 30, 2022,

the Company had approximately $ 17.3 million of total unrecognized compensation cost related to non-vested awards granted under

the Plans, which the Company expects to recognize over a weighted average period of 2.09 years.

Employee Stock Purchase Plans

On May 3, 2019, the

Company’s stockholders approved the Tonix Pharmaceuticals Holdings Corp.

2019 Employee Stock Purchase Plan (the “2019

As a result of adoption of the 2020 ESPP, as defined below, by the stockholders, no further grants may be made under

the 2019 ESPP Plan.

On May 1, 2020, the Company’s stockholders approved the Tonix Pharmaceuticals Holdings Corp.

2020 Employee

Stock Purchase Plan (the “2020 ESPP”).

As a result of the adoption of the 2022 ESPP, as defined below, by the stockholders,

no further grants may be made under the 2020 ESPP Plan.

On May 6, 2022, the Company’s stockholders approved the Tonix Pharmaceuticals

Holdings Corp.

2019 Employee Stock Purchase Plan (the “2019 ESPP”).

As a result of adoption of the 2020 ESPP, as defined below,

by the stockholders, no further grants may be made under the 2019 ESPP Plan.

On May 1, 2020, the Company’s stockholders approved

the Tonix Pharmaceuticals Holdings Corp.

2020 Employee Stock Purchase Plan (the “2020 ESPP”).

As a result of the adoption

of the 2022 ESPP, as defined below, by the stockholders, no further grants may be made under the 2020 ESPP Plan.

On May 6, 2022, the Company’s

stockholders approved the Tonix Pharmaceuticals Holdings Corp.

2022 Employee Stock Purchase Plan (the “2022 ESPP”, and together

with the 2019 ESPP and the 2020 ESPP, the “ESPP Plans”)).

2022 Employee Stock Purchase Plan (the “2022 ESPP”, and together with the 2019 ESPP and the 2020 ESPP,

the “ESPP Plans”)).

The 2022 ESPP allows

11 unchanged sentences

stock under the 2022 ESPP, subject to the statutory limit under the Code.

As of March 31, 2022, 7 shares were available for future

As of June 30, 2022, 1 share was available for future

sales under the 2020 ESPP and 93,750 shares were available for future sales under the 2022 ESPP.

The ESPP Plans are

considered compensatory plans with the related compensation cost expensed over the six-month offering period.

For the quarters ended

March 31, 2022 and 2021, $ 0

and $ 47,000 ,

respectively were expensed.

In January 2021, 54,447

shares that were purchased as of December 31, 2020, under the 2020 ESPP, were issued.

Accordingly, during the first quarter of 2021,

approximately $ 28,000

of employee payroll deductions accumulated at December 31, 2020, related to acquiring such shares, was transferred from accrued

expenses to additional paid in capital.

The remaining $ 4,000

was returned to the employees.

In January 2022, 129,041

shares that were purchased as of December 31, 2021, under the 2020 ESPP, were issued.

Accordingly, during the first quarter of 2022,

approximately $ 40,000

of employee payroll deductions accumulated at December 31, 2021, related to acquiring such shares, was transferred from accrued

expenses to additional paid in capital.

The remaining $ 30,000

was returned to the employees.

NOTE 14 – WARRANTS TO PURCHASE

2020 ESPP are considered compensatory plans with the related compensation cost expensed over the six-month offering period.

the six months ended June 30, 2022 and 2021, $ 0 and $ 47,000 , respectively were expensed.

In January 2021, 1,703 shares that were

purchased as of December 31, 2020, under the 2020 ESPP, were issued.

Accordingly, during the first quarter of 2021, approximately

$ 28,000 of employee payroll deductions accumulated at December 31, 2020, related to acquiring such shares, was transferred from

accrued expenses to additional paid in capital.

The remaining $ 4,000 was returned to the employees.

In January 2022, 4,033 shares

that were purchased as of December 31, 2021, under the 2020 ESPP, were issued.

Accordingly, during the first quarter of 2022, approximately

$ 40,000 of employee payroll deductions accumulated at December 31, 2021, related to acquiring such shares, was transferred from

accrued expenses to additional paid in capital.

The remaining $ 30,000 was returned to the employees.

NOTE 16 – STOCK WARRANTS

The following table

summarizes information with respect to outstanding warrants to purchase common stock of the Company at March 31, 2022:

summarizes information with respect to outstanding warrants to purchase common stock of the Company at June 30, 2022:

November 2024

1 unchanged sentence

December 2023

No warrants were exercised during

the quarter ended March 31, 2022.

During the quarter

ended March 31, 2021, 3,400 warrants from the February 2020 Financing, with an exercise price of $ 0.57 , were exercised for proceeds

of approximately $ 2,000 .

No warrants were

exercised during the six months ended June 30, 2022.

During the six months

June 30, 2021, 107 warrants from the February 2020 Financing, with an exercise price of $ 18.24 , were exercised for proceeds of

approximately $ 2,000 .

TONIX PHARMACEUTICALS HOLDING

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022 AND 2021 (UNAUDITED)

NOTE 17 – LEASES

5 unchanged sentences

on the Company’s ability to engage in financing transactions or enter into further lease agreements.

At March 31, 2022, the

At June 30, 2022, the

Company has right-of-use assets of $ 0.9 million and a total lease liability for operating leases of $ 1.0 million of which $ 0.5

million is included in long-term lease liabilities and $ 0.5 million is included in current lease liabilities.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

MARCH 31, 2022 AND 2021 (UNAUDITED)

At March 31, 2022,

future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands):

At June 30, 2022, future

minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands):

Year Ending December 31,

Remainder of 2022

2026 and beyond

Included interest

No new and amendments

to operating leases were entered into by the Company during either of the quarters ended March 31, 2022 and 2021.

During the six months

ended June 30, 2022, the Company entered into new operating leases and lease amendments, resulting in the Company recognizing an

additional operating lease liability of approximately $ 334,000 based on the present value of the minimum rental payments.

also recognized a corresponding increase to ROU assets of approximately $ 334,000 , which represents a non-cash investing and financing activity.

During the six months

ended June 30, 2021, the Company entered into lease amendments, resulting in the Company recognizing an operating lease liability

of approximately $ 249,000 based on the present value of the future minimum rental payments.

The Company also recognized corresponding

ROU assets of approximately $ 249,000 , which represents a non-cash investing and financing activity.

Operating lease expense

was $ 0.2 million for both the quarters ended March 31, 2022 and 2021.

was $ 0.1 million for both quarters ended June 30, 2022, and 2021.

Operating lease expense

million for both six-months ended June 30, 2022, and 2021.

Other information related to leases is as follows:

Cash paid for amounts included in the measurement of lease liabilities:

Three Months Ended

March 31, 2022

Three Months Ended

March 31, 2021

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

Operating cash flow from operating leases (in thousands)

7 unchanged sentences

into contracts with various contract research organizations with outstanding commitments aggregating approximately $ 62.5 million

at March 31, 2022 for future work to be performed.

at June 30, 2022 for future work to be performed.

The Company entered

into a construction contract with outstanding commitments aggregating approximately $ 18.1 million at March 31, 2022 for future

work to be performed.

On March 3, 2021, the

Company entered into a $ 2.9 million contingent non-binding Purchase and Sales Agreement in connection with a property in Massachusetts.

The property is intended for process development activities.

The purchase is expected to close during the second quarter of

into a construction contract with outstanding commitments aggregating approximately $ 8.4 million at June 30, 2022 for future work

to be performed.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022 AND 2021 (UNAUDITED)

Defined contribution plan

The Company established

a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible

employees may participate.

Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) Plan,

subject to defined limitations.

The Company has a qualified

defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible employees

may participate.

Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) Plan, subject

to defined limitations.

The Company is required to make contributions to the 401(k) Plan equal to 100 percent of each participant’s

1 unchanged sentence

equal to three percent of each participant’s salary, on an annual basis, subject to limitations under the Code.

For the three

months ended March 31, 2022 and 2021, the Company charged operations $ 191,000 and $ 70,000 , respectively, for contributions under

the 401(k) Plan.

charged operations $ 115,000 and $ 306,000 for the three and six months ended June 30, 2022, respectively, and $ 41,000 and $ 111,000

for the three and six months ended June 30, 2021, respectively, for contributions under the 401(k) Plan.

NOTE 19 – SUBSEQUENT EVENTS

Subsequent to March

31, 2022, the Company sold 33.9 million shares of common stock under the Sales Agreement with AGP for net proceeds of approximately

Subsequent to June

30, 2022, the Company has sold 9.6 million shares of common stock under the ATM Sales Agreement, for net proceeds of approximately

$ 16.2 million .

Subsequent to March

31, 2022, the Company sold 13 .0 million shares of common stock under the Purchase

Agreement with Lincoln Park for net proceeds of approximately $ 2 .0 million.

Subsequent to June

30, 2022, the Company has sol d 1.8 million shares

of common stock under the Purchase Agreement with Lincoln Park, for net proceeds of approximately $ 2.2 million .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements