What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-13 · 1529 added, 1475 removed, 171 unchanged (95% of the section changed)

of Risk Factors

We have a history of operating losses

and may never generate revenues or achieve profitability.

We expect our operating results

to fluctuate, which may make it difficult to predict our future performance.

Our product candidates are novel

and still in development.

We do not expect to generate any

revenues from product sales in the foreseeable future, if at all.

We are largely dependent on the

success of our product candidates and cannot be certain that our product candidates will receive regulatory approval or be successfully

commercialized.

Clinical studies required for our

product candidates are expensive and time-consuming, and their outcome is uncertain.

We are subject to extensive and

costly government regulation.

prospects are dependent on the continued successful commercialization of Tosymra and

prospects are dependent on the success of Tonmya.

are exposed to cybersecurity and data privacy risks that, if realized, could expose us to legal liability, damage our

reputation and harm our business.

have a history of operating losses and may never achieve profitability.

expect our operating results to fluctuate, which may make it difficult to predict our future performance.

product candidates are novel and still in development.

do not expect revenues from product sales to offset our expenses in the foreseeable future, if at all.

are largely dependent on the success of our product candidates and cannot be certain that our product candidates will receive

regulatory approval or be successfully commercialized.

studies required for our product candidates are expensive and time-consuming, and their outcome is uncertain.

are subject to extensive and costly government regulation.

have never submitted an NDA before, and may be unable to do so for our product candidates we are developing.

Our product candidates may cause

serious adverse events or undesirable side effects which may delay or prevent marketing approval, or, if approval is received, require

them to be taken off the market, require them to include safety warnings or otherwise limit their sales.

We may be unable to meet our anticipated

development and commercialization timelines for approval of any of our product candidates.

Any breakthrough, fast track or

orphan drug designation or grant of priority review status by the FDA may not actually lead to a faster development or regulatory review

or approval process, nor assure FDA approval of our product candidates.

Even if approved, our products may

not be accepted by the market.

We may use our financial and human

resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may

be more profitable or for which there is a greater likelihood of success.

Our independent registered public

accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited

financial statements.

We may be unable to continue to operate without the threat of liquidation for the foreseeable future.

We will need additional capital.

If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or eliminate

our research and development programs, reduce our commercialization efforts or curtail our operations.

Outbreaks of communicable diseases

may materially and adversely affect our business, financial condition and results of operations.

Competition and technological change

may make our product candidates and technologies less attractive or obsolete.

If we fail to protect our intellectual

property rights, our ability to pursue the development of our technologies and products would be negatively affected.

We may be involved in lawsuits to

protect or enforce our patents, which could be expensive and time consuming.

If we infringe the rights of third

parties we could be prevented from selling products, forced to pay damages, and defend against litigation.

We rely on third parties to conduct,

supervise and monitor our clinical studies, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We will need to expand our operations

and increase the size of our company, and we may experience difficulties in managing growth.

Our executive officers and other

key personnel are critical to our business, and our future success depends on our ability to retain them.

If we are unable to hire additional

qualified personnel, our ability to grow our business may be harmed.

We rely on third parties to manufacture

the compounds used in our studies, and we intend to rely on them for the manufacture of any approved products for commercial sale.

these third parties do not manufacture our product candidates in sufficient quantities and at an acceptable cost, clinical development

and commercialization of our product candidates could be delayed, prevented or impaired.

Failure by our third-party manufacturers

to comply with the regulatory guidelines set forth by the FDA with respect to our product candidates could delay or prevent the completion

of clinical studies, the approval of any product candidates or the commercialization of our products.

Adverse global conditions, including economic uncertainty, may

negatively impact our financial results.

Our internal computer systems, or those of our CRO’s or

other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development

Corporate and academic collaborators

may take actions to delay, prevent, or undermine the success of our products.

Data provided by collaborators and

others upon which we rely that has not been independently verified could turn out to be false, misleading, or incomplete.

Our product candidates may face

competition sooner than expected.

If we fail to establish marketing,

sales and distribution capabilities, or fail to enter into arrangements with third parties, we will not be able to create a market for

our product candidates.

Our relationships

with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state healthcare fraud and

abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.

If we are unable

to comply, or have not fully complied, with such laws, we could face substantial penalties.

and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to

sell profitably, if approved.

Healthcare legislative reform measures may have a negative impact

on our business and results of operations.

If we obtain approval to commercialize

any approved products outside of the United States, a variety of risks associated with international operations could materially adversely

affect our business.

We face the risk of product liability

claims and may not be able to obtain insurance.

We use hazardous chemicals in our

Potential claims relating to improper handling, storage or disposal of these chemicals could affect us and be time consuming

If we retain collaborative partners

and our partners do not satisfy their obligations, we will be unable to develop our partnered product candidates.

We may be unsuccessful in obtaining

a priority review voucher for material threat medical countermeasures.

Government entities may take actions that directly or indirectly

have the effect of limiting opportunities for our vaccines for COVID-19.

If technology developed for the

purposes of developing new medicines or vaccines can be applied to the creation or development of biological weapons, then our technology

may be considered “dual use” technology and be subject to limitations on public disclosure or export.

We face risks in connection with

existing and future collaborations with respect to the development, manufacture, and commercialization of our product candidates.

We face risks in connection with

the testing, production and storage of our vaccine product candidates.

An active trading market for our

common stock may not be sustained.

The market price of our common stock has been extremely volatile

and may continue to be volatile due to numerous circumstances beyond our control.

We could be delisted from Nasdaq,

which could seriously harm the liquidity of our stock and our ability to raise capital.

We do not anticipate paying dividends

on our common stock and, accordingly, shareholders must rely on stock appreciation for any return on their investment.

We expect that our quarterly results

of operations will fluctuate, and this fluctuation could cause our stock price to decline.

If we fail to comply with the rules

under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, or if we discover material weaknesses and deficiencies

in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult.

If securities or industry analysts

do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock

price and trading volume could decline.

Other companies may have difficulty

acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well as Nevada

Other companies may have difficulty

acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well as Nevada

Our bylaws designate the Eighth

Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain types of actions and proceedings that may

be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes

with us or our directors, officers, employees or agents.

product candidates may cause serious adverse events or undesirable side effects which may delay or prevent marketing approval,

or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise

limit their sales.

may be unable to meet our anticipated development and commercialization timelines for approval of any of our product candidates.

breakthrough, fast track or orphan drug designation or grant of priority review status by the FDA may not actually lead to

a faster development or regulatory review or approval process, nor assure FDA approval of our product candidates.

if approved, our products may not be accepted by the market.

may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize

on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.

independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as

a going concern in its report on our audited financial statements.

We may be unable to continue to operate without the threat

of liquidation for the foreseeable future.

will need additional capital.

If additional capital is not available or is available at unattractive terms, we may be forced

to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or

curtail our operations.

of communicable diseases may materially and adversely affect our business, financial condition and results of operations.

and technological change may make our product candidates and technologies less attractive or obsolete.

we fail to protect our intellectual property rights, our ability to pursue the development of our technologies and products

would be negatively affected.

may be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming.

we infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and defend against

rely on third parties to conduct, supervise and monitor our clinical studies, and if those third parties perform in an unsatisfactory

manner, it may harm our business.

will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth.

executive officers and other key personnel are critical to our business, and our future success depends on our ability to

we are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

rely on third parties to manufacture the compounds used in our studies, and we intend to rely on them for the manufacture

of any approved products for commercial sale.

If these third parties do not manufacture our product candidates in sufficient

quantities and at an acceptable cost, clinical development and commercialization of our product candidates could be delayed,

prevented or impaired.

by our third-party manufacturers to comply with the regulatory guidelines set forth by the FDA with respect to our product

candidates could delay or prevent the completion of clinical studies, the approval of any product candidates or the commercialization

of our products.

global conditions, including economic uncertainty, may negatively impact our financial results.

internal computer systems, or those of our CRO’s or other contractors or consultants, may fail or suffer security breaches,

which could result in a material disruption of our product development programs.

and academic collaborators may take actions to delay, prevent, or undermine the success of our products.

provided by collaborators and others upon which we rely that has not been independently verified could turn out to be false,

misleading, or incomplete.

product candidates may face competition sooner than expected.

we fail to establish marketing, sales and distribution capabilities, or fail to enter into arrangements with third parties,

we will not be able to create a market for our product candidates.

relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state

healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws

and regulations.

If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult

for us to sell profitably, if approved.

legislative reform measures may have a negative impact on our business and results of operations.

we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with

international operations could materially adversely affect our business.

face the risk of product liability claims and may not be able to obtain insurance.

use hazardous chemicals in our business.

Potential claims relating to improper handling, storage or disposal of these chemicals

could affect us and be time consuming and costly.

we retain collaborative partners and our partners do not satisfy their obligations, we will be unable to develop our partnered

product candidates.

may be unsuccessful in obtaining a priority review voucher for material threat medical countermeasures.

entities may take actions that directly or indirectly have the effect of limiting opportunities for our vaccines for COVID-19.

technology developed for the purposes of developing new medicines or vaccines can be applied to the creation or development

of biological weapons, then our technology may be considered “dual use” technology and be subject to limitations

on public disclosure or export.

face risks in connection with existing and future collaborations with respect to the development, manufacture, and commercialization

of our product candidates.

face risks in connection with the testing, production and storage of our vaccine product candidates.

active trading market for our common stock may not be sustained.

market price of our common stock has been extremely volatile and may continue to be volatile due to numerous circumstances

beyond our control.

could be delisted from Nasdaq, which could seriously harm the liquidity of our stock and our ability to raise capital.

do not anticipate paying dividends on our common stock and, accordingly, shareholders must rely on stock appreciation for

any return on their investment.

expect that our quarterly results of operations will fluctuate, and this fluctuation could cause our stock price to decline.

we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, or if

we discover material weaknesses and deficiencies in our internal control and accounting procedures, our stock price could

decline significantly and raising capital could be more difficult.

securities or industry analysts do not publish research or reports about our business, or if they change their recommendations

regarding our stock adversely, our stock price and trading volume could decline.

companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate

charter and bylaws, as well as Nevada law.

companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate

charter and bylaws, as well as Nevada law.

bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain types

of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to

obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

RELATED TO OUR BUSINESS

prospects are dependent on the continued successful commercialization of Zembrace and Tosymra.

To the extent we cannot maintain

or increase sales of Zembrace and Tosymra, our business, financial condition and results of operations may be materially adversely

affected and the price of our common stock may decline.

and Tosymra are our only drugs that have been approved for sale.

Continued successful commercialization of Zembrace and Tosymra

is subject to many risks, and there is no guarantee that we will be able to maintain or increase sales of Zembrace and Tosymra.

While we have established our commercial team and have hired our U.S.

sales force, we may need to further expand and develop the

team in order to continue to successfully grow the business.

Even if we are successful in developing our commercial team, there

are many factors that could negatively impact sales of Zembrace and Tosymra or cause the continued commercialization of Zembrace

and Tosymra to be unsuccessful, including several factors that are outside our control.

If the continued commercialization of

Zembrace and Tosymra or future sales are less successful than expected or perceived as disappointing, our stock price could decline

significantly, and the long-term success of the product and our company could be harmed.

Additionally,

our strategy in the U.S.

includes distributing Zembrace and Tosymra solely through a limited network of third-party specialty

distributors and specialty pharmacies.

While we have entered into agreements with each of these distributors and pharmacies to

distribute Zembrace and Tosymra in the U.S., they may not perform as agreed or they may terminate their agreements with us.

we may need to enter into agreements with additional distributors or pharmacies, and there is no guarantee that we will be able

to do so on commercially reasonable terms or at all.

In the event we are unable to maintain, or expand, if needed, our commercial

team, including our U.S.

sales force, or maintain and, if needed, expand, our network of third-party specialty distributors and

specialty pharmacies, our ability to continue commercializing Zembrace and Tosymra would be limited, and Zembrace and Tosymra

may not be profitable.

prospects are dependent on the success of Tonmya.

To the extent regulatory approval of Tonmya is delayed or not granted or, if

approved, Tonmya is not commercially successful, our business, financial condition and results of operations may be materially

adversely affected and the price of our common stock may decline.

research, testing, manufacturing, labeling, approval, sale, import, export, marketing, and distribution of pharmaceutical product

candidates are subject to extensive regulation by the FDA.

We have focused a significant portion of our activities and resources

on the development of Tonmya, and we believe our prospects are also dependent on our ability to obtain regulatory approval for

and successfully commercialize Tonmya in the U.S.

The regulatory approval and successful commercialization of Tonmya is subject

to many risks, including those discussed in other risk factors, and Tonmya may not receive approval from the FDA.

If the results

or timing of regulatory filings, the regulatory process, regulatory developments, commercialization, or other activities, actions

or decisions related to Tonmya do not meet our or others’ expectations, the market price of our common stock could decline

significantly.

December 2023, we announced positive results from our pivotal Phase 3 RESILIENT study.

The study demonstrated a statistically

significant improvement over placebo for both primary endpoints as well as key secondary endpoints.

FDA retains complete discretion in deciding whether to approve the NDA for Tonmya and there are many components to an NDA filing

beyond the efficacy and safety data provided to the FDA.

No assurances can be given that the FDA will approve Tonmya for the treatment

of FM, or that if approved, we will successfully commercialize Tonmya.

have a history of operating losses and expect to incur losses for the foreseeable future.

We may never generate revenues or, if we are

able to generate revenues, achieve profitability.

are focused on product development, and we have not generated any revenues to date.

We have incurred losses in each year of our operations,

and we expect to continue to incur operating losses for the foreseeable future.

These operating losses have adversely affected and are

likely to continue to adversely affect our working capital, total assets and shareholders’ equity.

and our prospects should be examined in light of the risks and difficulties frequently encountered by new and early-stage companies in

new and rapidly evolving markets.

These risks include, among other things, the speed at which we can scale up operations, our complete

dependence upon development of our product candidates that currently have no market acceptance, our ability to establish and expand our

brand name, our ability to expand our operations to meet the commercial demand of our clients, our development of and reliance on strategic

and customer relationships and our ability to minimize fraud and other security risks.

The process of developing our products requires significant clinical, nonclinical

and CMC development, laboratory testing and clinical studies.

In addition, commercialization of our product candidates will require that

we obtain necessary regulatory approvals and establish sales, marketing and manufacturing capabilities, either through internal hiring

or through contractual relationships with others.

We expect to incur substantial losses for the foreseeable future as a result of anticipated

increases in our research and development costs, including costs associated with conducting preclinical and nonclinical testing and clinical

studies, and regulatory compliance activities.

We expect to incur

substantial additional operating expenses over the next several years as our research, development, preclinical and nonclinical

testing, and clinical study activities increase , and if and when we acquire rights

to additional product candidates.

We may never achieve profitability.

are focused on product development, and we started generating revenues from product sales in the third quarter of 2023.

incurred losses in each year of our operations, and we expect to continue to incur operating losses for the foreseeable future.

These operating losses have adversely affected and are likely to continue to adversely affect our working capital, total assets

and shareholders’ equity.

and our prospects should be examined in light of the risks and difficulties frequently encountered by new and early-stage companies

in new and rapidly evolving markets.

These risks include, among other things, the speed at which we can scale up operations, our

complete dependence upon development of our product candidates that currently have no market acceptance, our ability to establish

and expand our brand name, our ability to expand our operations to meet the commercial demand of our clients, our development

of and reliance on strategic and customer relationships and our ability to minimize fraud and other security risks.

process of developing our products requires significant clinical, nonclinical and CMC development, laboratory testing and clinical

In addition, commercialization of our product candidates will require that we obtain necessary regulatory approvals and

establish sales, marketing and manufacturing capabilities, either through internal hiring or through contractual relationships

We expect to incur substantial losses for the foreseeable future as a result of anticipated increases in our research

and development costs, including costs associated with conducting preclinical and nonclinical testing and clinical studies, and

regulatory compliance activities.

expect to incur substantial additional operating expenses over the next several years as our research, development, preclinical

and nonclinical testing, and clinical study activities increase , and if and when we acquire rights to additional product

The amount of future losses and when, if ever, we will achieve profitability are uncertain.

have no products that have generated any commercial revenue, do not expect to generate revenues from the commercial sale of products

in the near future, and might never generate revenues from the sale of products.

Our ability to generate revenue and achieve

profitability will depend on, among other things, successful completion of the development of our product candidates;

necessary regulatory approvals from the FDA;

We have two products that

have generated commercial revenue starting in the third quarter of 2023, but we do not expect revenues from the commercial sale

of products to exceed expenses in the near future.

Our ability to generate revenue and achieve profitability will depend on, among

other things, successful completion of the development of our product candidates;

obtaining necessary regulatory approvals from

establishing manufacturing, sales, and marketing arrangements with third parties;

1 unchanged sentence

establishing a favorable competitive position;

and raising sufficient funds to finance

our activities.

Many of these factors will depend on circumstances beyond our control.

We might not succeed at any of these

undertakings.

If we are unsuccessful at some or all of these undertakings, our business, prospects, and results of operations may be

materially adversely affected.

expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to

predict our future performance.

We are a development-stage biopharmaceutical

and our operations to date have been primarily limited to developing our technology and undertaking preclinical and nonclinical testing

and clinical studies of our latest stage product candidate, TNX-102 SL for FM, Long COVID and potentially other CNS conditions.

not yet obtained regulatory approvals for TNX-102 SL or any of our other product candidates.

Consequently, any predictions made about

our future success or viability may not be as accurate as they could be if we had a longer operating history or commercialized products.

Our financial condition has varied significantly in the past and will continue to fluctuate from quarter-to-quarter or year-to-year due

to a variety of factors, many of which are beyond our control.

Factors relating to our business that may contribute to these fluctuations

include other factors described elsewhere in this annual report and also include, among other things:

our ability to obtain additional funding

to develop our product candidates;

delays in the commencement, enrollment and timing of clinical studies;

the success of our clinical studies through all phases of clinical development,

including studies of our most advanced product candidate, TNX-102 SL for FM, Long COVID and potentially other CNS indications;

any delays in regulatory review and approval of product candidates in clinical

our ability to obtain and maintain regulatory approval for our product candidate

TNX-102 SL for FM and Long COVID, TNX-1900 for chronic migraine, TNX-601 ER for depression or any of our other product candidates in the

United States and foreign jurisdictions;

potential nonclinical toxicity and/or side effects of our product candidates

that could delay or prevent commercialization, limit the indications for any approved drug, require the establishment of REMS, or cause

an approved drug to be taken off the market;

our ability to establish or maintain collaborations, licensing or other arrangements;

market acceptance of our product candidates;

competition from existing products or new products that may emerge;

the ability of patients or healthcare providers to obtain coverage of or sufficient

reimbursement for our products;

our ability to leverage our proprietary technology platform to discover and

develop additional product candidates;

our ability and our licensors’

abilities to successfully obtain, maintain, defend and enforce intellectual property rights important to our business;

potential product liability claims;

Accordingly, the results of any

quarterly or annual periods should not be relied upon as indications of future operating performance.

RISKS RELATED TO PRODUCT DEVELOPMENT, REGULATORY

APPROVAL, MANUFACTURING AND COMMERCILAIZATION

Our product candidates are novel and still in

We are a clinical-stage pharmaceutical

company focused on the development of drug product candidates, all of which are still in development.

Our drug development methods may

not lead to commercially viable drugs for any of several reasons.

For example, we may fail to identify appropriate targets or compounds,

our drug candidates may fail to be safe and effective in clinical studies, or we may have inadequate financial or other resources to pursue

development efforts for our drug candidates.

Our drug candidates will require significant additional development, clinical studies, regulatory

clearances and additional investment by us or our collaborators before they can be commercialized.

Further, we and our product candidates are subject to extensive regulation

by the FDA and comparable regulatory authorities in other countries governing, among other things, research, testing, clinical studies,

manufacturing, labeling, promotion, selling, adverse event reporting and recordkeeping.

We are not permitted to market any of our product

candidates in the United States until we receive approval of an NDA for a product candidate from the FDA or the equivalent approval from

a foreign regulatory authority.

Obtaining FDA approval is a lengthy, expensive and uncertain process.

We currently have one product candidate,

TNX-102 SL, in Phase 3 development for the treatment of FM and Phase 2 development for the treatment of Long COVID, and we have three

other products in Phase 2 development for the treatment of chronic migraine, depression and cocaine intoxication.

and raising sufficient funds to finance our activities.

Many of these factors will

depend on circumstances beyond our control.

We might not succeed at any of these undertakings.

If we are unsuccessful at some

or all of these undertakings, our business, prospects, and results of operations may be materially adversely affected.

expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult

to predict our future performance.

are a development-stage biopharmaceutical and our operations to date have been primarily limited to developing our technology

and undertaking preclinical and nonclinical testing and clinical studies of our latest stage product candidate, TNX-102 SL for

FM, Long COVID and potentially other CNS conditions.

We have not yet obtained regulatory approvals for TNX-102 SL or any of our

other product candidates.

Consequently, any predictions made about our future success or viability may not be as accurate as they

could be if we had a longer operating history or commercialized products.

Our financial condition has varied significantly in

the past and will continue to fluctuate from quarter-to-quarter or year-to-year due to a variety of factors, many of which are

beyond our control.

Factors relating to our business that may contribute to these fluctuations include other factors described

elsewhere in this annual report and also include, among other things:

ability to obtain additional funding to develop our product candidates;

in the commencement, enrollment and timing of clinical studies;

success of our clinical studies through all phases of clinical development, including studies of our most advanced product

candidate, TNX-102 SL for FM, FM-type Long COVID and potentially other CNS indications;

delays in regulatory review and approval of product candidates in clinical development;

ability to obtain and maintain regulatory approval for our product candidate TNX-102 SL for FM and FM-type Long COVID, or

any of our other product candidates in the United States and foreign jurisdictions;

nonclinical toxicity and/or side effects of our product candidates that could delay or prevent commercialization, limit the

indications for any approved drug, require the establishment of REMS, or cause an approved drug to be taken off the market;

ability to establish or maintain collaborations, licensing or other arrangements;

acceptance of our product candidates;

from existing products or new products that may emerge;

ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for our products;

ability to leverage our proprietary technology platform to discover and develop additional product candidates;

ability and our licensors’ abilities to successfully obtain, maintain, defend and enforce intellectual property rights

important to our business;

product liability claims;

the results of any quarterly or annual periods should not be relied upon as indications of future operating performance.

are exposed to cybersecurity and data privacy risks that, if realized, could expose us to legal liability, damage our reputation

and harm our business.

face risks of cyber-attacks, computer hacks, theft, viruses, malicious software, phishing, employee error, denial-of-service attacks

and other security breaches that could jeopardize the performance of our software and expose us to financial and reputational

Any of these occurrences could create liability for us, put our reputation in jeopardy and harm our business.

could be in the form of theft of our or our customers’ confidential information, the inability to access our systems.

some cases, we rely on the safeguards put in place by third parties to protect against security threats.

These third parties,

including vendors that provide products and services for our operations, could also be a source of security risk to us in the

event of a failure or a security incident affecting their own security systems and infrastructure.

Our network of partners could

also be a source of vulnerability to the extent their applications interface with ours, whether unintentionally or through a malicious

We do not review the software code included in third-party integrations in all instances.

Because the techniques used

to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against

a target, we or these third parties may be unable to anticipate these techniques or to implement adequate preventative measures.

We have internal controls designed to prevent cyber-related frauds related to authorizing the transfer of funds, but such internal

controls may not be adequate.

With the increasing frequency of cyber-related frauds to obtain inappropriate payments and other

threats related to cyber-attacks, we may find it necessary to expend resources to remediate cyber-related incidents or to enhance

and strengthen our cybersecurity.

Our remediation efforts may not be successful and could result in interruptions, delays or cessation

Although we have insurance coverage for losses associated with cyber-attacks, as with all insurance policies, there

are coverage exclusions and limitations, and our coverage may not be sufficient to cover all possible claims, and we may still

suffer losses that could have a material adverse effect on our reputation and business.

increase in remote working arrangements by our employees, vendors, and other third parties also increase the risk of a data security

compromise and the possible attack surfaces.

Although we conduct training as part of our information security, cybersecurity,

and data privacy efforts, that training cannot be completely effective in preventing those attacks from being successful.

can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures,

will be fully implemented, complied with or effective in protecting our systems and information.

RELATED TO PRODUCT DEVELOPMENT, REGULATORY APPROVAL, MANUFACTURING AND COMMERCILAIZATION

product candidates are novel and still in development.

are a biopharmaceutical company focused on commercializing, developing, discovering and licensing therapeutics to treat and prevent

human disease and alleviate suffering.

Our drug development methods may not lead to commercially viable drugs for any of several

For example, we may fail to identify appropriate targets or compounds, our drug candidates may fail to be safe and effective

in clinical studies, or we may have inadequate financial or other resources to pursue development efforts for our drug candidates.

Our drug candidates will require significant additional development, clinical studies, regulatory clearances and additional investment

by us or our collaborators before they can be commercialized.

Further, we and our product

candidates are subject to extensive regulation by the FDA and comparable regulatory authorities in other countries governing, among other

things, research, testing, clinical studies, manufacturing, labeling, promotion, selling, adverse event reporting and recordkeeping.

are not permitted to market any of our product candidates in the United States until we receive approval of an NDA for a product candidate

from the FDA or the equivalent approval from a foreign regulatory authority.

Obtaining FDA approval is a lengthy, expensive and uncertain

We currently have one product candidate, Tonmya, for the management of fibromyalgia and have completed two successful Phase 3

trials and for which we are preparing an NDA.

We also have TNX-102 SL in Phase 2 development for the treatment of FM-type Long COVID,

and we have two other products in Phase 2 development:

TNX-1300 for the treatment of cocaine intoxication, and TNX-1900 for the treatment

of binge eating disorder, adolescent obesity, social anxiety disorder and bone loss associated with autism.

TNX-2900 is in development

for Prader Willi Syndrome and has a cleared IND, orphan drug designation and Pediatric Rare Disease Designation.

The success of our business

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any reason, it would have a material adverse effect on our business and our ability to continue operations.

As we have no approved products on the market,

we do not expect to generate any revenues from product sales in the foreseeable future, if at all.

To date, we have no approved product

on the market and have generated no product revenues.

We have funded our operations primarily from sales of our securities.

received, and do not expect to receive for at least the next couple of years, if at all, any revenues from the commercialization of our

product candidates.

To obtain revenues from sales

of our product candidates, we must succeed, either alone or with third parties, in developing, obtaining regulatory approval for, manufacturing

and marketing drugs with commercial potential.

We may never succeed in these activities, and we may not generate sufficient revenues to

continue our business operations or achieve profitability.

We are largely dependent on the success of our

lead product candidates, and we cannot be certain that these product candidates will receive regulatory approval or be successfully commercialized.

We have not yet submitted an NDA

or foreign equivalent or received marketing approval for our lead product candidates anywhere in the world.

The clinical development programs

may not lead to commercial products for a number of reasons, including if we fail to obtain necessary approvals from the FDA or foreign

regulatory authorities because our clinical studies fail to demonstrate to their satisfaction that this product candidate is safe and

effective or a clinical program may be put on hold due to unexpected safety issues.

We may also fail to obtain the necessary approvals

if we have inadequate financial or other resources to advance our product candidates through the clinical study process.

Any failure or

delay in completing clinical studies or obtaining regulatory approvals for our lead product candidates in a timely manner would have a

material adverse impact on our business and our stock price.

We may not commence or advance clinical trials

for COVID-related products if the COVID-19 disease outbreak subsides.

Disease outbreaks are unpredictable.

we have two approved products on the market, we do not expect revenues from product sales to exceed expenses in the foreseeable

future, if at all.

date, we have two approved products on the market and have started generating product revenues in the second half of 2023.

we have primarily funded our operations from sales of our securities.

We expect to rely on investment capital for the foreseeable

obtain revenues from sales of our product candidates, we must succeed, either alone or with third parties, in developing, obtaining

regulatory approval for, manufacturing and marketing drugs with commercial potential.

We may never succeed in these activities,

and we may not generate sufficient revenues to continue our business operations or achieve profitability.

are largely dependent on the success of our lead product candidates, and we cannot be certain that these product candidates will

receive regulatory approval or be successfully commercialized.

have not yet submitted an NDA or foreign equivalent or received marketing approval for our lead product candidates anywhere in

The clinical development programs may not lead to commercial products for a number of reasons, including if we fail

to obtain necessary approvals from the FDA or foreign regulatory authorities because our clinical studies fail to demonstrate

to their satisfaction that this product candidate is safe and effective or a clinical program may be put on hold due to unexpected

safety issues.

We may also fail to obtain the necessary approvals if we have inadequate financial or other resources to advance

our product candidates through the clinical study process.

Any failure or delay in completing clinical studies or obtaining regulatory

approvals for our lead product candidates in a timely manner would have a material adverse impact on our business and our stock

may not commence or advance clinical trials for COVID-related products if the COVID-19 disease outbreak subsides.

outbreaks are unpredictable.

For example, the SARS virus disappeared just four months after it caused a global panic.

In the event that COVID-19 has a similar disease

cycle, we may be forced to abandon or delay the development of our COVID-related products due to a lack of patients or government funding.

Successful development of our products is uncertain.

Our development of current and

future product candidates is subject to the risks of failure and delay inherent in the development of new pharmaceutical products, including:

that COVID-19 has a similar disease cycle, we may be forced to abandon or delay the development of our COVID-related products

due to a lack of patients or government funding.

development of our products is uncertain.

development of current and future product candidates is subject to the risks of failure and delay inherent in the development

of new pharmaceutical products, including:

delays in product development, clinical testing, or manufacturing;

unplanned expenditures in product development, clinical testing, or

manufacturing;

unplanned expenditures

in product development, clinical testing, or manufacturing;

failure to receive regulatory approvals;

emergence of superior or equivalent products;

inability to manufacture on its

own, or through any others, product candidates on a commercial scale;

and failure to achieve market acceptance.

Because of these risks, our research

and development efforts may not result in any commercially viable products.

If a significant portion of these development efforts are

not successfully completed, required regulatory approvals are not obtained or any approved products are not commercially successfully,

our business, financial condition, and results of operations may be materially harmed.

Clinical studies required for our product candidates

are expensive and time-consuming, and their outcome is uncertain.

In order to obtain FDA approval

to market a new pharmaceutical product, we must demonstrate proof of safety and effectiveness in humans.

To meet these requirements, we

must conduct “adequate and well controlled” clinical studies.

Conducting clinical studies is a lengthy, time-consuming, and

expensive process.

The length of time may vary substantially according to the type, complexity, novelty, and intended use of the product

candidate, and often can be several years or more per study.

Delays associated with products for which we are directly conducting clinical

studies may cause us to incur additional operating expenses.

The commencement and rate of completion of clinical studies may be delayed

by many factors, including, for example:

inability to manufacture sufficient quantities of stable and qualified materials under cGMP,

for use in clinical studies;

emergence of superior or

equivalent products;

inability to manufacture on its own, or through any others, product candidates on a commercial scale;

failure to achieve market acceptance.

of these risks, our research and development efforts may not result in any commercially viable products.

If a significant portion

of these development efforts are not successfully completed, required regulatory approvals are not obtained or any approved products

are not commercially successfully, our business, financial condition, and results of operations may be materially harmed.

studies required for our product candidates are expensive and time-consuming, and their outcome is uncertain.

order to obtain FDA approval to market a new pharmaceutical product, we must demonstrate proof of safety and effectiveness in

To meet these requirements, we must conduct “adequate and well controlled” clinical studies.

Conducting clinical

studies is a lengthy, time-consuming, and expensive process.

The length of time may vary substantially according to the type,

complexity, novelty, and intended use of the product candidate, and often can be several years or more per study.

Delays associated

with products for which we are directly conducting clinical studies may cause us to incur additional operating expenses.

The commencement

and rate of completion of clinical studies may be delayed by many factors, including, for example:

inability to manufacture sufficient

quantities of stable and qualified materials under cGMP, for use in clinical studies;

slower than expected rates of patient recruitment;

failure to recruit a sufficient number of patients;

of clinical study protocols;

changes in regulatory requirements for clinical studies;

modification of clinical study protocols;

changes in regulatory requirements

for clinical studies;

the lack of effectiveness during clinical studies;

the emergence of unforeseen safety issues;

delays, suspension, or termination of the clinical studies due to the IRB responsible for overseeing

the study at a particular study site;

and government or regulatory delays or “clinical holds” requiring suspension or termination

of the studies.

delays, suspension,

or termination of the clinical studies due to the IRB responsible for overseeing the study at a particular study site;

and government

or regulatory delays or “clinical holds” requiring suspension or termination of the studies.

results from early clinical studies are not necessarily predictive of results obtained in later clinical studies.

Accordingly, even if

we obtain positive results from early clinical studies, we may not be able to confirm the results in future clinical studies.

clinical studies may not demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals for product candidates.

clinical studies may be conducted in patients with CNS conditions, and in some cases, our product candidates are expected to be used in

combination with approved therapies that themselves have significant adverse event profiles.

During the course of treatment, these patients

could suffer adverse medical events or die for reasons that may or may not be related to our product candidates.

We cannot ensure that

safety issues will not arise with respect to our product candidates in clinical development.

failure of clinical studies to demonstrate safety and effectiveness for the desired indications could harm the development of that product

candidate and other product candidates.

This failure could cause us to abandon a product candidate and could delay development of other

product candidates.

Any delay in, or termination of, our clinical studies would delay the filing of our NDAs with the FDA and, ultimately,

our ability to commercialize our product candidates and generate product revenues.

Any change in, or termination of, our clinical studies

could materially harm our business, financial condition, and results of operations.

even if we obtain positive results from early clinical studies, we may not be able to confirm the results in future clinical studies.

In addition, clinical studies may not demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals

for product candidates.

clinical studies may be conducted in patients with CNS conditions, and in some cases, our product candidates are expected to be

used in combination with approved therapies that themselves have significant adverse event profiles.

During the course of treatment,

these patients could suffer adverse medical events or die for reasons that may or may not be related to our product candidates.

We cannot ensure that safety issues will not arise with respect to our product candidates in clinical development.

failure of clinical studies to demonstrate safety and effectiveness for the desired indications could harm the development of

that product candidate and other product candidates.

This failure could cause us to abandon a product candidate and could delay

development of other product candidates.

Any delay in, or termination of, our clinical studies would delay the filing of our NDAs

with the FDA and, ultimately, our ability to commercialize our product candidates and generate product revenues.

Any change in,

or termination of, our clinical studies could materially harm our business, financial condition, and results of operations.

are subject to extensive and costly government regulation.

candidates employing our technology are subject to extensive and rigorous domestic government regulation including regulation by the FDA,

the Centers for Medicare and Medicaid Services, other divisions of the United States Department of Health and Human Services, the United

States Department of Justice, state and local governments, and their respective foreign equivalents.

The FDA regulates the research, development,

preclinical and nonclinical testing and clinical studies, manufacture, safety, effectiveness, record-keeping, reporting, labeling, storage,

approval, advertising, promotion, sale, distribution, import, and export of biopharmaceutical products.

The FDA regulates small molecule

chemical entities as drugs, subject to an NDA under the FDCA.

The FDA applies the same standards for biologics, requiring an IND application,

followed by a Biologic License Application, or BLA, prior to licensure.

Other products, such as vaccines, are also regulated under the

Public Health Service Act.

FDA has conflated the standards for approval of NDAs and BLAs so that they require the same types of information

on safety, effectiveness, and CMCs.

If products employing our technologies are marketed abroad, they will also be subject to extensive

regulation by foreign governments, whether or not they have obtained FDA approval for a given product and its uses.

Such foreign regulation

may be equally or more demanding than corresponding United States regulation.

candidates employing our technology are subject to extensive and rigorous domestic government regulation including regulation

by the FDA, the Centers for Medicare and Medicaid Services, other divisions of the United States Department of Health and Human

Services, the United States Department of Justice, state and local governments, and their respective foreign equivalents.

FDA regulates the research, development, preclinical and nonclinical testing and clinical studies, manufacture, safety, effectiveness,

record-keeping, reporting, labeling, storage, approval, advertising, promotion, sale, distribution, import, and export of biopharmaceutical

The FDA regulates small molecule chemical entities as drugs, subject to an NDA under the FDCA.

The FDA applies the same

standards for biologics, requiring an IND application, followed by a Biologic License Application, or BLA, prior to licensure.

Other products, such as vaccines, are also regulated under the Public Health Service Act.

FDA has conflated the standards for

approval of NDAs and BLAs so that they require the same types of information on safety, effectiveness, and CMCs.

If products employing

our technologies are marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not

they have obtained FDA approval for a given product and its uses.

Such foreign regulation may be equally or more demanding than

corresponding United States regulation.

regulation substantially increases the cost and risk of researching, developing, manufacturing, and selling our products.

The regulatory

review and approval process, which includes preclinical and nonclinical testing and clinical studies of each product candidate, is lengthy,

expensive, and uncertain.

We or our collaborators must obtain and maintain regulatory authorization to conduct clinical studies.

our collaborators must obtain regulatory approval for each product we intend to market, and the manufacturing facilities used for the

products must be inspected and meet legal requirements.

Securing regulatory approval requires the submission of extensive preclinical,

nonclinical and clinical data and other supporting information for each proposed therapeutic indication in order to establish the product’s

safety and efficacy, and in the case of biologics also potency and purity, for each intended use.

The development and approval process

takes many years, requires substantial resources, and may never lead to the approval of a product.

if we are able to obtain regulatory approval for a particular product, the approval may limit the indicated medical uses for the product,

may otherwise limit our ability to promote, sell, and distribute the product, may require that we conduct costly post-marketing surveillance,

and/or may require that we conduct ongoing post-marketing studies.

Material changes to an approved product, such as, for example, manufacturing

changes or revised labeling, may require further regulatory review and approval.

Once obtained, any approvals may be withdrawn, including,

for example, if there is a later discovery of previously unknown problems with the product, such as a previously unknown safety issue.

regulatory review and approval process, which includes preclinical and nonclinical testing and clinical studies of each product

candidate, is lengthy, expensive, and uncertain.

We or our collaborators must obtain and maintain regulatory authorization to

conduct clinical studies.

We or our collaborators must obtain regulatory approval for each product we intend to market, and the

manufacturing facilities used for the products must be inspected and meet legal requirements.

Securing regulatory approval requires

the submission of extensive preclinical, nonclinical and clinical data and other supporting information for each proposed therapeutic

indication in order to establish the product’s safety and efficacy, and in the case of biologics also potency and purity,

for each intended use.

The development and approval process takes many years, requires substantial resources, and may never lead

to the approval of a product.

if we are able to obtain regulatory approval for a particular product, the approval may limit the indicated medical uses for the

product, may otherwise limit our ability to promote, sell, and distribute the product, may require that we conduct costly post-marketing

surveillance, and/or may require that we conduct ongoing post-marketing studies.

Material changes to an approved product, such

as, for example, manufacturing changes or revised labeling, may require further regulatory review and approval.

Once obtained,

any approvals may be withdrawn, including, for example, if there is a later discovery of previously unknown problems with the

product, such as a previously unknown safety issue.

we, our collaborators, or our CMOs fail to comply with applicable regulatory requirements at any stage during the regulatory process,

such noncompliance could result in, among other things delays in the approval of applications or supplements to approved applications;

refusal of a regulatory authority, including the FDA, to review pending market approval applications or supplements to approved applications;

refusal of a regulatory authority, including the FDA, to review pending market approval applications or supplements to approved

applications;

warning letters;

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product recalls or seizures;

total or partial suspension of production;

total or partial

suspension of production;

civil penalties;

withdrawals of previously approved marketing applications or licenses;

recommendations by the FDA or other regulatory

authorities against governmental contracts;

recommendations

by the FDA or other regulatory authorities against governmental contracts;

and/or criminal prosecutions.

do not have, and may never obtain, the regulatory approvals we need to market our product candidates.

completion of clinical studies, the results are evaluated and, depending on the outcome, submitted to the FDA in the form of an NDA or

BLA in order to obtain FDA approval of the product and authorization to commence commercial marketing.

In responding to an NDA, the FDA

may require additional testing or information, may require that the product labeling be modified, may impose post-approval study and other

commitments or reporting requirements or other restrictions on product distribution, or may deny the application.

The FDA has established

performance goals for review of NDAs or BLAs:

six months for priority applications and ten months for standard applications.

the FDA is not required to complete its review within these time periods.

The timing of final FDA review and action varies greatly but

can take years in some cases and may involve the input of an FDA advisory committee of outside experts.

Product sales in the United States

may commence only when an NDA or BLA is approved.

date, we have not applied for or received the regulatory approvals required for the commercial sale of any of our products in the United

States or in any foreign jurisdiction.

None of our product candidates have been determined to be safe and effective, and we have not submitted

an NDA or BLA to the FDA or an equivalent application to any foreign regulatory authorities for any of our product candidates.

completion of clinical studies, the results are evaluated and, depending on the outcome, submitted to the FDA in the form of an

NDA or BLA in order to obtain FDA approval of the product and authorization to commence commercial marketing.

In responding to

an NDA, the FDA may require additional testing or information, may require that the product labeling be modified, may impose post-approval

study and other commitments or reporting requirements or other restrictions on product distribution, or may deny the application.

The FDA has established performance goals for review of NDAs or BLAs:

six months for priority applications and ten months for

standard applications.

However, the FDA is not required to complete its review within these time periods.

The timing of final

FDA review and action varies greatly but can take years in some cases and may involve the input of an FDA advisory committee of

outside experts.

Product sales in the United States may commence only when an NDA or BLA is approved.

date, we have not applied for or received the regulatory approvals required for the commercial sale of any of our products in

the United States or in any foreign jurisdiction.

None of our product candidates have been determined to be safe and effective,

and we have not submitted an NDA or BLA to the FDA or an equivalent application to any foreign regulatory authorities for any

of our product candidates.

is possible that none of our product candidates will be approved for marketing.

Failure to obtain regulatory approvals, or delays in obtaining

regulatory approvals, may adversely affect the successful commercialization of any drugs or biologics that we or our partners develop,

may impose additional costs on us or our collaborators, may diminish any competitive advantages that we or our partners may attain, and/or

may adversely affect our receipt of revenues or royalties.

Failure to obtain regulatory approvals, or delays

in obtaining regulatory approvals, may adversely affect the successful commercialization of any drugs or biologics that we or

our partners develop, may impose additional costs on us or our collaborators, may diminish any competitive advantages that we

or our partners may attain, and/or may adversely affect our receipt of revenues or royalties.

have never submitted an NDA before, and may be unable to do so for our product candidates we are developing.

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of drug, have limited experience in preparing, submitting and prosecuting regulatory filings, and have not submitted an NDA before.

Consequently,

we may be unable to successfully and efficiently execute and complete this planned clinical study in a way that leads to NDA submission

and approval of our product candidates we are developing.

We may require more time and incur greater costs than our competitors and may

not succeed in obtaining regulatory approvals of product candidates that we develop.

Failure to commence or complete, or delays in, our

planned clinical studies would prevent or delay commercialization of TNX-102 SL and other product candidates we are developing.

product candidates may cause serious adverse events, or SAEs, or undesirable side effects which may delay or prevent marketing approval,

or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their

or undesirable side effects from any of our other product candidates could arise either during clinical development or, if approved, after

the approved product has been marketed.

The results of future clinical studies may show that our product candidates cause SAEs or undesirable

side effects, which could interrupt, delay or halt clinical studies, resulting in delay of, or failure to obtain, marketing approval from

the FDA and other regulatory authorities.

Consequently, we may be unable to successfully and efficiently execute and complete this planned clinical study in a way that

leads to NDA submission and approval of our product candidates we are developing.

We may require more time and incur greater costs

than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop.

Failure to commence

or complete, or delays in, our planned clinical studies would prevent or delay commercialization of TNX-102 SL and other product

candidates we are developing.

product candidates may cause serious adverse events, or SAEs, or undesirable side effects which may delay or prevent marketing

approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise

limit their sales.

or undesirable side effects from any of our other product candidates could arise either during clinical development or, if approved,

after the approved product has been marketed.

The results of future clinical studies may show that our product candidates cause

SAEs or undesirable side effects, which could interrupt, delay or halt clinical studies, resulting in delay of, or failure to

obtain, marketing approval from the FDA and other regulatory authorities.

any of our other product candidates cause SAEs or undesirable side effects or suffer from quality control issues:

regulatory authorities may impose

a clinical hold or risk evaluation and mitigation strategies, or REMS, which could result in substantial delays, significantly increase

the cost of development, and/or adversely impact our ability to continue development of the product;

regulatory authorities may require

the addition of statements, specific warnings, or contraindications to the product label, or restrict the product’s indication to

a smaller potential treatment population;

we may be required to change the

way the product is administered or conduct additional clinical studies;

may be required to implement a risk minimization action plan, which could result in substantial cost increases and have a negative impact

on our ability to commercialize the product;

we may be required to limit the

participants who can receive the product;

we may be subject to limitations

on how we promote the product;

we may, voluntarily or involuntarily,

initiate field alerts for product recall, which may result in shortages;

sales of the product may decrease

significantly;

regulatory authorities may require

us to take our approved product off the market;

we may be subject to litigation

or product liability claims;

our reputation may suffer.

of these events could prevent us from achieving or maintaining market acceptance of the affected product or could substantially increase

commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of our

we are unable to file for approval of TNX-102 SL under Section 505(b)(2) of the FDCA or if we are required to generate additional data

related to safety and efficacy in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated development

and commercialization timelines.

Our current plans for filing NDAs

for our most advanced product candidate, TNX-102 SL, include efforts to minimize the data we will be required to generate in order to

obtain marketing approval and therefore reduce the development time.

We intend to file Section 505(b)(2) NDAs for TNX-102 SL for FM, Long

COVID and for other proposed indications, that might, if accepted by the FDA, save time and expense in the development and testing of

TNX-102 SL for FM and other

CNS indications is our most advanced development product candidate which is in mid-Phase 3 for FM.

The timeline for filing and

review of our NDA for TNX-102 SL for FM is based on our plan to submit this NDA under Section 505(b)(2) of the FDCA, which would

enable us to rely in part on data in the public domain or elsewhere.

We have not yet filed an NDA under Section 505(b)(2) for any of

our product candidates.

Depending on the data that may be required by the FDA for approval, some of the data may be related to

products already approved by the FDA.

If the data relied upon is related to products already approved by the FDA and covered by

third-party patents, we would be required to certify that we do not infringe the listed patents or that such patents are invalid or

unenforceable.

As a result of the certification, the third-party would have 45 days from notification of our certification to

initiate an action against us.

In the event that an action is brought in response to such a certification, the approval of our

NDA could be subject to a stay of up to 30 months or more while we defend against such a suit.

Approval of our product candidates

under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the

applicability of those patents to our product candidates.

Alternatively, we may elect to generate sufficient additional clinical

data so that we no longer rely on data which triggers a potential stay of the approval of our product candidates.

exclusivity periods apply to our applications under Section 505(b)(2), the FDA has broad discretion to require us to generate

additional data on the safety and efficacy of our product candidates to supplement third-party data on which we may be permitted to

authorities may impose a clinical hold or risk evaluation and mitigation strategies, or REMS, which could result in substantial

delays, significantly increase the cost of development, and/or adversely impact our ability to continue development of the

authorities may require the addition of statements, specific warnings, or contraindications to the product label, or restrict

the product’s indication to a smaller potential treatment population;

may be required to change the way the product is administered or conduct additional clinical studies;

may be required to implement a risk minimization action plan, which could result in substantial

cost increases and have a negative impact on our ability to commercialize the product;

may be required to limit the participants who can receive the product;

may be subject to limitations on how we promote the product;

may, voluntarily or involuntarily, initiate field alerts for product recall, which may result in shortages;

of the product may decrease significantly;

authorities may require us to take our approved product off the market;

may be subject to litigation or product liability claims;

reputation may suffer.

of these events could prevent us from achieving or maintaining market acceptance of the affected product or could substantially

increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from

the sale of our products.

we are unable to file for approval of TNX-102 SL under Section 505(b)(2) of the FDCA or if we are required to generate additional

data related to safety and efficacy in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated

development and commercialization timelines.

current plans for filing NDAs for our most advanced product candidate, TNX-102 SL, include efforts to minimize the data we will

be required to generate in order to obtain marketing approval and therefore reduce the development time.

We intend to file Section

505(b)(2) NDAs for TNX-102 SL for FM, Long COVID and for other proposed indications, that might, if accepted by the FDA, save

time and expense in the development and testing of TNX-102 SL.

Tonmya or TNX-102 SL for FM is our most advanced development product candidate which has completed two successful Phase 3 trials in FM and for which we are submitting the NDA under Section 505(b)(2) of the

FDCA, which would enable us to rely in part on data in the public domain or elsewhere.

We have not yet filed an NDA under Section

505(b)(2) for any of our product candidates.

Depending on the data that may be required by the FDA for approval, some of the data

may be related to products already approved by the FDA.

If the data relied upon is related to products already approved by the

FDA and covered by third-party patents, we would be required to certify that we do not infringe the listed patents or that such

patents are invalid or unenforceable.

As a result of the certification, the third-party would have 45 days from notification of

our certification to initiate an action against us.

In the event that an action is brought in response to such a certification,

the approval of our NDA could be subject to a stay of up to 30 months or more while we defend against such a suit.

our product candidates under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully

challenge the applicability of those patents to our product candidates.

Alternatively, we may elect to generate sufficient additional

clinical data so that we no longer rely on data which triggers a potential stay of the approval of our product candidates.

if no exclusivity periods apply to our applications under Section 505(b)(2), the FDA has broad discretion to require us to generate

additional data on the safety and efficacy of our product candidates to supplement third-party data on which we may be permitted

In either event, we could be required, before obtaining marketing approval for any of our product candidates, to conduct

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Such additional new research and development activities would be costly and time-consuming.

We may not be able to realize

a shortened development timeline for TNX-102 SL for FM, Long COVID (or other proposed indications under TNX-102 SL), and the FDA may not

approve our NDA based on their review of the submitted data.

If cyclobenzaprine-containing products are withdrawn from the market by the

FDA for any safety reason, we may not be able to reference such products to support a 505(b)(2) NDA for TNX-102 SL, and we may need to

fulfill the more extensive requirements of Section 505(b)(1).

If we are required to generate additional data to support approval, we may

be unable to meet our anticipated development and commercialization timelines, may be unable to generate the additional data at a reasonable

cost, or at all, and may be unable to obtain marketing approval of our lead product candidate.

breakthrough, fast track or orphan drug designation or grant of priority review status by the FDA may not actually lead to a faster development

or regulatory review or approval process, nor will it assure FDA approval of our product candidates.

Additionally, our product candidates

may treat indications that do not qualify for priority review vouchers.

may not be able to realize a shortened development timeline for TNX-102 SL for FM, Long COVID (or other proposed indications under

TNX-102 SL), and the FDA may not approve our NDA based on their review of the submitted data.

If cyclobenzaprine-containing products

are withdrawn from the market by the FDA for any safety reason, we may not be able to reference such products to support a 505(b)(2)

NDA for TNX-102 SL, and we may need to fulfill the more extensive requirements of Section 505(b)(1).

If we are required to generate

additional data to support approval, we may be unable to meet our anticipated development and commercialization timelines, may

be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval of our

lead product candidate.

breakthrough, fast track or orphan drug designation or grant of priority review status by the FDA may not actually lead to a faster

development or regulatory review or approval process, nor will it assure FDA approval of our product candidates.

Additionally,

our product candidates may treat indications that do not qualify for priority review vouchers.

a product candidate offers major advances in treatment, the FDA may designate it eligible for priority review.

The FDA has broad discretion

whether or not to grant these designations, so even if we believe a particular product candidate is eligible for these designations, we

cannot assure you that the FDA would decide to grant them.

Even if we do receive fast track designation or priority review, we may not

experience a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw fast track designation

if it believes that the designation is no longer supported by data from our clinical development program.

if approved, our products will be subject to extensive post-approval regulation.

The FDA has broad

discretion whether or not to grant these designations, so even if we believe a particular product candidate is eligible for these

designations, we cannot assure you that the FDA would decide to grant them.

Even if we do receive fast track designation or priority

review, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development

if approved, our product candidates will be subject to extensive post-approval regulation.

a product is approved, numerous post-approval requirements apply.

Among other things, the holder of an approved NDA is subject to periodic

and other FDA monitoring and reporting obligations, including obligations to monitor and report adverse events and instances of the failure

of a product to meet the specifications in the NDA.

Application holders must submit new or supplemental applications and obtain FDA approval

for certain changes to the approved product, product labeling, or manufacturing process.

Application holders must also submit advertising

and other promotional material to the FDA and report on ongoing clinical studies.

on the circumstances, failure to meet these post-approval requirements can result in criminal prosecution, fines, injunctions, recall

or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, or refusal

to allow us to enter into supply contracts, including government contracts.

In addition, even if we comply with FDA and other requirements,

new information regarding the safety or effectiveness of a product could lead the FDA to modify or withdraw product approval.

Among other things, the holder of an approved NDA is subject

to periodic and other FDA monitoring and reporting obligations, including obligations to monitor and report adverse events and

instances of the failure of a product to meet the specifications in the NDA.

Application holders must submit new or supplemental

applications and obtain FDA approval for certain changes to the approved product, product labeling, or manufacturing process.

Application holders must also submit advertising and other promotional material to the FDA and report on ongoing clinical studies.

on the circumstances, failure to meet these post-approval requirements can result in criminal prosecution, fines, injunctions,

recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals,

or refusal to allow us to enter into supply contracts, including government contracts.

In addition, even if we comply with FDA

and other requirements, new information regarding the safety or effectiveness of a product could lead the FDA to modify or withdraw

product approval.

if we obtain regulatory approval to market our product candidates, our product candidates may not be accepted by the market.

if the FDA approves one or more of our product candidates, physicians and patients may not accept it or use it.

Even if physicians and

patients would like to use our products, our products may not gain market acceptance among healthcare payors such as managed care formularies,

insurance companies or government programs such as Medicare or Medicaid.

Acceptance and use of our products will depend upon a number

of factors including:

perceptions by members of the health care community, including physicians, about the safety and effectiveness of

our drug or device product;

Even if physicians

and patients would like to use our products, our products may not gain market acceptance among healthcare payors such as managed

care formularies, insurance companies or government programs such as Medicare or Medicaid.

Acceptance and use of our products

will depend upon a number of factors including:

perceptions by members of the health care community, including physicians, about

the safety and effectiveness of our drug or device product;

cost-effectiveness of our product relative to competing products;

availability of reimbursement for our product

from government or other healthcare payors;

and effectiveness of marketing and distribution efforts by us and our licensees and distributors,

availability of reimbursement for our product from government or other healthcare payors;

and effectiveness of marketing and distribution

efforts by us and our licensees and distributors, if any.

degree of market acceptance of any pharmaceutical product that we develop will depend on a number of factors, including:

cost-effectiveness;

the safety and effectiveness of

our products, including any significant potential side effects (including drowsiness and dry mouth), as compared to alternative products

or treatment methods;

the timing of market entry as compared

to competitive products;

the rate of adoption of our products

by doctors and nurses;

product labeling or product insert

required by the FDA for each of our products;

reimbursement policies of government

and third-party payors;

effectiveness of our sales, marketing

and distribution capabilities and the effectiveness of such capabilities of our collaborative partners, if any;

unfavorable publicity concerning

our products or any similar products.

we expect sales of our current product candidates, if approved, to generate substantially all of our product revenues for the foreseeable

future, the failure of these products to find market acceptance would harm our business and could require us to seek additional financing.

may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs

or product candidates that may be more profitable or for which there is a greater likelihood of success.

safety and effectiveness of our products, including any significant potential side effects (including drowsiness and dry mouth),

as compared to alternative products or treatment methods;

timing of market entry as compared to competitive products;

rate of adoption of our products by doctors and nurses;

labeling or product insert required by the FDA for each of our products;

reimbursement

policies of government and third-party payors;

effectiveness

of our sales, marketing and distribution capabilities and the effectiveness of such capabilities of our collaborative partners,

publicity concerning our products or any similar products.

we expect sales of our current product candidates, if approved, to generate substantially all of our product revenues for the

foreseeable future, the failure of these products to find market acceptance would harm our business and could require us to seek

additional financing.

may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize

on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.

we have limited financial and human resources, we are currently focusing on development of our lead product candidates.

As a result, we

may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on existing and future product candidates for specific indications may not yield any commercially viable products.

do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights

to that product candidate through strategic alliance, licensing or other royalty arrangements in cases in which it would have been more

advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate internal resources

to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have

greater commercial potential.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products

or profitable market opportunities.

Our spending on existing and future product candidates for specific indications may not yield

any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular

product candidate, we may relinquish valuable rights to that product candidate through strategic alliance, licensing or other

royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization

rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which

it would have been more advantageous to enter into a partnering arrangement.

RELATED TO OUR FINANCIAL CONDITION AND CAPITAL REQUIREMENTS;

independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern

in its report on our audited financial statements.

We may be unable to continue to operate without the threat of liquidation for the foreseeable

In connection with our management’s

assessment, our report from our independent registered public accounting firm for the fiscal year ended December 31, 2022 includes

an explanatory paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our

ability to continue as a going concern.

If we are unable to obtain sufficient funding, our business, prospects, financial condition and

results of operations will be materially and adversely affected and we may be unable to continue as a going concern.

For example, we anticipate

that our existing cash and cash equivalents will enable us to maintain our current operations into the fourth quarter of 2023, but not

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which

those assets are carried on our consolidated financial statements, and investors will likely lose all or a part of their investment.

reports from our independent registered public accounting firm may also contain statements expressing substantial doubt about our ability

to continue as a going concern.

If we seek additional financing to fund our business activities in the future and there remains substantial

doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding

on commercially reasonable terms or at all.

independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going

concern in its report on our audited financial statements.

We may be unable to continue to operate without the threat of liquidation

for the foreseeable future.

connection with our management’s assessment, our report from our independent registered public accounting firm for the fiscal

year ended December 31, 2023 includes an explanatory paragraph stating that our recurring losses from operations and net

capital deficiency raise substantial doubt about our ability to continue as a going concern.

If we are unable to obtain sufficient

funding, our business, prospects, financial condition and results of operations will be materially and adversely affected and

we may be unable to continue as a going concern.

For example, we anticipate that our existing cash and cash equivalents will enable

us to maintain our current operations into the second quarter of 2024, but not beyond.

If we are unable to continue as a going

concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated

financial statements, and investors will likely lose all or a part of their investment.

Future reports from our independent registered

public accounting firm may also contain statements expressing substantial doubt about our ability to continue as a going concern.

If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability

to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially

reasonable terms or at all.

will need additional capital.

If additional capital is not available or is available at unattractive terms, we may be forced to delay,

reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or curtail our operations.

order to develop and bring our product candidates to market, we must commit substantial resources to costly and time-consuming research,

preclinical and nonclinical testing, clinical studies and marketing activities and the buildout of our research and development and manufacturing

We anticipate that our existing cash and cash equivalents will enable us to maintain our current operations into the fourth

quarter of 2023, but not beyond.

We anticipate using our cash and cash equivalents to fund further research and development with respect

to our lead product candidate.

We will, however, need to raise additional funding sooner if our business or operations change in a manner

that consumes available resources more rapidly than we anticipate.

Our requirements for additional capital will depend on many factors,

If additional capital is not available or is available at unattractive terms, we may be forced to

delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or curtail

our operations.

order to develop and bring our product candidates to market, we must commit substantial resources to costly and time-consuming

research, preclinical and nonclinical testing, clinical studies and marketing activities and the buildout of our research and

development and manufacturing facilities.

We anticipate that our existing cash and cash equivalents will enable us to maintain

our current operations into the second quarter of 2024, but not beyond.

We anticipate using our cash and cash equivalents to fund

further research and development with respect to our lead product candidate.

We will, however, need to raise additional funding

sooner if our business or operations change in a manner that consumes available resources more rapidly than we anticipate.

requirements for additional capital will depend on many factors, including:

increased sales of our two commercialized products;

commercialization of our product candidates;

the time and costs involved in obtaining

regulatory approval for our product candidates;

costs associated with protecting

our intellectual property rights;

development of marketing and sales

capabilities;

payments received under future collaborative

agreements, if any;

market acceptance of our products.

the extent we raise additional capital through the sale of equity securities, the issuance of those securities could result in dilution

to our shareholders.

In addition, if we obtain debt financing, a substantial portion of our operating cash flow may be dedicated to the

payment of principal and interest on such indebtedness, thus limiting funds available for our business activities.

If adequate funds are

not available, we may be required to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization

efforts or curtail our operations.

In addition, we may be required to obtain funds through arrangements with collaborative partners or

others that may require us to relinquish rights to technologies, product candidates or products that we would otherwise seek to develop

or commercialize ourselves or license rights to technologies, product candidates or products on terms that are less favorable to us than

might otherwise be available.

time and costs involved in obtaining regulatory approval for our product candidates;

associated with protecting our intellectual property rights;

of marketing and sales capabilities;

received under future collaborative agreements, if any;

acceptance of our products.

the extent we raise additional capital through the sale of equity securities, the issuance of those securities could result in

dilution to our shareholders.

In addition, if we obtain debt financing, a substantial portion of our operating cash flow may be

dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities.

If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate our research and development

programs, reduce our commercialization efforts or curtail our operations.

In addition, we may be required to obtain funds through

arrangements with collaborative partners or others that may require us to relinquish rights to technologies, product candidates

or products that we would otherwise seek to develop or commercialize ourselves or license rights to technologies, product candidates

or products on terms that are less favorable to us than might otherwise be available.

will require substantial additional funds to support our research and development activities, and the anticipated costs of preclinical

and nonclinical testing and clinical studies, regulatory approvals and eventual commercialization.

Such additional sources of financing

may not be available on favorable terms, if at all.

If we do not succeed in raising additional funds on acceptable terms, we may be unable

to commence or complete clinical studies or obtain approval of any product candidates from the FDA and other regulatory authorities.

addition, we could be forced to discontinue product development, forego sales and marketing efforts and forego attractive business opportunities.

Any additional sources of financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our

shareholders.

Such additional sources of

financing may not be available on favorable terms, if at all.

If we do not succeed in raising additional funds on acceptable terms,

we may be unable to commence or complete clinical studies or obtain approval of any product candidates from the FDA and other

regulatory authorities.

In addition, we could be forced to discontinue product development, forego sales and marketing efforts

and forego attractive business opportunities.

Any additional sources of financing will likely involve the issuance of our equity

securities, which will have a dilutive effect on our shareholders.

is no assurance that we will be successful in raising the additional funds needed to fund our business plan.

If we are not able to raise

sufficient capital in the near future, our continued operations will be in jeopardy and we may be forced to cease operations and sell

or otherwise transfer all or substantially all of our remaining assets.

If we are not able

to raise sufficient capital in the near future, our continued operations will be in jeopardy and we may be forced to cease operations

and sell or otherwise transfer all or substantially all of our remaining assets.

of communicable diseases may materially and adversely affect our business, financial condition and results of operations.

may face risks related to health epidemics or outbreaks of communicable diseases.

The outbreak of such communicable diseases, such as

COVID-19, has and may result in future widespread health crisis that adversely affect general commercial activity and the economies and

financial markets of many countries.

An outbreak of communicable diseases, or the perception that such an outbreak could occur, and the

measures taken by the governments of countries affected could adversely affect our business, financial condition or results of operations.

For example, an outbreak could significantly disrupt our business by limiting our ability to travel or ship materials within or outside

of an affected country and forcing temporary closure of facilities or service providers that we rely upon.

An outbreak could also impact

our ability to conduct our ongoing multicenter clinical trials if trial participant attendance at requisite study visits is substantially

reduced and if a significant percentage of study participants and study staff are adversely affected by coronavirus or other infections

and the resulting disease course.

Moreover, government or community shutdowns such as those caused by the COVID-19 pandemic, may impair

our ability to analyze and submit the results from our clinical and preclinical trials, leading to further delays in the development and

approval of our product candidates.

The outbreak of such communicable diseases,

such as COVID-19, has and may result in future widespread health crisis that adversely affect general commercial activity and

the economies and financial markets of many countries.

An outbreak of communicable diseases, or the perception that such an outbreak

could occur, and the measures taken by the governments of countries affected could adversely affect our business, financial condition

or results of operations.

For example, an outbreak could significantly disrupt our business by limiting our ability to travel

or ship materials within or outside of an affected country and forcing temporary closure of facilities or service providers that

we rely upon.

An outbreak could also impact our ability to conduct our ongoing multicenter clinical trials if trial participant

attendance at requisite study visits is substantially reduced and if a significant percentage of study participants and study

staff are adversely affected by coronavirus or other infections and the resulting disease course.

Moreover, government or community

shutdowns such as those caused by the COVID-19 pandemic, may impair our ability to analyze and submit the results from our clinical

and preclinical trials, leading to further delays in the development and approval of our product candidates.

and technological change may make our product candidates and technologies less attractive or obsolete.

compete with established pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same or similar

indications we are pursuing and that have greater financial and other resources.

Other companies may succeed in developing products earlier

than us, obtaining FDA approval for products more rapidly, or developing products that are more effective than our product candidates.

Research and development by others may render our technology or product candidates obsolete or noncompetitive, or result in treatments

or cures superior to any therapy we develop.

We face competition from companies that internally develop competing technology or acquire

competing technology from universities and other research institutions.

As these companies develop their technologies, they may develop

competitive positions that may prevent, make futile, or limit our product commercialization efforts, which would result in a decrease

in the revenue we would be able to derive from the sale of any products.

can be no assurance that any of our product candidates will be accepted by the marketplace as readily as these or other competing treatments.

Furthermore, if our competitors’ products are approved before ours, it could be more difficult for us to obtain approval from the

For example, at least three vaccines for the prevention of COVID-19 have been approved to date, and we expect that other vaccines

will be approved prior to the approval of our COVID-19 vaccine candidate, if it is approved at all.

Even if our products are successfully

developed and approved for use by all governing regulatory bodies, there can be no assurance that physicians and patients will accept

our product(s) as a treatment of choice.

compete with established pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same or

similar indications we are pursuing and that have greater financial and other resources.

Other companies may succeed in developing

products earlier than us, obtaining FDA approval for products more rapidly, or developing products that are more effective than

our product candidates.

Research and development by others may render our technology or product candidates obsolete or noncompetitive,

or result in treatments or cures superior to any therapy we develop.

We face competition from companies that internally develop

competing technology or acquire competing technology from universities and other research institutions.

As these companies develop

their technologies, they may develop competitive positions that may prevent, make futile, or limit our product commercialization

efforts, which would result in a decrease in the revenue we would be able to derive from the sale of any products.

can be no assurance that any of our product candidates will be accepted by the marketplace as readily as these or other competing

Furthermore, if our competitors’ products are approved before ours, it could be more difficult for us to obtain

approval from the FDA.

For example, at least three vaccines for the prevention of COVID-19 have been approved to date, and we

expect that other vaccines will be approved prior to the approval of our COVID-19 vaccine candidate, if it is approved at all.

Even if our products are successfully developed and approved for use by all governing regulatory bodies, there can be no assurance

that physicians and patients will accept our product(s) as a treatment of choice.

Additionally,

if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for our product

candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by the competitor of patents

covering its newly-approved drug product.

Periods of non-patent exclusivity for new versions of existing drugs such as our current drug

product candidate, TNX-102 SL, can extend up to three and one-half years.

if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for

our product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by

the competitor of patents covering its newly-approved drug product.

Periods of non-patent exclusivity for new versions of existing

drugs such as our current drug product candidate, TNX-102 SL, can extend up to three and one-half years.

the pharmaceutical research industry is diverse, complex, and rapidly changing.

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are numerous and significant.

The effects of competition, intellectual property disputes, market acceptance, and FDA regulations preclude

us from forecasting revenues or income with certainty or even confidence.

The effects of competition, intellectual property disputes, market acceptance, and FDA regulations

preclude us from forecasting revenues or income with certainty or even confidence.

RELATED TO OUR INTELLECTUAL PROPERTY RIGHTS AND REGULATORY EXCLUSIVITY

we fail to protect our intellectual property rights, our ability to pursue the development of our technologies and products would be negatively

we fail to protect our intellectual property rights, our ability to pursue the development of our technologies and products would

be negatively affected.

success will depend in part on our ability to obtain patents and maintain adequate protection of our technologies and products.

do not adequately protect our intellectual property, competitors may be able to use our technologies to produce and market drugs using

our technologies and patents in direct competition with us and erode our competitive advantage.

Some foreign countries lack rules and

methods for defending intellectual property rights and do not protect proprietary rights to the same extent as the United States.

companies have had difficulty protecting their proprietary rights in these foreign countries.

We may not be able to prevent misappropriation

of our proprietary rights and intellectual property rights in these and other countries.

If we do not adequately protect our intellectual property, competitors may be able to use our technologies to produce and market

drugs using our technologies and patents in direct competition with us and erode our competitive advantage.

Some foreign countries

lack rules and methods for defending intellectual property rights and do not protect proprietary rights to the same extent as

the United States.

Many companies have had difficulty protecting their proprietary rights in these foreign countries.

be able to prevent misappropriation of our proprietary rights and intellectual property rights in these and other countries.

have received, and are currently seeking, patent protection for numerous compounds and methods of treating diseases.

However, the patent

process is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products

by obtaining and defending patents related to them.

the patent process is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in

protecting our products by obtaining and defending patents related to them.

These risks and uncertainties include the following:

patents that may be issued or

licensed may be challenged, invalidated, or circumvented, or otherwise may not provide us any competitive advantage;

our competitors,

many of which have substantially greater resources than we and many of which have made significant investments in competing technologies,

may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential

products either in the United States or in international markets;

there may be significant pressure on the United States government and

other international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments

that prove successful as a matter of public policy regarding worldwide health concerns;

and countries other than the United States may

have less robust patent laws than those upheld by United States courts, allowing foreign competitors the ability to exploit these laws

to create, develop, and market competing products using our technologies and patents.

patents that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide us any competitive

our competitors, many of which have substantially greater resources than we and many of which have made significant

investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate

our ability to make, use, and sell our potential products either in the United States or in international markets;

significant pressure on the United States government and other international governmental bodies to limit the scope of patent

protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding

worldwide health concerns;

and countries other than the United States may have less robust patent laws than those upheld by United

States courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products

using our technologies and patents.

any patents issued to us may not provide us with meaningful protection, or others may challenge, circumvent or narrow our patents.

parties may also independently develop products similar to our products, duplicate our unpatented products or design around any patents

or propriety technologies on products we develop.

Additionally, extensive time is required for development, testing and regulatory review

of a potential product.

While extensions of patent term due to regulatory delays may be available, it is possible that, before any of

our product candidates can be commercialized, any related patent, even with an extension, may expire or remain in force for only a short

period following commercialization, thereby reducing any advantages to us of the patent.

addition, the PTO and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or

biotechnology-related inventions be limited or narrowed substantially to cover only the innovations specifically exemplified in the patent

application, thereby limiting the scope of protection against competitive challenges.

Thus, even if we or our licensors are able to obtain

patents, the patents may be substantially narrower than anticipated.

Third parties may also independently develop products similar to our products, duplicate our unpatented products or design around

any patents or propriety technologies on products we develop.

Additionally, extensive time is required for development, testing

and regulatory review of a potential product.

While extensions of patent term due to regulatory delays may be available, it is

possible that, before any of our product candidates can be commercialized, any related patent, even with an extension, may expire

or remain in force for only a short period following commercialization, thereby reducing any advantages to us of the patent.

addition, the PTO and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical

and/or biotechnology-related inventions be limited or narrowed substantially to cover only the innovations specifically exemplified

in the patent application, thereby limiting the scope of protection against competitive challenges.

Thus, even if we or our licensors

are able to obtain patents, the patents may be substantially narrower than anticipated.

success depends on our patents and patent applications that may be licensed exclusively to us and other patents and patent applications

to which we may obtain assignment or licenses.

We may not be aware, however, of all patents, published applications or published literature

that may affect our business either by blocking our ability to commercialize our product candidates, by preventing the patentability of

our product candidates to us or our licensors, or by covering the same or similar technologies.

These patents, patent applications, and

published literature may limit the scope of our future patent claims or adversely affect our ability to market our product candidates.

addition to patents, we rely on a combination of trade secrets, confidentiality, nondisclosure and other contractual provisions, and security

measures to protect our confidential and proprietary information.

These measures may not adequately protect our trade secrets or other

proprietary information.

If they do not adequately protect our rights, third parties could use our technology, and we could lose any competitive

advantage we may have.

In addition, others may independently develop similar proprietary information or techniques or otherwise gain access

to our trade secrets, which could impair any competitive advantage we may have.

protection and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial

risk that such protections will prove inadequate.

We may not be aware, however, of all patents, published applications or published

literature that may affect our business either by blocking our ability to commercialize our product candidates, by preventing

the patentability of our product candidates to us or our licensors, or by covering the same or similar technologies.

These patents,

patent applications, and published literature may limit the scope of our future patent claims or adversely affect our ability

to market our product candidates.

addition to patents, we rely on a combination of trade secrets, confidentiality, nondisclosure and other contractual provisions,

and security measures to protect our confidential and proprietary information.

These measures may not adequately protect our trade

secrets or other proprietary information.

If they do not adequately protect our rights, third parties could use our technology,

and we could lose any competitive advantage we may have.

In addition, others may independently develop similar proprietary information

or techniques or otherwise gain access to our trade secrets, which could impair any competitive advantage we may have.

protection and other intellectual property protection is crucial to the success of our business and prospects, and there is a

substantial risk that such protections will prove inadequate.

may be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming.

pharmaceutical industry has been characterized by extensive litigation regarding patents and other intellectual property rights, and companies

have employed intellectual property litigation to gain a competitive advantage.

We may become subject to infringement claims or litigation

arising out of present and future patents and other proceedings of our competitors.

The defense and prosecution of intellectual property

suits are costly and time-consuming to pursue, and their outcome is uncertain.

Litigation may be necessary to determine the enforceability,

scope, and validity of the proprietary rights of others.

An adverse determination in litigation to which we may become a party could subject

us to significant liabilities, require us to obtain licenses from third parties, or restrict or prevent us from selling our products in

certain markets.

Although patent and intellectual property disputes might be settled through licensing or similar arrangements, the costs

associated with such arrangements may be substantial and could include our paying large fixed payments and ongoing royalties.

the necessary licenses may not be available on satisfactory terms or at all.

pharmaceutical industry has been characterized by extensive litigation regarding patents and other intellectual property rights,

and companies have employed intellectual property litigation to gain a competitive advantage.

We may become subject to infringement

claims or litigation arising out of present and future patents and other proceedings of our competitors.

The defense and prosecution

of intellectual property suits are costly and time-consuming to pursue, and their outcome is uncertain.

Litigation may be necessary

to determine the enforceability, scope, and validity of the proprietary rights of others.

An adverse determination in litigation

to which we may become a party could subject us to significant liabilities, require us to obtain licenses from third parties,

or restrict or prevent us from selling our products in certain markets.

Although patent and intellectual property disputes might

be settled through licensing or similar arrangements, the costs associated with such arrangements may be substantial and could

include our paying large fixed payments and ongoing royalties.

Furthermore, the necessary licenses may not be available on satisfactory

terms or at all.

may infringe our patents, and we may file infringement claims to counter infringement or unauthorized use.

Third parties may assert that

our patents are invalid and/or unenforceable in these proceedings.

Such litigation can be expensive, particularly for a company of our

size, and time-consuming.

In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable,

or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover its technology.

An adverse determination of any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or

interpreted narrowly.

Third parties may assert

that our patents are invalid and/or unenforceable in these proceedings.

Such litigation can be expensive, particularly for a company

of our size, and time-consuming.

In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid

or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents

do not cover its technology.

An adverse determination of any litigation or defense proceedings could put one or more of our patents

at risk of being invalidated or interpreted narrowly.

parties may also assert that our patents are invalid in patent office administrative proceedings.

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in the European Patent Office and inter partes review and post-grant review proceedings in the PTO.

The success rate

of these administrative challenges to patent validity in the United States is higher than it is for validity challenges in litigation.

or derivation proceedings brought before the PTO may be necessary to determine priority of invention with respect to innovations disclosed

in our patents or patent applications.

During these proceedings, it may be determined that we do not have priority of invention for one

or more aspects in our patents or patent applications and could result in the invalidation in part or whole of a patent or could put a

patent application at risk of not issuing.

Even if successful, an interference or derivation proceeding may result in substantial costs

and distraction to our management.

because of the substantial amount of discovery required in connection with intellectual property litigation or interference or derivation

proceedings, there is a risk that some of our confidential information could be compromised by disclosure.

In addition, there could be

public announcements of the results of hearings, motions or other interim proceedings or developments.

If investors perceive these results

to be negative, the price of our common stock could be adversely affected.

rate of these administrative challenges to patent validity in the United States is higher than it is for validity challenges in

or derivation proceedings brought before the PTO may be necessary to determine priority of invention with respect to innovations

disclosed in our patents or patent applications.

During these proceedings, it may be determined that we do not have priority of

invention for one or more aspects in our patents or patent applications and could result in the invalidation in part or whole

of a patent or could put a patent application at risk of not issuing.

Even if successful, an interference or derivation proceeding

may result in substantial costs and distraction to our management.

because of the substantial amount of discovery required in connection with intellectual property litigation or interference or

derivation proceedings, there is a risk that some of our confidential information could be compromised by disclosure.

there could be public announcements of the results of hearings, motions or other interim proceedings or developments.

perceive these results to be negative, the price of our common stock could be adversely affected.

for the oppositions to European Patents 2501234, 2968992, and 2683245 (the Opposition Division in each of those oppositions maintained

our claims in unamended form;

Opponent has appealed that decision in the ‘234 Opposition and we expect the opponents to appeal the

decisions in the ‘992 and ‘245 oppositions), there are no unresolved communications, allegations, complaints or threats of

litigation related to the possibility that our patents are invalid or unenforceable.

Any litigation or claims against us, whether or not

merited, may result in substantial costs, place a significant strain on our financial resources, divert the attention of management and

harm our reputation.

An adverse decision in litigation or administrative proceedings could result in inadequate protection for our product

candidates and/or reduce the value of any license agreements we have with third parties.

we infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and defend against litigation.

our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs

and we may have to:

Opponent has appealed that decision in the ’234 Opposition and we expect the opponents to

appeal the decisions in the ’992 and ’245 oppositions), there are no unresolved communications, allegations, complaints

or threats of litigation related to the possibility that our patents are invalid or unenforceable.

Any litigation or claims against

us, whether or not merited, may result in substantial costs, place a significant strain on our financial resources, divert the

attention of management and harm our reputation.

An adverse decision in litigation or administrative proceedings could result

in inadequate protection for our product candidates and/or reduce the value of any license agreements we have with third parties.

we infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and defend against

our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial

costs and we may have to:

obtain licenses, which may not be available on commercially reasonable terms, if at all;

abandon an infringing product

infringing product candidate;

redesign our products or processes to avoid infringement;

stop using the subject matter claimed in the patents held by others;

and/or defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result

in a substantial diversion of our financial and management resources.

stop using the subject matter claimed

in the patents held by others;

and/or defend litigation or administrative proceedings which may be costly whether

we win or lose, and which could result in a substantial diversion of our financial and management resources.

are risks to our intellectual property based on our international business initiatives.

may face risks to our technology and intellectual property as a result of our conducting strategic business discussions outside of the

United States, and particularly in jurisdictions that do not have comparable levels of protection of corporate proprietary information

and assets such as intellectual property, trademarks, trade secrets, know-how and customer information and records.

While these risks

are common to many companies, conducting business in certain foreign jurisdictions, housing technology, data and intellectual property

abroad, or licensing technology to joint ventures with foreign partners may have more significant exposure.

For example, we have shared

intellectual properties with entities in China pursuant to confidentiality agreements in connection with discussions on potential strategic

collaborations, which may expose us to material risks of theft of our proprietary information and other intellectual property, including

technical data, manufacturing processes, data sets or other sensitive information.

For example, our technology may be reverse engineered

by the parties or other parties, which could result in our patents being infringed or our know-how or trade secrets stolen.

be by direct intrusion wherein technology and intellectual property is stolen or compromised through cyber intrusions or physical theft

through corporate espionage, including with the assistance of insiders, or via more indirect routes.

may face risks to our technology and intellectual property as a result of our conducting strategic business discussions outside

of the United States, and particularly in jurisdictions that do not have comparable levels of protection of corporate proprietary

information and assets such as intellectual property, trademarks, trade secrets, know-how and customer information and records.

While these risks are common to many companies, conducting business in certain foreign jurisdictions, housing technology, data

and intellectual property abroad, or licensing technology to joint ventures with foreign partners may have more significant exposure.

For example, we have shared intellectual properties with entities in China pursuant to confidentiality agreements in connection

with discussions on potential strategic collaborations, which may expose us to material risks of theft of our proprietary information

and other intellectual property, including technical data, manufacturing processes, data sets or other sensitive information.

For example, our technology may be reverse engineered by the parties or other parties, which could result in our patents being

infringed or our know-how or trade secrets stolen.

The risk can be by direct intrusion wherein technology and intellectual property

is stolen or compromised through cyber intrusions or physical theft through corporate espionage, including with the assistance

of insiders, or via more indirect routes.

COMPANY-RELATED RISKS

preclinical and nonclinical testing or clinical studies for our product candidates are unsuccessful or delayed, we will be unable to meet

our anticipated development and commercialization timelines.

rely and expect to continue to rely on third parties, including contract research organizations, or CROs, and outside consultants, to

conduct, supervise or monitor some or all aspects of preclinical and nonclinical testing and clinical studies involving our product candidates.

We have less control over the timing and other aspects of these preclinical and nonclinical testing activities and clinical studies than

if we performed the monitoring and supervision entirely on our own.

Third parties may not perform their responsibilities for our preclinical

and nonclinical testing and clinical studies on our anticipated schedule or, for clinical studies, consistent with a clinical study protocol.

Delays in preclinical and nonclinical testing, and clinical studies could significantly increase our product development costs and delay

product commercialization.

In addition, many of the factors that may cause, or lead to, a delay in the clinical studies may also ultimately

lead to denial of regulatory approval of a product candidate.

preclinical and nonclinical testing or clinical studies for our product candidates are unsuccessful or delayed, we will be unable

to meet our anticipated development and commercialization timelines.

rely and expect to continue to rely on third parties, including contract research organizations, or CROs, and outside consultants,

to conduct, supervise or monitor some or all aspects of preclinical and nonclinical testing and clinical studies involving our

product candidates.

We have less control over the timing and other aspects of these preclinical and nonclinical testing activities

and clinical studies than if we performed the monitoring and supervision entirely on our own.

Third parties may not perform their

responsibilities for our preclinical and nonclinical testing and clinical studies on our anticipated schedule or, for clinical

studies, consistent with a clinical study protocol.

Delays in preclinical and nonclinical testing, and clinical studies could

significantly increase our product development costs and delay product commercialization.

In addition, many of the factors that

may cause, or lead to, a delay in the clinical studies may also ultimately lead to denial of regulatory approval of a product

commencement of clinical studies can be delayed for a variety of reasons, including delays in:

demonstrating sufficient safety

and efficacy to obtain regulatory approval to commence a clinical study;

reaching agreement on acceptable

terms with prospective CROs and study sites;

developing a stable formulation

of a product candidate;

manufacturing sufficient quantities

of a product candidate;

obtaining institutional review board,

or IRB, approval to conduct a clinical study at a prospective site.

a clinical study has begun, it may be delayed, suspended or terminated by us or the FDA or other regulatory authorities due to a number

of factors, including:

ongoing discussions with the FDA

or other regulatory authorities regarding the scope or design of our clinical studies;

failure to conduct clinical studies

in accordance with regulatory requirements;

lower than anticipated recruitment

or retention rate of patients in clinical studies;

inspection of the clinical study

operations or study sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;

lack of adequate funding to continue

clinical studies;

negative results of clinical studies;

demonstrating

sufficient safety and efficacy to obtain regulatory approval to commence a clinical study;

agreement on acceptable terms with prospective CROs and study sites;

a stable formulation of a product candidate;

manufacturing

sufficient quantities of a product candidate;

institutional review board, or IRB, approval to conduct a clinical study at a prospective site.

a clinical study has begun, it may be delayed, suspended or terminated by us or the FDA or other regulatory authorities due to

a number of factors, including:

discussions with the FDA or other regulatory authorities regarding the scope or design of our clinical studies;

to conduct clinical studies in accordance with regulatory requirements;

than anticipated recruitment or retention rate of patients in clinical studies;

of the clinical study operations or study sites by the FDA or other regulatory authorities resulting in the imposition of

a clinical hold;

of adequate funding to continue clinical studies;

results of clinical studies;

investigational

drug product out-of-specification;

nonclinical or clinical safety observations,

including adverse events and SAEs.

clinical studies are unsuccessful, and we are not able to obtain regulatory approvals for our product candidates under development, we

will not be able to commercialize these products, and therefore may not be able to generate sufficient revenues to support our business.

or clinical safety observations, including adverse events and SAEs.

clinical studies are unsuccessful, and we are not able to obtain regulatory approvals for our product candidates under development,

we will not be able to commercialize these products, and therefore may not be able to generate sufficient revenues to support

our business.

rely on third parties to conduct, supervise and monitor our clinical studies, and if those third parties perform in an unsatisfactory

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rely on CROs and clinical study sites to ensure the proper and timely conduct of our clinical studies.

While we have agreements governing

their activities, we will have limited influence over their actual performance.

We will control only certain aspects of our CROs’

Nevertheless, we will be responsible for ensuring that our clinical studies are conducted in accordance with the applicable

protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.

and our CROs are required to comply with the FDA’s cGCP for conducting, recording and reporting the results of clinical studies

to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical study

participants are protected.

The FDA enforces these cGCPs through periodic inspections of study sponsors, principal investigators and clinical

If we or our CROs fail to comply with applicable cGCPs, the clinical data generated in our clinical studies may be deemed

unreliable and the FDA may require us to perform additional clinical studies before approving any marketing applications.

Upon inspection,

the FDA may determine that our clinical studies did not comply with cGCPs.

In addition, our clinical studies, including our ongoing Phase

3 RESILIENT study, will require a sufficiently large number of fibromyalgia participants to evaluate the effectiveness and safety of TNX-102

Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of participants, our clinical

studies may be delayed or we may be required to repeat such clinical studies, which would delay the regulatory approval process.

CROs are not our employees, and we are not able to control whether or not they devote sufficient time and resources to our clinical studies.

These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting

clinical studies, or other drug development activities which could harm our competitive position.

our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or

accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements,

or for any other reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval

for, or successfully commercialize our product candidates.

As a result, our financial results and the commercial prospects for such product

candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

While we have agreements

governing their activities, we will have limited influence over their actual performance.

We will control only certain aspects

of our CROs’ activities.

Nevertheless, we will be responsible for ensuring that our clinical studies are conducted in accordance

with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our

regulatory responsibilities.

and our CROs are required to comply with the FDA’s cGCP for conducting, recording and reporting the results of clinical

studies to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality

of clinical study participants are protected.

The FDA enforces these cGCPs through periodic inspections of study sponsors, principal

investigators and clinical study sites.

If we or our CROs fail to comply with applicable cGCPs, the clinical data generated in

our clinical studies may be deemed unreliable and the FDA may require us to perform additional clinical studies before approving

any marketing applications.

Upon inspection, the FDA may determine that our clinical studies did not comply with cGCPs.

Accordingly, if our CROs fail to comply with these

regulations, we may be required

to repeat such clinical studies, which would delay the regulatory approval process.

CROs are not our employees, and we are not able to control whether or not they devote sufficient time and resources to our clinical

These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also

be conducting clinical studies, or other drug development activities which could harm our competitive position.

our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality

or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory

requirements, or for any other reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to

obtain regulatory approval for, or successfully commercialize our product candidates.

As a result, our financial results and the

commercial prospects for such product candidates would be harmed, our costs could increase, and our ability to generate revenues

could be delayed.

also rely on other third parties to store and distribute drug products for our clinical studies.

Any performance failure on the part of

our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products,

if approved, producing additional losses and depriving us of potential product revenue.

Any performance failure on the

part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization

of our products, if approved, producing additional losses and depriving us of potential product revenue.

In addition, we currently

rely on foreign CROs and CMOs, including WuXi Biologics, and will likely continue to rely on foreign CROs and CMOs in the future.

CMOs may be subject to U.S.

legislation, including the proposed BIOSECURE Act, sanctions, trade restrictions and other foreign

regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply

of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential

For example, the biopharmaceutical

industry in China is strictly regulated by the Chinese government.

Changes to Chinese regulations or government policies affecting biopharmaceutical

companies are unpredictable and may have a material adverse effect on our collaborators in China which could have an adverse effect on

our business, financial condition, results of operations and prospects.

Evolving changes in China’s public health, economic, political,

and social conditions and the uncertainty around China’s relationship with other governments, such as the United States and the

U.K., could also negatively impact our ability to manufacture our product candidates for our planned clinical trials or have an adverse

effect on our ability to secure government funding, which could adversely affect our financial condition and cause us to delay our clinical

development programs.

will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth.

we advance our product candidates through preclinical and nonclinical testing and clinical studies, and develop new product candidates

and buildout of our research and development and manufacturing facilities, we will need to increase our product development, scientific,

we advance our product candidates through preclinical and nonclinical testing and clinical studies, and develop new product candidates, buildout of our research and development and manufacturing facilities, and develop our commercialization organization, we will need to increase our product development, scientific,

regulatory and compliance and administrative headcount to manage these programs.

In addition, to meet our obligations as a public company,

we will need to increase our general and administrative capabilities.

Our management, personnel and systems currently in place may not

be adequate to support this future growth.

Our need to effectively manage our operations, growth and various projects requires that we:

successfully attract and recruit

new employees with the expertise and experience we will require;

manage our clinical programs effectively,

which we anticipate being conducted at numerous clinical sites;

develop a marketing, distribution

and sales infrastructure in addition to a post-marketing surveillance program if we seek to market our products directly;

continue to improve our operational,

manufacturing, quality assurance, financial and management controls, reporting systems and procedures.

In addition, to meet our obligations as a public

company, we will need to increase our general and administrative capabilities.

Our management, personnel and systems currently

in place may not be adequate to support this future growth.

Our need to effectively manage our operations, growth and various

projects requires that we:

attract and recruit new employees with the expertise and experience we will require;

our clinical programs effectively, which we anticipate being conducted at numerous clinical sites;

maintain a marketing, distribution and sales infrastructure in addition

to a post-marketing surveillance program;

to improve our operational, manufacturing, quality assurance, financial and management controls, reporting systems and procedures.

we are unable to successfully manage this growth and increased complexity of operations, our business may be adversely affected.

executive officers and other key personnel are critical to our business, and our future success depends on our ability to retain them.

executive officers and other key personnel are critical to our business, and our future success depends on our ability to retain

success depends to a significant extent upon the continued services of Dr.

Seth Lederman, our President and Chief Executive Officer and

Seth Lederman, our President and Chief Executive Officer

Sullivan, our Chief Medical Officer.

Lederman has overseen Tonix Pharmaceuticals, Inc., a wholly-owned subsidiary,

since inception and provides leadership for our growth and operations strategy as well as being an inventor on many of our patents.

Sullivan has served as our Chief Medical Officer since 2014 and directed the Phase 2 AtEase study, Phase 3 HONOR study, the Phase 3 RECOVERY

study, Phase 3 RELIEF study, the Phase 3 RALLY study and the Phase 3 RESILIENCE study.

Loss of the services of Drs.

Lederman or Sullivan

would have a material adverse effect on our growth, revenues, and prospective business.

The loss of any of our key personnel, or the inability

to attract and retain qualified personnel, may significantly delay or prevent the achievement of our research, development or business

objectives and could materially adversely affect our business, financial condition and results of operations.

Lederman has overseen Tonix Pharmaceuticals, Inc., a wholly-owned

subsidiary, since inception and provides leadership for our growth and operations strategy as well as being an inventor on many

of our patents.

Sullivan has served as our Chief Medical Officer since 2014 and directed the Phase 2 AtEase study, Phase 3

HONOR study, the Phase 3 RECOVERY study, Phase 3 RELIEF study, the Phase 3 RALLY study and the Phase 3 RESILIENCE study.

of the services of Drs.

Lederman or Sullivan would have a material adverse effect on our growth, revenues, and prospective business.

The loss of any of our key personnel, or the inability to attract and retain qualified personnel, may significantly delay or prevent

the achievement of our research, development or business objectives and could materially adversely affect our business, financial

condition and results of operations.

employment agreement we enter into will not ensure the retention of the employee who is a party to the agreement.

In addition, we have

only limited ability to prevent former employees from competing with us.

our future success will also depend in part on the continued service of our key scientific and management personnel and our ability to

identify, hire, and retain additional personnel.

We experience intense competition for qualified personnel and may be unable to attract

and retain the personnel necessary for the development of our business.

Moreover, competition for personnel with the scientific and technical

skills that we seek is extremely high and is likely to remain high.

Because of this competition, our compensation costs may increase significantly.

are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

we have only limited ability to prevent former employees from competing with us.

our future success will also depend in part on the continued service of our key scientific and management personnel and our ability

to identify, hire, and retain additional personnel.

We experience intense competition for qualified personnel and may be unable

to attract and retain the personnel necessary for the development of our business.

Moreover, competition for personnel with the

scientific and technical skills that we seek is extremely high and is likely to remain high.

Because of this competition, our

compensation costs may increase significantly.

we are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

time we will need to hire additional qualified personnel with expertise in drug development, product registration, clinical, preclinical

and nonclinical research, quality compliance, government regulation, formulation and manufacturing, financial matters and sales and marketing.

We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions.

for such individuals is intense, and we cannot be certain that our search for such personnel will be successful.

Attracting and retaining

qualified personnel will be critical to our success.

rely on third parties to manufacture the compounds used in our studies, and we intend to rely on them for the manufacture of any approved

products for commercial sale.

If these third parties do not manufacture our product candidates in sufficient quantities and at an acceptable

cost, clinical development and commercialization of our product candidates could be delayed, prevented or impaired.

have no experience in the clinical or commercial-scale manufacture of drugs or in designing drug manufacturing processes.

rely on CMOs to manufacture some or all of our product candidates in clinical studies and our products that reach commercialization.

of our clinical studies and commercialization of our product candidates requires the manufacture of a sufficient supply of our product

We have contracted with outside sources to manufacture our development compounds.

If, for any reason, we become unable to

rely on our current sources for the manufacture of our product candidates, either for clinical studies or, at some future date, for commercial

quantities, then we would need to identify and contract with additional or replacement third-party manufacturers to manufacture compounds

for nonclinical, preclinical, clinical, and commercial purposes.

Although we are in discussions with other manufacturers we have identified

as potential alternative CMOs of TNX-102 SL, we may not be successful in negotiating acceptable terms with any of them.

believe that there are a variety of manufacturers that we may be able to retain to produce these products.

However, once we retain a manufacturing

source, if our manufacturers do not perform in a satisfactory manner, we may not be able to develop or commercialize potential products

Certain specialized manufacturers are expected to provide us with modified and unmodified pharmaceutical compounds, including

finished products, for use in our preclinical and nonclinical testing and clinical studies.

and nonclinical research, quality compliance, government regulation, formulation and manufacturing, financial matters and sales

and marketing.

We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research

institutions.

Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be

Attracting and retaining qualified personnel will be critical to our success.

We rely on third parties to manufacture

our marketed products and the compounds used in our studies, and we intend to rely on them in the future.

If these third parties do not

manufacture our products and product candidates in sufficient quantities and at an acceptable cost, clinical development and commercialization

of our products and product candidates could be delayed, prevented or impaired.

We have no experience in the

clinical or commercial-scale manufacture of drugs or in designing drug manufacturing processes.

We rely on CMOs to manufacture all of

our product candidates in clinical studies and our commercial products.

Completion of our clinical studies and commercialization of our

products requires the manufacture of a sufficient supply of our products.

We have contracted with outside sources to manufacture our development

compounds and commercial products.

If, for any reason, we become unable to rely on our current manufacturing sources, either for clinical

studies or for commercial quantities, then we would need to identify and contract with additional or replacement third-party manufacturers.

Although we are in discussions with other manufacturers we have identified as potential alternative CMOs of TNX-102 SL, we may not be

successful in negotiating acceptable terms with any of them.

We believe that there are

a variety of manufacturers that we may be able to retain to produce these products.

However, once we retain a manufacturing source, if

our manufacturers do not perform in a satisfactory manner, we may not be able to develop or commercialize our products as planned.

specialized manufacturers are expected to provide us with modified and unmodified pharmaceutical compounds, including finished products,

for use in our preclinical and nonclinical testing and clinical studies and final product.

Some of these materials are available from

7 unchanged sentences

on acceptable terms or if third-party manufacturers do not perform as we expect, our development programs could be materially adversely

This may result in delays in filing for and receiving FDA approval for one or more of our products.

Any such delays could cause

our prospects to suffer significantly.

by our third-party manufacturers to comply with the regulatory guidelines set forth by the FDA with respect to our product candidates

could delay or prevent the completion of clinical studies, the approval of any product candidates or the commercialization of our products.

affected, and our efforts to commercialize our marketed products will be materially impaired.

This may result in delays in filing for

and receiving FDA approval for one or more of our products and impair our revenues from sales.

Any such delays could cause our prospects

and financial condition to suffer significantly.

by our third-party manufacturers to comply with the regulatory guidelines set forth by the FDA with respect to our products and product candidates

could delay or prevent the completion of clinical studies, the approval of any product candidates or the commercialization of

our products.

Third-party manufacturers must be inspected by FDA for cGMP compliance before they can produce commercial product.

We may be in competition

with other companies for access to these manufacturers’ facilities and may be subject to delays in manufacture if the manufacturers

give other clients higher priority than they give to us.

If we are unable to secure and maintain third-party manufacturing capacity, the

development and sales of our products and our financial performance may be materially affected.

competition with other companies for access to these manufacturers’ facilities and may be subject to delays in manufacture

if the manufacturers give other clients higher priority than they give to us.

If we are unable to secure and maintain third-party

manufacturing capacity, the development and sales of our products and our financial performance may be materially affected.

Manufacturers

1 unchanged sentence

A failure of any of our third-party manufacturers to establish

and follow cGMP requirements and to document their adherence to such practices may lead to significant delays in the availability of material

for clinical studies, may delay or prevent filing or approval of marketing applications for our products, and may cause delays or interruptions

in the availability of our products for commercial distribution following FDA approval.

This could result in higher costs to us or deprive

us of potential product revenues.

manufacturers are subject to ongoing periodic unannounced inspections by the FDA, the Drug Enforcement Administration, or DEA, and corresponding

state and foreign agencies to ensure strict compliance with cGMP requirements and other requirements under Federal drug laws, other government

regulations and corresponding foreign standards.

If we or our third-party manufacturers fail to comply with applicable regulations, sanctions

could be imposed on us, including fines, injunctions, civil penalties, failure by the government to grant marketing approval of drugs,

delays, suspension or withdrawal of approvals, seizures or recalls of product, operating restrictions and criminal prosecutions.

and follow cGMP requirements and to document their adherence to such practices may lead to significant delays in the availability

of material for clinical studies, may delay or prevent filing or approval of marketing applications for our products, and may

cause delays or interruptions in the availability of our products for commercial distribution following FDA approval.

result in higher costs to us or deprive us of potential product revenues.

manufacturers are subject to ongoing periodic unannounced inspections by the FDA, the Drug Enforcement Administration, or DEA,

and corresponding state and foreign agencies to ensure strict compliance with cGMP requirements and other requirements under Federal

drug laws, other government regulations and corresponding foreign standards.

If we or our third-party manufacturers fail to comply

with applicable regulations, sanctions could be imposed on us, including fines, injunctions, civil penalties, failure by the government

to grant marketing approval of drugs, delays, suspension or withdrawal of approvals, seizures or recalls of product, operating

restrictions and criminal prosecutions.

global conditions, including economic uncertainty, may negatively impact our financial results.

1 unchanged sentence

In addition, the global macroeconomic

environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased

trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability

in the geopolitical environment as a result of the Russian invasion of the Ukraine, the withdrawal of the United Kingdom from the European

Union, and other political tensions, and foreign governmental debt concerns.

Such challenges have caused, and may continue to cause, uncertainty

and instability in local economies and in global financial markets, which may adversely affect our business.

internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could

result in a material disruption of our product development programs.

the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are

vulnerable to damage or disruption from computer viruses, software bugs, unauthorized access, natural disasters, terrorism, war, and telecommunication,

equipment and electrical failures.

we have not, to our knowledge, experienced any significant system failure, accident or security breach to date, if such an event were

to occur and cause interruptions in our operations, it could result in a material disruption of our programs.

For example, the loss of

clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays in our regulatory

approval efforts and significantly increase our costs to recover or reproduce the data.

Moreover, our information security systems and

those of our CROs are also subject to laws and regulations requiring that we take measures to protect the privacy and security of certain

information gathered and used in our business.

For example, HIPAA and its implementing regulations impose, among other requirements, certain

regulatory and contractual requirements regarding the privacy and security of personal health information.

In the European Union the General

Data Protection Regulation, or GDPR, is even more restrictive with respect to all personal information, including information masked by

a coding system.

In addition to HIPAA and GDPR, numerous other federal and state laws, including, without limitation, state security breach

notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use, disclosure

and storage of personal information.

To the extent that any disruption or security breach results in a loss of or damage to our data or

applications, or inappropriate disclosure or theft of confidential or proprietary information, we could incur liability, the further development

of our product candidates could be delayed, our competitive position could be compromised, or our business reputation could be harmed.

environment has been and may continue to be negatively affected by, among other things, instability in global economic markets,

increased U.S.

trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses,

instability in the geopolitical environment as a result of the Russian invasion of the Ukraine, the withdrawal of the United Kingdom

from the European Union, and other political tensions, and foreign governmental debt concerns.

Such challenges have caused, and

may continue to cause, uncertainty and instability in local economies and in global financial markets, which may adversely affect

our business.

internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which

could result in a material disruption of our product development programs.

the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants

are vulnerable to damage or disruption from computer viruses, software bugs, unauthorized access, natural disasters, terrorism,

war, and telecommunication, equipment and electrical failures.

we have not, to our knowledge, experienced any significant system failure, accident or security breach to date, if such an event

were to occur and cause interruptions in our operations, it could result in a material disruption of our programs.

the loss of clinical trial data from completed or ongoing clinical trials for any of our product candidates could result in delays

in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Moreover, our information

security systems and those of our CROs are also subject to laws and regulations requiring that we take measures to protect the

privacy and security of certain information gathered and used in our business.

For example, HIPAA and its implementing regulations

impose, among other requirements, certain regulatory and contractual requirements regarding the privacy and security of personal

health information.

In the European Union the General Data Protection Regulation, or GDPR, is even more restrictive with respect

to all personal information, including information masked by a coding system.

In addition to HIPAA and GDPR, numerous other federal

and state laws, including, without limitation, state security breach notification laws, state health information privacy laws

and federal and state consumer protection laws, govern the collection, use, disclosure and storage of personal information.

the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate

disclosure or theft of confidential or proprietary information, we could incur liability, the further development of our product

candidates could be delayed, our competitive position could be compromised, or our business reputation could be harmed.

and academic collaborators may take actions to delay, prevent, or undermine the success of our products.

operating and financial strategy for the development, clinical testing, manufacture, and commercialization of drug candidates is heavily

dependent on our entering into collaborations with corporations, academic institutions, licensors, licensees, and other parties.

strategy assumes that we will successfully establish these collaborations, or similar relationships;

however, there can be no assurance

that we will be successful establishing such collaborations.

Some of our existing collaborations are, and future collaborations may be,

terminable at the sole discretion of the collaborator.

Replacement collaborators might not be available on attractive terms, or at all.

The activities of any collaborator will not be within our control and may not be within our power to influence.

There can be no assurance

that any collaborator will perform its obligations to our satisfaction or at all, that we will derive any revenue or profits from such

collaborations, or that any collaborator will not compete with us.

If any collaboration is not pursued, we may require substantially greater

capital to undertake development and marketing of our proposed products and may not be able to develop and market such products effectively,

In addition, a lack of development and marketing collaborations may lead to significant delays in introducing proposed products

into certain markets and/or reduced sales of proposed products in such markets.

operating and financial strategy for the development, clinical testing, manufacture, and commercialization of drug candidates

is heavily dependent on our entering into collaborations with corporations, academic institutions, licensors, licensees, and other

Our current strategy assumes that we will successfully establish these collaborations, or similar relationships;

there can be no assurance that we will be successful establishing such collaborations.

Some of our existing collaborations are,

and future collaborations may be, terminable at the sole discretion of the collaborator.

Replacement collaborators might not be

available on attractive terms, or at all.

The activities of any collaborator will not be within our control and may not be within

our power to influence.

There can be no assurance that any collaborator will perform its obligations to our satisfaction or at

all, that we will derive any revenue or profits from such collaborations, or that any collaborator will not compete with us.

any collaboration is not pursued, we may require substantially greater capital to undertake development and marketing of our proposed

products and may not be able to develop and market such products effectively, if at all.

In addition, a lack of development and

marketing collaborations may lead to significant delays in introducing proposed products into certain markets and/or reduced sales

of proposed products in such markets.

provided by collaborators and others upon which we rely that has not been independently verified could turn out to be false, misleading,

or incomplete.

rely on third-party vendors, scientists, and collaborators to provide us with significant data and other information related to our projects,

clinical studies, and our business.

If such third parties provide inaccurate, misleading, or incomplete data, our business, prospects,

and results of operations could be materially adversely affected.

rely on third-party vendors, scientists, and collaborators to provide us with significant data and other information related to

our projects, clinical studies, and our business.

If such third parties provide inaccurate, misleading, or incomplete data, our

business, prospects, and results of operations could be materially adversely affected.

product candidates may face competition sooner than expected.

intend to seek data exclusivity or market exclusivity for our product candidates provided under the FDCA and similar laws in other countries.

We believe that TNX-801 could qualify for 12 years of data exclusivity under the Biologics Price Competition and Innovation Act of 2009,

or BPCIA, which was enacted as part of the Patient Protection and Affordable Care Act.

Under the BPCIA, an application for a biosimilar

product or BLA cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand product

identified as the reference product is approved under a BLA.

The BPCIA provides an abbreviated pathway for the approval of biosimilar

and interchangeable biological products.

The new abbreviated regulatory pathway establishes legal authority for the FDA to review and

approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity

to an existing brand product.

The new law is complex and is only beginning to be interpreted and implemented by the FDA.

While it is uncertain

when any such processes may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial

prospects for any of our product candidates that are biologics.

There is also a risk that BPCIA could be repealed or amended to shorten

this exclusivity period, potentially creating the opportunity for biosimilar competition sooner than anticipated after the expiration

of our patent protection.

Although there is no current discussion of repeal or modification of the BPCIA, the future remains uncertain.

Moreover, the extent to which a biosimilar, once approved, will be substituted for any reference product in a way that is similar to traditional

generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that

are still developing.

product candidates that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for

market exclusivity as drugs under the FDCA.

intend to seek data exclusivity or market exclusivity for our product candidates provided under the FDCA and similar laws in other

We believe that TNX-801 could qualify for 12 years of data exclusivity under the Biologics Price Competition and Innovation

Act of 2009, or BPCIA, which was enacted as part of the PPACA.

Under the BPCIA, an application for a biosimilar product or BLA

cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand product identified

as the reference product is approved under a BLA.

The BPCIA provides an abbreviated pathway for the approval of biosimilar and

interchangeable biological products.

The new abbreviated regulatory pathway establishes legal authority for the FDA to review

and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on

its similarity to an existing brand product.

The new law is complex and is only beginning to be interpreted and implemented by

While it is uncertain when any such processes may be fully adopted by the FDA, any such processes could have a material

adverse effect on the future commercial prospects for any of our product candidates that are biologics.

There is also a risk that

BPCIA could be repealed or amended to shorten this exclusivity period, potentially creating the opportunity for biosimilar competition

sooner than anticipated after the expiration of our patent protection.

Although there is no current discussion of repeal or modification

of the BPCIA, the future remains uncertain.

Moreover, the extent to which a biosimilar, once approved, will be substituted for

any reference product in a way that is similar to traditional generic substitution for non-biological products is not yet clear,

and will depend on a number of marketplace and regulatory factors that are still developing.

Our product candidates that are not, or

are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for market exclusivity as drugs

under the FDCA.

The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S.

the first applicant to gain approval of an NDA for an NCE.

A drug is an NCE if the FDA has not previously approved any other new drug

containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity

period, the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA, submitted by another company

for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations,

other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval

of the application, for example, for new indications, dosages, or strengths of an existing drug.

This three-year exclusivity covers only

the conditions associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing

the original active agent.

if, as we expect, our product candidates are considered to be reference products eligible for 12 years of exclusivity under the BPCIA

or five years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full BLA or full NDA

for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate

the safety, purity and potency of the products.

Moreover, an amendment or repeal of the BPCIA could result in a shorter exclusivity period

for our product candidates, which could have a material adverse effect on our business.

we fail to establish marketing, sales and distribution capabilities, or fail to enter into arrangements with third parties, we will not

be able to create a market for our product candidates.

strategy with our product candidates is to control, directly or through contracted third parties, all or most aspects of the product development

process, including marketing, sales and distribution.

we do not have any sales, marketing or distribution capabilities.

In order to generate sales of any product candidates that receive regulatory

approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution

capabilities or make arrangements with third parties to perform these services for us.

The acquisition or development of a sales and distribution

infrastructure would require substantial resources, which may divert the attention of our management and key personnel and defer our product

development efforts.

the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of others.

to the first applicant

to gain approval of an NDA for an NCE.

A drug is an NCE if the FDA has not previously approved any other new drug containing the

same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period,

the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA, submitted by another company

for another version of such drug where the applicant does not own or have a legal right of reference to all the data required

for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or

non-infringement.

The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing

NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are

deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, or strengths

of an existing drug.

This three-year exclusivity covers only the conditions associated with the new clinical investigations and

does not prohibit the FDA from approving ANDAs for drugs containing the original active agent.

if, as we expect, our product candidates are considered to be reference products eligible for 12 years of exclusivity under the

BPCIA or five years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full

BLA or full NDA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled

clinical trials to demonstrate the safety, purity and potency of the products.

Moreover, an amendment or repeal of the BPCIA could

result in a shorter exclusivity period for our product candidates, which could have a material adverse effect on our business.

we fail to establish marketing, sales and distribution capabilities, or fail to enter into arrangements with third parties, we

will not be able to create a market for our product candidates.

strategy for our marketed products and our product candidates is to control, directly or through contracted third parties, all or most aspects of the product

development process, including marketing, sales and distribution.

We are in the process of establishing

sales, marketing or distribution capabilities.

In order to successfully generate and increase sales of our marketed products or any of

our product candidates that receive regulatory approval, we must either acquire or develop an internal marketing and sales force with

technical expertise and with supporting distribution capabilities or make arrangements with third parties to perform these services for

The acquisition or development of a sales and distribution infrastructure, which we have commenced, requires substantial resources,

which may divert the attention of our management and key personnel and defer our product development efforts.

the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of

These efforts may not be successful.

If we fail to develop sales, marketing and distribution channels, or enter into arrangements with

third parties, we will experience delays in product sales and incur increased costs.

If we fail to develop sales, marketing and distribution channels, or enter into arrangements

with third parties, we will experience delays in product sales and incur increased costs.

of pharmaceutical products largely depend on the reimbursement of patients’ medical expenses by government health care programs

and private health insurers.

Without the financial support of the government or third-party payors, the market for our products will be

These third-party payors are increasingly challenging the price and examining the cost effectiveness of medical products and

Recent proposals to change the health care system in the United States have included measures that would limit or eliminate

payments for medical products and services or subject the pricing of medical treatment products to government control.

Significant uncertainty

exists as to the reimbursement status of newly approved health care products.

Third-party payors may not reimburse sales of our products

or enable our collaborators to sell them at profitable prices.

business strategy might involve out-licensing product candidates to or collaborating with larger firms with experience in marketing and

selling pharmaceutical products.

There can be no assurance that we will be able to successfully establish marketing, sales, or distribution

relationships;

Without the financial support of the government or third-party payors, the market for our products

will be limited.

These third-party payors are increasingly challenging the price and examining the cost effectiveness of medical

products and services.

Recent proposals to change the health care system in the United States have included measures that would

limit or eliminate payments for medical products and services or subject the pricing of medical treatment products to government

Significant uncertainty exists as to the reimbursement status of newly approved health care products.

Third-party payors

may not reimburse sales of our products or enable our collaborators to sell them at profitable prices.

business strategy might involve out-licensing product candidates to or collaborating with larger firms with experience in marketing

and selling pharmaceutical products.

There can be no assurance that we will be able to successfully establish marketing, sales,

or distribution relationships;

that such relationships, if established, will be successful;

or that we will be successful in gaining market acceptance

for our products.

To the extent that we enter into any marketing, sales, or distribution arrangements with third parties, our product

revenues will be lower than if we marketed and sold our products directly, and any revenues we receive will depend upon the efforts of

such third-parties.

If we are unable to establish such third-party sales and marketing relationships, or choose not to do so, we will

have to establish and rely on our own in-house capabilities.

or that we will be successful in gaining

market acceptance for our products.

To the extent that we enter into any marketing, sales, or distribution arrangements with third

parties, our product revenues will be lower than if we marketed and sold our products directly, and any revenues we receive will

depend upon the efforts of such third-parties.

If we are unable to establish such third-party sales and marketing relationships,

or choose not to do so, we will have to establish and rely on our own in-house capabilities.

as a company, have no experience in marketing or selling pharmaceutical products and currently have no sales, marketing, or distribution

infrastructure.

To market any of our products directly, we would need to develop a marketing, sales, and distribution force that both

has technical expertise and the ability to support a distribution capability.

The establishment of a marketing, sales, and distribution

capability would significantly increase our costs, possibly requiring substantial additional capital.

In addition, there is intense competition

for proficient sales and marketing personnel, and we may not be able to attract individuals who have the qualifications necessary to market,

sell, and distribute our products.

There can be no assurance that we will be able to establish internal marketing, sales, or distribution

capabilities.

If we are unable to, or choose not to establish these capabilities, or if the capabilities we establish are not sufficient

to meet our needs, we will be required to establish collaborative marketing, sales, or distribution relationships with third parties.

relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state healthcare

fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.

are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription

of any drug candidates for which we obtain marketing approval.

Our current and future arrangements with healthcare professionals, principal

investigators, consultants, customers and third-party payors may subject us to various federal and state fraud and abuse laws and other

health care laws, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and

the law commonly referred to as the Physician Payments Sunshine Act and regulations.

These laws will impact, among other things, our clinical

research, proposed sales, marketing and educational programs.

In addition, we may be subject to patient privacy laws by both the federal

government and the states in which we conduct or may conduct our business.

The laws that will affect our operations include, but are not

Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering

or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind,

in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal healthcare program,

such as the Medicare and Medicaid programs;

federal civil

and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among

other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare,

Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation

to pay money to the federal government;

Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit a person

from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless

of the payor (e.g., public or private);

HIPAA, as amended

by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, and as amended

again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under

HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications to HIPAA, published in January 2013, which imposes certain

requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization

by entities subject to the rule, such as health plans, health care clearinghouses and health care providers, and their respective business

federal transparency

laws, including the federal Physician Payments Sunshine Act, which is part of PPACA, that require certain manufacturers of drugs, devices,

biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program,

with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to:

(i) payments or other “transfers of value’’ made to physicians and teaching hospitals;

and (ii) ownership

and investment interests held by physicians and their immediate family members;

state and foreign

law equivalents of each of the above federal laws, state laws that require manufacturers to report information related to payments and

other transfers of value to physicians and other healthcare providers or marketing expenditures, and state laws that require pharmaceutical

companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated

by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments

that may be made to healthcare providers;

state and foreign

laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant

ways and often are not preempted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our

business activities could be subject to challenge under one or more of such laws.

is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations

or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation

of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and

administrative penalties, damages, fines, disgorgement, imprisonment, exclusion of drugs from government funded healthcare programs, such

as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar

agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.

risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory

authorities or the courts, and their provisions are open to a variety of interpretations.

Efforts to ensure that our business arrangements

with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.

Any action against us for

violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our

management’s attention from the operation of our business.

The shifting compliance environment and the need to build and maintain

robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases

the possibility that a healthcare company may run afoul of one or more of the requirements.

and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to

sell profitably, if approved.

acceptance and sales of any drug candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement

for these drugs and related treatments will be available from third-party payors, including government health administration authorities,

managed care organizations and other private health insurers.

Third-party payors decide which therapies they will pay for and establish

reimbursement levels.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage

and reimbursement policies.

However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any drug

candidates that we develop will be made on a payor-by-payor basis.

One payor’s determination to provide coverage for a

drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug.

Additionally, a third-party

payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.

determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what

tier of its formulary it will be placed.

The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that

a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians.

Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors

to reimburse all or part of the associated healthcare costs.

Patients are unlikely to use our drugs unless coverage is provided and reimbursement

is adequate to cover a significant portion of the cost of our drugs.

To market any of our products directly, we would need to develop a marketing, sales, and distribution force that

both has technical expertise and the ability to support a distribution capability.

The establishment of a marketing, sales, and

distribution capability would significantly increase our costs, possibly requiring substantial additional capital.

there is intense competition for proficient sales and marketing personnel, and we may not be able to attract individuals who have

the qualifications necessary to market, sell, and distribute our products.

There can be no assurance that we will be able to establish

internal marketing, sales, or distribution capabilities.

If we are unable to, or choose not to establish these capabilities, or

if the capabilities we establish are not sufficient to meet our needs, we will be required to establish collaborative marketing,

sales, or distribution relationships with third parties.

relationships with customers, physicians, and third-party payors is subject, to federal and state

healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and

If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Healthcare providers, physicians

and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of our products.

Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors

subject us to various federal and state fraud and abuse laws and other health care laws, including, without limitation, the federal Anti-Kickback

Statute, the federal civil and criminal false claims laws and the law commonly referred to as the Physician Payments Sunshine Act and

These laws will impact, among other things, our clinical research, sales, marketing and educational programs.

we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.

The laws that will affect our operations include, but are not limited to:

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,

receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly

or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable

under a federal healthcare program, such as the Medicare and Medicaid programs;

civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws

which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims

for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false

statement to avoid, decrease or conceal an obligation to pay money to the federal government;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes

that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud

any healthcare benefit program, regardless of the payor (e.g., public or private);

as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations,

and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach

Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications to HIPAA, published

in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable

health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses

and health care providers, and their respective business associates;

transparency laws, including the federal Physician Payments Sunshine Act, which is part of PPACA, that require certain manufacturers

of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services,

or CMS, information related to:

(i) payments or other “transfers of value’’ made to physicians and

teaching hospitals;

and (ii) ownership and investment interests held by physicians and their immediate family members;

and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information

related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines

and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by

state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers;

and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from

each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some

of our business activities could be subject to challenge under one or more of such laws.

is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes,

regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found

to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant

civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion of drugs from government funded

healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a

corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the

curtailment or restructuring of our operations.

risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted

by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Efforts to ensure

that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant

legal expenses and divert our management’s attention from the operation of our business.

The shifting compliance environment

and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance

and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

and adequate reimbursement may not be available for our products, which could make it difficult for us to sell profitably.

acceptance and sales of any of our products depends in part on the extent to which reimbursement for these drugs and related treatments

will be available from third-party payors, including government health administration authorities, managed care organizations and other

private health insurers.

Third-party payors decide which therapies they will pay for and establish reimbursement levels.

Third-party payors

often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies.

However, decisions

regarding the extent of coverage and amount of reimbursement to be provided for any drug is made on a payor-by-payor basis.

One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate

reimbursement, for the drug.

Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that

an adequate reimbursement rate will be approved.

Each payor determines whether or not it will provide coverage for a therapy, what amount

it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed.

The position on a payor’s list

of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and

can strongly influence the adoption of such therapy by patients and physicians.

Patients who are prescribed treatments for their conditions

and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

Patients are unlikely to use our drugs unless coverage is provided and reimbursement is adequate to cover a significant portion of the

cost of our drugs.

primary trend in the U.S.

3 unchanged sentences

We cannot be sure that coverage and reimbursement will be

available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will be.

Inadequate coverage

and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval.

If coverage and adequate

reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current

and any future drug candidates that we develop.

legislative or regulatory reform measures, including government restrictions on pricing and reimbursement, may have a negative impact

on our business and results of operations.

the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and

proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate

post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

Among policy makers and payors

in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of

containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular

focus of these efforts and has been significantly affected by major legislative initiatives.

For example, in the United States, the Patient

Protection and Affordable Care Act of 2010 (“ACA”) substantially changed the way healthcare is financed by both the government

and private insurers , and significantly

affects the pharmaceutical industry.

Many provisions of the ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical

product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S.

available or continue to be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement

Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug we commercialize.

If coverage and

adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our

current and any future drug products.

legislative or regulatory reform measures, including government restrictions on pricing and reimbursement, may have a negative

impact on our business and results of operations.

the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes

and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict

or regulate post-approval activities, and affect our ability to profitably sell any of our commercialized products.

policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare

systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States,

the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative

For example, in the United States, the PPACA substantially changed the way healthcare is financed by both the government

and private insurers , and significantly affects the pharmaceutical

Many provisions of the ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical product

to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S.

government agencies,

the manufacturer must extend discounts to entities eligible to participate in the drug pricing program under the Public Health Services

Additionally, the Inflation Reduction

Act of 2022, which took in 2023, includes policies that are designed to have a direct impact on drug prices and reduce drug spending by

the federal government.

This legislation contains substantial drug pricing reforms, including the establishment of a drug price negotiation

program within the U.S.

Department of Health and Human Services that would require manufacturers to charge a negotiated “maximum

fair price” for certain selected drugs covered by Medicare or pay an excise tax for noncompliance, the establishment of rebate payment

requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation,

and requires manufacturers to provide discounts on Part D drugs.

Legislative, administrative, and

private payor efforts to control drug costs span a range of proposals, including drug price negotiation, Medicare Part D redesign, drug

price inflation rebates, international mechanisms, generic drug promotion and anticompetitive behavior, manufacturer reporting, and reforms

that could impact therapies utilizing the accelerated approval pathway.

We cannot predict the ultimate content, timing or effect of any

changes to the ACA, the Inflation Reduction Act, or other federal and state healthcare policy reform efforts including those aimed at

drug pricing.

There is no assurance that federal or state health care reform will not adversely affect our future business and financial

results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare policy

will affect our business.

the manufacturer must extend discounts to entities eligible to participate in the drug pricing program under the Public Health

Services Act, or PHS.

Additionally,

the Inflation Reduction Act of 2022, which took effect in 2023, includes policies that are designed to have a direct impact on

drug prices and reduce drug spending by the federal government.

This legislation contains substantial drug pricing reforms, including

the establishment of a drug price negotiation program within the U.S.

Department of Health and Human Services that would require

manufacturers to charge a negotiated “maximum fair price” for certain selected drugs covered by Medicare or pay an

excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under

Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on

Part D drugs.

administrative, and private payor efforts to control drug costs span a range of proposals, including drug price negotiation, Medicare

Part D redesign, drug price inflation rebates, international mechanisms, generic drug promotion and anticompetitive behavior,

manufacturer reporting, and reforms that could impact therapies utilizing the accelerated approval pathway.

We cannot predict

the ultimate content, timing or effect of any changes to the ACA, the Inflation Reduction Act, or other federal and state healthcare

policy reform efforts including those aimed at drug pricing.

There is no assurance that federal or state health care reform will

not adversely affect our future business and financial results, and we cannot predict how future federal or state legislative,

judicial or administrative changes relating to healthcare policy will affect our business.

the federal level, the now-departed Trump administration proposed numerous prescription drug cost control measures.

Similarly, the

new Biden administration has made lowering prescription drug prices one of its priorities.

The Biden administration has not yet

proposed any specific plans, but we expect that these will be forthcoming in the near term.

At the state level, legislatures are increasingly

passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or

patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures,

and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Other examples of proposed changes include,

but are not limited to, expanding post-approval requirements, changing the Orphan Drug Act, and restricting sales and promotional activities

for pharmaceutical products.

the new Biden administration has made lowering prescription drug prices one of its priorities.

The Biden administration

has not yet proposed any specific plans, but we expect that these will be forthcoming in the near term.

At the state level, legislatures

are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing,

including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure

and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

examples of proposed changes include, but are not limited to, expanding post-approval requirements, changing the Orphan Drug Act,

and restricting sales and promotional activities for pharmaceutical products.

cannot be sure whether additional legislative changes will be enacted, or whether government regulations, guidance or interpretations

will be changed, or what the impact of such changes would be on the marketing approvals, sales, pricing, or reimbursement of our drug

candidates or products, if any, may be.

We expect that these and other healthcare reform measures that may be adopted in the future, may

result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug.

reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain

profitability, or commercialize our drugs.

addition, FDA regulations and guidance may be revised or reinterpreted by the FDA in ways that may significantly affect our business and

our products.

Any new regulations or guidance, or revisions or reinterpretations of existing regulations or guidance, may impose additional

costs or lengthen FDA review times for our product candidates.

We cannot determine how changes in regulations, statutes, policies, or

interpretations when and if issued, enacted or adopted, may affect our business in the future.

Such changes could, among other things,

additional clinical trials to be conducted prior to obtaining

changes to manufacturing methods;

recalls, replacements, or discontinuance of one or more of our

additional recordkeeping.

changes would likely require substantial time and impose significant costs, or could reduce the potential commercial value of our product

In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any other products would harm

our business, financial condition, and results of operations.

will be changed, or what the impact of such changes would be on the marketing approvals, sales, pricing, or reimbursement of our

drug candidates or products, if any, may be.

We expect that these and other healthcare reform measures that may be adopted in

the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for

any approved drug.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction

in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from

being able to generate revenue, attain profitability, or commercialize our drugs.

addition, FDA regulations and guidance may be revised or reinterpreted by the FDA in ways that may significantly affect our business

and our products.

Any new regulations or guidance, or revisions or reinterpretations of existing regulations or guidance, may

impose additional costs or lengthen FDA review times for our product candidates.

We cannot determine how changes in regulations,

statutes, policies, or interpretations when and if issued, enacted or adopted, may affect our business in the future.

could, among other things, require:

clinical trials to be conducted prior to obtaining approval;

to manufacturing methods;

replacements, or discontinuance of one or more of our products;

recordkeeping.

changes would likely require substantial time and impose significant costs, or could reduce the potential commercial value of

our product candidates.

In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any other

products would harm our business, financial condition, and results of operations.

we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with international

operations could materially adversely affect our business.

TNX-102 SL or any of our other product candidates are approved for commercialization outside of the United States, we intend to enter

into agreements with third parties to market them on a worldwide basis or in more limited geographical regions.

We expect that we will

be subject to additional risks related to entering into international business relationships, including:

different regulatory requirements

for drug approvals;

reduced protection for intellectual

property rights, including trade secret and patent rights;

unexpected changes in tariffs, trade

barriers and regulatory requirements;

economic weakness, including inflation,

or political instability in particular foreign economies and markets;

compliance with tax, employment,

immigration and labor laws for employees living or traveling abroad;

foreign taxes, including withholding

of payroll taxes;

foreign currency fluctuations, which

could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

workforce uncertainty in countries

where labor unrest is more common than in the United States;

production shortages resulting from

any events affecting raw material supply or manufacturing capabilities abroad;

business interruptions resulting

from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes, floods and fires;

difficulty in importing and exporting

clinical study materials and study samples.

TNX-102 SL or any of our other product candidates are approved for commercialization outside of the United States, we intend to

enter into agreements with third parties to market them on a worldwide basis or in more limited geographical regions.

that we will be subject to additional risks related to entering into international business relationships, including:

regulatory requirements for drug approvals;

protection for intellectual property rights, including trade secret and patent rights;

changes in tariffs, trade barriers and regulatory requirements;

weakness, including inflation, or political instability in particular foreign economies and markets;

with tax, employment, immigration and labor laws for employees living or traveling abroad;

taxes, including withholding of payroll taxes;

currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident

to doing business in another country;

uncertainty in countries where labor unrest is more common than in the United States;

shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes,

hurricanes, floods and fires;

in importing and exporting clinical study materials and study samples.

face the risk of product liability claims and may not be able to obtain insurance.

business exposes us to the risk of product liability claims that are inherent in the development of drugs.

If the use of one or more of

our or our collaborators’ drugs harms people, we may be subject to costly and damaging product liability claims brought against

us by clinical study participants, consumers, health care providers, pharmaceutical companies or others selling our products.

Our inability

to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent

or inhibit the commercialization of pharmaceutical products we develop, alone or with collaborators.

While we currently carry clinical

study insurance and product liability insurance, we cannot predict all of the possible harms or side effects that may result and, therefore,

the amount of insurance coverage we hold now or in the future may not be adequate to cover all liabilities we might incur.

expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for our drug candidates in development,

but we may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing.

unable to obtain insurance at an acceptable cost or otherwise protect against potential product liability claims, we will be exposed to

significant liabilities, which may materially and adversely affect our business and financial position.

If we are sued for any injury

allegedly caused by our or our collaborators’ products, our liability could exceed our total assets and our ability to pay the liability.

A product liability claim or series of claims brought against us would decrease our cash and could cause our stock price to fall.

Our business exposes

us to the risk of product liability claims that are inherent in the sale and development of drugs.

If the use of one or more of our or

our collaborators’ drugs harms people, we may be subject to costly and damaging product liability claims brought against us by clinical

study participants, consumers, health care providers, pharmaceutical companies or others selling our products.

Our inability to obtain

sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit

the commercialization of pharmaceutical products we develop, alone or with collaborators.

While we currently carry clinical study insurance

and product liability insurance, we cannot predict all of the possible harms or side effects that may result and, therefore, the amount

of insurance coverage we hold now or in the future may not be adequate to cover all liabilities we might incur.

We expanded our insurance

coverage to include the sale of our commercial products Tosymra and Zembrace Symtouch.

We intend to further expand our insurance coverage

to include the sale of Tonmya upon receiving FDA approval for marketing.

If we are unable to obtain insurance at an acceptable cost or

otherwise protect against potential product liability claims, we will be exposed to significant liabilities, which may materially and

adversely affect our business and financial position.

If we are sued for any injury allegedly caused by our or our collaborators’

products, our liability could exceed our total assets and our ability to pay the liability.

A product liability claim or series of claims

brought against us would decrease our cash and could cause our stock price to fall.

use hazardous chemicals in our business.

Potential claims relating to improper handling, storage or disposal of these chemicals could

affect us and be time-consuming and costly.

research and development processes and/or those of our third party contractors may involve the controlled use of hazardous materials and

Potential claims relating to improper handling, storage or disposal of these chemicals

could affect us and be time-consuming and costly.

research and development processes and/or those of our third party contractors may involve the controlled use of hazardous materials

and chemicals.

These hazardous chemicals are reagents and solvents typically found in a chemistry laboratory.

Our operations also produce

hazardous waste products.

Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of

hazardous materials.

While we attempt to comply with all environmental laws and regulations, including those relating to the outsourcing

of the disposal of all hazardous chemicals and waste products, we cannot eliminate the risk of contamination from or discharge of hazardous

materials and any resultant injury.

In the event of such an accident, we could be held liable for any resulting damages and any liability

could materially adversely affect our business, financial condition and results of operations.

Our operations also

produce hazardous waste products.

Federal, state and local laws and regulations govern the use, manufacture, storage, handling

and disposal of hazardous materials.

While we attempt to comply with all environmental laws and regulations, including those relating

to the outsourcing of the disposal of all hazardous chemicals and waste products, we cannot eliminate the risk of contamination

from or discharge of hazardous materials and any resultant injury.

In the event of such an accident, we could be held liable for

any resulting damages and any liability could materially adversely affect our business, financial condition and results of operations.

with environmental laws and regulations may be expensive.

Current or future environmental regulations may impair our research, development

or production efforts.

We might have to pay civil damages in the event of an improper or unauthorized release of, or exposure of individuals

to, hazardous materials.

Current or future environmental regulations may impair our research,

development or production efforts.

We might have to pay civil damages in the event of an improper or unauthorized release of,

or exposure of individuals to, hazardous materials.

We are not insured against these environmental risks.

we enter into collaborations with third parties, they might also work with hazardous materials in connection with our collaborations.

We may agree to indemnify our collaborators in some circumstances against damages and other liabilities arising out of development activities

or products produced in connection with these collaborations.

addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous

or radioactive materials and waste products may require us to incur substantial compliance costs that could materially adversely affect

our business, financial condition and results of operations.

insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant uninsured liabilities.

We may agree to indemnify our collaborators in some circumstances against damages and other liabilities arising out of development

activities or products produced in connection with these collaborations.

addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of

hazardous or radioactive materials and waste products may require us to incur substantial compliance costs that could materially

adversely affect our business, financial condition and results of operations.

insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant uninsured

carry insurance for most categories of risk that our business may encounter, however, we may not have adequate levels of coverage.

currently maintain general liability, clinical study, property, workers’ compensation, products liability and directors’ and

officers’ insurance, along with an umbrella policy, which collectively costs approximately $2,000,000 per annum.

We cannot provide

any assurances that we will be able to maintain existing insurance at current or adequate levels of coverage.

Any significant uninsured

liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.

we retain collaborative partners and our partners do not satisfy their obligations, we will be unable to develop our partnered product

the event we enter into any collaborative agreements, we may not have day-to-day control over the activities of our collaborative partners

with respect to any of these product candidates.

Any collaborative partner may not fulfill its obligations under these agreements.

a collaborative partner fails to fulfill its obligations under an agreement with us, we may be unable to assume the development of the

products covered by that agreement or enter into alternative arrangements with a third party.

In addition, we may encounter delays in

the commercialization of the product candidate that is the subject of the agreement.

Accordingly, our ability to receive any revenue from

the product candidates covered by these agreements will be dependent on the efforts of our collaborative partner.

We could also become

involved in disputes with a collaborative partner, which could lead to delays in or termination of our development and commercialization

programs and time-consuming and expensive litigation or arbitration.

In addition, any such dispute could diminish our collaborators’

commitment to us and reduce the resources they devote to developing and commercializing our products.

Conflicts or disputes with our collaborators,

and competition from them, could harm our relationships with our other collaborators, restrict our ability to enter future collaboration

agreements and delay the research, development or commercialization of our product candidates.

If any collaborative partner terminates

or breaches its agreement, or otherwise fails to complete its obligations in a timely manner, our chances of successfully developing or

commercializing these product candidates would be materially and adversely affected.

We may not be able to enter into collaborative agreements

with partners on terms favorable to us, or at all.

Our inability to enter into collaborative arrangements with collaborative partners,

or our failure to maintain such arrangements, would limit the number of product candidates that we could develop and ultimately, decrease

We currently maintain general liability, clinical study, property, workers’ compensation, products liability and directors’

and officers’ insurance, along with an umbrella policy, which collectively costs approximately $2,000,000 per annum.

cannot provide any assurances that we will be able to maintain existing insurance at current or adequate levels of coverage.

significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and

results of operations.

we retain collaborative partners and our partners do not satisfy their obligations, we will be unable to develop our partnered

product candidates.

the event we enter into any collaborative agreements, we may not have day-to-day control over the activities of our collaborative

partners with respect to any of these product candidates.

Any collaborative partner may not fulfill its obligations under these

If a collaborative partner fails to fulfill its obligations under an agreement with us, we may be unable to assume

the development of the products covered by that agreement or enter into alternative arrangements with a third party.

we may encounter delays in the commercialization of the product candidate that is the subject of the agreement.

Accordingly, our

ability to receive any revenue from the product candidates covered by these agreements will be dependent on the efforts of our

collaborative partner.

We could also become involved in disputes with a collaborative partner, which could lead to delays in or

termination of our development and commercialization programs and time-consuming and expensive litigation or arbitration.

any such dispute could diminish our collaborators’ commitment to us and reduce the resources they devote to developing and

commercializing our products.

Conflicts or disputes with our collaborators, and competition from them, could harm our relationships

with our other collaborators, restrict our ability to enter future collaboration agreements and delay the research, development

or commercialization of our product candidates.

If any collaborative partner terminates or breaches its agreement, or otherwise

fails to complete its obligations in a timely manner, our chances of successfully developing or commercializing these product

candidates would be materially and adversely affected.

We may not be able to enter into collaborative agreements with partners

on terms favorable to us, or at all.

Our inability to enter into collaborative arrangements with collaborative partners, or our

failure to maintain such arrangements, would limit the number of product candidates that we could develop and ultimately, decrease

our sources of any future revenues.

may be unsuccessful in obtaining a priority review voucher for material threat medical countermeasures.

In 2016, the 21 st Century Cures Act, or the Act, was signed

into law to support ongoing biomedical innovation.

One part of the Act, Section 3086, is aimed at “Encouraging Treatments for Agents

that Present a National Security Threat.” The Act created a new priority review voucher program for approved “material threat

medical countermeasures.” The Act defines such countermeasures as drug or biologic products, including vaccines, intended to treat

biological, chemical, radiological, or nuclear agents that present a national security threat or to treat harm from a condition that may

be caused by administering a drug or biological product against such an agent.

The Department of Homeland Security has identified 13 such

threats, including anthrax, smallpox, Ebola/Marburg, tularemia, botulinum toxin, and pandemic influenza, which includes the SARS coronavirus

2 known as SARS-CoV-2.

2016, the 21 st Century Cures Act, or the Act, was signed into law to support ongoing biomedical innovation.

of the Act, Section 3086, is aimed at “Encouraging Treatments for Agents that Present a National Security Threat.”

The Act created a new priority review voucher program for approved “material threat medical countermeasures.” The

Act defines such countermeasures as drug or biologic products, including vaccines, intended to treat biological, chemical, radiological,

or nuclear agents that present a national security threat or to treat harm from a condition that may be caused by administering

a drug or biological product against such an agent.

The Department of Homeland Security has identified 13 such threats, including

anthrax, smallpox, Ebola/Marburg, tularemia, botulinum toxin, and pandemic influenza, which includes the SARS coronavirus 2 known

as SARS-CoV-2.

A priority review voucher can be applied to any other product;

4 unchanged sentences

government is the only market for most medical countermeasures.

This is because unlike other drugs and vaccines, these products are not

sold to doctors, hospitals, or pharmacies.

The BioShield Special Reserve Fund, or SRF, has been the sole medical countermeasures market

for the last decade.

The SRF is now appropriated annually and has not kept pace with the need for purchasing products ready for stockpiling.

This is because unlike other drugs and vaccines, these products

are not sold to doctors, hospitals, or pharmacies.

The BioShield Special Reserve Fund, or SRF, has been the sole medical countermeasures

market for the last decade.

The SRF is now appropriated annually and has not kept pace with the need for purchasing products ready

for stockpiling.

During 2020, $735 million was appropriated to SRF.

As such, even if TNX-801 were to receive FDA licensure, the commercial success of TNX-801

remains uncertain.

entities may take actions that directly or indirectly have the effect of limiting opportunities for our vaccine candidates for COVID-19.

As such, even if TNX-801 were to receive FDA licensure, the

commercial success of TNX-801 remains uncertain.

entities may take actions that directly or indirectly have the effect of limiting opportunities for our vaccine candidates for

government entities, including the U.S.

government, are offering incentives, grants and contracts to encourage additional investment by

commercial organizations into preventative and therapeutic agents against COVID-19, which may have the effect of increasing the number

of competitors and/or providing advantages to competitors.

Accordingly, there can be no assurance that we will be able to successfully

establish a competitive market share if we ultimately receive regulatory approval for our vaccines as a vaccine for COVID-19.

vaccines may also be subject to government pricing controls, which could adversely affect the profitability of any COVID-19 vaccine we

are able to develop and commercialize.

technology developed for the purposes of developing new medicines or vaccines can be applied to the creation or development of biological

weapons, then our technology may be considered “dual use” technology and be subject to limitations on public disclosure or

research and development of synthetic poxviruses is dedicated not only to creating tools that better protect public health but also to

safeguarding any information with broad, dual-use potential that could be inappropriately applied.

“Dual use research” is

research conducted for legitimate purposes that generates knowledge, information, technologies, and/or products that can be reasonably

anticipated to provide knowledge, information, products, or technologies that could be directly misapplied to pose a significant threat

to public health, agricultural crops, or national security.

Because variola, the agent that causes smallpox, is a pox virus, the technology

we created could be considered dual use and could be subject to export control, for example under the Wassenaar Arrangement.

if federal authorities determine that our research is subject to institutional oversight, we will need to implement a risk-management

plan developed in collaboration with the institutional review entity.

Failure to comply with the plan may result in suspension, limitation,

or termination of federal funding or loss of future federal funding opportunities for any of our research.

face risks in connection with existing and future collaborations with respect to the development, manufacture, and commercialization of

our product candidates.

government, are offering incentives, grants and contracts to encourage additional investment

by commercial organizations into preventative and therapeutic agents against COVID-19, which may have the effect of increasing

the number of competitors and/or providing advantages to competitors.

Accordingly, there can be no assurance that we will be able

to successfully establish a competitive market share if we ultimately receive regulatory approval for our vaccines as a vaccine

for COVID-19.

COVID-19 vaccines may also be subject to government pricing controls, which could adversely affect the profitability

of any COVID-19 vaccine we are able to develop and commercialize.

technology developed for the purposes of developing new medicines or vaccines can be applied to the creation or development of

biological weapons, then our technology may be considered “dual use” technology and be subject to limitations on public

disclosure or export.

research and development of synthetic poxviruses is dedicated not only to creating tools that better protect public health but

also to safeguarding any information with broad, dual-use potential that could be inappropriately applied.

“Dual use research”

is research conducted for legitimate purposes that generates knowledge, information, technologies, and/or products that can be

reasonably anticipated to provide knowledge, information, products, or technologies that could be directly misapplied to pose

a significant threat to public health, agricultural crops, or national security.

Because variola, the agent that causes smallpox,

is a pox virus, the technology we created could be considered dual use and could be subject to export control, for example under

the Wassenaar Arrangement.

Further, if federal authorities determine that our research is subject to institutional oversight,

we will need to implement a risk-management plan developed in collaboration with the institutional review entity.

Failure to comply

with the plan may result in suspension, limitation, or termination of federal funding or loss of future federal funding opportunities

for any of our research.

face risks in connection with existing and future collaborations with respect to the development, manufacture, and commercialization

of our product candidates.

face a number of risks in connection with our current collaborations.

Our collaboration agreements are subject to termination under various

circumstances.

Our collaborators may change the focus of their development and commercialization efforts or may have insufficient resources

to effectively assist in the development of our products.

Any future collaboration agreements may have the effect of limiting the areas

of research and development that we may pursue, either alone or in collaboration with third parties.

Further, disagreements with collaborators,

including disagreements over proprietary rights, contract interpretation, or the preferred course of development, might cause delays,

might result in litigation or arbitration, or might result in termination of the research, development or commercialization of our products.

Any such disagreements would divert management attention and resources and be time-consuming and costly.

Our collaboration agreements are subject to termination

under various circumstances.

Our collaborators may change the focus of their development and commercialization efforts or may

have insufficient resources to effectively assist in the development of our products.

Any future collaboration agreements may

have the effect of limiting the areas of research and development that we may pursue, either alone or in collaboration with third

Further, disagreements with collaborators, including disagreements over proprietary rights, contract interpretation,

or the preferred course of development, might cause delays, might result in litigation or arbitration, or might result in termination

of the research, development or commercialization of our products.

Any such disagreements would divert management attention and

resources and be time-consuming and costly.

face risks in connection with the testing, production and storage of our vaccine product candidates.

our TNX-1850 and TNX-801 vaccine candidates each require testing of challenges with monkeypox or SARS-CoV-2 viruses under controlled experimental

our TNX-1850 and TNX-801 vaccine candidates each require testing of challenges with mpox or SARS-CoV-2 viruses under controlled

experimental conditions.

The testing of TNX-1850 and TNX-801 may carry risk of infection and harm to individuals.

addition, our TNX-1850 and TNX-801 vaccine candidates are both live forms of the horsepox.

We have initiated vaccine-manufacturing activities

to support further nonclinical testing of TNX-801.

The production and storage of the synthesized horsepox virus stock and, once initiated,

TNX-1850 virus stock, may carry risk of infection and harm to individuals.

Any such infection could expose us to product and general liability

claims, and may carry risk of infection and harm to individuals.

We have initiated vaccine-manufacturing

activities to support further nonclinical testing of TNX-801.

The production and storage of the synthesized horsepox virus stock

and, once initiated, TNX-1850 virus stock, may carry risk of infection and harm to individuals.

Any such infection could expose

us to product and general liability claims, and may carry risk of infection and harm to individuals.

RELATED TO OUR STOCK

of additional shares of our common stock could cause the price of our common stock to decline.

of substantial amounts of our common stock in the public market, or the availability of such shares for sale, by us or others, including

the issuance of common stock upon exercise of outstanding options and warrants, could adversely affect the price of our common stock.

We and our directors and officers may sell shares into the market, which could adversely affect the market price of shares of our common

of substantial amounts of our common stock in the public market, or the availability of such shares for sale, by us or others,

including the issuance of common stock upon exercise of outstanding options and warrants, could adversely affect the price of

our common stock.

We and our directors and officers may sell shares into the market, which could adversely affect the market price

of shares of our common stock.

active trading market for our common stock may not be sustained.

our common stock is listed on the NASDAQ Capital Market, the market for our shares has demonstrated varying levels of trading activity.

our common stock is listed on the NASDAQ Capital Market, the market for our shares has demonstrated varying levels of trading

Furthermore, the current level of trading may not be sustained in the future.

The lack of an active market for our common stock may impair

investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce

the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and

may impair our ability to acquire additional intellectual property assets by using our shares as consideration.

market price of our common stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our

market price of our common stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may be beyond

The lack of an active market for our common

stock may impair investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider

reasonable, may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations

by selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration.

market price of our common stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond

market price of our common stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may

be beyond our control.

These factors include, without limitation:

“short squeezes”;

comments by securities analysts or other third parties, including

blogs, articles, message boards and social and other media;

large stockholders exiting their position in our common stock

or an increase or decrease in the short interest in our common stock;

actual or anticipated fluctuations in our financial and operating

risks and uncertainties associated with the ongoing COVID-19

the timing and allocations of new product candidates;

public perception of our product candidates and competitive

changes in financial estimates or recommendations by securities

changes in the reimbursement policies of third party insurance

companies or government agencies;

overall general market fluctuations.

markets in general and our stock price in particular have experienced extreme price and volume fluctuations that have often been unrelated

or disproportionate to the operating performance of those companies and our company.

Broad market fluctuations may adversely affect the

trading price of our common stock.

In particular, a proportion of our common stock has been and may continue to be traded by short sellers

which may put pressure on the supply and demand for our common stock, further influencing volatility in its market price.

Additionally,

these and other external factors have caused and may continue to cause the market price and demand for our common stock to fluctuate,

which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity

of our common stock.

“short squeeze” due to a sudden increase in demand for shares of our common stock that largely could lead to extreme price

volatility in shares of our common stock.

by securities analysts or other third parties, including blogs, articles, message boards and social and other media;

stockholders exiting their position in our common stock or an increase or decrease in the short interest in our common stock;

or anticipated fluctuations in our financial and operating results;

timing and allocations of new product candidates;

perception of our product candidates and competitive products;

in financial estimates or recommendations by securities analysts;

in the reimbursement policies of third party insurance companies or government agencies;

general market fluctuations.

markets in general and our stock price in particular have experienced extreme price and volume fluctuations that have often been

unrelated or disproportionate to the operating performance of those companies and our company.

Broad market fluctuations may adversely

affect the trading price of our common stock.

In particular, a proportion of our common stock has been and may continue to be

traded by short sellers which may put pressure on the supply and demand for our common stock, further influencing volatility in

its market price.

Additionally, these and other external factors have caused and may continue to cause the market price and demand

for our common stock to fluctuate, which may limit or prevent investors from readily selling their shares of common stock and

may otherwise negatively affect the liquidity of our common stock.

“short squeeze” due to a sudden increase in demand for shares of our common stock that largely could lead to extreme

price volatility in shares of our common stock.

may purchase shares of our common stock to hedge existing exposure or to speculate on the price of our common stock.

Speculation on the

price of our common stock may involve long and short exposures.

To the extent aggregate short exposure exceeds the number of shares of

our common stock available for purchase on the open market, investors with short exposure may have to pay a premium to repurchase shares

of our common stock for delivery to lenders of our common stock.

Those repurchases may in turn, dramatically increase the price of our

common stock until additional shares of our common stock are available for trading or borrowing.

This is often referred to as a “short

squeeze.” A proportion of our common stock has been and may continue to be traded by short sellers which may increase the likelihood

that our common stock will be the target of a short squeeze.

A short squeeze could lead to volatile price movements in shares of our common

stock that are unrelated or disproportionate to our operating performance or prospectus and, once investors purchase the shares of our

common stock necessary to cover their short positions, the price of our common stock may rapidly decline.

Investors that purchase shares

of our common stock during a short squeeze may lose a significant portion of their investment.

on the price of our common stock may involve long and short exposures.

To the extent aggregate short exposure exceeds the number

of shares of our common stock available for purchase on the open market, investors with short exposure may have to pay a premium

to repurchase shares of our common stock for delivery to lenders of our common stock.

Those repurchases may in turn, dramatically

increase the price of our common stock until additional shares of our common stock are available for trading or borrowing.

is often referred to as a “short squeeze.” A proportion of our common stock has been and may continue to be traded

by short sellers which may increase the likelihood that our common stock will be the target of a short squeeze.

A short squeeze

could lead to volatile price movements in shares of our common stock that are unrelated or disproportionate to our operating performance

or prospectus and, once investors purchase the shares of our common stock necessary to cover their short positions, the price

of our common stock may rapidly decline.

Investors that purchase shares of our common stock during a short squeeze may lose a

significant portion of their investment.

could be delisted from Nasdaq, which could seriously harm the liquidity of our stock and our ability to raise capital.

have had in the past, and may in the future, have difficulty satisfying Nasdaq listing requirements for our common stock.

If we are unable

to satisfy Nasdaq listing requirements, we will cease to be eligible to trade on Nasdaq.

October 17, 2023, we received a written notice from the Nasdaq staff indicating that, based upon the closing bid price of our

common stock, we no longer met the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing

Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

In accordance with Nasdaq listing rules, we have a period of

180 calendar days, or until April 15, 2024, in which to regain compliance.

In order to regain compliance with the Minimum Bid

Price Requirement, the closing bid price of our common stock must be at least $1 per share for a minimum of ten consecutive business

days during this 180-day period.

In the event we do not regain compliance within this 180-day period, we may be eligible to seek

an additional compliance period of 180 calendar days if we meet the continued listing requirement for market value of publicly

held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price

However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise

not eligible, our common stock will be subject to delisting.

If we are unable to maintain compliance with the Minimum Bid Price

or other listing requirements, we could lose eligibility for continued listing on the Nasdaq Capital Market or any comparable

trading market.

In such event:

We may have to pursue trading on

a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets.”

Shares of our common stock could

be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as quickly and as inexpensively

as they have done historically.

If our stock is traded as a “penny stock,” transactions in our stock would be more difficult

and cumbersome.

We may be unable to access capital

on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated

risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our common

This may also cause the market price of our common stock to decline.

do not anticipate paying dividends on our common stock and, accordingly, shareholders must rely on stock appreciation for any return on

their investment.

may have to pursue trading on a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets.”

of our common stock could be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell

our shares as quickly and as inexpensively as they have done historically.

If our stock is traded as a “penny stock,”

transactions in our stock would be more difficult and cumbersome.

may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as

less attractive investments with higher associated risks, such that existing or prospective institutional investors may be

less interested in, or prohibited from, investing in our common stock.

This may also cause the market price of our common

stock to decline.

do not anticipate paying dividends on our common stock and, accordingly, shareholders must rely on stock appreciation for any

return on their investment.

have never declared or paid cash dividends on our common stock and do not expect to do so in the foreseeable future.

The declaration of

dividends is subject to the discretion of our board of directors and will depend on various factors, including our operating results,

financial condition, future prospects and any other factors deemed relevant by our board of directors.

You should not rely on an investment

in our company if you require dividend income from your investment in our company.

The success of your investment will likely depend entirely

upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable.

There is no guarantee that

our common stock will appreciate in value.

The declaration

of dividends is subject to the discretion of our board of directors and will depend on various factors, including our operating

results, financial condition, future prospects and any other factors deemed relevant by our board of directors.

You should not

rely on an investment in our company if you require dividend income from your investment in our company.

The success of your investment

will likely depend entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable.

There is no guarantee that our common stock will appreciate in value.

expect that our quarterly results of operations will fluctuate, and this fluctuation could cause our stock price to decline.

1 unchanged sentence

These fluctuations could cause our stock price to decline.

of our business involves variable factors, such as the timing of the research, development and regulatory pathways of our product candidates,

which could cause our operating results to fluctuate.

to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results

are not a good indication of our future performance.

The nature of our business involves variable factors, such as the timing of the research, development and regulatory pathways

of our product candidates, which could cause our operating results to fluctuate.

to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating

results are not a good indication of our future performance.

rights of the holders of common stock may be impaired by the potential issuance of preferred stock.

articles of incorporation give our board of directors the right to create new series of preferred stock.

As a result, the board of directors

may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely

affect the voting power and equity interest of the holders of common stock.

Preferred stock, which could be issued with the right to more

than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change of control.

The possible impact

on takeover attempts could adversely affect the price of our common stock.

Although we have no present intention to issue any shares of

preferred stock or to create a series of preferred stock, we may issue such shares in the future.

we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, or if we discover

material weaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and

raising capital could be more difficult.

we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we discover

material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly

and raising capital could be more difficult.

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness

of our internal control over financial reporting.

If material weaknesses or significant deficiencies are discovered or if we otherwise

fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoing basis

that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

effective internal controls are necessary for us to produce reliable financial reports and are important to helping prevent financial

If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors

could lose confidence in our reported financial information, and the trading price of our common stock could drop significantly.

securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding

our stock adversely, our stock price and trading volume could decline.

trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about

us or our business.

As a result, the board

of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other

rights which could adversely affect the voting power and equity interest of the holders of common stock.

Preferred stock, which

could be issued with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing

a change of control.

The possible impact on takeover attempts could adversely affect the price of our common stock.

have no present intention to issue any shares of preferred stock or to create a series of preferred stock, we may issue such shares

in the future.

we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, or if we

discover material weaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline

significantly and raising capital could be more difficult.

we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we

discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline

significantly and raising capital could be more difficult.

Section 404 of the Sarbanes-Oxley Act requires annual management assessments

of the effectiveness of our internal control over financial reporting.

If material weaknesses or significant deficiencies are

discovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure

that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with

Section 404 of the Sarbanes-Oxley Act.

Moreover, effective internal controls are necessary for us to produce reliable financial

reports and are important to helping prevent financial fraud.

If we cannot provide reliable financial reports or prevent fraud,

our business and operating results could be harmed, investors could lose confidence in our reported financial information, and

the trading price of our common stock could drop significantly.

securities or industry analysts do not publish research or reports about our business, or if they change their recommendations

regarding our stock adversely, our stock price and trading volume could decline.

trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish

about us or our business.

Our research coverage by industry and financial analysts is currently limited.

Even if our analyst coverage increases,

if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline.

If one or more of these analysts

cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in

turn could cause our stock price or trading volume to decline.

companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter

and bylaws, as well as Nevada law.

in our articles of incorporation, our bylaws, and under Nevada law could make it more difficult for other companies to acquire us, even

if doing so would benefit our stockholders.

Our articles of incorporation and bylaws contain the following provisions, among others, which

may inhibit an acquisition of our company by a third party:

advance notification procedures

for matters to be brought before stockholder meetings

a limitation on who may call stockholder

a limitation on the removal of directors

the ability of our board of directors

to issue up to 5,000,000 shares of preferred stock without a stockholder vote

are also subject to provisions of Nevada law that prohibit us from engaging in any business combination with any “interested stockholder,”

meaning generally that a stockholder who beneficially owns 10 percent or more of our stock cannot acquire us for a period of time after

the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our board

of directors and stockholders.

bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain types of actions

and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial

forum for disputes with us or our directors, officers, employees or agents.

bylaws require that, to the fullest extent permitted by law, and unless the Company consents in writing to the selection of an alternative

forum, the Eighth Judicial District Court of Clark County, Nevada, will, to the fullest extent permitted by law, be the sole and exclusive

forum for each of the following:

Even if our analyst coverage

increases, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline.

If one or more

of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial

markets, which in turn could cause our stock price or trading volume to decline.

companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate

charter and bylaws, as well as Nevada law.

in our articles of incorporation, our bylaws, and under Nevada law could make it more difficult for other companies to acquire

us, even if doing so would benefit our stockholders.

Our articles of incorporation and bylaws contain the following provisions,

among others, which may inhibit an acquisition of our company by a third party:

notification procedures for matters to be brought before stockholder meetings

limitation on who may call stockholder meetings

limitation on the removal of directors

ability of our board of directors to issue up to 5,000,000 shares of preferred stock without a stockholder vote

are also subject to provisions of Nevada law that prohibit us from engaging in any business combination with any “interested

stockholder,” meaning generally that a stockholder who beneficially owns 10 percent or more of our stock cannot acquire

us for a period of time after the date this person became an interested stockholder, unless various conditions are met, such as

approval of the transaction by our board of directors and stockholders.

bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain types

of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain

a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

bylaws require that, to the fullest extent permitted by law, and unless the Company consents in writing to the selection of an

alternative forum, the Eighth Judicial District Court of Clark County, Nevada, will, to the fullest extent permitted by law, be

the sole and exclusive forum for each of the following:

derivative action or proceeding brought in the name or right of the Company or on its behalf,

action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the Company

or the Company’s stockholders,

action arising or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles of incorporation

or bylaws, or

action asserting a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce

or determine the validity of our articles of incorporation or bylaws.

the applicability of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum provision

would not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended (Exchange

Act), or any other claim for which the federal courts have exclusive jurisdiction, and that federal courts have concurrent jurisdiction

over all suits brought to enforce any duty or liability created by the Securities Act of 1933, as amended (Securities Act).

there is uncertainty as to whether a court would enforce the provision and that investors cannot waive compliance with the federal securities

laws and the rules and regulations thereunder.

Although we believe this provision benefits us by providing increased consistency in the

application of Nevada law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against

our directors and officers.

1B – UNRESOLVED STAFF COMMENTS

are no unresolved staff comments at December 31, 2022.

action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the

Company or the Company’s stockholders,

action arising or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles

of incorporation or bylaws, or

action asserting a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret, apply,

enforce or determine the validity of our articles of incorporation or bylaws.

the applicability of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum

provision would not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as

amended (Exchange Act), or any other claim for which the federal courts have exclusive jurisdiction, and that federal courts have

concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act of 1933, as amended

(Securities Act).

We note that there is uncertainty as to whether a court would enforce the provision and that investors cannot

waive compliance with the federal securities laws and the rules and regulations thereunder.

Although we believe this provision

benefits us by providing increased consistency in the application of Nevada law in the types of lawsuits to which it applies,

the provision may have the effect of discouraging lawsuits against our directors and officers.

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-K

Item 1A. Risk Factors