Tonix Pharmaceuticals Holding Corp. 10-Q

ITEM 4 – CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act, as amended) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective as of September 30, 2024, as the material weakness described below has been remediated. Previously Reported Material Weakness in Internal Control Over Financial Reporting In the 2024 Form 10-Q, filed with the SEC on August 16, 2024, management concluded that our internal control over financial reporting was not effective as of June 30, 2024. In the evaluation, we did not maintain an effective control environment over the internal control activities to ensure the proper recognition and measurement related to the accounting for complex and non-routine transactions. We did not have adequate supervision and review controls over the complex accounting related to the non-cash impairment of intangibles, non-cash equity transactions and the recoverability of inventory. As a result, management review of asset impairment calculations did not identify errors in the associated cash flow projections which led to an error in the conclusion of the initial impairment assessment. We also did not properly assess the realizability of inventory based upon the projections utilized and our assessment of an amendment to existing warrants that were reclassified into equity in the same period did not include a quantitative evaluation of the potential materiality of revaluation adjustments. In connection with the material weakness as it relates to the accounting for complex and non-routine transactions related to the non-cash impairment of intangibles, non-cash equity transactions and the recoverability of inventory, management re-evaluated the effectiveness of such controls as of September 30, 2024, and concluded that such controls were operating effectively as of September 30, 2024. The remediation of the material weakness over the complex accounting related to the non-cash impairment of intangibles, non-cash equity transactions was as a result of no material balances related to these financial statement captions as of September 30, 2024, and consequently there was no risk of material misstatements for these financial statement captions. In relation to the realizability of inventory, the remediation of this material weakness constituted expanded review processes including but not limited to the assessment of additional data points for the assessment and additional personnel included to evaluate our ability to realize inventory balances. 54 Changes in internal control over financial reporting. Other than as described above, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings We are currently not a party to any material legal proceedings or claims.