What changed in this filing

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Item 1A. Risk Factors

2025-03-18 compared with 2024-04-01 · 1057 added, 1065 removed, 635 unchanged (77% of the section changed)

of Risk Factors

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.

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,

ITEM 1A – Risk Factors

Summary of Risk Factors

Our prospects are dependent on the continued successful commercialization of Tosymra and Zembrace, and on the success of TNX 102-SL.

We are exposed to cybersecurity and data privacy risks that, if realized, could harm our business.

We have a history of operating losses and may never reach profitability.

We may struggle to continue operations without facing the risk of liquidation, as we don’t expect product sales to cover expenses.

If novel product candidates are successfully developed, it is uncertain they will receive regulatory approval or successful commercialization.

We are subject to extensive and costly government regulation, and we do not have, and may never obtain, the regulatory approvals we need to market our product candidates.

Our product candidates may cause serious adverse events or undesirable side effects, which would delay or prevent approval, or lead to market removal, safety warnings, or sales limitations.

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

Changes in the U.S.

political and regulatory environment could affect

availability of government funding that we may rely on, or cause delays in the development and approval of our product

Any 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 be subject to post-approval regulation or may not be accepted by the market.

We may use our financial and human resources to pursue research programs or product candidates that are less profitable and have a lower likelihood of success than other programs.

We may need additional capital, and, if unavailable, we may have to delay or scale-back operations.

Outbreaks of communicable diseases may materially and adversely affect our business.

Competition and technological change may make our product candidates and technologies less attractive or obsolete, and our product candidates may face competition sooner than expected.

Failure to protect our intellectual property rights could negatively affect our development of products.

We may be involved in lawsuits to protect or enforce our patents, which could be costly.

If we infringe the rights of third parties, we could suffer adverse effects, including defending against litigation.

We may experience difficulties managing growth when we ultimately expand our operations.

Our future success depends on our ability to retain our current executive officers and other key personnel.

The failure of third parties to manufacture compounds used our studies, and any approved products for sale at sufficient quantities and at acceptable costs could harm our business.

Failure by our third-party manufacturers to comply with regulatory guidelines set forth by the FDA could harm the development, approval and commercialization of our product candidates.

Adverse global conditions, including economic uncertainty, may negatively impact our finances.

Our internal computer systems 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.

Corporate and academic collaborators may take actions to 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.

If we fail to establish marketing, sales and distribution capabilities, 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 to federal and state healthcare laws and regulations.

If we are unable to comply with such laws, including any newly adopted healthcare legislative reform measures, we could face substantial penalties.

Coverage 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.

Obtaining approval to commercialize products outside the U.S.

would expose us to international risk.

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

We use hazardous chemicals in our business which could expose us to costly and time consuming legal claims.

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 our technology is ever considered “dual use” technology, it will 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.

Sales of additional shares of our common stock could cause the price of our common stock to decline, and the issuance of preferred stock may impair the rights of the holders of common stock.

The market price of our common stock has been extremely volatile and may continue to be.

We expect that our quarterly results of operations will fluctuate, which could cause our stock price to decline.

We could be delisted from Nasdaq, which could harm the liquidity of our stock and our capital raising.

If we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures, our stock price could decline significantly and raising capital could be more difficult.

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 law.

The Eighth Judicial District Court of Clark County, Nevada as the sole

and exclusive forum for certain types of stockholder actions or proceedings, which could limit our stockholders’ ability to

obtain a favorable judicial forum for disputes with us.

RISKS RELATED TO OUR BUSINESS

Our prospects are dependent on the

success of TNX-102 SL.

To the extent regulatory approval of TNX-102 SL is delayed or not granted or, if approved, TNX-102 SL 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.

The 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

TNX-102 SL, and we believe our prospects are also dependent on our ability to obtain regulatory approval for and successfully commercialize

TNX-102 SL in the U.S.

The regulatory approval and successful commercialization of TNX-102 SL is subject to many risks, including

those discussed in other risk factors, and TNX-102 SL 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 TNX-102 SL do not meet our or others’ expectations, the market price of our common stock could decline significantly.

assigned a PDUFA goal date of August 15, 2025, for a decision on marketing authorization for TNX-102 SL.

and retains complete

discretion in deciding whether to approve the NDA for TNX-102 SL, 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 TNX-102 SL for the treatment of FM, or

that if approved, we will successfully commercialize TNX-102 SL.

Coverage and adequate reimbursement

may not be available for our products, which could make it difficult for us to sell our products profitably.

Market acceptance and sales 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, p harmacy benefit managers (“PBMs”), managed

care organizations and other private health insurers.

Third-party payors decide which therapies they will pay for and establish reimbursement

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement

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.

If PBMs other payers or payer affiliates deny formulary inclusion, impose unfavorable tiering, or require burdensome utilization

management restrictions, patient access to our products could be significantly limited.

Moreover, 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.

healthcare industry and elsewhere is cost containment.

Third-party payors have attempted to control

costs by limiting coverage and the amount of reimbursement for particular medications.

We cannot be sure that coverage and reimbursement

will be available or continue to 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 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.

Access to prescription drugs in the U.S.

commercial market is largely controlled

by three dominant entities:

Emisar/Optum/United HealthCare, Ascent/Express Scripts/Cigna, and Zinc/CVS Caremark/Aetna, which collectively

manage a significant portion of formulary decisions and reimbursement policies.

These entities have the ability to deny or restrict formulary

access to our products through various techniques, including National Drug Code (“NDC”) blocks, exclusion lists, and unfavorable

tier placement.

Such actions could severely limit patient access to our therapies, reduce sales, and negatively impact our financial performance.

Additionally, the consolidation of PBMs and insurers further strengthens their negotiating leverage, increasing the risk of unfavorable

pricing and reimbursement terms for our products.

Moreover, PBMs have significant influence over prescription drug access

through formulary decisions, reimbursement policies, and utilization management practices.

In some cases, PBMs may prioritize lower-cost

alternatives, including off-label or unapproved therapies, over our FDA-approved products.

This could include steering patients toward

opioid-based treatments for fibromyalgia or barbiturates for migraine or other medications that do not meet the same regulatory and safety

standards as our products.

Such actions may limit patient access to clinically appropriate therapies and negatively impact our sales.

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 authorization 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 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.

government agencies, 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 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.

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

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.

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:

additional clinical trials to be conducted prior

to obtaining approval;

changes to manufacturing methods;

recalls, replacements, or discontinuance of

one or more of our products;

additional 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.

Even if we obtain regulatory approval to market our product

candidates, our product candidates may not be accepted by the market.

Even 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;

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, if any.

The 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.

Our 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.

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

Continued 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

sales force, we will 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.

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.

Also, 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.

We have a history of operating losses

and expect to incur losses for the foreseeable future.

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.

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;

We are focused on product

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

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’

We 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.

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.

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

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 the FDA;

manufacturing, sales, and marketing arrangements with third parties;

successfully commercializing our products;

establishing a favorable competitive position;

establishing a

favorable competitive position;

and raising sufficient funds to finance our activities.

Many of these factors will

depend on circumstances beyond our control.

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.

If we are unsuccessful at some or all of these undertakings,

our business, prospects, and results of operations may be materially adversely affected.

We 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 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

currently depends on the successful development, approval and commercialization of our product candidates and TNX-102 SL.

Any projected

sales or future revenue predictions are predicated upon FDA approval and market acceptance.

If projected sales do not materialize for

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

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.

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:

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

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;

market acceptance of our product candidates;

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

our ability to obtain and maintain regulatory approval for our product

candidate TNX-102 SL for FM, or any of our other product candidates in the United States and foreign jurisdictions;

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 and potentially other CNS

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

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;

competition from existing products or new products that may emerge;

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.

Uncertainty in Government Funding and

In-Kind Support Policies and Programs may adversely affect our business.

Changes in federal funding policies, including the ongoing review of DoD

contracts and NIH grants and in-kind support by the new administration of President Donald Trump, could materially impact our financial

resources and the progress of research conducted with U.S.-based university collaborators.

While we have secured certain DoD and NIH funding

and NIH in-kind support through Project NextGen, there is no guarantee that such funding or in-kind support will not be rescinded or otherwise

Additionally, DoD, NIH and Biomedical Advanced Research and Development Authority (“BARDA”) funding for future

projects may be delayed, reduced, or denied altogether.

Any such changes could adversely affect our research programs, financial condition,

and operational plans.

Further, certain research projects conducted in collaboration with U.S.-based university collaborators could be

slowed or discontinued.

We are exposed to cybersecurity and

data privacy risks that, if realized, could expose us to legal liability, damage our reputation and harm our business.

We 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 harm.

Any of these occurrences

could create liability for us, put our reputation in jeopardy and harm our business.

Such harm could be in the form of theft of

our or our customers’ confidential information, the inability to access our systems.

In 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 backdoor.

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 of service.

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.

The 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.

There 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.

RISKS RELATED TO PRODUCT DEVELOPMENT,

REGULATORY APPROVAL, MANUFACTURING AND COMMERCILAIZATION

Our product candidates are novel

and 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.

The success of our business depends on

the successful development, approval and commercialization of our product candidates.

Any projected sales or future revenue

predictions are predicated upon FDA approval and market acceptance.

If projected sales do not materialize for any reason, it would have

a material adverse effect on our business and our ability to continue operations.

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.

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:

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;

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;

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.

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

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.

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

emergence of superior or equivalent products;

to manufacture on our 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.

If 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

We 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.

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.

The 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.

Once 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;

investigational drug product out-of-specification;

nonclinical or clinical safety observations, including adverse events and SAEs.

If 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.

We are subject to extensive and costly

government regulation.

Product 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.

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

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;

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.

Government 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.

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

Even 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.

If 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;

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

warning letters;

1 unchanged sentence

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

We do not have, and may never obtain,

the regulatory approvals we need to market our product candidates.

Following 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.

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.

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.

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

conduct of pivotal clinical studies and the submission of a successful NDA is a complicated process.

Although members of our management

team have extensive industry experience, including in the development and clinical testing of drug candidates and the commercialization

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 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:

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

To date, we have not 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 equivalent application to any foreign regulatory authorities for any of our product candidates.

It 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.

Our product candidates may cause serious

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

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

SAEs 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 authorization

from the FDA and other regulatory authorities.

If 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;

we 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.

Any 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.

If we are required to generate additional data related to safety and efficacy

in order to obtain approval for TNX-SL for FM under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization

We submitted the NDA for TNX-102 SL for FM 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

Some of the data required by the FDA for approval

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

substantial new research and development activities beyond those we currently plan to engage in order to obtain approval of our

product candidates.

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

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.

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.

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;

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, if any.

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

cost-effectiveness;

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.

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.

Even 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 to rely.

In either event, we could be required, before obtaining marketing

authorization for any of our product candidates, to conduct substantial new research and development activities beyond those we currently plan

to engage in order to obtain approval of our product candidates.

Such additional new research and development activities would be costly

and time-consuming.

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 authorization of our lead product

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 will it assure FDA approval of our product candidates.

Additionally, our product candidates may treat

indications that do not qualify for priority review vouchers.

If 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.

Even if approved, our product candidates

will be subject to extensive post-approval regulation.

Once 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.

Depending 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.

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 regulations.

If we 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 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 regulations.

These laws will impact, among other things, our

clinical research, 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 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.

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.

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.

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

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

The biopharmaceutical industry is subject

to extensive regulatory obligations and policies that may be subject to change, including due to judicial challenges.

biopharmaceutical

industry is highly regulated and subject to frequent and substantial changes, including as a result of new judicial or government actions.

Legislative and regulatory agendas as they relate to the biopharmaceutical industry are currently uncertain.

Changes in the regulatory

approval process, or substantial reductions in the personnel who oversee that process, could affect our ability to obtain regulatory approval

for our product candidates or the timeline in which we can obtain that approval.

We and our current and future third party collaborators

rely on government programs and agencies, such as DTRA and the NIH, as a source of grant funding for scientific research relevant to our

product candidates.

Funding from government agencies such as DTRA and the NIH can fluctuate and is subject to the political

process, which is often unpredictable.

Reductions in government grants to us or our third party collaborators may adversely impact our

ability to develop our existing product candidates and our ability to identify new product candidates.

In addition, on June 28, 2024,

Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (“APA”)

“must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because

a statute is ambiguous.” The decision could have a significant impact on how lower courts evaluate challenges to agency interpretations

of law, including those by the FDA and other agencies with significant oversight and impact of the biopharmaceutical industry.

framework may increase both the frequency of such challenges and their odds of success by eliminating one way in which the government

previously prevailed in such cases.

As a result, significant regulatory policies could be subject to increased litigation and judicial

We cannot predict how other future federal or state legislative or administrative changes relating to healthcare reform or the

biopharmaceutical industry, or the regulatory agencies that oversee the biopharmaceutical industry, will affect our business.

Reductions in staffing and funding at FDA and other federal agencies

could cause delays in the development and approval of our products.

Under the Federal Food, Drug,

and Cosmetic Act, our products cannot be investigated in humans or marketed without approval from FDA.

In addition, companies developing

new therapies routinely seek and receive guidance from FDA regarding their methods and plans for developing their products.

We and companies

like us may also benefit from FDA-administered programs like orphan drug designation and expedited development pathways, e.g., breakthrough

Any material reductions in the ability of FDA to perform these and other functions may delay the development and approval

of our product candidates.

Recent actions by the United States federal government have caused concern in the industry that this may occur.

For example, beginning on February 13, 2025, the Department of Health and Human Services began firing a large number of its probationary

employees, a category that includes new federal employees and employees recently promoted or transferred to new positions or agencies.

Larger layoffs may follow, according to a memorandum issued by the Office of Personnel Management on February 26, 2025.

These terminations,

if they withstand legal challenges, may significantly delay and impede our interactions with FDA.

Similar results may stem from the recent

confirmed resignations of some senior FDA employees with responsibility for regulation of drugs and biologics, as well as possible future

layoffs and resignations.

There are also reports that the United States federal government intends to request Congress to reduce FDA

funding in upcoming budgets.

Such funding cuts may also delay the development and approval of our products.

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 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.

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.

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 first

quarter of 2026, 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.

In connection with our management’s assessment,

our report from our independent registered public accounting firm for the fiscal year ended December 31, 2024 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.

will need additional capital.

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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.

our current operations into the first quarter of 2026, but not beyond.

We anticipate using our cash and cash equivalents to fund

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commercialization of our product candidates;

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 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

23 unchanged sentences

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.

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

29 unchanged sentences

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

Although 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.

We have two approved products on the market and started generating product

revenues in the second half of 2023.

However, we have primarily funded our operations from sales of our securities and government funding.

We expect to rely on investment capital for the foreseeable future.

Outbreaks of communicable diseases may materially

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

We 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.

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.

RELATED TO OUR INTELLECTUAL PROPERTY RIGHTS AND REGULATORY EXCLUSIVITY

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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

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;

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;

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.

GENERAL COMPANY-RELATED RISKS

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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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.

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

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Any performance failure on the

part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization

part of our distributors could delay clinical development or marketing authorization 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.

In addition, we currently rely on foreign CROs and CMOs, and will likely

continue to rely on foreign CROs and CMOs in the future.

Foreign 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 therapies.

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.

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, 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:

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 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;

maintain a marketing,

distribution and sales infrastructure in addition to a post-marketing surveillance program;

continue 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

success depends to a significant extent upon the continued services of Dr.

Seth Lederman, our President and Chief Executive Officer

Our success depends to a significant extent upon the continued services

Seth Lederman, our President and Chief Executive Officer and Dr.

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.

of the services of Drs.

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 fibromyalgia program’s Phase 2 AtEase study, Phase 3 RELIEF study, the Phase 3 RALLY study and the Phase 3 RESILIENT 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.

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.

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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

only one supplier or vendor.

Any interruption in or termination of service by such sole source suppliers could result in a delay or interruption

in manufacturing until we locate an alternative source of supply.

Any delay or interruption in manufacturing operations (or failure to

locate a suitable replacement for such suppliers) could materially adversely affect our business, prospects, or results of operations.

We do not have any short-term or long-term manufacturing agreements with many of these manufacturers.

If we fail to contract for manufacturing

on acceptable terms or if third-party manufacturers do not perform as we expect, our development programs could be materially adversely

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.

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.

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

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

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.

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.

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 final product.

Some of these materials are available from only one supplier or vendor.

Any interruption in or termination of service by such

sole source suppliers could result in a delay or interruption in manufacturing until we locate an alternative source of supply.

Any delay or interruption in manufacturing operations (or failure to locate a suitable replacement for such suppliers) could materially

adversely affect our business, prospects, or results of operations.

We do not have any short-term or long-term manufacturing agreements

with many of these manufacturers.

If we fail to contract for manufacturing on acceptable terms or if third-party manufacturers

do not perform as we expect, our development programs could be materially adversely 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.

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.

Manufacturers

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

conditions, dislocations in the financial markets, or inflation could adversely impact our business.

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 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.

Global conditions, dislocations in the financial markets, or inflation

could adversely impact our business.

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 U.S.

trade tariffs and trade disputes with other countries,

instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment, 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

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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

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

We 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.

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.

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.

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.

If the BPCIA is 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, or business may be harmed.

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.

to the first applicant to gain approval of an NDA for an new chemical entity

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

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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.

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.

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 us.

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

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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.

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: