What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-12 · 844 added, 623 removed, 582 unchanged (72% of the section changed)

25 unchanged sentences

Preferred stock, $ 0.001 par value;

5,000,000 shares authorized, 0 shares designated as of both March 31, 2025, and December 31, 2024;

0 shares issued and outstanding - as of both March 31, 2025 and December 31, 2024

5,000,000 shares authorized, 0 shares designated as of both June 30, 2025, and December 31, 2024;

0 shares issued and outstanding - as of both June 30, 2025 and December 31, 2024

Common stock, $ 0.001 par value;

1,000,000,000 shares authorized;

6,877,816 and 4,385,929 shares issued and outstanding as of March 31, 2025, and December 31, 2024, respectively

7,546,276 and 4,385,929 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively

Additional paid in capital

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Three Months Ended

Six Months Ended

Product revenue, net

COSTS AND EXPENSES:

Cost of sales

Cost of revenue

Research and development

General and administrative

Selling, general and administrative

Asset impairment charges

Total operating expenses

Operating loss

Gain on change in fair value of warrant liabilities

(Loss) gain on change in fair value of warrant liabilities

Loss on extinguishment of debt

Other income (expense), net

Interest income, net

Other expense, net

Net loss available to common stockholders

Net loss to common stockholders per common share, basic and diluted

Net loss per common share, basic and diluted

Weighted average common shares outstanding, basic and diluted

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TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

(In Thousands)

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive loss:

Foreign currency translation loss

Total other comprehensive loss

Comprehensive loss

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TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2025

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

(In Thousands, Except Share and Per Share Amounts)

1 unchanged sentence

Balance, December 31, 2024

$ ( 730,694 )

Repurchase of common stock under share repurchase program including transactional expenses of $ 8

1 unchanged sentence

Stock-based compensation

Foreign currency translation loss

Foreign currency transaction gain

Balance, March 31, 2025

$ ( 747,523 )

See the accompanying notes to the condensed consolidated

financial statements

Repurchase of common stock under share repurchase program including transactional expenses of $ 5

Issuance of common stock under At-the-Market, net of transactional expenses of $ 487

Issuance of common stock for 2025 Lincoln Park Transaction commitment shares

Stock-based compensation

Foreign currency transaction gain

Balance, June 30, 2025

See the accompanying notes to the

condensed consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2024

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

(In Thousands, Except Share and Per Share Amounts)

1 unchanged sentence

Balance, December 31, 2023

$ ( 600,658 )

Issuance of common stock upon exercise of prefunded common warrants

2 unchanged sentences

Stock-based compensation

Foreign currency translation loss

Foreign currency transaction gain

Balance, March 31, 2024

$ ( 615,597 )

See the accompanying notes to the condensed consolidated

financial statements

Issuance of common stock, net of transactional expenses of $ 1,704

Issuance of common stock upon exercise of prefunded common warrants

Fair value of warrants reclassified from equity to liabilities

Fair value of warrants reclassified from liabilities to equity

Stock-based compensation

Foreign currency transaction gain

Balance, June 30, 2024

See the accompanying notes to the

condensed consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP .

1 unchanged sentence

(In Thousands)

Three Months Ended

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Depreciation and amortization

Amortization of debt discount

Asset impairment charges

Change in fair value of warrant liabilities

Inventory write-off

Amortization of debt discount

Loss on extinguishment of debt

Stock-based compensation

Issuance costs from derivative instruments

Changes in operating assets and liabilities:

Accounts receivable, net

Prepaid expenses and other

Accounts receivable

Prepaid expenses and other current assets

Accounts payable

Operating lease liabilities and ROU asset, net

Lease liabilities and ROU asset, net

Accrued expenses and other current liabilities

1 unchanged sentence

CASH FLOWS FROM INVESTING ACTIVITIES:

Issuance of note

Purchase of property and equipment

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of term loan

Purchase of a business

Repurchase of common stock

Proceeds from ESPP

Proceeds, net of expenses of $ 2,270 and $ 0 , from sale of common stock

Net cash provided by (used in) financing activities

Payment of term loan

Proceeds, net of $ 2,757 and $ 1,704 expenses, from sale of common stock and warrants

Net cash provided by financing activities

Effect of currency rate change on cash

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Interest paid

See the accompanying notes to the condensed consolidated

financial statements

Non-cash financing and investing activities:

Issuance costs from derivative instruments

Net ATM proceeds received after quarter-end

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

See the accompanying notes to the

condensed consolidated financial statements

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 1 – BUSINESS

Tonix Pharmaceuticals Holding

(“Tonix” or the “Company”), through its wholly owned subsidiary Tonix Pharmaceuticals, Inc.

Sub”), is a fully integrated biopharmaceutical company focused on transforming therapies for pain management and vaccines for public

health challenges.

Tonix’s priority is to advance TNX-102 SL, a product candidate for the management of fibromyalgia, for which

New Drug Application (“NDA”) was submitted to the U.S.

Pharmaceuticals Holding Corp.

(“Tonix” or the “Company”), through its wholly owned subsidiary Tonix Pharmaceuticals,

(“Tonix Sub”), and its wholly owned commercial subsidiary Tonix Medicines (“Tonix Medicines”), is

a fully- integrated biotechnology company focused on transforming therapies for pain management and vaccines for public health

priority is to advance TNX-102 SL, a product candidate for the management of fibromyalgia, for which a Prescription Drug User

Fee Act (“PDUFA”) goal date of August 15, 2025 has been assigned for a decision on marketing authorization.

Drug Application (“NDA”) for TNX-102 SL was submitted to the U.S.

Food and Drug Administration (“FDA”) based on two statistically

significant Phase 3 studies for the management of fibromyalgia and for which a Prescription Drug User Fee Act (“PDUFA”) goal

date of August 15, 2025 has been assigned for a decision on marketing authorization.

In March 2025 the FDA guided that no Advisory Committee

Meeting will be required for this NDA.

The FDA has also granted Fast Track designation to TNX-102 SL for the management of fibromyalgia.

TNX-102 SL is also being developed to treat acute stress reaction and acute stress disorder under a Physician-Initiated Investigational

significant Phase 3 studies for the management of fibromyalgia.

In March 2025 the FDA guided that no Advisory Committee Meeting

will be required for this NDA.

The FDA had also granted Fast Track designation to TNX-102 SL for the management of fibromyalgia

which indicates that the FDA views fibromyalgia as a serious condition that remains an unmet medical need.

TNX-102 SL is also

being developed to treat acute stress reaction and acute stress disorder (ASR/ASD) under a Physician-Initiated Investigational

New Drug application (“IND”) at the University of North Carolina in the OASIS study funded by the U.S.

Department of Defense

Tonix is also developing TNX-1300 double-mutant cocaine esterase 200 mg, i.v.

solution product as an antidote for cocaine.

The Company discontinued enrollment and terminated the Phase 2 CATALYST study of TNX-1300

for the treatment of cocaine intoxication because enrollment in this emergency department-based study was slower than projected.

The Company is evaluating new study designs and new endpoints for further development of TNX-1300.

The CATALYST study was not discontinued

for safety or efficacy reasons.

Tonix’s immunology development portfolio consists of biologics to address organ transplant

rejection, autoimmunity and cancer, including TNX-1500, which is an Fc-modified humanized monoclonal antibody targeting CD40-ligand (CD40L

or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases.

Tonix’s infectious

disease portfolio includes TNX-801, a vaccine in development to prevent mpox and smallpox, as well as TNX-4200 , a small molecule broad-spectrum

antiviral agent targeting CD45 for the prevention or treatment of infections to improve the medical readiness of military personnel in

biological threat environments.

Tonix has a contract with the DoD’s Defense Threat Reduction Agency (“DTRA”) for up

million over five years to develop TNX-4200.

Tonix owns and operates a state-of-the art infectious disease research facility in Frederick,

Tonix Medicines, our commercial subsidiary, markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra®

(sumatriptan nasal spray) 10 mg for the treatment of acute migraine with or without aura in adults.

The consolidated financial

statements include the accounts of Tonix Pharmaceuticals Holding Corp.

and its wholly owned subsidiaries, Tonix Sub, Krele LLC, Tonix

Pharmaceuticals (Canada), Inc., Tonix Medicines, Inc., Jenner Institute LLC, Tonix R&D Center LLC, Tonix Pharma Holdings Limited and

Tonix Pharma Limited (collectively, the “Company” or “Tonix”).

All intercompany balances and transactions have

been eliminated in consolidation.

of Defense (“DoD”).

The first patient was enrolled in the ASD/ASR study in May 2025 and topline results are expected

in the second half of 2026.

immunology and immune-oncology pipeline consists of biologics to address organ transplant rejection, autoimmunity and cancer,

including TNX-1500, which is an Fc-modified humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed

for the prevention of allograft rejection and for the treatment of autoimmune diseases.

In February 2025, Tonix announced positive

topline results from a Phase 1 trial of TNX-1500 which supported proceeding to develop a Phase 2 trial for the prevention of kidney

transplant rejection.

TNX-1700 is a stabilized recombinant version of Trefoil Factor 2 (TFF2) and is in the preclinical stages

of development to treat gastric and colorectal cancers.

Tonix’s infectious disease portfolio includes TNX-801, a vaccine in development

to prevent mpox and smallpox, as well as TNX-4200, a small molecule broad-spectrum antiviral agent targeting CD45 for the prevention

or treatment of infections to improve the medical readiness of military personnel in biological threat environments.

Tonix has a contract

with the DoD’s Defense Threat Reduction Agency (“DTRA”) for up to $ 34 million over five years to develop TNX-4200.

Tonix owns and operates a state-of-the art infectious disease research facility in Frederick, Md.

Tonix Medicines, our commercial subsidiary,

markets Zembrace ® SymTouch ® (sumatriptan injection) 3 mg and Tosymra ® (sumatriptan nasal

spray) 10 mg for the treatment of acute migraine with or without aura in adults.

The consolidated financial statements

include the accounts of Tonix Pharmaceuticals Holding Corp.

and its wholly owned subsidiaries, Tonix Sub, Krele LLC, Tonix Pharmaceuticals

(Canada), Inc., Tonix Medicines, Inc., Jenner Institute LLC, Tonix R&D Center LLC, Tonix Pharma Holdings Limited and Tonix Pharma

Limited (collectively, the “Company” or “Tonix”).

All intercompany balances and transactions have been eliminated

in consolidation.

Going Concern

The accompanying financial

statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization

of assets and satisfaction of liabilities and commitments in the normal course of business.

The Company has suffered recurring losses

from operations and negative cash flows from operating activities.

At March 31, 2025, the Company had working capital of approximately

$ 137.4 million.

At March 31, 2025, the Company had an accumulated deficit of approximately $747.5 million.

The Company held cash and cash

equivalents of approximately $131.7 million as of March 31, 2025.

The Company believes that

its cash resources at March 31, 2025 and the net proceeds of $ 9.9 million, that it raised from equity offerings in the second quarter

of 2025 (See Note 17), will meet its planned operating and capital expenditure requirements into the second quarter of 2026, but not beyond.

The accompanying financial statements

have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of

assets and satisfaction of liabilities and commitments in the normal course of business.

The Company has suffered recurring losses from

operations and negative cash flows from operating activities.

At June 30, 2025, the Company had working capital of approximately $ 124.5

At June 30, 2025, the Company had an accumulated deficit of approximately $775.8 million.

The Company held cash and cash equivalents

of approximately $125.3 million as of June 30, 2025.

The Company believes that its

cash resources at June 30, 2025 and the net proceeds of $ 51.5 million that it received from equity offerings in the third quarter of 2025

(See Note 17), will meet its planned operating and capital expenditure requirements into the third quarter of 2026.

These factors raise substantial

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However, the Company may not be able to raise capital on terms acceptable to the Company, or at

Without additional funds, it may be forced to delay, scale back or eliminate some of its research and development activities, or

other operations and potentially delay product development in an effort to maintain sufficient funds to continue operations.

these events occurs, its ability to achieve development and commercialization goals would be adversely affected and the Company may be

forced to cease operations.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Without additional funds, it may be forced to delay, scale back or eliminate some or all of its research and development activities

or other operations, and potentially delay product development in an effort to maintain sufficient funds to continue operations.

of these events occurs, the Company’s ability to achieve development and commercialization goals will be adversely affected and

the Company may be forced to cease operations.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

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Operating results for the

three months ended March 31, 2025 are not necessarily indicative of results that may be expected for the year ending December 31, 2025.

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

notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K, filed with the Securities

three and six months ended June 30, 2025 are not necessarily indicative of results that may be expected for the year ending December 31,

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

and notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K, filed with the Securities

and Exchange Commission (“SEC”) on March 18, 2025.

1 unchanged sentence

effected a 1-for-100 reverse stock split of its issued and outstanding shares of common stock.

On June 10, 2024, the Company

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

The Company accounted for both reverse stock

splits on a retrospective basis pursuant to ASC 260, Earnings Per Share.

All issued and outstanding common stock, common stock warrants,

stock option awards, exercise prices and per share data have been adjusted in these consolidated financial statements, on a retrospective

basis, to reflect the reverse stock splits for all periods presented.

Authorized common and preferred stock were not adjusted because

of the reverse stock splits.

On June 10, 2024, the Company effected

a 1-for-32 reverse stock split of its issued and outstanding shares of common stock.

The Company accounted for both reverse stock splits

on a retrospective basis pursuant to ASC 260, Earnings Per Share.

All issued and outstanding common stock, common stock warrants, stock

option awards, exercise prices and per share data have been adjusted in these consolidated financial statements, on a retrospective basis,

to reflect the reverse stock splits for all periods presented.

Authorized common and preferred stock were not adjusted because of the

reverse stock splits.

Risks and uncertainties

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Use of estimates

The preparation of financial

statements in accordance with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date

of the financial statements, and the reported amounts of expenses during the reporting period.

Actual results could differ from those

Significant estimates include, but are not limited to, impairments, provisions for product returns, coupons, rebates, chargebacks,

discounts, allowances, inventory realization, the assumptions used in the fair value of stock-based compensation and other equity instruments,

and the percent of completion of research and development contracts.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

The preparation of financial statements in accordance with Generally Accepted

Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts

of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include,

but are not limited to, impairments, provisions for product returns, coupons, rebates, chargebacks, discounts, allowances, inventory realization,

the assumptions used in the fair value of stock-based compensation and other equity instruments, and the percent of completion of research

and development contracts.

Segment Information and Concentrations

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consolidated results and therefore operates as one segment.

Segment revenue, profit or

loss, significant segment expenses and other segment items - The accounting policies of the Company’s single operating and reportable

segment are the same as those described in the summary of significant accounting policies.

The Company’s method for measuring segment

profitability includes net income (loss), which the CODM uses to assess performance and make decisions for resource allocation, consistent

with the measurement principals for net income (loss) as reported on the Company’s consolidated statement of operations.

The significant

expenses regularly reviewed by the CODM are consistent with those reported on the Company’s consolidated statement of operations,

and expenses are not regularly reviewed on a more disaggregated basis for purposes of assessing segment performance and deciding how to

allocate resources.

The measure of segment assets is reported.

The Company has two products

that each accounted for $ 2.0 million and $ 0.4 million, respectively, representing 100 % of total revenues during the three months ended

March 31, 2025.

The Company has two products that each accounted for $ 1.9 million and $ 0.6 million, respectively, representing 100 % of

total revenues during the three months ended March 31, 2024.

As of March 31, 2025, accounts

receivable from three customers accounted for 33 %, 27 %, and 22 % of accounts receivable.

As of December 31, 2024, accounts receivable from

four customers accounted for 30 %, 26 %, 25 %, and 9 % of accounts receivable.

For the three months ended

March 31, 2025, revenues from five customers accounted for 25 %, 25 %, 20 %, 13 % and 12 % of net product revenues, respectively.

three months ended March 31, 2024, revenues from five customers accounted for 22 %, 21 %, 21 %, 20 % and 14 % of net product revenues, respectively.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

JUNE 30, 2025 AND 2024 (UNAUDITED)

Segment revenue, profit or loss, significant segment expenses and other

segment items - The accounting policies of the Company’s single operating and reportable segment are the same as those described

in the summary of significant accounting policies.

The Company’s method for measuring segment profitability includes net income

(loss), which the CODM uses to assess performance and make decisions for resource allocation, consistent with the measurement principals

for net income (loss) as reported on the Company’s consolidated statements of operations.

The significant expenses regularly reviewed

by the CODM are consistent with those reported on the Company’s consolidated statements of operations, and expenses are not regularly

reviewed on a more disaggregated basis for purposes of assessing segment performance and deciding how to allocate resources.

The Company has two products that

each accounted for more than 10% of total revenues during the three and six months ended June 30, 2025, and 2024.

These products collectively

accounted for 100 % of revenues during the three and six months ended June 30, 2025, and 2024.

As of June 30, 2025, accounts

receivable from four customers accounted for 26 %, 23 %, 21 %, and 21 % of total accounts receivable.

For the three months ended June 30,

2025, revenues from five customers accounted for 30 %, 19 %, 17 %, 17 % and 15 % of net product revenues, respectively.

For the six months

ended June 30, 2025, revenues from five customers accounted for 22 %, 21 %, 21 %, 18 % and 14 % of net product revenues, respectively.

the three months ended June 30, 2024, revenues from five customers accounted for 27 %, 26 %, 23 %, 18 % and 5 % of net product revenues, respectively.

For the six months ended June 30, 2024, revenues from five customers accounted for 24 %, 24 %, 22 %, 16 % and 13 % of net product revenues,

respectively.

Cash, Cash Equivalents and Restricted Cash

The Company considers cash

equivalents to be those investments which are highly liquid, readily convertible to cash and have an original maturity of three months

or less when purchased.

At March 31, 2025, and March 31, 2024, cash equivalents, which consisted of money market funds, amounted to approximately

The Company considers cash equivalents

to be those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less when

At June 30, 2025, and June 30, 2024, cash equivalents, which consisted of money market funds and other cash equivalents, amounted to approximately $ 101.5

million and $ 24,000 , respectively.

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

at both March 31, 2025, and December 31, 2024, of approximately $ 0.9 million collateralizes a letter of credit issued in connection with

the lease of office space in Chatham, New Jersey (see Note 15) and restricted cash held by vendors in escrow accounts for patient support

The following table provides

a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the

Restricted cash, which is included in Other non-current assets on the consolidated balance sheet, at

both June 30, 2025, and December 31, 2024, of approximately $ 0.9 million collateralizes a letter of credit issued in connection with the

lease of office space in Chatham, New Jersey (see Note 15) and restricted cash held by vendors in escrow accounts for patient support

The following table provides a

reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the

total of the same amounts shown in the condensed consolidated statement of cash flows:

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Restricted cash

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Accounts Receivable, net

Accounts receivable consists

of amounts due from our wholesale and other third-party distributors and pharmacies and have standard payment terms that generally require

Accounts receivable consists of

amounts due from our wholesale and other third-party distributors and pharmacies and have standard payment terms that generally require

payment within 30 to 90 days.

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Amounts determined to be uncollectible are charged or written-off against the

As of March 31,

2025 and December 31, 2024, the Company did not have an allowance for credit losses, as the Company’s exposure to credit losses is de minimis.

allowance for credit losses is determined based on the financial condition and creditworthiness of customers and the Company

considers economic factors and events or trends expected to affect future collections experience.

Any allowance would reduce the net

receivables to the amount that is expected to be collected.

The payment history of the Company’s customers will be considered

in future assessments of collectability as these patterns are established over a longer period.

As of June 30, 2025 and December

31, 2024, the Company did not have an allowance for credit losses, as the Company’s exposure to credit losses is de minimis.

allowance for credit losses is determined based on the financial condition and creditworthiness of customers and the Company considers

economic factors and events or trends expected to affect future collections experience.

Any allowance would reduce the net receivables

to the amount that is expected to be collected.

The payment history of the Company’s customers will be considered in future assessments

of collectability as these patterns are established over a longer period.

Concentration of Credit Risk

Financial instruments that

potentially subject us to concentrations of credit risk include cash and cash equivalents, and accounts receivable.

We attempt to minimize

the risks related to cash and cash equivalents by investing in a broad and diverse range of financial instruments, and we have established

guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity.

Concentrations of

credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the variety of customers using our

products, as well as their dispersion across different geographic areas.

potentially subject us to concentrations of credit risk include cash and cash equivalents, and receivables.

We attempt to minimize the

risks related to cash and cash equivalents by investing in money market accounts, and we have established guidelines related to credit

ratings and maturities intended to safeguard principal balances and maintain liquidity.

Concentrations of credit risk with respect to

receivables, which are typically unsecured, are somewhat mitigated due to the variety of customers using our products, as well as their

dispersion across different geographic areas.

We monitor the financial performance

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these conditions and assess their possible impact on our business.

Inventories are recorded at

the lower of cost or net realizable value, with cost determined by the weighted average cost method.

Acquired inventory was valued at

estimated selling price less a reasonable margin.

The Company periodically reviews the composition of inventory in order to identify excess,

obsolete, slow-moving or otherwise non-saleable items taking into account anticipated future sales compared with quantities on hand, and

the remaining shelf life of goods on hand.

If non-saleable items are observed and there are no alternate uses for the inventory, the Company

records a write-down to net realizable value in the period that the decline in value is first recognized.

Although the Company makes every

effort to ensure the accuracy of forecasts of future product demand, any significant unanticipated decreases in demand could have a material

impact on the carrying value of inventories and reported operating results.

Inventories are recorded at the

lower of cost or net realizable value, with cost determined by the weighted average cost method.

Acquired inventory was valued at estimated

selling price less a reasonable margin.

The Company periodically reviews the composition of inventory in order to identify excess, obsolete,

slow-moving or otherwise non-saleable items taking into account anticipated future sales compared with quantities on hand, and the remaining

shelf life of goods on hand.

If non-saleable items are observed and there are no alternate uses for the inventory, the Company records

a write-down to net realizable value in the period that the decline in value is first recognized.

During the three months ended June 30,

2025 and 2024, the Company recorded write-downs related to Tosymra and Zembrace finished goods inventory of approximately $ 2.3 million

and $ 1.7 million, respectively, based on an assessment of inventory on hand and projected sales.

Although the Company makes every effort to ensure the accuracy of forecasts of future product demand, any significant unanticipated decreases

in demand could have a material impact on the carrying value of inventories and reported operating results.

Property and equipment

Property and equipment are

stated at cost, less accumulated depreciation.

Property and equipment are stated

at cost, less accumulated depreciation.

Depreciation and amortization is calculated using the straight-line method over the asset’s

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Depreciation and amortization expense

for the quarters ended March 31, 2025, and 2024 was $ 0.5 million and $ 1 .0 million, respectively.

for the three months ended June 30, 2025, and 2024 was $ 0.5 million and $ 0.9 million, respectively.

Depreciation and amortization expense

for the six months ended June 30, 2025, and 2024 was $ 1 .0 million and $ 1.9 million, respectively.

The Company’s property and

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Intangible assets, net

Intangible assets deemed to

have finite lives are carried at acquisition-date fair value less accumulated amortization and impairment, if any.

Intangible assets deemed to have

finite lives are carried at acquisition-date fair value less accumulated amortization and impairment, if any.

Finite-lived intangible

assets consisted of developed technology intangible assets acquired in connection with the acquisition of certain products from Upsher Smith

Laboratories, LLC (“Upsher Smith”) consummated on June 30, 2023 (See Note 5).

assets consisted of developed technology intangible assets acquired in connection with the acquisition of certain products from Upsher

Smith Laboratories, LLC (“Upsher Smith”) consummated on June 30, 2023 (See Note 5).

The acquired intangible assets were amortized

using the straight-line method over the estimated useful lives of the respective assets.

Amortization expense for the three months ended

March 31, 2024 was $ 0.2 million.

The Company recorded a full impairment of its developed technology assets during the second quarter of

2024, therefore there is no amortization for the three months ended March 31, 2025.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

JUNE 30, 2025 AND 2024 (UNAUDITED)

Amortization expense for the three

and six months ended June 30, 2024, was $ 0.2 million and $ 0.5 million, respectively.

The Company recorded a full impairment of its developed technology

assets during the second quarter of 2024, therefore there is no amortization for the three and six months ended June 30, 2025.

Impairment testing of long-lived assets

evaluates long-lived assets for impairment, including property and equipment, finite-lived intangibles assets and operating lease right-to-use

assets whenever events or changes in circumstances indicate that their net book value may not be recoverable.

When such factors and circumstances

exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their

estimated useful lives against their respective carrying amount.

Impairment, if any, is based on the excess of the carrying amount over

the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period

in which the determination is made.

For the three months ended March 31, 2025 and 2024, the Company believed

impairment existed.

Goodwill represented the

excess of the aggregate purchase price over the fair value of the net tangible and intangible assets acquired in a business combination.

Goodwill was reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying

amount of goodwill may be impaired.

The Company previously recognized goodwill in connection with the USL Acquisition consummated on

June 30, 2023 (See Note 5).

The Company evaluates long-lived assets for impairment, including property

and equipment, finite-lived intangibles assets and operating lease right-to-use assets whenever events or changes in circumstances indicate

that their net book value may not be recoverable.

When such factors and circumstances exist, the Company compares the projected undiscounted

future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying

Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or

discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

For the six months ended

June 30, 2025, the Company concluded that no impairment existed.

During the three months ended

June 30, 2024, the Company identified certain triggering events related to its decommissioned Advance Development Center in Dartmouth, Massachusetts (“ADC”).

The Company determined

that the carrying value of the ADC was not recoverable and that the carrying value exceeded its fair value.

As such, the Company recorded

a non-cash impairment charge of $ 48.8 million, which is reflected in asset impairment charges in the consolidated statements of operations

for the three and six months ended June 30, 2024.

Additionally, due to a sustained

decline in revenues and continued delays in building out the sales team for its commercialized products, the Company also tested its commercialized

products asset group for recoverability as of June 30, 2024.

The Company determined that the carrying value was not recoverable and therefore

estimated the fair value of the asset group using a discounted cash flow analysis.

As the carrying value of the asset group significantly

exceeded its fair value, the Company recorded a full non-cash impairment charge of $ 9.2 million, consisting of $ 6.2 million and $ 3 .0 million

for the Zembrace and Tosymra developed technology intangible assets, respectively, which is reflected in asset impairment charges in the

consolidated statements of operations for the three and six months ended June 30, 2024.

Goodwill represents the excess

of the aggregate purchase price over the fair value of the net tangible and intangible assets acquired in a business combination.

is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount

of goodwill may be impaired.

The Company previously recognized goodwill in connection with the USL Acquisition consummated on June 30,

2023 (See Note 5).

The Company completed the required annual impairment test for goodwill as of June 30, 2024, which resulted in full

non-cash impairment of the Company’s $ 965,000 of goodwill, which is reflected in asset impairment charges in the consolidated statements

of operations for the three and six months ended June 30, 2024.

The Company determines if an arrangement

is, or contains, a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating

lease liabilities, current and operating lease liabilities, noncurrent in the Company’s consolidated balance sheets.

represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make

lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present

value of lease payments over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses an incremental

borrowing rate based on the information available at the transition date and subsequent lease commencement dates in determining the present

value of lease payments.

This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to

The operating lease ROU asset excludes lease incentives.

The Company’s lease terms may include options to extend or

terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments made under

operating leases is recognized on a straight-line basis over the lease term.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

The Company determines if

an arrangement is, or contains, a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”)

assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation

to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on

the present value of lease payments over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses

an incremental borrowing rate based on the information available at the transition date and subsequent lease commencement dates in determining

the present value of lease payments.

This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar

term to each lease.

The operating lease ROU asset excludes lease incentives.

The Company’s lease terms may include options to extend

or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments made

under operating leases is recognized on a straight-line basis over the lease term.

JUNE 30, 2025 AND 2024 (UNAUDITED)

Deferred financing costs

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the condensed consolidated balance sheet.

Amortization of deferred financing costs are included in interest expense on the consolidated

statements of operations.

Amortization of deferred financing costs are included in interest expense on the consolidated statements

of operations.

Original issue discount

Certain term debt issued by

the Company provides the debt holder with an original issue discount.

Original issue discounts are reflected as a direct reduction of

the related debt liability on the consolidated balance sheets and are amortized over the term of the related debt agreement using the

effective interest method.

Amortization of original issue discounts are included in interest expense on the consolidated statements of

Certain term debt issued by the

Company provides the debt holder with an original issue discount.

Original issue discounts are reflected as a direct reduction of the

related debt liability on the consolidated balance sheets and are amortized over the term of the related debt agreement using the effective

interest method.

Amortization of original issue discounts are included in interest expense on the consolidated statements of operations.

Revenue Recognition

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contracts with customers, which are generally short-term and have a single performance obligation - the delivery of product.

The Company’s performance

obligation to deliver products is satisfied at the point in time that the goods are received by the customer, which is when the customer

obtains title to and has the risks and rewards of ownership of the products, which is generally upon shipment or delivery to the customer

as stipulated by the terms of the sale agreements.

The transaction price is the amount of consideration to which the Company expects to

be entitled in exchange for transferring promised goods to a customer.

The consideration promised in a contract with a customer may include

fixed amounts, variable amounts, or both.

The Company’s

performance obligation to deliver products is satisfied at the point in time that the goods are received by the customer, which is when

the customer obtains title to and has the risks and rewards of ownership of the products, which is generally upon shipment or delivery

to the customer as stipulated by the terms of the sale agreements.

The transaction price is the amount of consideration to which the Company

expects to be entitled in exchange for transferring promised goods to a customer.

The consideration promised in a contract with a customer

may include fixed amounts, variable amounts, or both.

Our contractual payment terms are typically 30 to 90 days.

Revenues from product sales,

net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized

is not probable of occurring and when the uncertainty associated with gross-to-net deductions is subsequently resolved.

Taxes assessed

by governmental authorities and collected from customers are excluded from product sales.

Shipping and handling activities are considered

to be fulfillment activities and not a separate performance obligation.

Many of the Company’s

products sold are subject to a variety of deductions.

Revenues are recognized net of estimated rebates and chargebacks, cash discounts,

distributor fees, sales return provisions and other related deductions.

Deductions to product sales are referred to as gross-to-net deductions

and are estimated and recorded in the period in which the related product sales occur.

Accruals for these provisions are presented in

the consolidated financial statements as reductions to gross sales in determining net sales, and as a contra asset within accounts receivable,

Revenues from product sales, net

of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not

probable of occurring and when the uncertainty associated with gross-to-net deductions is subsequently resolved.

Taxes assessed by governmental

authorities and collected from customers are excluded from product sales.

Shipping and handling activities are considered to be fulfillment

activities and not a separate performance obligation.

Many of the Company’s products

sold are subject to a variety of deductions.

Revenues are recognized net of estimated rebates and chargebacks, cash discounts, distributor

fees, sales return provisions and other related deductions.

Deductions to product sales are referred to as gross-to-net deductions and

are estimated and recorded in the period in which the related product sales occur.

Accruals for these provisions are presented in the

consolidated financial statements as reductions to gross sales in determining net sales, and as a contra asset within accounts receivable,

net (if settled via credit) and other current liabilities (if paid in cash).

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from actual experience.

Rebates - The Company

participates in certain government and specific sales rebate programs which provides discounted prescription drugs to qualified recipients,

and primarily relate to Medicaid and managed care rebates, pharmacy rebates, Tri-Care rebates and discounts, specialty pharmacy program

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Rebates - The Company participates

in certain government and specific sales rebate programs which provides discounted prescription drugs to qualified recipients, and primarily

relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, Tri-Care rebates and discounts, specialty pharmacy program

fees and other governmental rebates or applicable allowances.

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The rate is estimated by using

historical sales information.

historical sales information, including its visibility and estimates into the inventory remaining in the distribution channel.

are made to the current provision for returns when data suggests product returns may differ from original estimates.

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projects and had no alternative future uses.

The Company estimates

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

The Company estimates its

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

site agreements in connection with conducting clinical trials.

The financial terms of these contracts are subject to negotiations, which

vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided

under such contracts.

The Company accounts for trial expenses according to the timing of various aspects of the trial.

The Company determines

accrual estimates taking into account discussion with applicable personnel and outside service providers as to the progress or state of

consummation of trials, or the services completed.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

The financial terms of these contracts

are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which

materials or services are provided under such contracts.

The Company accounts for trial expenses according to the timing of various aspects

of the trial.

The Company determines accrual estimates taking into account discussion with applicable personnel and outside service providers

as to the progress or state of consummation of trials, or the services completed.

During the course of a clinical

5 unchanged sentences

Government Grants

From time to time, the Company

may enter into arrangements with governmental entities for the purpose of obtaining funding for research and development activities.

Company is reimbursed for costs incurred that are associated with specified research and development activities included in the grant

application approved by the government authority and, in certain arrangements.

GAAP does not have specific accounting standards covering

government grants to business entities.

The Company applies International Accounting Standards 20 (“IAS 20”), Accounting for

Government Grants and Disclosure of Government Assistance by analogy when accounting for government grants.

Under IAS 20, government grants

are initially recognized when there is reasonable assurance the conditions of the grant will be met and the grant will be received.

initial recognition, government grants received are recognized in earnings in the same period the underlying costs for which the grant

is intended to compensate are incurred.

The Company classifies government grants received under these arrangements as either a reduction

to the related research and development expense or as grant income in the consolidated statements of operations, depending on the fee

structure of the arrangement.

time to time, the Company may enter into arrangements with governmental entities for the purpose of obtaining funding for research

and development activities.

The Company is reimbursed for costs incurred that are associated with specified research and development

activities included in the grant application approved by the government authority and, in certain arrangements.

not have specific accounting standards covering government grants to business entities.

The Company applies International Accounting

Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance by analogy when

accounting for government grants.

Under IAS 20, government grants are initially recognized when there is reasonable assurance

the conditions of the grant will be met and the grant will be received.

After initial recognition, government grants received

are recognized in earnings in the same period the underlying costs for which the grant is intended to compensate are incurred.

The Company classifies government grants received under these arrangements as either a reduction to the related research and development

expense or as grant income in the consolidated statements of operations, depending on the fee structure of the arrangement.

The Company also applies the disclosure requirements of ASC 832, Government Assistance.

In August 2022, the

Company received a Cooperative Agreement grant from the National Institute on Drug Abuse (“NIDA”), part of the National

Institutes of Health, to support the development of its TNX-1300 product candidate for the treatment of cocaine intoxication.

Included in Prepaid

expenses and other current assets at March 31, 2024 is $ 0.3

million which was received in April 2024, and resulted in a reduction of research and development expense during the three months

ended March 31, 2024.

No funding was received during the three months ended March 31, 2025.

In August 2022, the Company

received a Cooperative Agreement grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes

of Health, to support the development of its TNX-1300 product candidate for the treatment of cocaine intoxication.

During the three and six months

ended June 30, 2025, the Company recorded $ 0.6 million in funding as a reduction of related research and development expense, of which all is included

in prepaid expenses and other current assets .

During the three and six months ended June 30, 2024, the Company received $ 0.2 million and $ 0.5 million, respectively, in funding as a reduction

of related research and development expense.

In June 2024, the Company

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During the three

months ended March 31, 2025, $0.9 million was recognized in grant income related to the DTRA grant.

As of March 31, 2025, all of the grant

income, included above, was earned but not yet received and is presented in prepaid expenses and other current assets.

and six months ended June 30, 2025, $1.1 million and $2.0 million, respectively, was recognized in grant income related to the DTRA grant.

As of June 30, 2025, $ 0.7 million of the grant income, included above, was earned but not yet received and is presented in prepaid expenses

and other current assets.

No grant income was received during the three and six months ended June 30, 2024.

Stock-based Compensation.

All stock-based payments to

employees and to nonemployees for their services, including grants of restricted stock units (“RSUs”), and stock options,

are measured at fair value on the grant date and recognized in the consolidated statements of operations as compensation expense over

the requisite service period.

The Company accounts for share-based awards in accordance with the provisions of the Accounting Standards

Codification (“ASC”) 718, Compensation – Stock Compensation.

All stock-based payments to employees

and to nonemployees for their services, including grants of restricted stock units (“RSUs”), and stock options, are measured

at fair value on the grant date and recognized in the consolidated statements of operations as compensation expense over the requisite

service period.

The Company accounts for share-based awards in accordance with the provisions of the Accounting Standards Codification

(“ASC”) 718, Compensation – Stock Compensation.

Foreign Currency Translation

9 unchanged sentences

Comprehensive Income (Loss)

Comprehensive income (loss)

is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners

Comprehensive income (loss) is

defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources.

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

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

Deferred income tax assets

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

differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted

The Company records a valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred

income tax assets will be realized.

The Company recognizes a tax

benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing

authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from

such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

As of March 31, 2025, the Company has not recorded any unrecognized tax benefits.

The Company’s policy is to recognize interest

and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

comprehensive income (loss) represents foreign currency translation adjustments.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Deferred income tax assets and

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

between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates.

The Company records a valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income

tax assets will be realized.

The Company recognizes a tax benefit

from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities,

based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such a position

are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

30, 2025, the Company has not recorded any unrecognized tax benefits.

The Company’s policy is to recognize interest and penalties

accrued on any unrecognized tax benefits as a component of income tax expense.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was

enacted in the United States.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions

of the Tax Cuts and Jobs Act, and the restoration of favorable tax treatment for certain business provisions.

The legislation has

multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently

assessing the impact on its condensed consolidated financial statements.

Derivative Instruments and Warrant Liabilities

The Company evaluates all

of its financial instruments, including issued warrants to purchase common stock under ASC 815 – Derivatives and Hedging, to determine

The Company evaluates all of its

financial instruments, including issued warrants to purchase common stock under ASC 815 – Derivatives and Hedging, to determine

if such instruments are derivatives or contain features that qualify as embedded derivatives (See Note 13).

5 unchanged sentences

terms as applicable.

From time to time, certain

equity-linked instruments may be classified as derivative liabilities due to the variable exercise price of the shares to fully settle

the equity-linked financial instruments in shares.

In such case, the Company has adopted a sequencing approach under ASC 815-40, Derivatives

and Hedging - Contracts in Entity’s Own Equity to determine the classification of its contracts at issuance and at each subsequent

reporting date.

From time to time, certain equity-linked

instruments may be classified as derivative liabilities due to the variable exercise price of the shares to fully settle the equity-linked

financial instruments in shares.

In such case, the Company has adopted a sequencing approach under ASC 815-40, Derivatives and Hedging

- Contracts in Entity’s Own Equity to determine the classification of its contracts at issuance and at each subsequent reporting

In the event that reclassification

8 unchanged sentences

be reclassified.

During the three and six months ended June 30, 2025, the Company recorded

$ 2 .0 million in issuance costs related to the equity line of credit with Lincoln Park Capital Fund, LLC (“Lincoln Park”).

These costs were expensed, and are included in other expense, net on the condensed consolidated statement of operations, as the equity

line qualified as a derivative instrument.

The Company evaluated the contract that includes the right to require Lincoln

Park to purchase shares of Common Stock in the future (“purchased put right”) considering the guidance in ASC 815-40, and

concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting

as a derivative asset (liability).

The Company has analyzed the terms of the purchased put right and has concluded that it had insignificant

value as of June 30, 2025.

Per Share Data

The computation of basic and

diluted loss per share for the three months ended March 31, 2025 and 2024 excludes potentially dilutive securities when their inclusion

would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Prefunded warrants are assumed exercised on date of issuance and are included in the basic earnings per share (“EPS”) calculation.

All warrants (See Note 14)

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

on the Company’s common stock.

For purposes of computing EPS, these warrants are considered to participate with common stock in

earnings of the Company.

The computation of basic and diluted

loss per share for the quarters ended June 30, 2025 and 2024 excludes potentially dilutive securities when their inclusion would be anti-dilutive,

or if their exercise prices were greater than the average market price of the common stock during the period.

All warrants issued participate

on a one-for-one basis with common stock in the distribution of dividends, if and when declared by the Board of Directors, on the Company’s

common stock.

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

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

Under the two-class method,

net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation

rights in undistributed earnings.

No income was allocated to the warrants for the three months ended March 31, 2025 and 2024, as results

of operations were a loss for the periods.

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

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

Prefunded warrants are assumed exercised on date of issuance and are included in the basic EPS calculation.

No income was allocated

to the warrants for the three and six months ended June 30, 2025, and 2024, as results of operations were a loss for the periods.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Potentially dilutive securities

excluded from the computation of basic and diluted net loss per share, as of March 31, 2025, and 2024, are as follows:

excluded from the computation of basic and diluted net loss per share, as of June 30, 2025 and 2024, are as follows:

Warrants to purchase common stock

Options to purchase common stock

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-09, Improvements to Income

Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliations as well

as expanded information on income taxes by jurisdiction.

The standard is effective for fiscal years beginning after December 15, 2024

on a prospective basis.

The Company discloses its income tax rate reconciliation in its annual consolidated financial statements only

and does not expect the adoption to have a material impact on its consolidated financial statements.

In November 2023, the FASB issued

ASU 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective

tax rate reconciliations as well as expanded information on income taxes by jurisdiction.

The standard is effective for fiscal years beginning

after December 15, 2024 on a prospective basis.

The Company discloses its income tax rate reconciliation in its annual consolidated financial

statements only and does not expect the adoption to have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

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The Company is in the process of assessing the impact on our consolidated financial statements and disclosures.

In November 2024, the FASB

issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to improve

transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within

the Income Statement.

The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim

reporting periods beginning after December 15, 2027.

In November 2024, the FASB issued

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to improve transparency

in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income

The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim reporting

periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is in the process of assessing the impact

of ASU 2024-03 on our financial statements.

The Company is in the process of assessing the impact of ASU 2024-03

on our financial statements.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 3 – INVENTORY

The components of inventory

consisted of the following (in thousands):

The components of inventory consisted

of the following (in thousands):

(in thousands)

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Total Inventory

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net

consisted of the following (in thousands):

Property and equipment, net consisted

of the following (in thousands):

(in thousands)

8 unchanged sentences

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

The following table provides

the gross carrying amount and accumulated amortization for each major class of intangible asset:

The following table provides the

gross carrying amount and accumulated amortization for each major class of intangible asset:

(in thousands)

6 unchanged sentences

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

MARCH 31, 2025 AND 2024 (UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 6 – FAIR VALUE MEASUREMENTS

10 unchanged sentences

Unobservable inputs in which there is little or no market data.

As of March 31, 2025, and

December 31, 2024, the Company used Level 1 quoted prices in active markets to value cash equivalents of $ 75.7 million and $ 24,000 , respectively.

The Company did not have any Level 2 or Level 3 assets or liabilities as of March 31, 2025.

As of December 31, 2023, Level 3 liabilities

included a portion of the Series D Warrants and all Series C Warrants issued in December 2023, which did not meet the criteria for equity

classification due to insufficient authorized shares to settle the instruments and were therefore accounted for as liabilities at fair

After the Company received stockholder approval to increase the number of authorized shares on January 25, 2024, the liability

classified Series D Warrants and the Series C Warrants met all requirements for equity classification and, as a result, the Company reclassified

them to equity as of January 25, 2024.

From December 31, 2023 to

the reclassification date, the Company recognized a change in fair value resulting in a gain of $ 7 .0 million related to the liability-classified

warrants prior to meeting the criteria for equity classification.

Changes in the fair value of the liability-classified warrants are recognized

as a separate component in the consolidated statement of operations.

As of June 30, 2025, and December

31, 2024, the Company used Level 1 quoted prices in active markets to value cash equivalents of $ 101.5 million and $ 24,000 , respectively.

The Company did not have any Level 2 or Level 3 assets or liabilities as of June 30, 2025.

The Company received stockholder approval to increase the number of authorized shares on January 25, 2024, at which time

previous liability classified Series D Warrants and the Series C Warrants met all requirements for equity classification, and,

as a result, the Company reclassified them to equity as of January 25, 2024.

The Company used the Black-Scholes

option pricing model to estimate the fair value of the Series D Warrants and the Series C Warrants using significant unobservable inputs,

which represent Level 3 measurements within the fair value hierarchy.

For periods prior to the receipt of stockholder approval, the fair

value was then adjusted by applying a discount for lack of marketability (“DLOM”) based on the expected timing of receipt

of stockholder approval to increase the number of authorized shares and to allow the Warrants to become exercisable in accordance with

Nasdaq Listing Rule 5635.

Additionally, between April 1, 2024 and May 22, 2024, Level 3 liabilities included a portion of the Company’s

outstanding August 2023 Warrants, Series A Warrants, Series B Warrants, Series C Warrants, and Series D Warrants (collectively, the “Existing

Warrants”), as a result of certain Warrant Amendments entered into upon the closing of an equity financing on April 1, 2024, which

provided for adjustments to the exercise prices of the Existing Warrants, contingent on approval by the Company’s stockholders of

a proposal to allow the Existing Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635.

The Company determined that

the exercise price adjustment provision that is contingent on stockholder approval precluded the Existing Warrants from being indexed

to the Company’s own stock, and therefore were reclassified to liabilities at post-modification fair value on April 1, 2024.

the Company received stockholder approval on May 22, 2024, thereby reducing the exercise prices of each of the Existing Warrants to $ 10.56

per share, the Existing Warrants met all requirements for equity classification and the Company reclassified them to equity as of May

To estimate the fair value of the Existing Warrants on the reclassification dates, the Company used a Black-Scholes option pricing

model, probability weighted for different scenarios as applicable.

The following table summarizes

the range of significant assumptions used in determining the fair value of liability-classified warrants on

the respective reclassification dates for the three and six months ended June 30, 2024:

Three months ended

Six months ended

June 30, 2024

Common stock price

6.080 - 9.888

Risk-free rate

4.39 % - 5.37 %

4.01 % - 5.37 %

Expected term (in years)

Expected volatility

105.00 % - 120.00 %

Discount for lack of marketability

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

A reconciliation of the beginning

and ending balances for the liability-classified warrants measured at fair value on a recurring basis using significant unobservable inputs

(Level 3) is as follows for the three and six months ended June 30, 2024:

Warrant liabilities

Balance at December 31, 2023

Fair value - mark to market adjustment

Warrants reclassified from liabilities to equity

Balance at March 31, 2024

Warrants reclassified from equity to liabilities

Fair value - mark to market adjustment

Warrants reclassified from liabilities to equity

Balance at June 30, 2024

the three and six months ended June 30, 2024, the Company recognized a change in fair value resulting in a loss of $0.9 million

and gain of $6.2 million, respectively, related to the liability-classified warrants prior to meeting the criteria for equity

classification.

There were no liability-classified

warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three or six months ended

June 30, 2025.

Changes in the fair value of the liability-classified warrants are recognized as a separate component in the consolidated

statement of operations.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 7 – OTHER BALANCE SHEET INFORMATION

13 unchanged sentences

Professional fees and other

NOTE 8 – DEBT FINANCING

Long-term debt consists of

the following:

8 – DEBT FINANCING

Long-term debt consists of the

current portion

2 unchanged sentences

Total long-term debt, net

On December 8, 2023, the Company

entered into a Loan and Guaranty Agreement (the “Loan Agreement”) by and among the Company, Krele LLC, Tonix Pharmaceuticals,

Inc., Jenner and Tonix R&D Center (collectively, the “Loan Parties”), with JGB Capital, LP, JGB Partners, LP, JGB (Cayman)

Port Ellen Ltd., and any other lender from time to time party hereto (collectively, the “Lenders”), and JGB Collateral LLC,

as administrative agent and collateral agent for the Lenders (in such capacity, “JGB Agent”) for a 36 -month term loan (the

“Term Loan”) in the aggregate principal amount of $ 11 .0 million, with a maturity date of December 8, 2026 (the “Maturity

The Term Loan was funded with an original issue discount of 9 % of the principal amount of the Term Loan, or $ 1 .0

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

MARCH 31, 2025 AND 2024 (UNAUDITED)

million, which was amortized over the term of

the debt as an adjustment to the effective interest rate on the outstanding borrowings.

Borrowings under the Term

Loan carried interest at a fluctuating rate equal to the greater of (i) the prime rate as defined in the Loan Agreement plus 3.5 % and

December 8, 2023, the Company entered into a Loan and Guaranty Agreement (the “Loan Agreement”) by and among the Company,

Krele LLC, Tonix Pharmaceuticals, Inc., Jenner and Tonix R&D Center (collectively, the “Loan Parties”), with JGB Capital,

LP, JGB Partners, LP, JGB (Cayman) Port Ellen Ltd., and any other lender from time to time party hereto (collectively, the “Lenders”),

and JGB Collateral LLC, as administrative agent and collateral agent for the Lenders (in such capacity, “JGB Agent”) for

a 36 -month term loan (the “Term Loan”) in the aggregate principal amount of $ 11 .0 million, with a maturity date of December

8, 2026 (the “Maturity Date”).

The Term Loan was funded with an original issue discount of 9 % of the principal amount of

the Term Loan, or $ 1 .0 million, which was amortized over the term of the debt as an adjustment to the effective interest rate on

the outstanding borrowings.

Borrowings under the Term Loan

carried interest at a fluctuating rate equal to the greater of (i) the prime rate as defined in the Loan Agreement plus 3.5 % and (ii)

Interest was payable monthly in arrears commencing in December 2023.

In connection with the Term Loan, the Company deposited

into a reserve account $ 1.8 million to be used exclusively to fund interest payments related to the Term Loan.

The remaining deposit as

of December 31, 2024 totaled $ 0.2 million, which was reflected in Prepaid expenses and other current assets on the consolidated balance

Commencing on March 8, 2024

and continuing monthly through the Maturity Date, the outstanding principal was due and payable in monthly installments of $ 0.2 million,

with the final remaining balance of unpaid principal and interest due and payable on the Maturity Date.

In addition, the Company paid

a monthly collateral monitoring charge equal to 0.23 % of the outstanding principal amount of the term loan as of the date of payment.

Company incurred $ 1.1 million in issuance costs, which was amortized over the term of the debt as an adjustment to the effective interest

rate on the outstanding borrowings.

In connection with the Term Loan, the Company deposited into

a reserve account $ 1.8 million to be used exclusively to fund interest payments related to the Term Loan.

The remaining deposit as of

December 31, 2024 totaled $ 0.2 million, which was reflected in Prepaid expenses and other current assets on the consolidated balance sheet.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Commencing on March 8, 2024 and

continuing monthly through the Maturity Date, the outstanding principal was due and payable in monthly installments of $ 0.2 million, with

the final remaining balance of unpaid principal and interest due and payable on the Maturity Date.

In addition, the Company paid a monthly

collateral monitoring charge equal to 0.23 % of the outstanding principal amount of the term loan as of the date of payment.

incurred $ 1.1 million in issuance costs, which was amortized over the term of the debt as an adjustment to the effective interest rate

on the outstanding borrowings.

The Loan Agreement provided

3 unchanged sentences

and substantially all of the relevant deposit accounts.

the first quarter of 2025, the Company paid $ 9.6

During the first

quarter of 2025, the Company paid $ 9.6

million as a result of a pay-off of the above-mentioned loan.

2 unchanged sentences

million in accordance with the terms and provisions of the Loan Agreement.

In connection with the pay-off of the loan, the Company incurred a loss on extinguishment of the debt amounting

to $ 2.1 million during the three months ended March 31, 2025.

In connection with the pay-off of the loan, the Company

incurred a loss on extinguishment of the debt amounting to $ 0 and $ 2.1

million, respectively, during the three and six months ended June 30, 2025.

NOTE 9 – STOCKHOLDERS’ EQUITY

11 unchanged sentences

5550(a)(2), and that the matter is now closed.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

NOTE 10 – REVENUES

1 unchanged sentence

The Company’s net product revenues are summarized

Three months ended

Zembrace Symtouch

Total product revenues

All sales are generated in

the United States.

Six months ended

Zembrace Symtouch

Total product revenues

Gross-to-Net Sales Accruals

We record gross-to-net sales

accruals for chargebacks, rebates, sales and other discounts, and product returns, which are all customary to the pharmaceutical industry.

We record gross-to-net sales accruals

for chargebacks, rebates, sales and other discounts, and product returns, which are all customary to the pharmaceutical industry.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

Our provision for gross-to-net

allowances was $ 5.1 million at March 31, 2025, $ 1.2 million of which was recorded as a reduction to accounts receivable and $ 3.9 million

allowances was $ 5.8 million at June 30, 2025, $ 0.5 million of which was recorded as a reduction to accounts receivable and $ 5.3 million

recorded as a component of accrued expenses.

Our provision for gross-to-net allowances was $ 3 .0 million at March 31, 2024, $ 0.6 million

Our provision for gross-to-net allowances was $ 4.3 million at June 30, 2024, $ 0.6 million

of which was recorded as a reduction to accounts receivable and $ 3.7 million recorded as a component of accrued expenses.

NOTE 11 – ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH

On June 30, 2023, the Company completed the acquisition of certain assets

from Upsher Smith related to Zembrace SymTouch (sumatriptan injection) 3 mg (“Zembrace”) and Tosymra (sumatriptan nasal spray)

10 mg (“Tosymra”) products (such businesses collectively, the “Business”) and certain inventory related to the

Business for an aggregate purchase price of approximately $ 26.5 million, including certain deferred payments (such transaction, the “USL

Acquisition”).

The Company paid the $ 3 .0 million deferred payment to Upsher Smith in April 2024.

Company has assumed certain obligations of Upsher Smith, including the payment of quarterly royalty payments on annual net sales from

the Business in the U.S.

On June 30, 2023, the Company

completed the acquisition of certain assets from Upsher Smith related to Zembrace SymTouch (sumatriptan injection) 3 mg (“Zembrace”)

and Tosymra (sumatriptan nasal spray) 10 mg (“Tosymra”) products (such businesses collectively, the “Business”)

and certain inventory related to the Business for an aggregate purchase price of approximately $ 26.5 million, including certain deferred

payments (such transaction, the “USL Acquisition”).

The Company paid the $ 3 .0 million deferred payment to Upsher Smith in

has assumed certain obligations of Upsher Smith, including the payment of quarterly royalty payments on annual net sales from the Business

for Tosymra, 4 % for net sales of $ 0 to $ 30 million, 7 % of net sales of $ 30 to $ 75 million;

net sales of $ 75 to $ 100 million;

9 % for net sales of

$ 75 to $ 100 million;

12 % for net sales of $ 100 to $ 150 million;

and 15 % for net sales greater than $ 150 million.

payments with respect to Tosymra are payable until the expiration or termination of the product’s Orange Book listed patent(s)

with respect to the United States or, outside the United States, the expiration of the last valid claim covering the product in the relevant

country of the territory.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

Zembrace, royalty payments on annual net sales in the U.S.

Royalty payments with

respect to Tosymra are payable until the expiration or termination of the product’s Orange Book listed patent(s) with respect to

the United States or, outside the United States, the expiration of the last valid claim covering the product in the relevant country of

the territory.

For Zembrace,

royalty payments on annual net sales in the U.S.

are 3 % for net sales of $ 0 to $ 30 million, 6 % of net sales of $ 30 to $ 75 million;

2 unchanged sentences

Such royalty payments are payable until July 19,

Upon the entry of a generic version of the relevant product, the applicable royalty rates shall be reduced by 90 % percent with

respect to Zembrace, and by 66.7 % percent for Tosymra.

Prior to Purchaser or a licensee filing an application for marketing authorization

for either of the products in a permitted country outside the U.S., the parties will negotiate in good faith the royalty payment rates

annual net sales tiers that will apply for such country, based on the market opportunity for the product in such country.

If the parties

fail to agree, then the royalty payment rates and annual net sales tiers described above will apply.

addition, the Company has assumed the obligation to pay an additional 3 % royalty on net sales of Tosymra, plus an additional 3 % if a patent

containing certain claims related to Tosymra issues in the U.S., for 15 years from the first commercial sale of Tosymra in the applicable

country or for as long as the manufacture, use or sale of Tosymra in such country is covered by a valid claim of a licensed patent, and

up to $ 15 million per Tosymra product on the achievement of sales milestones.

NOTE 12 – SALE AND PURCHASE OF COMMON

Upon the entry of a generic version of the relevant product, the applicable royalty rates shall be reduced by 90 % percent with respect

to Zembrace, and by 66.7 % percent for Tosymra.

Prior to Purchaser or a licensee filing an application for marketing authorization for

either of the products in a permitted country outside the U.S., the parties will negotiate in good faith the royalty payment rates annual

net sales tiers that will apply for such country, based on the market opportunity for the product in such country.

If the parties fail

to agree, then the royalty payment rates and annual net sales tiers described above will apply.

the Company has assumed the obligation to pay an additional 3 % royalty on net sales of Tosymra, plus an additional 3 % if a patent containing

certain claims related to Tosymra issues in the U.S., for 15 years from the first commercial sale of Tosymra in the applicable country

or for as long as the manufacture, use or sale of Tosymra in such country is covered by a valid claim of a licensed patent, and up to

$ 15 million per Tosymra product on the achievement of sales milestones.

NOTE 12 – SALE AND PURCHASE OF COMMON STOCK

2025 Lincoln Park Transaction

On June 11, 2025, the Company

entered into a purchase agreement (the “2025 Purchase Agreement”) and a registration rights agreement (the “2025 Registration

Rights Agreement”) with Lincoln Park.

Pursuant to the terms of the 2025 Purchase

Agreement, Lincoln Park has agreed to purchase from the Company up to $ 75,000,000 of the Company’s common stock (subject to certain

limitations) from time to time during the term of the 2025 Purchase Agreement.

Pursuant to the terms of the 2025 Registration Rights Agreement,

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

be issued to Lincoln Park under the 2025 Purchase Agreement.

Pursuant to the terms

of the 2025 Purchase Agreement, at the time the Company signed the 2025 Purchase Agreement and the 2025 Registration Rights

Agreement, the Company issued 48,708

shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of the Company’s common stock

under the 2025 Purchase Agreement.

The commitment shares were valued at $ 1.8

million and recorded as an addition to equity for the issuance of the common stock and treated as other expense, net on the

condensed consolidated statement of operations under the 2025 Purchase Agreement.

No shares were sold during the second quarter ending June 30, 2025, under the 2025 Purchase Agreement.

The Company evaluated the

2025 Purchase Agreement under ASC 815-40 Derivatives and Hedging-Contracts on an Entity's Own Equity as it

represents the right to require Lincoln Park to purchase shares of common stock in the future, similar to a put option.

Company concluded that the 2025 Purchase Agreement represents a freestanding derivative instrument that does not qualify for

equity classification and therefore requires fair value accounting.

The Company analyzed the terms of the contract and concluded that

the derivative instrument had insignificant value as of June 30, 2025.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

2025 At-the-Market Offerings

On July 30, 2024, the Company entered into a Sales Agreement ( the “2024

Sales Agreement”), with A.G.P./Alliance Global Partners (“AGP”) pursuant to which the Company may issue and sell, from

time to time, shares of common stock having an aggregate offering price of up to $ 250 .0 million in sales.

AGP is sales agent under the

ATM and paid a 3 % commission on each sale under the 2024 Sales Agreement.

The Company’s common stock is sold at prevailing market

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

During the three months ended March 31, 2025, the Company sold approximately

2.7 million shares of common stock under the Sales Agreement for net proceeds of approximately $ 59.8 million.

Subsequent to March 31,

2025, the Company sold 0.6 million shares of common stock under the Sales Agreement, for net proceeds of approximately $ 9.9 million.

On June 11, 2025, the Company

entered into a Sales Agreement (the “2025 Sales Agreement”), with A.G.P./Alliance Global Partners (“AGP”) pursuant

to which the Company may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $ 150 .0

million in sales.

AGP is sales agent under the ATM and paid a 3 % commission on each sale under the 2025 Sales Agreement.

The Company’s

common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary.

No shares were sold during

the quarter ended June 30, 2025 under the 2025 Sales Agreement.

Subsequent to June 30, 2025, the Company sold 0.3 million shares

of common stock under the 2025 Sales Agreement, for net proceeds of approximately $ 12.3 million.

2024 At-the-Market Offerings

On July 30, 2024, the Company

entered into a Sales Agreement (the “2024 Sales Agreement”), with AGP pursuant

to which the Company may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $ 250 .0

million in sales.

AGP is sales agent under the ATM and paid a 3 % commission on each sale under the 2024 Sales Agreement.

The Company’s

common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary.

During the three and six

months ended June 30, 2025, the Company sold approximately 0.8 million and 3.5 million shares, respectively, of common stock under the

Sales Agreement for net proceeds of approximately $ 15.5 million and $ 75.4 million, respectively.

Subsequent to June 30, 2025, the Company

sold 0.9 million shares of common stock under the Sales Agreement, for net proceeds of approximately $ 37.5 million.

The Company can no longer sell shares under the 2024 Sales Agreement as the Company has reached the aggregate $ 250 million in sales.

June 2024 Financings

On June 12, 2024, the Company

entered into a securities purchase agreement with certain investors, pursuant to which the Company sold 11,995 shares of common stock

and pre-funded warrants to purchase up to 25,682 shares of common stock.

The offering price per share of common stock was $ 106.50 , and

the offering price per share of pre-funded warrant was $ 106.40 .

The offering closed on June 13,

The Company incurred offering expenses of approximately $ 0.6 million, including placement agent fees of approximately $ 0.3 million.

The Company received net proceeds of approximately $ 3.4 million, after deducting the underwriting discount and other offering expenses.

On June 27, 2024, the Company

entered into a securities purchase agreement with certain institutional and retail investors, pursuant to which the Company sold 28,339

shares of common stock and pre-funded warrants to purchase up to 42,282 shares of common stock.

The offering price per share of common

stock was $ 57.00 , and the offering price per share of pre-funded warrant was $ 56.99 .

The offering closed on June 28,

The Company incurred offering expenses of approximately $ 0.6 million, including placement agent fees of approximately $ 0.3 million.

The Company received net proceeds of approximately $ 3.4 million, after deducting the underwriting discount and other offering expenses.

March 2024 Financing

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024

JUNE 30, 2025 AND 2024 (UNAUDITED)

Additionally, with the closing

18 unchanged sentences

The other terms of the Existing Warrants remained unchanged.

The Company evaluated the

Warrant Amendments as of April 1, 2024, and determined that the potential adjustment to the exercise price that is contingent on stockholder

approval precluded the Existing Warrants from being indexed to the Company’s own stock, and as a result, did not meet the criteria

for equity classification under ASC 815-40.

The Company accounted for the incremental fair value of the Warrant Amendments of $ 3 .0 million

as a direct and incremental cost of the March 2024 financing as an offset to the proceeds received.

As all of the Existing Warrants were

equity-classified prior to the Warrant Amendments, the net impact to the consolidated statement of stockholders’ equity was zero.

The Company then reclassified the Existing Warrants from equity to liabilities at post-modification fair value on April 1, 2024.

22, 2024, the date the Company’s stockholders approved the proposal to fix the exercise prices at $ 1,056.00 per share, the Existing

Warrants were adjusted to fair value and reclassified back to equity.

The Company evaluated the Warrant

Amendments as of April 1, 2024, and determined that the potential adjustment to the exercise price that is contingent on stockholder approval

precluded the Existing Warrants from being indexed to the Company’s own stock, and as a result, did not meet the criteria for equity

classification under ASC 815-40.

The Company accounted for the incremental fair value of the Warrant Amendments of $ 3 .0 million as a direct

and incremental cost of the March 2024 financing as an offset to the proceeds received.

As all of the Existing Warrants were equity-classified

prior to the Warrant Amendments, the net impact to the consolidated statement of stockholders’ equity was zero.

The Company then

reclassified the Existing Warrants from equity to liabilities at post-modification fair value on April 1, 2024.

On May 22, 2024, the date

the Company’s stockholders approved the proposal to fix the exercise prices at $ 1,056.00 per share, the Existing Warrants were adjusted

to fair value and reclassified back to equity.

December 2023 Financing

On December 20, 2023, the

Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant

to which the Company sold and issued (i) 7,920 shares of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded

On December 20, 2023, the Company

entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to

which the Company sold and issued (i) 7,920 shares of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to 8,973 shares of common stock and (iii) Series C warrants to purchase up to 25,338 shares of common

9 unchanged sentences

of the offering, 2,034 Pre-Funded Warrants were immediately exercised into shares of common stock for nominal proceeds.

The Pre-Funded Warrants have

an exercise price of $ 0.32 per share, were immediately exercisable subject to certain ownership limitations, and can be exercised at any

The Pre-Funded Warrants have an

exercise price of $ 0.32 per share, were immediately exercisable subject to certain ownership limitations, and can be exercised at any

time until exercised in full.

8 unchanged sentences

in patients with fibromyalgia.

The Series D Warrants have an exercise price of $ 2,720.00

per share and were exercisable beginning on the Approval Date through the five-year anniversary of the Approval Date.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024

The Series D Warrants have an exercise price of $ 2,720.00 per share and were exercisable beginning on the

Approval Date through the five-year anniversary of the Approval Date.

Upon the closing of the offering,

11 unchanged sentences

at fair value and presented within non-current liabilities on the consolidated balance sheet as of December 31, 2023.

The $ 30 .0 million in gross

proceeds received by the Company were first allocated to the Series C Warrants and the liability-classified Series D Warrants at their

respective fair values, and the residual proceeds were allocated between the shares of common stock, the Pre-Funded Warrants, and the

equity-classified Series D Warrants on a relative fair value basis.

The issuance costs were allocated between the equity and liability-classified

instruments on a relative fair value basis, resulting in issuance costs of $ 1.4 million recognized as a discount to the equity-classified

instruments, and $ 0.9 million allocated to the liability-classified instruments and immediately expensed within Selling, general and administrative

The $ 30 .0 million in gross proceeds

received by the Company were first allocated to the Series C Warrants and the liability-classified Series D Warrants at their respective

fair values, and the residual proceeds were allocated between the shares of common stock, the Pre-Funded Warrants, and the equity-classified

Series D Warrants on a relative fair value basis.

The issuance costs were allocated between the equity and liability-classified instruments

on a relative fair value basis, resulting in issuance costs of $ 1.4 million recognized as a discount to the equity-classified instruments,

and $ 0.9 million allocated to the liability-classified instruments and immediately expensed within Selling, general and administrative

expense on the consolidated statements of operations.

9 unchanged sentences

Stock repurchases

September 2024, the Board of Directors approved a 2024 share repurchase program pursuant

to which the Company may repurchase up to $ 10 .0

million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject

to market conditions, share price and other factors.

During the three months ended March 31,

2025, the Company repurchased 250,000

In September 2024,

the Board of Directors approved a 2024 share repurchase program pursuant to which the Company may repurchase up

million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions

subject to market conditions, share price and other factors.

During the three months ended June 30, 2025, the Company

repurchased 150,000

shares of its common stock outstanding under the 2024 share repurchase at prices ranging from $ 18.25

per share for a gross aggregate cost of approximately $ 2.9

The repurchased shares were immediately retired.

The Company repurchased the following

capital stock:

June 30, 2025

June 30, 2024

Total cost of repurchased shares (in thousands)

Shares repurchased

Weighted average price per share

During the six

months ended June 30, 2025, the Company repurchased 400,000

of shares of its common stock outstanding under the 2024 share repurchase at prices ranging from $ 9.98

1 unchanged sentence

The repurchased shares were immediately retired.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

The Company repurchased the

following capital stock:

Three Months Ended

March 31, 2025

Three Months Ended

March 31, 2024

The Company repurchased the following

capital stock:

Six Months Ended

June 30, 2025

Six Months Ended

June 30, 2024

Total cost of repurchased shares (in thousands)

1 unchanged sentence

Weighted average price per share

Subsequent to March 31, 2025, the Company repurchased 150,000

of shares of common stock under a 2024 share repurchase program at prices ranging from $ 18.25

to $ 20.47 per share for a gross aggregate cost of approximately $ 2.9 million.

timing and amount of any shares repurchased will be determined based on the Company’s

evaluation of market conditions and other factors and the New Share Repurchase Program may

be discontinued or suspended at any time.

The timing and amount

of any shares repurchased will be determined based on the Company’s evaluation of market conditions and other factors

and the New Share Repurchase Program may be discontinued or suspended at any time.

Repurchases will be made in accordance

1 unchanged sentence

Company may be subject.

Repurchases may be made, in part, under a Rule 10b5-1 plan,

which allows stock repurchases when the Company might otherwise be precluded from

Repurchases may be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when

the Company might otherwise be precluded from doing so.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

NOTE 13 – STOCK-BASED COMPENSATION

2 unchanged sentences

Amended and Restated 2020 Stock Incentive Plan (“Amended and Restated

Under the terms of the

Amended and Restated 2020 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3)

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

The Amended and

Restated 2020 Plan initially provided for the issuance of up to 50,000 shares of common stock, which amount will be increased

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

Amended and Restated 2020 Plan).

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

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

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

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

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

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

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

On May 8, 2025, the Company's stockholders approved the addition of 1,000,000 shares to the Company's Amended and Restated 2020 Plan.

Under the terms of the Amended

and Restated 2020 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3) stock appreciation

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

The Amended and Restated 2020 Plan initially

provided for the issuance of up to 50,000 shares of common stock, which amount will be increased to the extent that awards granted

under the Plans are forfeited, expire or are settled for cash (except as otherwise provided in the Amended and Restated 2020 Plan).

addition, the Amended and Restated 2020 Plan contains an “evergreen provision” providing for an annual increase in the number

of shares of our common stock available for issuance under the Amended and Restated 2020 Plan on January 1 of each year for a period of

ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030, in an amount equal to the difference between (x)

twenty percent ( 20 %) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, and (y)

the total number of shares of common stock reserved under the Amended and Restated 2020 Plan on December 31 st of such preceding

calendar year (including shares subject to outstanding awards, issued pursuant to awards or available for future awards).

On May 8, 2025,

the Company's stockholders approved the addition of 1,000,000 shares to the Company's Amended and Restated 2020 Plan.

The Board of Directors determines

7 unchanged sentences

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

As of March 31, 2025, there were 202,890 options available for

As of June 30, 2025, there were 723,113 options available for

future grants under the Amended and Restated 2020 Plan.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

A summary of the stock option activity and related

information for the Plans for the three months ended March 31, 2025, is as follows:

Weighted-Average

information for the Plans for the six months ended June 30, 2025, is as follows:

Exercise Price

4 unchanged sentences

1,102,887,011

Outstanding at March 31, 2025

Exercisable at March 31, 2025

Outstanding at June 30, 2025

Exercisable at June 30, 2025

The aggregate intrinsic value

1 unchanged sentence

closing stock price at the respective dates.

The weighted average fair

value of options granted for the three-month periods ended March 31, 2025 and 2024 was $ 7.55 and $ 1,056.00 per share, respectively.

The Company measures

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

The weighted average

fair value of options granted during the three and six months ended June 30, 2025 was $ 19.63

per share and $ 12.59

per share, respectively.

The weighted average fair value of options granted during the three and six months ended June 2024 was

per share and $ 1,015.52

per share, respectively.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED)

The Company measures the

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

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

5 unchanged sentences

vest over a one-year period.

The Company also issues premium options to executive officers which have an exercise price greater than

the grant date fair value and has issued performance-based options which vest when target parameters are met or probable of being met,

subject in each case to a one year minimum service period prior to vesting.

Stock-based compensation expense related to awards is amortized

over the applicable service period using the straight-line method.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

The assumptions used in the

valuation of stock options granted during the three months ended March 31, 2025, and 2024 were as follows:

Three Months Ended

March 31, 2025

Three Months Ended

March 31, 2024

The Company also issues premium options to executive officers which have an exercise price greater than the

grant date fair value and has issued performance-based options which vest when target parameters are met or probable of being met, subject

in each case to a one year minimum service period prior to vesting.

Stock-based compensation expense related to awards is amortized over

the applicable service period using the straight-line method.

The assumptions used in the valuation

of stock options granted during the six months ended June 30, 2025, and 2024 were as follows:

Six Months Ended

June 30, 2025

Six Months Ended

June 30, 2024

Risk-free interest rate

3.81 % to 4.30

4.23 % to 5.33

Expected term of option

5.50 to 6.08 years

5.25 to 10.00 years

Expected stock price volatility

149.34 % to 153.44

111.89 % - 137.79

Expected dividend yield

The risk-free interest rate

is based on the yield of Daily U.S.

The risk-free interest rate is

based on the yield of Daily U.S.

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

3 unchanged sentences

relating to options granted of $ 1.4 million, of which $ 1 .0 million and $ 0.4 million, related to General and Administration and Research

and Development, respectively was recognized for the three months ended March 31, 2025.

and Development, respectively was recognized for the quarter ended June 30, 2025.

Stock-based compensation expense relating to options

granted of $ 1.1 million, of which $ 0.8 million and $ 0.3 million, related to General and Administration and Research and Development, respectively

was recognized for the quarter ended June 30, 2024.

Stock-based compensation expense

relating to options granted of $ 2.3 million, of which $ 1.6 million and $ 0.7 million, related to General and Administration and Research

and Development, respectively was recognized for the three months ended March 31, 2024.

As of March 31, 2025, the

Company had approximately $ 7.6 million of total unrecognized compensation cost related to non-vested awards granted under the Plans, which

the Company expects to recognize over a weighted average period of 2.26 years.

and Development, respectively was recognized for the six-month period ended June 30, 2025.

Stock-based compensation expense relating to

options granted of $ 2.8 million, of which $ 2 .0 million and $ 0.8 million, related to General and Administration and Research and Development,

respectively was recognized for the six-month period ended June 30, 2024.

As of June 30, 2025, the Company

had approximately $ 15.5 million of total unrecognized compensation cost related to non-vested awards granted under the Plans, which the

Company expects to recognize over a weighted average period of 3.08 years.

Employee Stock Purchase Plans

On May 5, 2023, the Company’s stockholders approved the Tonix

Pharmaceuticals Holdings Corp.

On May 5, 2023, the Company’s

stockholders approved the Tonix Pharmaceuticals Holdings Corp.

2023 Employee Stock Purchase Plan.

(the “2023 ESPP”), which was replaced by the Tonix Pharmaceuticals

Holdings Corp.

2025 Employee Stock Purchase Plan (the “2025 ESPP”, and together with the 2023 ESPP, the “ESPP Plans”),

which was approved by the Company’s stockholders on May 8, 2025.

The 2025 ESPP allows eligible employees to purchase up to an aggregate of 2,000,000 shares of the Company's common stock.

Under the 2025 ESPP, on the first day of each offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of the Company's common stock at the end of the offering period.

Each offering period under the 2025 ESPP is for six months, which can be modified from time to time.

Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less.

A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2025 ESPP, subject to the statutory limit under the Code.

The 2023 ESPP allows eligible employees to purchase up to an aggregate of 250 shares of the Company's common stock.

Under the 2023 ESPP, on the first day of each offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of the Company's common stock at the end of the offering period.

Each offering period under the 2023 ESPP is for six months, which can be modified from time-to-time.

A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2023 ESPP, subject to the statutory limit under the Code.

As of March 31, 2025, 159 shares were available for future sales under the 2023 ESPP.

(the “2023 ESPP”),

which was replaced by the Tonix Pharmaceuticals Holdings Corp.

2025 Employee Stock Purchase Plan (the “2025 ESPP”, and together

with the 2023 ESPP, the “ESPP Plans”), which was approved by the Company’s stockholders on May 8, 2025.

The 2025 ESPP allows eligible

employees to purchase up to an aggregate of 2,000,000 shares of the Company's common stock.

Under the 2025 ESPP, on the first day of each

offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible

employees to purchase shares of the Company's common stock at the end of the offering period.

Each offering period under the 2025 ESPP

is for six months, which can be modified from time to time.

Subject to limitations, each participant will be permitted to purchase a number

of shares determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price,

which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is

A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that

offering period for the purchase of stock under the 2025 ESPP, subject to the statutory limit under the Code.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024 (UNAUDITED

The 2023 ESPP allows eligible

employees to purchase up to an aggregate of 250 shares of the Company's common stock.

Under the 2023 ESPP, on the first day of each offering

period, each employee eligible for that offering period has the option to enroll for that offering period, which allows the eligible employees

to purchase shares of the Company's common stock at the end of the offering period.

Each offering period under the 2023 ESPP is for six

months, which can be modified from time-to-time.

Subject to limitations, each participant will be permitted to purchase a number of shares

determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price, which is

equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less.

participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering

period for the purchase of stock under the 2023 ESPP, subject to the statutory limit under the Code.

As of June 30, 2025, 159 shares were

available for future sales under the 2023 ESPP and 2,000,000 shares were available under the 2025 ESPP.

The ESPP Plans are considered

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

For the three months ended March 31,

For the six months ended June 30, 2025,

and 2024, $ 0 and $ 27,000 , respectively, was expensed.

In January 2024, 21 shares that were purchased as of December 31, 2023, under

the 2022 ESPP, were issued.

TONIX PHARMACEUTICALS HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

NOTE 14 – WARRANTS TO PURCHASE COMMON

In January 2024, 21 shares that were purchased as of December 31, 2023, under the

2022 ESPP, were issued.

As of June 30, 2024, approximately $ 33,000 of employee payroll deductions had accumulated and had been recorded

in accrued expenses.

In July 2024, 70 shares that were purchased as of June 30, 2024, under the 2022 ESPP, were issued.

NOTE 14 – WARRANTS TO PURCHASE COMMON STOCK

The following table summarizes

information with respect to outstanding warrants to purchase common stock of the Company at March 31, 2025:

information with respect to outstanding warrants to purchase common stock of the Company at June 30, 2025:

December 2028

During the three months ended

March 31, 2025, 10,884 , 5,758 (as the Company received FDA acceptance of our NDA filing), and 1 warrants with an exercise price of $ 1,056 ,

$ 1,776 and $ 364,800 , respectively, expired.

During the three months ended

March 31, 2024, 4,701 prefunded common warrants were exercised.

During the six months

ended June 30, 2025, 13,666 ;

(as the Company received FDA acceptance of our NDA filing), and 1

warrants with an exercise price of $ 1,056 ,

and $ 364,800 ,

respectively, expired.

During the six months ended June

30, 2024, 33,841 prefunded common warrants were exercised.

NOTE 15 – LEASES

5 unchanged sentences

ability to engage in financing transactions or enter into further lease agreements.

At March 31, 2025, the Company has right-of-use assets

At June 30, 2025, the Company has right-of-use assets

of $ 0.5 million and a total lease liability for operating leases of $ 0.5 million of which $ 0.3 million is included in long-term lease

liabilities and $ 0.2 million is included in current lease liabilities.

At March 31, 2025, future

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

At June 30, 2025, future minimum

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

Year Ending December 31,

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025 AND 2024 (UNAUDITED)

No new leases or amendments

were entered into during the three months ended March 31, 2025 and 2024.

Operating lease expenses were

$ 0.1 for both the quarters ended March 31, 2025, and 2024.

JUNE 30, 2025 AND 2024 (UNAUDITED)

No new leases or amendments were

entered into during the six months ended June 30, 2025 and 2024.

Operating lease expense was $ 0.1

million for both the three-months ended June 30, 2025, and 2024.

Operating lease expense was $ 0.2

million for both the six-months ended June 30, 2025 and 2024.

Other information related to leases is as follows:

As of and for the

Three Months Ended

March 31, 2025

Three Months Ended

March 31, 2024

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

Six Months Ended

June 30, 2025

Six Months Ended

June 30, 2024

Operating cash flow from operating leases (in thousands)

5 unchanged sentences

Contractual agreements

The Company has entered into

contracts with various contract research organizations with outstanding commitments aggregating approximately $ 21.3 million at March 31,

2025 for future work to be performed.

The Company has entered into contracts

with various contract research organizations with outstanding commitments aggregating approximately $ 21.7 million at June 30, 2025 for

future work to be performed.

Defined contribution plan

The Company established a

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

may participate.

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

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

contributions of up to six percent of his or her eligible compensation, and the Company is also required to make a contribution equal

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

For the three months ended

March 31, 2025 and 2024, the Company charged operations $ 0.2 million and $ 0.3 million, respectively for contributions under the 401(k)

The Company established a qualified

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

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

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

up to six percent of his or her eligible compensation.

The Company charged operations $ 0.2 million and $ 0.4 million for the three and six months

ended June 30, 2025, respectively, and $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2024, respectively, for contributions

under the 401(k) Plan.

NOTE 17 – SUBSEQUENT EVENTS

Subsequent to March 31, 2025,

the Company sold 0.6 million shares of common stock under the Sales Agreement, for net proceeds of approximately $ 9.9 million.

Subsequent to March 31, 2025, the Company repurchased 150,000

of shares of common stock under a 2024 share repurchase program at prices ranging from $ 18.25

to $ 20.47 per share for a gross aggregate cost of approximately $ 2.9 million.

On May 8, 2025, the Company's stockholders approved the Tonix Pharmaceuticals Holdings Corp.

On May 8, 2025, the Company's stockholders approved the addition of 1,000,000 shares to the Company's Amended and Restated 2020 Plan.

Subsequent to June 30, 2025, the

Company sold 0.3 million shares of common stock under the 2025 Sales Agreement, for net proceeds of approximately $ 12.3 million.

Subsequent to June 30, 2025, the

Company sold 0.9 million shares of common stock under the 2024 Sales Agreement, for net proceeds of approximately $ 37.5 million.

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

What changed 10-Q

Item 1. Financial Statements