What changed in this filing

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Item 1A. Risk Factors

2026-03-12 compared with 2025-03-18 · 1230 added, 1125 removed, 567 unchanged (81% of the section changed)

ITEM 1A – Risk Factors

Summary of Risk Factors

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

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

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

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

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

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

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

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

Changes in the U.S.

political and regulatory environment could affect

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

Any grant of priority review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor assure FDA approval of our product candidates.

Even if approved, our products may be subject to post-approval regulation or may not be accepted by the market.

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

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

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

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

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

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

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

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

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

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

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

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

Our internal computer systems may fail or suffer security breaches,

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

Corporate and academic collaborators may take actions to undermine the success of our products.

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

If we fail to establish marketing, sales and distribution capabilities, we will not be able to create a market for our product candidates.

Our relationships with customers, physicians, and third-party payors will be subject to federal and state healthcare laws and regulations.

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

Coverage and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to sell profitably, if approved.

Obtaining approval to commercialize products outside the U.S.

would expose us to international risk.

1A – Risk Factors

of Risk Factors

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

We may never achieve profitability.

● We expect a number of factors to cause our operating results to fluctuate on a quarterly

and annual basis, which may make it difficult to predict our future performance.

● Our independent registered public accounting firm has included an explanatory paragraph relating

to our ability to continue as a going concern in its report on our audited financial statements.

● We will need additional capital to fund our operations.

● Our prospects are highly dependent on the success of TONMYA.

If we are unable to successfully

commercialize or maintain approval for TONMYA, our business will be materially adversely affected.

● We have a limited operating history and only recently launched TONMYA in the United States,

which may make it difficult to evaluate the prospects for our future viability.

● TONMYA and our migraine products remain subject to ongoing regulatory review, and if we fail

to comply with continuing regulations, we could lose our approval and the sale of TONMYA or our migraine products could be suspended.

● If estimates of the size of the potential market for TONMYA are overstated or data we have

used to identify prescribing healthcare providers is inaccurate, our ability to earn revenue to support our business could be materially

adversely affected.

● Coverage and adequate reimbursement may not be available for our products.

● Healthcare legislative or regulatory reform measures, including government restrictions on

pricing and reimbursement, may have a negative impact on our business and results of operations.

● Even if we obtain regulatory approval to market our product candidates, our product candidates

may not be accepted by the market.

● Uncertainty in Government funding and in-kind support policies and programs may adversely

affect our business.

● Our product candidates are novel and still in development.

● If preclinical and nonclinical testing or clinical studies for our product candidates are

unsuccessful or delayed, we will be unable to meet our anticipated development and commercialization timelines.

● We are subject to extensive and costly government regulation.

● Our product candidates may cause serious adverse events, or SAEs, or undesirable side effects.

● Any breakthrough, fast track or orphan drug designation or grant of priority review status

by the FDA may not actually lead to the benefits we anticipate.

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

● Our relationships with customers, physicians and third-party payors is subject to federal

and state healthcare laws and regulations

● If we obtain approval to commercialize any approved products outside of the United States,

a variety of risks associated with international operations could materially adversely affect our business.

● Governments outside the United States tend to impose strict price controls, which may adversely

affect our revenues, if any.

● If the FDA approves generic products that compete with TONMYA, sales of TONMYA would be adversely

● The biopharmaceutical industry is subject to extensive regulatory obligations and policies

that may be subject to change, including due to judicial challenges.

● Reductions in staffing and funding at FDA and other federal agencies could cause delays in

the development and approval of our products.

● We may never receive regulatory approval to market our current or future product candidates

outside of the U.S.

● Our future growth may depend, in part, on our ability to penetrate foreign markets, where

we would be subject to additional regulatory burdens and other risks and uncertainties that could materially adversely affect our business.

● There may not be market interest in TNX-801.

● If technology developed for the purposes of developing new medicines or vaccines can be applied

to the creation or development of biological weapons, then our technology may be considered “dual use” technology and be

subject to limitations on public disclosure or export.

● Competition and technological change may make our product candidates and technologies less

attractive or obsolete.

● Failure to protect our intellectual property could materially adversely affect our business.

● We are dependent on license relationships with third parties for certain of our drug development

● We may be involved in lawsuits to protect or enforce our patents, which could be expensive

and time consuming.

● If we infringe the rights of third parties we could be prevented from selling products, forced

to pay damages, and defend against litigation.

● There are risks to our intellectual property based on our international business initiatives.

● We may be unable to protect the confidentiality of our trade secrets, thus harming our business

and competitive position.

● Third parties may assert that our employees or consultants have wrongfully used or disclosed

confidential information or misappropriated trade secrets.

● We may need to license intellectual property from third parties, and such licenses may not

be available or may not be available on commercially reasonable terms.

● We rely on third parties to conduct, supervise and monitor our clinical studies, and if those

third parties perform in an unsatisfactory manner, it may harm our business.

● We may use our financial and human resources to pursue a particular research program or product

candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood

● We will need to expand our operations and increase the size of our company, and we may experience

difficulties in managing growth.

● Our executive officers and other key personnel are critical to our business, and our future

success depends on our ability to retain them.

● If we are unable to hire additional qualified personnel, our ability to grow our business

may be harmed.

● We rely on, and expect to continue to rely on, third parties to manufacture our marketed

products and the compounds used in our studies.

● Failure by our third-party manufacturers to comply with the regulatory guidelines could delay

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

● We are exposed to cybersecurity and data privacy risks.

● Adverse global conditions, including economic uncertainty, may negatively impact our financial

● Our internal computer systems, or those of our CROs or other contractors or consultants,

may fail or suffer security breaches.

● Corporate and academic collaborators may take actions to delay, prevent, or undermine the

success of our products.

● Data provided by collaborators and others upon which we rely that has not been independently

verified could turn out to be false, misleading, or incomplete.

● Our product candidates may face competition sooner than expected.

● We may be unable to establish, or engage third-parties to provide, effective marketing, sales

and distribution capabilities.

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

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

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

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

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

If our technology is ever considered “dual use” technology, it will be subject to limitations on public disclosure or export.

We face risks in connection with existing and future collaborations with respect to the development, manufacture, and commercialization of our product candidates.

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

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

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

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

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

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

Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well as Nevada law.

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

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

obtain a favorable judicial forum for disputes with us.

RISKS RELATED TO OUR BUSINESS

Our prospects are dependent on the

success of TNX-102 SL.

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

not commercially successful, our business, financial condition and results of operations may be materially adversely affected and

the price of our common stock may decline.

The research, testing,

manufacturing, labeling, approval, sale, import, export, marketing, and distribution of pharmaceutical product candidates are subject

to extensive regulation by the FDA.

We have focused a significant portion of our activities and resources on the development of

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

TNX-102 SL in the U.S.

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

those discussed in other risk factors, and TNX-102 SL may not receive approval from the FDA.

If the results or timing of regulatory

filings, the regulatory process, regulatory developments, commercialization, or other activities, actions or decisions related

to TNX-102 SL do not meet our or others’ expectations, the market price of our common stock could decline significantly.

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

and retains complete

discretion in deciding whether to approve the NDA for TNX-102 SL, and there are many components to an NDA filing beyond the efficacy

and safety data provided to the FDA.

No assurances can be given that the FDA will approve TNX-102 SL for the treatment of FM, or

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

Coverage and adequate reimbursement

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

Market acceptance and sales of our

products depends in part on the extent to which reimbursement for these drugs and related treatments will be available from third-party

payors, including government health administration authorities, p harmacy benefit managers (“PBMs”), managed

care organizations and other private health insurers.

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

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

However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any drug is made on a payor-by-payor basis.

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

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

Moreover, one

payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate

reimbursement, for the drug.

Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that

an adequate reimbursement rate will be approved.

Each payor determines whether or not it will provide coverage for a therapy, what amount

it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed.

The position on a payor’s list

of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and

can strongly influence the adoption of such therapy by patients and physicians.

Patients who are prescribed treatments for their conditions

and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

Patients are unlikely to use our drugs unless coverage is provided and reimbursement is adequate to cover a significant portion of the

cost of our drugs.

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

used in our business could affect us and be time-consuming and costly.

● Our insurance policies are expensive and protect us only from some business risks, which

will leave us exposed to significant uninsured liabilities.

● If we retain collaborative partners and our partners do not satisfy their obligations, we

will be unable to develop our partnered product candidates.

● We face risks in connection with existing and future collaborations with respect to the development,

manufacture, and commercialization of our product candidates.

● We face risks in connection with the testing, production and storage of our vaccine product

● Changes in tax laws could adversely affect our business and financial condition.

● Sales of additional shares of our common stock could cause the price of our common stock

● We may not be able to maintain compliance with the Listing Rules of the NASDAQ Stock Exchange.

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

● The market price of our common stock has been extremely volatile in the past and may be volatile

in the future due to numerous circumstances beyond our control.

● A “short squeeze” due to a sudden increase in demand for shares of our common

stock that largely could lead to extreme price volatility in shares of our common stock.

● We do not anticipate paying dividends on our common stock.

● The rights of the holders of common stock may be impaired by the potential issuance of preferred

● If we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting

controls and procedures, or if we discover material weaknesses and deficiencies in our internal control and accounting procedures, our

stock price could decline significantly and raising capital could be more difficult.

● If securities or industry analysts do not publish research or reports about our business,

or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

● Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders,

due to provisions under our corporate charter and bylaws, as well as Nevada law.

● Our bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole

and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’

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

RELATED TO OUR FINANCIAL CONDITION AND CAPITAL REQUIREMENTS

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

We may never achieve profitability.

started generating revenues from product sales in the third quarter of 2023, and from sales of TONMYA in the fourth quarter of 2025.

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

future as our sales and marketing, research, development, preclinical and nonclinical testing, and clinical study activities

increase, and if and when we acquire rights to additional products and product candidates.

The amount of future losses and when, if

ever, we will achieve profitability are uncertain.

Failure to achieve profitability could diminish our ability to sustain

operations, pay dividends on our common stock, obtain additional required funds and make required payments on any future

indebtedness.

We have three products that have generated commercial revenue in the past two years, but we do not expect revenues

from the commercial sale of products to exceed expenses in the near future.

Our ability to generate revenue and achieve

profitability will depend on, among other things, successfully commercializing our products;

establishing a favorable competitive

successful completion of the development of our product candidates;

obtaining necessary regulatory approvals from the FDA;

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

and raising sufficient funds to finance our

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

We might not succeed at any of these

undertakings.

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

materially adversely affected.

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

to predict our future performance.

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

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

Factors relating to our business that may contribute to these

fluctuations include other factors described elsewhere in this Annual Report and include, among other things:

ability to obtain additional funding to commercialize our products and develop our product

acceptance of our products;

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

for our products;

ability to maintain regulatory approval for TONMYA and our migraine products, and to

obtain regulatory approval for our product candidates in the United States and foreign

jurisdictions;

in the commencement, enrollment and timing of clinical studies;

success of our clinical studies through all phases of clinical development;

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

nonclinical toxicity and/or side effects of our products or product candidates that could

delay or prevent commercialization, limit the indications for any approved drug, require

the establishment of a REMS, or cause an approved drug to be taken off the market;

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

● competition

from existing or new products;

ability to leverage our proprietary technology platform to discover and develop additional

product candidates;

ability and our licensors’ abilities to successfully obtain, maintain, defend and

enforce intellectual property rights important to our business;

product liability claims.

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

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

concern in its report on our audited financial statements.

we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially

and adversely affected, and we may be unable to continue as a going concern.

For example, we anticipate that our existing cash

and cash equivalents will enable us to maintain our current operations into the first quarter of 2027.

If we are unable to continue

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

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

Future reports from

our independent registered public accounting firm may continue to include statements expressing substantial doubt about our ability

to continue as a going concern.

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

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

additional funding on commercially reasonable terms or at all.

In connection with our management’s assessment, our report

from our independent registered public accounting firm for the fiscal year ended December 31, 2025, includes an explanatory paragraph

stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue

as a going concern.

will need additional capital to fund our operations.

If additional capital is not available or is available at unattractive terms,

we may be forced to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization

efforts or curtail our operations.

order to successfully commercialize our marketed products and develop and bring our product candidates to market, we must commit

substantial resources to costly and time-consuming commercialization activities, research, preclinical and nonclinical testing,

clinical studies and the buildout of our sales, research and development and manufacturing facilities.

We anticipate that our

existing cash and cash equivalents will enable us to maintain our current operations until the first quarter of 2027.

We anticipate

using our cash and cash equivalents to commercialize TONMYA and to fund further research and development with respect to our product

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

available resources more rapidly than we anticipate.

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

commercialization of our marketed products;

● development

of marketing and sales capabilities;

acceptance of our products;

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

associated with protecting our intellectual property rights;

received under future collaborative agreements, if any.

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

dilution to our shareholders.

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

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

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

programs, reduce our commercialization efforts or curtail our operations.

In addition, we may be required to obtain funds through

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

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

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

will require substantial funds to support our commercialization, research and development activities, and the anticipated costs

of preclinical and nonclinical testing and clinical studies, regulatory approvals and eventual commercialization of our product

Such additional sources of financing may not be available on favorable terms, if at all.

If we do not succeed in raising

additional funds on acceptable terms, we may be unable to commence or complete clinical studies or obtain approval of any product

candidates from the FDA and other regulatory authorities.

In addition, we could be forced to discontinue product development,

forego sales and marketing efforts and forego attractive business opportunities.

Any additional sources of financing will likely

involve the issuance of our equity securities, which will have a dilutive effect on our shareholders.

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

If we are not able

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

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

RELATED TO OUR BUSINESS

prospects are highly dependent on the success of TONMYA.

If we are unable to successfully commercialize or maintain approval for

TONMYA, our business, financial condition, results of operations and prospects and the value of our common stock will be materially

adversely affected.

August 2025, the FDA granted approval of TONMYA for the treatment of fibromyalgia.

We have invested, and continue to invest, significant

efforts and financial resources in the launch of TONMYA.

We have never, as an organization, launched any other product, and there

is no guarantee that we will be able to successfully commercialize TONMYA.

There are numerous examples of failures to meet high

expectations of market potential, including by pharmaceutical companies with more experience and resources than us.

that the commercial success of TONMYA depends on many factors, including the following:

acceptance of TONMYA by physicians, patients and third-party payors;

ability to effectively educate healthcare providers and patients on the risks and clinical

benefits of TONMYA;

efficacy, cost, approved use, and side-effect profile of TONMYA relative to competitive

treatment regimens for fibromyalgia;

may compete with the off-label use of currently marketed products and other therapies

in development that may in the future obtain approval for fibromyalgia;

effectiveness of our commercial strategy for the marketing of TONMYA, including our pricing

strategy and the effectiveness of our efforts to obtain adequate third-party reimbursement;

● developing,

maintaining and successfully monitoring commercial manufacturing arrangements for TONMYA

with third-party manufacturers to ensure they meet our standards and those of regulatory

authorities, including the FDA, which extensively regulate and monitor pharmaceutical

manufacturing facilities;

ability to negotiate and enter into any additional commercial, supply and distribution

contracts to support commercialization efforts, and to hire and manage additional qualified

ability to meet the demand for commercial supplies of TONMYA at acceptable costs;

ability to remain compliant with laws and regulations that apply to us and our commercial

actual market-size, ability to identify targeted patients and the demographics of patients

eligible for TONMYA, which may be different than what we currently expect;

occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity

in these areas;

ability to obtain, maintain or enforce our patents and other intellectual property rights;

effect of current and future health care legislation in the United States.

we believe that TONMYA has a commercially competitive profile, we cannot accurately predict the amount of time needed to attain

a commercially successful profile or the amount of revenue that would be generated from sales of TONMYA, and there is no guarantee

that we will be able to maintain or increase product sales for TONMYA or any of our marketed products.

While we have established

our commercial team and hired our U.S.

sales force, we will need to further expand and develop the team in order to continue to

grow the business.

Even if we are successful in developing our commercial team, there are many factors that could negatively impact

sales of our marketed products or cause commercialization efforts to be unsuccessful, including several factors that are outside

If the continued commercialization of our marketed products or future sales are less successful than expected or

perceived as disappointing, our stock price could decline significantly, and our long-term success company could be harmed.

have a limited operating history and only recently launched TONMYA in the United States, which may make it difficult to evaluate

the prospects for our future viability.

are still in the relatively early stages of our transition from a clinical-stage to a commercial-stage company.

Our operations

to date have been primarily limited to conducting research and development activities, including preclinical studies and clinical

trials and, more recently, commercializing our migraine products and launching TONMYA.

We have not yet demonstrated an ability

to generate significant revenues, or to conduct sales and marketing activities on a long-term sustained basis necessary for successful

product commercialization.

Initial sales of TONMYA may not be predictive of long-term commercial results.

may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently

encountered by companies in the early commercial stage, especially pharmaceutical companies such as ours.

Any predictions about

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

and our migraine products remain subject to ongoing regulatory review, and if we fail to comply with continuing regulations, we

could lose our approval and the sale of TONMYA or our migraine products could be suspended.

though we received FDA approval for TONMYA, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage,

advertising, promotion, sampling, and record keeping related to TONMYA and our migraine products will remain subject to extensive

regulatory requirements.

These requirements include submissions of safety and other post-marketing information and reports, registration,

as well as continued compliance with cGMP regulations, and GCPs for any clinical trials that we conduct post-approval, all of

which may result in significant expense and limit our ability to commercialize TONMYA and our migraine products.

As such, we and

our contract manufacturers will be subject to periodic review and inspections to assess compliance with cGMP and adherence to

commitments made in any NDA or other marketing application and previous responses to inspection observations.

For certain commercial

prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution

requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit,

diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United

Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory

compliance, including manufacturing, production and quality control.

The FDA may also require a REMS program for TONMYA or any

future product candidates, which could include requirements for a medication guide, physician communication plans or additional

elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

we fail to comply with the regulatory requirements of the FDA and other applicable domestic and foreign regulatory authorities,

or previously unknown problems with any of our marketed products, manufacturer, or manufacturing process are discovered, we could

be subject to administrative or judicially imposed sanctions, including:

● restrictions

on marketing or manufacturing;

of the product from the market;

on clinical trials;

letters or untitled letters;

or criminal penalties;

● injunctions;

seizures or detentions;

to initiate voluntary product recalls;

or withdrawal of regulatory approvals;

to approve supplements to approved applications.

any of these events occur, our ability to sell the affected product may be impaired, and we may incur substantial additional expense

to comply with regulatory requirements, which could adversely affect our business, financial condition and results of operations.

estimates of the size of the potential market for TONMYA are overstated or data we have used to identify prescribing healthcare

providers is inaccurate, our ability to earn revenue to support our business could be materially adversely affected.

have relied on external sources, including market research funded by us and third parties, and internal analyses and calculations

to estimate the potential market opportunities for TONMYA.

The externally sourced information used to develop these estimates

has been obtained from sources we believe to be reliable, but we have not verified the data from such sources, and their accuracy

and completeness cannot be assured.

With respect to TONMYA, our internal analyses and calculations are based upon management’s

understanding and assessment of numerous inputs and market conditions.

These understandings and assessments necessarily require

assumptions subject to significant judgment and may prove to be inaccurate.

As a result, our estimates of the size of these potential

market for TONMYA could prove to be overstated, perhaps materially.

addition, we are relying on third-party data to identify the prescribers who treat the majority of fibromyalgia patients in the

United States;

however, we may not be marketing to the appropriate prescribers and may therefore be limiting our market opportunity.

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

acceptance and sales of our products depends in part on the extent to which reimbursement for these drugs and related treatments

will be available from third-party payors, including government health administration authorities, pharmacy benefit managers (“PBMs”),

managed care organizations and other private health insurers.

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

establish reimbursement levels.

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

their own coverage and reimbursement policies.

However, decisions regarding the extent of coverage and amount of reimbursement

to be provided for any drug is made on a payor-by-payor basis.

If PBMs other payers or payer affiliates deny formulary inclusion,

impose unfavorable tiering, or require burdensome utilization management restrictions, patient access to our products could be

significantly limited.

Moreover, one payor’s determination to provide coverage for a drug does not assure that other payors

will also provide coverage, and adequate reimbursement, for the drug.

Additionally, a third-party payor’s decision to provide

coverage for a therapy does not imply that an adequate reimbursement rate will be approved.

Each payor determines whether or not

it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary

it will be placed.

The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that

a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians.

Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party

payors to reimburse all or part of the associated healthcare costs.

Patients are unlikely to use our drugs unless coverage is

provided and reimbursement is adequate to cover a significant portion of the cost of our drugs.

primary trend in the U.S.

9 unchanged sentences

able to successfully commercialize our current and any future drug products.

Access to prescription drugs in the U.S.

commercial market is largely controlled

by three dominant entities:

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

manage a significant portion of formulary decisions and reimbursement policies.

These entities have the ability to deny or restrict formulary

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

tier placement.

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

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

pricing and reimbursement terms for our products.

Moreover, PBMs have significant influence over prescription drug access

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

In some cases, PBMs may prioritize lower-cost

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

This could include steering patients toward

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

standards as our products.

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

to prescription drugs in the U.S.

commercial market is largely controlled by three dominant entities:

Emisar/Optum/United HealthCare,

Ascent/Express Scripts/Cigna, and Zinc/CVS Caremark/Aetna, which collectively manage a significant portion of formulary decisions

and reimbursement policies.

These entities have the ability to deny or restrict formulary access to our products through various

techniques, including National Drug Code (“NDC”) blocks, exclusion lists, and unfavorable tier placement.

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

Additionally,

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

and reimbursement terms for our products.

PBMs have significant influence over prescription drug access through formulary decisions, reimbursement policies, and utilization

management practices.

In some cases, PBMs may prioritize lower-cost alternatives, including off-label or unapproved therapies,

over our FDA-approved products.

This could include steering patients toward opioid-based treatments for fibromyalgia or barbiturates

for migraine or other medications that do not meet the same regulatory and safety standards as our products.

Such actions may

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

legislative or regulatory reform measures, including government restrictions on pricing and reimbursement, may have a negative

1 unchanged sentence

the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes

and proposed changes regarding the healthcare system that could prevent or delay marketing authorization of product candidates, restrict

or regulate post-approval activities, and affect our ability to profitably sell any of our commercialized products.

and proposed changes regarding the healthcare system that could prevent or delay marketing authorization of product candidates,

restrict or regulate post-approval activities, and affect our ability to profitably sell any of our commercialized products.

policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare

2 unchanged sentences

the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative

For example, in the United States, the PPACA substantially changed the way healthcare is financed by both the government

and private insurers, and significantly affects the pharmaceutical industry.

Many provisions of the ACA impact the biopharmaceutical

industry, including that in order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and

Medicaid programs or to be sold directly to U.S.

government agencies, the manufacturer must extend discounts to entities eligible

to participate in the drug pricing program under the Public Health Services Act, or PHS.

For example, in the United States, the Patient Protection and Affordable Care Act (“ACA”), as supplemented

by the Inflation Reduction Act of 2022 (“IRA”) and presidential executive orders, substantially changed the way healthcare

is financed by both the government and private insurers, and significantly affects the pharmaceutical industry.

Many provisions

of the ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical product to receive federal reimbursement

under the Medicare Part B and Medicaid programs or to be sold directly to U.S.

government agencies, the manufacturer must extend

discounts to entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS.

Additionally,

the Inflation Reduction Act of 2022 includes policies that are designed to have a direct impact on

drug prices and reduce drug spending by the federal government.

This legislation contains substantial drug pricing reforms, including

the establishment of a drug price negotiation program within the U.S.

Department of Health and Human Services that would require

manufacturers to charge a negotiated “maximum fair price” for certain selected drugs covered by Medicare or pay an

excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under

Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on

Part D drugs.

the IRA, which is subject to active modification efforts, includes policies that have a direct impact on drug prices and reduced

drug spending by the federal government.

This legislation contains substantial drug pricing reforms, including the establishment

of a drug price negotiation program within the U.S.

Department of Health and Human Services that requires manufacturers to charge

a negotiated “maximum fair price” for certain selected drugs covered by Medicare or pay an excise tax for noncompliance,

rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases

that outpace inflation, and required discounts on Part D drugs.

Moreover, presidential executive orders and agency guidance may

rapidly change reimbursement and pricing conditions.

administrative, and private payor efforts to control drug costs span a range of proposals, including drug price negotiation, Medicare

7 unchanged sentences

judicial or administrative changes relating to healthcare policy will affect our business.

At the state level, legislatures are increasingly passing legislation and

implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints,

discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed

to encourage importation from other countries and bulk purchasing.

Other examples of proposed changes include, but are not limited to,

expanding post-approval requirements, changing the Orphan Drug Act, and restricting sales and promotional activities for pharmaceutical

cannot be sure whether additional legislative changes will be enacted, or whether government regulations, guidance or interpretations

will be changed, or what the impact of such changes would be on the marketing approvals, sales, pricing, or reimbursement of our

drug candidates or products, if any, may be.

We expect that these and other healthcare reform measures that may be adopted in

the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for

any approved drug.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction

in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from

being able to generate revenue, attain profitability, or commercialize our drugs.

the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical

and biological product pricing, including price and patient reimbursement constraints, discounts, restrictions on certain product

access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other

countries and bulk purchasing.

Other examples of proposed and recent changes include, but are not limited to, expanding post-approval

requirements, changing the Orphan Drug Act, restricting sales and promotional activities for pharmaceutical products, enacting

drug price transparency laws, and the creation of prescription drug affordability boards with authority to review and, in some

cases, constrain, payment levels.

cannot be sure whether additional legislative or administrative changes will be enacted, or whether government regulations, guidance

or interpretations will be changed, or what the impact of such changes would be on the marketing approvals, sales, pricing, or

reimbursement of our drug candidates or products, if any, may be.

We expect that these and other healthcare reform measures that

may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that

we receive for any approved drug.

Any reduction in reimbursement from Medicare or other government programs may result in a similar

reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent

us from being able to generate revenue, attain profitability, or commercialize our drugs.

addition, FDA regulations and guidance may be revised or reinterpreted by the FDA in ways that may significantly affect our business

2 unchanged sentences

impose additional costs or lengthen FDA review times for our product candidates.

We cannot determine how changes in regulations,

statutes, policies, or interpretations when and if issued, enacted or adopted, may affect our business in the future.

could, among other things, require:

additional clinical trials to be conducted prior

to obtaining approval;

changes to manufacturing methods;

recalls, replacements, or discontinuance of

one or more of our products;

additional recordkeeping.

Moreover, ongoing policy focus on accelerated

approval oversight and facilitating the introduction of generics and biosimilars could tighten post-marketing obligations

and increase competitive pressure on reference products.

We cannot determine how changes in regulations, statutes, policies, or

interpretations when and if issued, enacted or adopted, may affect our business in the future.

Such changes could, among other

things, require:

clinical trials to be conducted prior to obtaining approval;

to manufacturing methods;

replacements, or discontinuance of one or more of our products;

recordkeeping.

changes would likely require substantial time and impose significant costs, or could reduce the potential commercial value of

2 unchanged sentences

products would harm our business, financial condition, and results of operations.

Even if we obtain regulatory approval to market our product

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

Even if the FDA approves

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

Even if physicians and patients would

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

insurance companies or government programs such as Medicare or Medicaid.

Acceptance and use of our products will depend upon a

number of factors including:

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

of our drug or device product;

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

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

Even if physicians

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

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

Acceptance and use of our products

will depend upon a number of factors including:

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

the safety and effectiveness of our drug or device product;

cost-effectiveness of our product relative to competing products;

availability of reimbursement

for our product from government or other healthcare payors;

and effectiveness of marketing and distribution efforts by us and our

licensees and distributors, if any.

The degree of market

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

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

and effectiveness of marketing and distribution

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

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

● cost-effectiveness;

the safety and effectiveness of our products, including any significant potential side effects (including drowsiness and dry mouth), as compared to alternative products or treatment methods;

the timing of market entry as compared to competitive products;

the rate of adoption of our products by doctors and nurses;

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

reimbursement policies of government and third-party payors;

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

unfavorable publicity concerning our products or any similar products.

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

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

additional financing.

Our prospects are dependent on the continued

successful commercialization of Zembrace and Tosymra.

To the extent we cannot maintain or increase sales of Zembrace and Tosymra, our

business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline.

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

Continued commercialization of Zembrace and Tosymra is subject to many risks, and there is no guarantee that we will be able to maintain

or increase sales of Zembrace and Tosymra.

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

sales force, we will need

to further expand and develop the team in order to continue to successfully grow the business.

Even if we are successful in developing

our commercial team, there are many factors that could negatively impact sales of Zembrace and Tosymra or cause the continued commercialization

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

If the continued commercialization

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

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

Additionally, our strategy in the U.S.

includes distributing Zembrace and

Tosymra solely through a limited network of third-party specialty distributors and specialty pharmacies.

While we have entered into agreements

with each of these distributors and pharmacies to distribute Zembrace and Tosymra in the U.S., they may not perform as agreed or they

may terminate their agreements with us.

Also, we may need to enter into agreements with additional distributors or pharmacies, and there

is no guarantee that we will be able to do so on commercially reasonable terms or at all.

In the event we are unable to maintain, or expand,

if needed, our commercial team, including our U.S.

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

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

Tosymra may not be profitable.

We have a history of operating losses

and expect to incur losses for the foreseeable future.

We may never achieve profitability.

We are focused on product

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

We have incurred losses in each

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

These operating losses

have adversely affected and are likely to continue to adversely affect our working capital, total assets and shareholders’

We and our prospects

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

evolving markets.

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

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

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

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

The process of developing

our products requires significant clinical, nonclinical and CMC development, laboratory testing and clinical studies.

commercialization of our product candidates will require that we obtain necessary regulatory approvals and establish sales, marketing

and manufacturing capabilities, either through internal hiring or through contractual relationships with others.

We expect to incur

substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including

costs associated with conducting preclinical and nonclinical testing and clinical studies, and regulatory compliance activities.

We expect to incur

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

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

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

We have two products that have generated

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

exceed expenses in the near future.

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

successful completion of the development of our product candidates;

obtaining necessary regulatory approvals from the FDA;

manufacturing, sales, and marketing arrangements with third parties;

successfully commercializing our products;

establishing a

favorable competitive position;

and raising sufficient funds to finance our activities.

Many of these factors will depend on circumstances

beyond our control.

We might not succeed at any of these undertakings.

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

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

We expect a number of factors to

cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

We have not yet obtained regulatory approvals for TNX-102

SL or any of our other product candidates.

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

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

Our financial condition has varied significantly in

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

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

annual report and also include, among other things:

our ability to obtain additional funding to develop our product candidates;

market acceptance of our product candidates;

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

our ability to obtain and maintain regulatory approval for our product

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

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

the success of our clinical studies through all phases of clinical

development, including studies of our most advanced product candidate, TNX-102 SL for FM and potentially other CNS

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

potential nonclinical toxicity and/or side effects of our product candidates that could delay or prevent commercialization, limit the indications for any approved drug, require the establishment of REMS, or cause an approved drug to be taken off the market;

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

competition from existing products or new products that may emerge;

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

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

potential product liability claims;

Accordingly, the results

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

Uncertainty in Government Funding and

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

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

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

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

While we have secured certain DoD and NIH funding

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

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

projects may be delayed, reduced, or denied altogether.

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

and operational plans.

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

slowed or discontinued.

We are exposed to cybersecurity and

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

We face risks of cyber-attacks,

computer hacks, theft, viruses, malicious software, phishing, employee error, denial-of-service attacks and other security breaches

that could jeopardize the performance of our software and expose us to financial and reputational harm.

Any of these occurrences

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

Such harm could be in the form of theft of

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

In some cases, we rely on the safeguards

put in place by third parties to protect against security threats.

These third parties, including vendors that provide products

and services for our operations, could also be a source of security risk to us in the event of a failure or a security incident

affecting their own security systems and infrastructure.

Our network of partners could also be a source of vulnerability to the

extent their applications interface with ours, whether unintentionally or through a malicious backdoor.

We do not review the software

code included in third-party integrations in all instances.

Because the techniques used to obtain unauthorized access or to sabotage

systems change frequently and generally are not recognized until launched against a target, we or these third parties may be unable

to anticipate these techniques or to implement adequate preventative measures.

We have internal controls designed to prevent cyber-related

frauds related to authorizing the transfer of funds, but such internal controls may not be adequate.

With the increasing frequency

of cyber-related frauds to obtain inappropriate payments and other threats related to cyber-attacks, we may find it necessary to

expend resources to remediate cyber-related incidents or to enhance and strengthen our cybersecurity.

Our remediation efforts may

not be successful and could result in interruptions, delays or cessation of service.

Although we have insurance coverage for losses

associated with cyber-attacks, as with all insurance policies, there are coverage exclusions and limitations, and our coverage

may not be sufficient to cover all possible claims, and we may still suffer losses that could have a material adverse effect on

our reputation and business.

The increase in remote

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

the possible attack surfaces.

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

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

There can be no assurance

that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented,

complied with or effective in protecting our systems and information.

RISKS RELATED TO PRODUCT DEVELOPMENT,

REGULATORY APPROVAL, MANUFACTURING AND COMMERCILAIZATION

Our product candidates are novel

and still in development.

Our drug development methods may not lead to commercially

viable drugs for any of several reasons.

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

fail to be safe and effective in clinical studies, or we may have inadequate financial or other resources to pursue development efforts

for our drug candidates.

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

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

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

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

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

We are not permitted to market any of our product

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

a foreign regulatory authority.

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

The success of our business depends on

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

Any projected sales or future revenue

predictions are predicated upon FDA approval and market acceptance.

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

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

To obtain revenues

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

approval for, manufacturing and marketing drugs with commercial potential.

We may never succeed in these activities, and we may

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

Successful development of our products

is uncertain.

Our development of

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

products, including:

delays in product development, clinical testing, or manufacturing;

unplanned expenditures in product development,

clinical testing, or manufacturing;

failure to receive regulatory approvals;

emergence of superior or equivalent products;

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

and failure to achieve market acceptance.

Because of these risks,

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

If a significant portion of these development

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

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

If preclinical and nonclinical testing or clinical

studies for our product candidates are unsuccessful or delayed, we will be unable to meet our anticipated development and commercialization

We rely and expect to continue

to rely on third parties, including contract research organizations, or CROs, and outside consultants, to conduct, supervise or monitor

some or all aspects of preclinical and nonclinical testing and clinical studies involving our product candidates.

We have less control

over the timing and other aspects of these preclinical and nonclinical testing activities and clinical studies than if we performed the

monitoring and supervision entirely on our own.

Third parties may not perform their responsibilities for our preclinical and nonclinical

testing and clinical studies on our anticipated schedule or, for clinical studies, consistent with a clinical study protocol.

preclinical and nonclinical testing, and clinical studies could significantly increase our product development costs and delay product

commercialization.

In addition, many of the factors that may cause, or lead to, a delay in the clinical studies may also ultimately lead

to denial of regulatory approval of a product candidate.

The commencement of clinical studies

can be delayed for a variety of reasons, including delays in:

demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical study;

reaching agreement on acceptable terms with prospective CROs and study sites;

developing a stable formulation of a product candidate;

manufacturing sufficient quantities of a product candidate;

obtaining institutional review board, or IRB, approval to conduct a clinical study at a prospective site.

Once a clinical study has begun,

it may be delayed, suspended or terminated by us or the FDA or other regulatory authorities due to a number of factors, including:

ongoing discussions with the FDA or other regulatory authorities regarding the scope or design of our clinical studies;

failure to conduct clinical studies in accordance with regulatory requirements;

lower than anticipated recruitment or retention rate of patients in clinical studies;

inspection of the clinical study operations or study sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;

lack of adequate funding to continue clinical studies;

negative results of clinical studies;

investigational drug product out-of-specification;

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

If clinical studies are unsuccessful,

and we are not able to obtain regulatory approvals for our product candidates under development, we will not be able to commercialize

these products, and therefore may not be able to generate sufficient revenues to support our business.

We are subject to extensive and costly

government regulation.

safety and effectiveness of our product candidates, including any significant potential

side effects as compared to alternative products or treatment methods;

timing of market entry as compared to competitive products;

rate of adoption of our products by doctors and nurses;

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

● reimbursement

policies of government and third-party payors;

● effectiveness

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

of our collaborative partners, if any;

● unfavorable

publicity concerning our products or any similar products.

we expect sales of our current product candidates, if approved, to generate product revenues, the failure of these products to

find market acceptance would harm our business and could require us to seek additional financing.

in Government funding and in-kind support policies and programs may adversely affect our business.

in federal funding policies, including the ongoing review of DoD contracts and NIH grants and in-kind support by the current administration,

could impact our financial resources and the progress of research conducted with U.S.-based university collaborators.

have secured certain DoD and NIH funding and NIH in-kind support through Project NextGen, there is no guarantee that such funding

or in-kind support will not be rescinded or otherwise restricted, particularly as the Biomedical Advanced Research and Development

Authority (“BARDA”) has begun withdrawing or terminating some Project NextGen-related awards.

Additionally, DoD,

NIH and BARDA funding for any of our future projects may be delayed, reduced, or denied altogether.

Any such changes could adversely

affect our research programs, financial condition, and operational plans.

Further, certain research projects conducted in collaboration

with U.S.-based university collaborators could be slowed or discontinued.

RELATED TO PRODUCT DEVELOPMENT, REGULATORY APPROVAL, MANUFACTURING AND COMMERCIALIZATION

product candidates are novel and still in development.

drug development activities may not lead to commercially viable drugs for any of several reasons.

For example, we may fail to

identify appropriate targets or compounds, our drug candidates may fail to be safe and effective in clinical studies, or we may

have inadequate financial or other resources to pursue development efforts for our drug candidates.

Our drug candidates will require

significant additional development, clinical studies, regulatory clearances and additional investment by us or our collaborators

before they can be commercialized.

we and our product candidates are subject to extensive regulation by the FDA and comparable regulatory authorities in other countries

governing, among other things, research, testing, clinical studies, manufacturing, labeling, promotion, selling, adverse event

reporting and recordkeeping.

We are not permitted to market any of our product candidates in the United States until we receive

approval of an NDA for a product candidate from the FDA or the equivalent approval from a foreign regulatory authority.

FDA approval is a lengthy, expensive and uncertain process.

The success of our business depends on the successful development,

approval and commercialization of our product candidates.

Any projected sales or future revenue predictions are predicated upon

FDA approval and market acceptance.

If projected sales do not materialize for any reason, it would have a material adverse effect

on our business and our ability to continue operations.

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

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

We may never succeed in these activities,

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

preclinical and nonclinical testing or clinical studies for our product candidates are unsuccessful or delayed, we will be unable

to meet our anticipated development and commercialization timelines.

rely and expect to continue to rely on third parties, including contract research organizations, or CROs, and outside consultants,

to conduct, supervise or monitor some or all aspects of preclinical and nonclinical testing and clinical studies involving our

product candidates.

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

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

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

The FDA regulates the

research, development, preclinical and nonclinical testing and clinical studies, manufacture, safety, effectiveness, record-keeping,

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

We have less control over the timing and other aspects of these preclinical and nonclinical testing activities

and clinical studies than if we performed the monitoring and supervision entirely on our own.

Third parties may not perform their

responsibilities for our preclinical and nonclinical testing and clinical studies on our anticipated schedule or, for clinical

studies, consistent with a clinical study protocol.

Delays in preclinical and nonclinical testing, and clinical studies could

significantly increase our product development costs and delay product commercialization.

In addition, many of the factors that

may cause, or lead to, a delay in the clinical studies may also ultimately lead to denial of regulatory approval of a product

commencement of clinical studies can be delayed for a variety of reasons, including delays in:

● demonstrating

sufficient safety and efficacy to obtain regulatory approval to commence a clinical study;

agreement on acceptable terms with prospective CROs and study sites;

a stable formulation of a product candidate;

● manufacturing

sufficient quantities of a product candidate;

institutional review board, or IRB, approval to conduct a clinical study at a prospective

a clinical study has begun, it may be delayed, suspended or terminated by us or the FDA or other regulatory authorities due to

a number of factors, including:

discussions with the FDA or other regulatory authorities regarding the scope or design

of our clinical studies;

to conduct clinical studies in accordance with regulatory requirements;

than anticipated recruitment or retention rate of patients in clinical studies;

of the clinical study operations or study sites by the FDA or other regulatory authorities

resulting in the imposition of a clinical hold;

of adequate funding to continue clinical studies;

results of clinical studies;

● investigational

drug product out-of-specification;

● nonclinical

or clinical safety observations, including adverse events and SAEs.

clinical studies are unsuccessful, and we are not able to obtain regulatory approvals for our product candidates under development,

we will not be able to commercialize these products, and therefore may not be able to generate sufficient revenues to support

our business.

are subject to extensive and costly government regulation.

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

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

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

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

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

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

The FDA applies the same standards

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

Other products,

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

FDA has conflated the standards for approval of NDAs

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

If products employing our technologies

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

FDA approval for a given product and its uses.

Such foreign regulation may be equally or more demanding than corresponding United

States regulation.

Government regulation

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

The regulatory review

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

expensive, and uncertain.

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

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

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

Securing regulatory approval requires the submission of extensive

preclinical, nonclinical and clinical data and other supporting information for each proposed therapeutic indication in order to

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

The development and approval process takes many years, requires substantial resources, and may never lead to the approval of a

Even if we are able

to obtain regulatory approval for a particular product, the approval may limit the indicated medical uses for the product, may

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

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

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

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

Once obtained, any approvals may

be withdrawn, including, for example, if there is a later discovery of previously unknown problems with the product, such as a

previously unknown safety issue.

If we, our collaborators,

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

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

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

The FDA applies the same

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

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

FDA has conflated the standards for

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

If products employing

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

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

Such foreign regulation may be equally or more demanding than

corresponding United States regulation.

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

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

candidate, is lengthy, expensive, and uncertain.

We or our collaborators must obtain and maintain regulatory authorization to

conduct clinical studies.

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

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

Securing regulatory approval requires

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

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

for each intended use.

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

to the approval of a product.

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

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

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

Material changes to an approved product, such

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

Once obtained,

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

product, such as a previously unknown safety issue.

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

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

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

applications;

warning letters;

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product recalls or seizures;

total or partial suspension

of production;

total or partial

suspension of production;

civil penalties;

withdrawals of previously approved marketing applications or licenses;

recommendations by the FDA

or other regulatory authorities against governmental contracts;

recommendations

by the FDA or other regulatory authorities against governmental contracts;

and/or criminal prosecutions.

We do not have, and may never obtain,

the regulatory approvals we need to market our product candidates.

Following completion

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

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

In responding to an NDA, the

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

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

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

six months for priority applications and ten months for standard

applications.

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

The timing of final FDA review

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

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

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

in any foreign jurisdiction.

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

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

It is possible that

none of our product candidates will be approved for marketing.

Failure to obtain regulatory approvals, or delays in obtaining regulatory

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

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

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

Our product candidates may cause serious

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

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

SAEs or undesirable

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

approved product has been marketed.

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

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

from the FDA and other regulatory authorities.

If any of our other

product candidates cause SAEs or undesirable side effects or suffer from quality control issues:

regulatory authorities may impose a clinical hold or risk evaluation and mitigation strategies, or REMS, which could result in substantial delays, significantly increase the cost of development, and/or adversely impact our ability to continue development of the product;

regulatory authorities may require the addition of statements, specific warnings, or contraindications to the product label, or restrict the product’s indication to a smaller potential treatment population;

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

we may be required to implement

a risk minimization action plan, which could result in substantial cost increases and have a negative impact on our ability to

commercialize the product;

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

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

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

sales of the product may decrease significantly;

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

we may be subject to litigation or product liability claims;

our reputation may suffer.

Any of these events

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

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

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

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

We submitted the NDA for TNX-102 SL for FM under Section 505(b)(2) of the

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

Some of the data required by the FDA for approval

may be related to products already approved by the FDA.

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

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

or unenforceable.

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

an action against us.

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

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

Approval of our product candidates under Section

505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents

to our product candidates.

Alternatively, we may elect to generate sufficient additional clinical data so that we no longer rely on data

which triggers a potential stay of the approval of our product candidates.

Even if no exclusivity periods apply to our applications under

Section 505(b)(2), the FDA has broad discretion to require us to generate additional data on the safety and efficacy of our product candidates

to supplement third-party data on which we may be permitted to rely.

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

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

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

Such additional new research and development activities would be costly

and time-consuming.

The FDA may not approve our NDA based on their review of the submitted data.

If cyclobenzaprine-containing products are withdrawn

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

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

If we are required to generate additional

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

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

Any breakthrough, fast track or orphan

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

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

Additionally, our product candidates may treat

indications that do not qualify for priority review vouchers.

If a product candidate

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

The FDA has broad discretion whether

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

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

Even if we do receive fast track designation or priority review, we

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

The FDA may withdraw

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

Even if approved, our product candidates

will be subject to extensive post-approval regulation.

Once a product is approved,

numerous post-approval requirements apply.

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

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

a product to meet the specifications in the NDA.

Application holders must submit new or supplemental applications and obtain FDA

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

Application holders must also

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

Depending on the circumstances,

failure to meet these post-approval requirements can result in criminal prosecution, fines, injunctions, recall or seizure of products,

total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, or refusal to allow us to enter

into supply contracts, including government contracts.

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

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

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

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

otherwise limit their sales.

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

after the approved product has been marketed.

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

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

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

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

authorities may impose a clinical hold or risk evaluation and mitigation strategies,

or REMS, which could result in substantial delays, significantly increase the cost of

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

authorities may require the addition of statements, specific warnings, or contraindications

to the product label, or restrict the product’s indication to a smaller potential

treatment population;

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

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

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

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

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

may, voluntarily or involuntarily, initiate field alerts for product recall, which may

result in shortages;

of the product may decrease significantly;

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

may be subject to litigation or product liability claims;

reputation may suffer.

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

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

the sale of our products.

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

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

Additionally,

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

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

The FDA has broad

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

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

Even if we do receive fast track designation or priority

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

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

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

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

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

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

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

Application holders must submit new or supplemental

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

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

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

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

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

In addition, even if we comply with FDA

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

product approval.

relationships with customers, physicians and third-party payors is subject to federal and state healthcare fraud and abuse laws,

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but are not limited to:

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,

receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly

or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable

under a federal healthcare program, such as the Medicare and Medicaid programs;

civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws

which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims

for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false

statement to avoid, decrease or conceal an obligation to pay money to the federal government;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes

that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud

any healthcare benefit program, regardless of the payor (e.g., public or private);

as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations,

and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach

Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications to HIPAA, published

in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable

health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses

and health care providers, and their respective business associates;

transparency laws, including the federal Physician Payments Sunshine Act, which is part of PPACA, that require certain manufacturers

of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services,

or CMS, information related to:

(i) payments or other “transfers of value’’ made to physicians and

teaching hospitals;

and (ii) ownership and investment interests held by physicians and their immediate family members;

and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information

related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines

and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by

state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers;

and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from

each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities

from knowingly and willfully soliciting, receiving, offering or paying any remuneration

(including any kickback, bribe or rebate), directly or indirectly, overtly or covertly,

in cash or in kind, in return for the purchase, recommendation, leasing or furnishing

of an item or service reimbursable under a federal healthcare program, such as the Medicare

and Medicaid programs;

civil and criminal false claims laws, including, without limitation, the False Claims

Act, and civil monetary penalty laws which prohibit, among other things, individuals

or entities from knowingly presenting, or causing to be presented, claims for payment

or approval from Medicare, Medicaid or other government payors that are false or fraudulent

or making a false statement to avoid, decrease or conceal an obligation to pay money

to the federal government;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which

created new federal criminal statutes that prohibit a person from knowingly and willfully

executing a scheme or making false or fraudulent statements to defraud any healthcare

benefit program, regardless of the payor (e.g., public or private);

as amended by the Health Information Technology for Economic and Clinical Health Act,

or HITECH, and its implementing regulations, and as amended again by the final HIPAA

omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification

Rules Under HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications

to HIPAA, published in January 2013, which imposes certain requirements relating to the

privacy, security and transmission of individually identifiable health information without

appropriate authorization by entities subject to the rule, such as health plans, health

care clearinghouses and health care providers, and their respective business associates;

additionally, several states have enacted comprehensive privacy and data protection laws

that may apply to health related and consumer data, some of which may not be protected

health information under HIPAA, and other jurisdictions, including, among others the

EU and UK, include strict rules on processing personal data, cross border data transfers,

and data subject rights, and may impose significant fines and corrective orders;

transparency laws, including the federal Physician Payments Sunshine Act, which is part

of PPACA, that require certain manufacturers of drugs, devices, biologics and medical

supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program, with specific exceptions, to report annually to the Centers

for Medicare & Medicaid Services, or CMS, information related to:

(i) payments or

other “transfers of value’’ made to covered recipients, including physicians,

certain non physician practitioners, and teaching hospitals;

and (ii) ownership and investment

interests held by covered recipients and their immediate family members;

and foreign law equivalents of each of the above federal laws, state laws that require

manufacturers to report information related to payments and other transfers of value

to physicians and other healthcare providers or marketing expenditures, and state laws

that require pharmaceutical companies to comply with the pharmaceutical industry’s

voluntary compliance guidelines and the relevant compliance guidance promulgated by the

federal government or to adopt compliance programs as prescribed by state laws and regulations,

or that otherwise restrict payments that may be made to healthcare providers;

and foreign laws that govern the privacy and security of health information in some circumstances,

many of which differ from each other in significant ways and often are not preempted

by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some

of our business activities could be subject to challenge under one or more of such laws.

is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes,

is possible that government authorities will conclude that our business practices may not comply with current or future statutes,

regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

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healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a

corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the

curtailment or restructuring of our operations.

corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment

or restructuring of our operations.

risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted

by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Efforts to ensure

that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant

legal expenses and divert our management’s attention from the operation of our business.

The shifting compliance environment

and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance

and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

by the regulatory authorities or the courts, their provisions are open to a variety of interpretations, and they are subject to

frequent policy changes.

In addition, time-sensitive reporting and complex data aggregation requirements, and the need for

ongoing training and monitoring create a shifting compliance environment.

Efforts to ensure that our business complies with applicable

healthcare laws and regulations involves substantial costs.

Any action against us for violation of these laws, even if we successfully

defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation

of our business.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply

with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that we may run

afoul of one or more of the requirements.

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

operations could materially adversely affect our business.

TNX-102 SL or any of our other product candidates are approved for commercialization outside of the United States, we intend to

enter into agreements with third parties to market them on a worldwide basis or in more limited geographical regions.

that we will be subject to additional risks related to entering into international business relationships, including:

different regulatory

requirements for drug approvals;

reduced protection

for intellectual property rights, including trade secret and patent rights;

unexpected changes

in tariffs, trade barriers and regulatory requirements;

economic weakness,

including inflation, or political instability in particular foreign economies and markets;

compliance with

tax, employment, immigration and labor laws for employees living or traveling abroad;

foreign taxes, including

withholding of payroll taxes;

foreign currency

fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing

business in another country;

workforce uncertainty

in countries where labor unrest is more common than in the United States;

production shortages

resulting from any events affecting raw material supply or manufacturing capabilities abroad;

business interruptions

resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes,

floods and fires;

difficulty in importing

and exporting clinical study materials and study samples.

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

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

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

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

greater commercial potential.

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

or profitable market opportunities.

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

any commercially viable products.

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

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

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

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

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

The biopharmaceutical industry is subject

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

biopharmaceutical

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

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

Changes in the regulatory

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

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

We and our current and future third party collaborators

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

product candidates.

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

process, which is often unpredictable.

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

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

In addition, on June 28, 2024,

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

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

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

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

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

previously prevailed in such cases.

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

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

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

Reductions in staffing and funding at FDA and other federal agencies

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

Under the Federal Food, Drug,

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

In addition, companies developing

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

We and companies

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

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

of our product candidates.

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

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

TONMYA or any of our product candidates is approved for commercialization outside of the United States, we intend to enter into

agreements with third parties to market them on a worldwide basis or in more limited geographical regions.

We expect that we will

be subject to additional risks related to entering into international business relationships, including:

regulatory requirements for drug approvals;

protection for intellectual property rights, including trade secret and patent rights;

changes in tariffs, trade barriers and regulatory requirements;

weakness, including inflation, or political instability in particular foreign economies

with tax, employment, immigration and labor laws for employees living or traveling abroad;

taxes, including withholding of payroll taxes;

currency fluctuations, which could result in increased operating expenses and reduced

revenues, and other obligations incident to doing business in another country;

uncertainty in countries where labor unrest is more common than in the United States;

shortages resulting from any events affecting raw material supply or manufacturing capabilities

interruptions resulting from geopolitical actions, including war and terrorism, or natural

disasters including earthquakes, hurricanes, floods and fires;

in importing and exporting clinical study materials and study samples.

outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

any our products are approved in foreign jurisdictions, we will be subject to pricing and reimbursement policies in those jurisdictions.

In some countries, including countries in the EU, the pricing of prescription pharmaceuticals is subject to governmental control.

In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing

approval for a drug.

To obtain reimbursement or pricing approval in some countries, governmental authorities adopt a number of

different methodologies for assessing drug costs and reimbursement levels.

These include comparisons with currently available

medicines for the same indication and/or cost effectiveness assessments as the basis for negotiation.

If reimbursement of our

drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially

the FDA approves generic products that compete with TONMYA, sales of TONMYA would be adversely affected.

an NDA or marketing authorization application outside the United States is approved, the product covered thereby becomes a “listed

drug” that can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application

in the United States or equivalent marketing authorization application outside the United States.

Agency regulations and other

applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug

to facilitate the approval of an abbreviated new drug application or other application for generic substitutes in the United States

and in nearly every pharmaceutical market around the world.

These manufacturers might only be required to conduct a relatively

inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration

and conditions of use, or labeling, as our product and that the generic product is bioequivalent to our product, meaning it is

absorbed in the body at the same rate and to the same extent as our product.

These generic equivalents, which must meet the same

quality standards as branded pharmaceuticals, would be significantly less costly than our product to bring to market, and companies

that produce generic equivalents are generally able to offer their products at lower prices.

Thus, after the introduction of a

generic competitor, a significant percentage of the sales of any branded product are typically lost to the generic product.

competition from generic equivalents to TONMYA would materially adversely affect our future revenue, profitability and cash flows

and substantially limit our ability to obtain a return on the investments we have made.

biopharmaceutical industry is subject to extensive regulatory obligations and policies that may be subject to change, including

due to judicial challenges.

biopharmaceutical industry is highly regulated and subject to frequent and substantial changes, including as a result of

new judicial or government actions.

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

Changes in the regulatory approval process, or substantial reductions in the personnel who oversee that process, could

affect our ability to obtain regulatory approval for our product candidates or the timeline in which we can obtain that approval.

We and our current and future third-party collaborators rely on government programs and agencies, such as DTRA and the NIH, as

a source of grant funding for scientific research relevant to our product candidates.

Funding from government agencies such as

DTRA and the NIH can fluctuate and is subject to the political process, which is often unpredictable, and the NIH and other research-funding

agencies are revising how they make grant decisions, which may result in fewer grants.

Reductions in government grants to us or

our third-party collaborators may adversely impact our ability to develop our existing product candidates and our ability to identify

new product candidates.

In addition, on June 28, 2024, the U.S.

Supreme Court issued an opinion holding that courts reviewing

agency action pursuant to the Administrative Procedure Act (“APA”) “must exercise their independent judgment”

and “may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The decision could

have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by the FDA

and other agencies with significant oversight and impact of the biopharmaceutical industry, and introduces additional uncertainty

into the regulatory landscape for biopharmaceutical products.

The new framework may increase both the frequency of such challenges

and their odds of success by eliminating one way in which the government previously prevailed in such cases.

As a result, significant

regulatory policies could be subject to increased litigation and judicial scrutiny.

We cannot predict how other future federal

or state legislative or administrative changes relating to healthcare reform or the biopharmaceutical industry, or the regulatory

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

in staffing and funding at FDA and other federal agencies could cause delays in the development and approval of our products.

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

In addition, companies developing new therapies routinely seek and receive guidance from FDA regarding their methods and plans

for developing their products.

We and companies like us may also benefit from FDA-administered programs like orphan drug designation

and expedited development pathways, e.g., breakthrough designation.

Any material reductions in the ability of FDA to perform these

and other functions may delay the development and approval of our product candidates.

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

For example, beginning

in February 2025, the Department of Health and Human Services initiated the termination of a large number of its probationary

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

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

These terminations,

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

Similar results may stem from the recent

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

layoffs and resignations.

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

funding in upcoming budgets.

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

RELATED TO OUR FINANCIAL CONDITION AND CAPITAL REQUIREMENTS;

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

for the foreseeable future.

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

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

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

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

For example, we anticipate that our existing cash and cash equivalents will enable us to maintain our current operations into the first

quarter of 2026, but not beyond.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive

less than the value at which those assets are carried on our consolidated financial statements, and investors will likely lose all or

a part of their investment.

Future reports from our independent registered public accounting firm may also contain statements expressing

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

If we seek additional financing to fund our business activities in

the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources

may be unwilling to provide additional funding on commercially reasonable terms or at all.

In connection with our management’s assessment,

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

paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue

as a going concern.

will need additional capital.

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

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

our operations.

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

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

development and manufacturing facilities.

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

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

We anticipate using our cash and cash equivalents to fund

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

We will, however, need to raise additional funding

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

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

increased sales of our two commercialized products;

commercialization of our product candidates;

the time and costs

involved in obtaining regulatory approval for our product candidates;

costs associated

with protecting our intellectual property rights;

development of marketing

and sales capabilities;

payments received

under future collaborative agreements, if any;

market acceptance

of our products.

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

dilution to our shareholders.

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

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

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

programs, reduce our commercialization efforts or curtail our operations.

In addition, we may be required to obtain funds through

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

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

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

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

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

Such additional sources of

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

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

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

regulatory authorities.

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

and forego attractive business opportunities.

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

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

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

If we are not able

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

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

Larger layoffs may follow, according to a memorandum issued by the Office of Personnel Management in February 2025, and subsequent

actions have, in fact, led to material workforce reductions at FDA.

These terminations may significantly delay and impede our

interactions with FDA, resulting in fewer or delayed meetings, slower feedback on development plans, less guidance issuance, greater

variability in review times and possible delays in inspections or facility clearances.

There are also reports that the United

States federal government intends to request Congress to reduce FDA funding in upcoming budgets.

Such funding cuts may also delay

the development and approval of our products.

Any significant decrease in FDA appropriations, or material reallocation of its

budget or personnel, could impair the FDA’s ability to carry out its existing responsibilities and further slow the development,

review, and potential approval of our product candidates.

We cannot predict the scope, timing, outcome, or combined effect of

these or any future federal actions affecting the FDA, but any significant adverse impact on the agency’s operations could

materially and adversely affect our business and development timelines.

We may never receive

regulatory approval to market our current or future product candidates outside of the U.S.

plan to seek regulatory approval of our current or future product candidates outside of the U.S.

In order to market any product outside

of the U.S., however, we must establish and comply with the numerous and varying safety, efficacy and other regulatory requirements of

other countries.

Approval procedures vary among countries and can involve additional product candidate testing and additional administrative

review periods.

The time required to obtain approvals in other countries might differ substantially from that required to obtain FDA approval.

The marketing approval processes in other countries generally implicate all of the risks detailed above regarding FDA approval in the

as well as other risks.

In particular, in many countries outside of the U.S., products must receive pricing and reimbursement approval

before the product can be commercialized.

Obtaining this approval can result in substantial delays in bringing products to market in such

Marketing approval in one country does not ensure marketing approval in another, but a failure or delay in obtaining marketing

approval in one country may have a negative effect on the regulatory process in others.

Failure to obtain marketing approval in other

countries or any delay or other setback in obtaining such approval would impair our ability to market our current or future product candidates

in such foreign markets.

Any such impairment would reduce the size of our potential market, which could have a material adverse impact

on our business, results of operations and prospects.

Our future growth

may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other

risks and uncertainties that could materially adversely affect our business.

We are not permitted

to market or promote any of our current or future product candidates before we receive regulatory approval from the applicable regulatory

authority in that foreign market, and we may never receive such regulatory approval for any of our current or future product candidates.

To obtain separate regulatory approval in many other countries we must comply with numerous and varying regulatory requirements of such

countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution

of our current or future product candidates, and we cannot predict success in these jurisdictions.

If we obtain approval of our current

or future product candidates and ultimately commercialize our current or future product candidates in foreign markets, we would be subject

to additional risks and uncertainties, including:

differing regulatory requirements in foreign countries, such that obtaining regulatory approvals outside of the U.S.

may take longer and be more costly than obtaining approval in the U.S.;

our customers’ ability to obtain reimbursement for our current or future product candidates in foreign markets;

the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;

different medical practices and customs in foreign countries affecting acceptance in the marketplace;

import or export licensing requirements;

longer accounts receivable collection times;

longer lead times for shipping;

language barriers for technical training;

reduced protection of intellectual property rights in some foreign countries;

the existence of additional potentially relevant third-party intellectual property rights;

economic weakness, including inflation, or political instability in particular foreign economies and markets;

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

foreign taxes, including withholding of payroll taxes;

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

difficulties staffing and managing foreign operations;

workforce uncertainty in countries where labor unrest is more common than in the U.S.;

potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations;

the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

business interruptions resulting from geo-political actions, including war and terrorism.

Foreign sales of our

current or future product candidates could also be adversely affected by the imposition of governmental controls, political and economic

instability, trade restrictions and changes in tariffs (including tariffs that have been or may in the future be imposed by the United

States or other countries).

may not be market interest in TNX-801.

government is the only market for most medical countermeasures.

This is because unlike other drugs and vaccines, these products

are not sold to doctors, hospitals, or pharmacies.

The BioShield Special Reserve Fund, or SRF, has been the sole medical countermeasures

market for the last decade.

The SRF is now appropriated annually and has not kept pace with the need for purchasing products ready

for stockpiling.

As such, even if TNX-801 were to receive FDA licensure, the

commercial success of TNX-801 remains uncertain.

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

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

disclosure or export.

research and development of synthetic poxviruses is dedicated not only to creating tools that better protect public health but

also to safeguarding any information with broad, dual-use potential that could be inappropriately applied.

“Dual use research”

is research conducted for legitimate purposes that generates knowledge, information, technologies, and/or products that can be

reasonably anticipated to provide knowledge, information, products, or technologies that could be directly misapplied to pose

a significant threat to public health, agricultural crops, or national security.

Because variola, the agent that causes smallpox,

is a pox virus, the technology we created could be considered dual use and could be subject to export control, for example under

the Wassenaar Arrangement.

Further, if federal authorities determine that our research is subject to institutional oversight,

we will need to implement a risk-management plan developed in collaboration with the institutional review entity.

Failure to comply

with the plan may result in suspension, limitation, or termination of federal funding or loss of future federal funding opportunities

for any of our research.

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

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approval from the FDA.

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

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

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

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

Even if our products are successfully developed and approved for use by all governing regulatory bodies,

there can be no assurance that physicians and patients will accept our product(s) as a treatment of choice.

Additionally,

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Periods of non-patent exclusivity for new versions of existing

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

drugs such as TONMYA, can extend up to three and one-half years.

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

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

Although we have two approved products on the market, we do not expect revenues from product sales to exceed expenses in the foreseeable future, if at all.

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

revenues in the second half of 2023.

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

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

Outbreaks of communicable diseases may materially

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

We may face risks related to health

epidemics or outbreaks of communicable diseases.

The outbreak of such communicable diseases, such as COVID-19, has and may result in future

widespread health crisis that adversely affect general commercial activity and the economies and financial markets of many countries.

An outbreak of communicable diseases, or the perception that such an outbreak could occur, and the measures taken by the governments of

countries affected could adversely affect our business, financial condition or results of operations.

For example, an outbreak could significantly

disrupt our business by limiting our ability to travel or ship materials within or outside of an affected country and forcing temporary

closure of facilities or service providers that we rely upon.

An outbreak could also impact our ability to conduct our ongoing multicenter

clinical trials if trial participant attendance at requisite study visits is substantially reduced and if a significant percentage of

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

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

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

RELATED TO OUR INTELLECTUAL PROPERTY RIGHTS AND REGULATORY EXCLUSIVITY

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using our technologies and patents.

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

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

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

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and regulatory review of a potential product.

While extensions of patent term due to regulatory delays may be available, it is

While extensions of patent terms due to regulatory delays may be available, it is

possible that, before any of our product candidates can be commercialized, any related patent, even with an extension, may expire

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substantial risk that such protections will prove inadequate.

We are dependent on license relationships

with third parties for certain of our drug development programs.

that license technologies to us that we use in our research and development programs may require us to achieve milestones or devote minimum

amounts of resources to develop products using those technologies.

They may also require us to make significant royalty and milestone

payments, including a percentage of any sublicensing income, as well as payments to reimburse them for patent costs.

The number and variety

of our research and development programs require us to establish priorities and to allocate available resources among competing programs.

From time to time, we may choose to slow down or cease our efforts on particular products.

If in doing so we fail to fully perform our

obligations under a license, the licensor can terminate the license or permit our competitors to use the technology.

Termination of these

licenses or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less

favorable terms.

Moreover, we may lose our right to market and sell any products based on the licensed technology.

The occurrence of

such events could materially harm our business.

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

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in the European Patent Office and inter partes review and post-grant review proceedings in the PTO.

rate of these administrative challenges to patent validity in the United States is higher than it is for validity challenges in

The success rate of

these administrative challenges to patent validity in the United States is higher than it is for validity challenges in litigation.

or derivation proceedings brought before the PTO may be necessary to determine priority of invention with respect to innovations

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our claims in unamended form;

Opponent has appealed that decision in the ’234 Opposition and we expect the opponents to

appeal the decisions in the ’992 and ’245 oppositions), there are no unresolved communications, allegations, complaints

or threats of litigation related to the possibility that our patents are invalid or unenforceable.

Any litigation or claims against

us, whether or not merited, may result in substantial costs, place a significant strain on our financial resources, divert the

attention of management and harm our reputation.

An adverse decision in litigation or administrative proceedings could result

in inadequate protection for our product candidates and/or reduce the value of any license agreements we have with third parties.

Opponent did not appeal those decisions) and the opposition to European Patent 2,501,234 (the Opposition

Division upheld the patent in unamended form;

on appeal the Technical Board reversed and held the patent invalid, no appeal may

be had from that decision), there are no unresolved communications, allegations, complaints or threats of litigation related to

the possibility that our patents are invalid or unenforceable.

Any litigation or claims against us, whether or not merited, may

result in substantial costs, place a significant strain on our financial resources, divert the attention of management and harm

our reputation.

An adverse decision in litigation or administrative proceedings could result in inadequate protection for our

product candidates and/or reduce the value of any license agreements we have with third parties.

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

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of insiders, or via more indirect routes.

GENERAL COMPANY-RELATED RISKS

We may be unable to protect the confidentiality

of our trade secrets, thus harming our business and competitive position.

We rely upon trade secrets,

including unpatented know-how, technology and other proprietary information, to develop and maintain our competitive position, which we

seek to protect, in part, by confidentiality agreements with our employees and our collaborators and consultants.

We also have agreements

with our employees that obligate them to assign their inventions to us.

However, it is possible that technology relevant to our business

will be independently developed by a person that is not a party to such an agreement.

Furthermore, if the employees, consultants or collaborators

that are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach

or violation, and we could lose our trade secrets through such breaches or violations.

Further, our trade secrets could be disclosed,

misappropriated or otherwise become known or be independently discovered by our competitors.

In addition, intellectual property laws in

foreign countries may not protect our intellectual property to the same extent as the laws of the United States.

If our trade secrets

are disclosed or misappropriated, it would harm our ability to protect our rights and have a material adverse effect on our business.

Third parties may assert

that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We employ individuals who

were previously employed at universities or other diagnostic or biopharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work

for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used

or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties.

Litigation may be necessary to defend against these claims.

If we fail in defending any such claims, in addition to paying monetary damages,

we may lose valuable intellectual property rights or personnel.

Even if we are successful in defending against such claims, litigation

could result in substantial costs and be a distraction to management and other employees.

We may need to license

intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

A third party may hold intellectual

property, including patent rights, that are important or necessary to the development of our drug candidates.

It may be necessary for

us to use the patented or proprietary technology of a third party to commercialize our own technology or drug candidates, in which case

we would be required to obtain a license from such third party.

A license to such intellectual property may not be available or may not

be available on commercially reasonable terms, which could have a material adverse effect on our business and financial condition.

COMPANY-RELATED RISKS

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

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of our products, if approved, producing additional losses and depriving us of potential product revenue.

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

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

addition, we currently rely on foreign CROs and CMOs, and will likely continue to rely on foreign CROs and CMOs in the future.

Foreign CMOs may be subject to U.S.

legislation, including the proposed BIOSECURE Act,

sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material

available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments

from governments to purchase our potential therapies.

example, the biopharmaceutical industry in China is strictly regulated by the Chinese government.

Changes to Chinese regulations

or government policies affecting biopharmaceutical companies are unpredictable and may have a material adverse effect on our collaborators

in China which could have an adverse effect on our business, financial condition, results of operations and prospects.

changes in China’s public health, economic, political, and social conditions and the uncertainty around China’s relationship

with other governments, such as the United States and the U.K., could also negatively impact our ability to manufacture our product

candidates for our planned clinical trials or have an adverse effect on our ability to secure government funding, which could

adversely affect our financial condition and cause us to delay our clinical development programs.

legislation, including the proposed BIOSECURE Act, sanctions, trade restrictions and other

foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement

or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase

our potential therapies.

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

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

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

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

greater commercial potential.

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

or profitable market opportunities.

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

any commercially viable products.

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

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

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

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

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

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

we advance our product candidates through preclinical and nonclinical testing and clinical studies, and develop new product candidates,

buildout of our research and development and manufacturing facilities, and develop our commercialization organization, we will

need to increase our product development, scientific, regulatory and compliance and administrative headcount to manage these programs.

In addition, to meet our obligations as a public company, we will need to increase our general and administrative capabilities.

we increase our commercialization efforts for TONMYA and advance our product candidates through preclinical and nonclinical testing

and clinical studies, and develop new product candidates, and buildout of our research and development and manufacturing facilities,

we will need to increase our commercial, administrative, product development, scientific, regulatory and compliance headcount

to manage these programs.

In addition, to meet our obligations as a public company, we will need to increase our general and administrative

capabilities.

Our management, personnel and systems currently in place may not be adequate to support this future growth.

Our need to effectively

manage our operations, growth and various projects requires that we:

successfully attract

and recruit new employees with the expertise and experience we will require;

manage our clinical

programs effectively, which we anticipate being conducted at numerous clinical sites;

maintain a marketing,

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

continue to improve

our operational, manufacturing, quality assurance, financial and management controls, reporting systems and procedures.

need to effectively manage our operations, growth and various projects requires that we:

● successfully

attract and recruit new employees with the expertise and experience we will require;

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

our clinical programs effectively, which we anticipate being conducted at numerous clinical

to improve our operational, manufacturing, quality assurance, financial and management

controls, reporting systems and procedures.

we are unable to successfully manage this growth and increased complexity of operations, our business may be adversely affected.

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

Our success depends to a significant extent upon the continued services

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

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

Seth Lederman, our President and Chief Executive Officer

Sullivan, our Chief Medical Officer.

overseen Tonix Pharmaceuticals, Inc., a wholly-owned subsidiary, since inception and provides leadership for our growth and operations

strategy as well as being an inventor on many of our patents.

Sullivan has served as our Chief Medical Officer since 2014 and directed

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

Lederman has overseen Tonix Pharmaceuticals, Inc., a wholly-owned

subsidiary, since inception and provides leadership for our growth and operations strategy as well as being an inventor on many

of our patents.

Sullivan has served as our Chief Medical Officer since 2014 and directed the fibromyalgia program’s

Phase 2 AtEase study, Phase 3 RELIEF study, the Phase 3 RALLY study and the Phase 3 RESILIENT study.

Loss of the services of Drs.

Lederman or Sullivan would have a material adverse effect on our growth, revenues, and prospective business.

The loss of any of our key personnel, or the inability to attract and retain qualified personnel, may significantly delay or prevent the

achievement of our research, development or business objectives and could materially adversely affect our business, financial condition

and results of operations.

The loss of any of

our key personnel, or the inability to attract and retain qualified personnel, may significantly delay or prevent the achievement

of our research, development or business objectives and could materially adversely affect our business, financial condition and

results of operations.

employment agreement we enter into will not ensure the retention of the employee who is a party to the agreement.

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

time we will need to hire additional qualified personnel with expertise in drug development, product registration, clinical, preclinical

and nonclinical research, quality compliance, government regulation, formulation and manufacturing, financial matters and sales

and marketing.

We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research

institutions.

Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be

Attracting and retaining qualified personnel will be critical to our success.

time we will need to hire additional qualified personnel with expertise in sales and marketing, drug development, product registration,

clinical, preclinical and nonclinical research, quality compliance, government regulation, formulation and manufacturing and financial

We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions.

Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be successful.

and retaining qualified personnel will be critical to our success.

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

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acceptable cost, clinical development and commercialization of our products and product candidates could be delayed, prevented

We rely on CMOs to manufacture all of our product candidates in clinical

studies and our commercial products.

Completion of our clinical studies and commercialization of our products requires the manufacture

of a sufficient supply of our products.

We have contracted with outside sources to manufacture our development compounds and commercial

If, for any reason, we become unable to rely on our current manufacturing sources, either for clinical studies or for commercial

quantities, then we would need to identify and contract with additional or replacement third-party manufacturers.

rely on CMOs to manufacture all of our product candidates in clinical studies and our commercial products.

Completion of our clinical

studies and commercialization of our products requires the manufacture of a sufficient supply of our products.

We have contracted

with outside sources to manufacture our development compounds and commercial products.

If, for any reason, we become unable to

rely on our current manufacturing sources, either for clinical studies or for commercial quantities, then we would need to identify

and contract with additional or replacement third-party manufacturers.

believe that there are a variety of manufacturers that we may be able to retain to produce these products.

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We may be in competition

with other companies for access to these manufacturers’ facilities and may be subject to delays in manufacture if the manufacturers

give other clients higher priority than they give to us.

If we are unable to secure and maintain third-party manufacturing capacity,

the development and sales of our products and our financial performance may be materially affected.

with other companies for access to these manufacturers’ facilities and may be subject to delays in manufacturing if the

manufacturers give other clients higher priority than they give to us.

If we are unable to secure and maintain third-party manufacturing

capacity, the development and sales of our products and our financial performance may be materially affected.

Manufacturers

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restrictions and criminal prosecutions.

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

and harm our business.

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

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

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

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

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

These third parties,

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

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

Our network of partners could

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

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

Because the techniques used

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

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

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

controls may not be adequate.

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

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

and strengthen our cybersecurity.

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

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

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

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

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

compromise and the possible attack surfaces.

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

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

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

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

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

Global conditions, dislocations in the financial markets, or inflation

could adversely impact our business.

In addition, the global macroeconomic environment has been and may continue to be negatively affected

by, among other things, instability in global economic markets, increased U.S.

trade tariffs and trade disputes with other countries,

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

foreign governmental debt concerns.

Such challenges have caused, and may continue to cause, uncertainty and instability in local economies

and in global financial markets, which may adversely affect our business.

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

In addition, the global macroeconomic

environment has been and may continue to be negatively affected by, among other things, instability in global economic markets,

increased U.S.

trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses,

instability in the geopolitical environment, political tensions, and foreign governmental debt concerns.

Such challenges have

caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets, which may adversely

affect our business.

internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which

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product candidates may face competition sooner than expected.

We intend to seek data exclusivity or market exclusivity for our product

candidates provided under the FDCA and similar laws in other countries.

We believe that TNX-801 could qualify for 12 years of data exclusivity

under the Biologics Price Competition and Innovation Act of 2009, or BPCIA.

Under the BPCIA, an application for a biosimilar product or

BLA cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand product identified

as the reference product is approved under a BLA.

The BPCIA provides an abbreviated pathway for the approval of biosimilar and interchangeable

biological products.

The new abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics,

including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product.

intend to seek data exclusivity or market exclusivity for our product candidates provided under the FDCA and similar laws in other

We believe that TNX-801 could qualify for 12 years of data exclusivity under the Biologics Price Competition and Innovation

Act of 2009, or BPCIA.

Under the BPCIA, an application for a biosimilar product or BLA cannot be submitted to the FDA until four

years, or if approved by the FDA, until 12 years, after the original brand product identified as the reference product is approved

The BPCIA provides an abbreviated pathway for the approval of biosimilar and interchangeable biological products.

The new abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including

the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product.

If the BPCIA is repealed or amended to shorten this exclusivity period, potentially creating the opportunity for biosimilar competition

sooner than anticipated after the expiration of our patent protection, or business may be harmed.

Moreover, the extent to which a biosimilar,

once approved, will be substituted for any reference product in a way that is similar to traditional generic substitution for non-biological

products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Our product candidates that are not, or are not considered, biologics that

would qualify for exclusivity under the BPCIA may be eligible for market exclusivity as drugs under the FDCA.

The FDCA provides a five-year

period of non-patent marketing exclusivity within the U.S.

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

A drug is an NCE if the FDA has not previously approved any other new drug containing the same active moiety, which

is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period, the FDA may not accept for review

an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA, submitted by another company for another version of such drug where

the applicant does not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted

after four years if it contains a certification of patent invalidity or non-infringement.

Moreover, the extent to which

a biosimilar, once approved, will be substituted for any reference product in a way that is similar to traditional generic substitution

for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still

product candidates that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible

for market exclusivity as drugs under the FDCA.

The FDCA provides a five-year period of non-patent marketing exclusivity within

to the first applicant to gain approval of an NDA for a new chemical entity (“NCE”).

A drug is an NCE if

the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible

for the action of the drug substance.

During the exclusivity period, the FDA may not accept for review an abbreviated new drug

application, or ANDA, or a 505(b)(2) NDA, submitted by another company for another version of such drug where the applicant does

not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after

four years if it contains a certification of patent invalidity or non-infringement.

The FDCA also provides three years of marketing

exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies,

that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example,

for new indications, dosages, or strengths of an existing drug.

This three-year exclusivity covers only the conditions associated with

the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent.

if, as we expect, our product candidates are considered to be reference products eligible for 12 years of exclusivity under the

BPCIA or five years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full

BLA or full NDA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled

clinical trials to demonstrate the safety, purity and potency of the products.

Moreover, an amendment or repeal of the BPCIA could

result in a shorter exclusivity period for our product candidates, which could have a material adverse effect on our business.

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

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

strategy for our marketed products and our product candidates is to control, directly or through contracted third parties, all

or most aspects of the product development process, including marketing, sales and distribution.

are in the process of establishing sales, marketing or distribution capabilities.

In order to successfully generate and increase

sales of our marketed products or any of our product candidates that receive regulatory approval, we must either acquire or develop

an internal marketing and sales force with technical expertise and with supporting distribution capabilities or make arrangements

with third parties to perform these services for us.

The acquisition or development of a sales and distribution infrastructure,

which we have commenced, requires substantial resources, which may divert the attention of our management and key personnel and

defer our product development efforts.

the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of

These efforts may not be successful.

If we fail to develop sales, marketing and distribution channels, or enter into arrangements

with third parties, we will experience delays in product sales and incur increased costs.

of pharmaceutical products largely depend on the reimbursement of patients’ medical expenses by government health care programs

and private health insurers.

Without the financial support of the government or third-party payors, the market for our products

will be limited.

These third-party payors are increasingly challenging the price and examining the cost effectiveness of medical

products and services.

Recent proposals to change the health care system in the United States have included measures that would

limit or eliminate payments for medical products and services or subject the pricing of medical treatment products to government

Significant uncertainty exists as to the reimbursement status of newly approved health care products.

Third-party payors

may not reimburse sales of our products or enable our collaborators to sell them at profitable prices.

business strategy might involve out-licensing product candidates to or collaborating with larger firms with experience in marketing

and selling pharmaceutical products.

There can be no assurance that we will be able to successfully establish marketing, sales,

or distribution relationships;

that such relationships, if established, will be successful;

or that we will be successful in gaining

market acceptance for our products.

To the extent that we enter into any marketing, sales, or distribution arrangements with third

parties, our product revenues will be lower than if we marketed and sold our products directly, and any revenues we receive will

depend upon the efforts of such third-parties.

If we are unable to establish such third-party sales and marketing relationships,

or choose not to do so, we will have to establish and rely on our own in-house capabilities.

We, as a company, have limited experience in marketing or selling pharmaceutical

products and currently have a small sales, marketing, and distribution infrastructure.

To market any of our products directly, we would

need to continue to develop a marketing, sales, and distribution force that both has technical expertise and the ability to support a

distribution capability.

The establishment of a marketing, sales, and distribution capability would significantly increase our costs,

possibly requiring substantial additional capital.

In addition, there is intense competition for proficient sales and marketing personnel,

and we may not be able to attract individuals who have the qualifications necessary to market, sell, and distribute our products.

can be no assurance that we will be able to establish internal marketing, sales, or distribution capabilities.

If we are unable to, or

choose not to establish these capabilities, or if the capabilities we establish are not sufficient to meet our needs, we will be required

to establish collaborative marketing, sales, or distribution relationships with third parties.

exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability

studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application,

for example, for new indications, dosages, or strengths of an existing drug.

This three-year exclusivity covers only the conditions

associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original

active agent.

if our product candidates are considered to be reference products eligible for 12 years of exclusivity under the BPCIA or five

years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full BLA or full NDA

for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials

to demonstrate the safety, purity and potency of the products.

Moreover, an amendment or repeal of the BPCIA could result in a

shorter exclusivity period for our product candidates, which could have a material adverse effect on our business.

we are unable to establish effective marketing, sales and distribution capabilities or enter into agreements with third parties

to market, sell and distribute our products, we may be unable to generate significant product awareness and that lack of awareness

may limit the product revenues that we generate.

recently expanded our commercial infrastructure for the marketing, sale, and distribution of pharmaceutical products, which includes

a field-based sales force conducted through a combination of internal commercial personnel and contracted sales representatives

to promote our commercial stage products throughout the United States.

This effort requires additional compliance with a range

of federal and state laws.

many of our officers and employees have experience commercializing drug products with prior companies, as an organization we have

limited experience in the marketing, sale, and distribution of pharmaceutical products, and there are significant risks involved

in building, managing and maintaining a commercial infrastructure.

We have to compete with other pharmaceutical and biotechnology

companies to recruit, hire, train, manage, and retain marketing and sales personnel.

In the event we are unable to maintain our

marketing and sales infrastructure, we may not be able to successfully commercialize any of our existing commercial stage products

or future product candidates, which would limit our ability to generate revenue.

Factors that may inhibit our efforts to commercialize

any of our products on our own include:

inability to recruit, train, manage, and retain adequate numbers of effective sales and

marketing personnel;

inability of sales personnel to obtain access to physicians or appropriately persuade

adequate numbers of physicians to prescribe any of our current or future product candidates;

inability to effectively oversee a geographically dispersed sales and marketing team;

application of federal and state drug distribution and supply chain requirements to our

costs associated with training sales and marketing personnel on legal and regulatory

compliance matters and monitoring their actions;

inability to secure adequate or any coverage and reimbursement by government and private

health plans or other payers;

clinical indications and labeled claims for which the product is approved;

● limitations

or warnings, including distribution or use restrictions, contained in the product’s

approved labeling;

distribution and use restrictions imposed by the FDA or to which we agree as part of

a mandatory REMS or voluntary risk management plan;

for sales or marketing personnel who fail to comply with the applicable legal and regulatory

requirements;

lack of complementary products to be offered by sales personnel, which may put us at

a competitive disadvantage relative to companies with more extensive product lines;

costs and expenses associated with creating an independent sales and marketing organization

or engaging a contract sales organization.

additional product candidates are approved, we may incur expenses prior to product launch in expanding our sales force and compliant

marketing and sales infrastructure.

If a commercial launch is delayed as a result of FDA requirements or other reasons, we may

incur these expenses prior to being able to realize any revenue from sales of such product candidate(s).

Furthermore, our sales

force and marketing teams may not be successful in commercializing any of our current or future product candidates.

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

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may not be adequate to cover all liabilities we might incur.

We expanded our insurance coverage to include the sale of our commercial

products Tosymra and Zembrace Symtouch.

We intend to further expand our insurance coverage to include the sale of TNX-102 SL upon

receiving FDA approval for marketing.

If we are unable to obtain insurance at an acceptable cost or otherwise protect against

We expanded our insurance coverage to include the sale of TONMYA

and our migraine products.

However, if we are unable to maintain insurance at an acceptable cost or otherwise protect against

potential product liability claims, we will be exposed to significant liabilities, which may materially and adversely affect our

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insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant uninsured

We carry insurance for most categories of risk that our business

may encounter, however, we may not have adequate levels of coverage.

We currently maintain general liability, clinical study, property,

workers’ compensation, products liability and directors’ and officers’ insurance, along with an umbrella policy, which

collectively costs approximately $1,500,000 per annum.

We cannot provide any assurances that we will be able to maintain existing insurance

at current or adequate levels of coverage.

Any significant uninsured liability may require us to pay substantial amounts, which would

adversely affect our cash position and results of operations.

carry insurance for most categories of risk that our business may encounter, however, we may not have adequate levels of coverage.

We currently maintain general liability, clinical study, property, workers’ compensation, products liability and directors’

and officers’ insurance, along with an umbrella policy, which collectively costs approximately $1,500,000 per annum.

cannot provide any assurances that we will be able to maintain existing insurance at current or adequate levels of coverage.

significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and

results of operations.

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

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our sources of any future revenues.

If we are unsuccessful in obtaining a priority review voucher for material threat

medical countermeasures, the length of the approval process for our TNX-801 vaccine in development to prevent smallpox and mpox will be

longer than the approval process with the priority review voucher.

Section 3086, of the 21 st Century Cures Act, or the Act, is

aimed at “Encouraging Treatments for Agents that Present a National Security Threat.” The Act created a new priority review

voucher program for approved “material threat medical countermeasures.” The Act defines such countermeasures as drug or biologic

products, including vaccines, intended to treat biological, chemical, radiological, or nuclear agents that present a national security

threat or to treat harm from a condition that may be caused by administering a drug or biological product against such an agent.

The Department

of Homeland Security has identified 13 such threats, including anthrax, smallpox, Ebola/Marburg, tularemia, botulinum toxin, and pandemic

influenza, which includes the SARS coronavirus 2 known as SARS-CoV-2.

A priority review voucher can be applied to any other product;

shortens the FDA review timeline for a new application from 10 to 12 months to 6 months.

The recipient of a priority review voucher may

transfer it in some instances for a significant amount of money.

If we are not successful in obtaining a priority review voucher for TNX-801,

we would not receive the benefit from the voucher.

may not be market interest in TNX-801.

government is the only market for most medical countermeasures.

This is because unlike other drugs and vaccines, these products

are not sold to doctors, hospitals, or pharmacies.

The BioShield Special Reserve Fund, or SRF, has been the sole medical countermeasures

market for the last decade.

The SRF is now appropriated annually and has not kept pace with the need for purchasing products ready

for stockpiling.

During 2020, $735 million was appropriated to SRF.

As such, even if TNX-801 were to receive FDA licensure, the

commercial success of TNX-801 remains uncertain.

entities may take actions that directly or indirectly have the effect of limiting opportunities for our vaccine candidates for

government entities, including the U.S.

government, are offering incentives, grants and contracts to encourage additional investment

by commercial organizations into preventative and therapeutic agents against COVID-19, which may have the effect of increasing

the number of competitors and/or providing advantages to competitors.

Accordingly, there can be no assurance that we will be able

to successfully establish a competitive market share if we ultimately receive regulatory approval for our vaccines as a vaccine

for COVID-19.

COVID-19 vaccines may also be subject to government pricing controls, which could adversely affect the profitability

of any COVID-19 vaccine we are able to develop and commercialize.

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

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

disclosure or export.

research and development of synthetic poxviruses is dedicated not only to creating tools that better protect public health but

also to safeguarding any information with broad, dual-use potential that could be inappropriately applied.

“Dual use research”

is research conducted for legitimate purposes that generates knowledge, information, technologies, and/or products that can be

reasonably anticipated to provide knowledge, information, products, or technologies that could be directly misapplied to pose

a significant threat to public health, agricultural crops, or national security.

Because variola, the agent that causes smallpox,

is a pox virus, the technology we created could be considered dual use and could be subject to export control, for example under

the Wassenaar Arrangement.

Further, if federal authorities determine that our research is subject to institutional oversight,

we will need to implement a risk-management plan developed in collaboration with the institutional review entity.

Failure to comply

with the plan may result in suspension, limitation, or termination of federal funding or loss of future federal funding opportunities

for any of our research.

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

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

Developing our TNX-1800 and TNX-801 vaccine candidates each require testing

of challenges with rabbitpox, vaccinia mpox or SARS-CoV-2 viruses under controlled experimental conditions.

The testing of TNX-1800 and

TNX-801 may carry risk of infection and harm to individuals.

In addition, our TNX-1800 and TNX-801 vaccine candidates are both live

forms of the horsepox.

We have initiated vaccine-manufacturing activities to support further nonclinical testing of TNX-801.

The production

and storage of the synthesized horsepox virus stock and, once initiated, TNX-1800 virus stock, may carry risk of infection and harm to

Any such infection could expose us to product and general liability claims, and may carry risk of infection and harm to individuals.

our TNX-801 vaccine candidate requires testing of challenges with rabbitpox and vaccinia mpox viruses under controlled experimental

The testing of TNX-801 may carry risk of infection and harm to individuals.

addition, TNX-801 is a live form of the horsepox.

We have initiated vaccine-manufacturing activities to support further nonclinical

testing of TNX-801.

The production and storage of the synthesized horsepox virus stock may carry risk of infection and harm to

Any such infection could expose us to product and general liability claims, and may carry risk of infection and harm

to individuals.

in tax laws could adversely affect our business and financial condition.

legislation continues to evolve globally with new laws and regulations that create uncertainty in the global economy.

on July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law,

which includes significant provisions, including tax cut extensions and modifications to the international tax framework.

assessed the impact the OBBBA had on our financial condition, results of operations, cash flows or effective tax rate, and

will continue to evaluate the impact of the legislative changes as additional guidance becomes available.

Uncertainty remains

regarding timing and interpretation by the tax authorities in the affected jurisdictions.

Future tax reform and legislative changes

could have an adverse impact on our future effective tax rate, tax liabilities, and cash tax.

RELATED TO OUR STOCK

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of shares of our common stock.

We may not be able to maintain compliance

with the Listing Rules of the NASDAQ Stock Exchange.

There can be no assurance that in the future we will be able to maintain

compliance with the Nasdaq Listing Rules, including the minimum bid price requirement and other applicable corporate governance requirements.

If we fail to maintain compliance with the minimum bid requirement or to meet the other applicable continued listing requirements for

the NASDAQ Global Select Market in the future and NASDAQ determines to delist our common stock, the delisting could adversely affect the

market price and liquidity of our common stock and reduce our ability to raise additional capital.

In addition, if our common stock is

delisted from NASDAQ and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the

requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection

with any trade involving a stock defined as a “penny stock” (generally, any equity security not listed on a national securities

exchange or quoted on NASDAQ that has a market price of less than $5.00 per share, subject to certain exceptions).

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

our common stock is listed on the NASDAQ Capital Market, the market for our shares has demonstrated varying levels of trading

Furthermore, the current level of trading may not be sustained in the future.

The lack of an active market for our common

stock may impair investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider

reasonable, may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations

by selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration.

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

market price of our common stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may

be beyond our control.

Although our common stock is listed on the NASDAQ Global Select Market,

the market for our shares has demonstrated varying levels of trading activity.

Furthermore, the current level of trading may not be sustained

in the future.

The lack of an active market for our common stock may impair investors’ ability to sell their shares at the time

they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their shares and may impair our

ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional intellectual

property assets by using our shares as consideration.

market price of our common stock has been extremely volatile in the past and may be volatile in the future due to numerous circumstances

beyond our control.

market price of our common stock has fluctuated, and may fluctuate, widely, due to many factors, some of which may be beyond our

These factors include, without limitation:

“short squeezes”;

“short sellers”;

comments by securities analysts or other third

parties, including blogs, articles, message boards and social and other media;

large stockholders exiting their position in

our common stock or an increase or decrease in the short interest in our common stock;

actual or anticipated fluctuations in our financial

and operating results;

the timing and allocations of new product candidates;

public perception of our product candidates

and competitive products;

changes in financial estimates or recommendations

by securities analysts;

changes in the reimbursement policies of third

party insurance companies or government agencies;

overall general market fluctuations.

by securities analysts or other third parties, including blogs, articles, message boards

and social and other media;

stockholders exiting their position in our common stock or an increase or decrease in

the short interest in our common stock;

or anticipated fluctuations in our financial and operating results;

timing and allocations of new product candidates;

perception of our product candidates and competitive products;

in financial estimates or recommendations by securities analysts;

in the reimbursement policies of third party insurance companies or government agencies;

general market fluctuations.

markets in general and our stock price in particular have experienced extreme price and volume fluctuations that have often been

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significant portion of their investment.

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

we are unable to maintain compliance with the Minimum Bid Price or other listing requirements, we could lose eligibility for continued

listing on the Nasdaq Capital Market or any comparable trading market.

In such event:

We may have to pursue

trading on a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets.”

Shares of our common

stock could be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as

quickly and as inexpensively as they have done historically.

If our stock is traded as a “penny stock,” transactions

in our stock would be more difficult and cumbersome.

We may be unable

to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive

investments with higher associated risks, such that existing or prospective institutional investors may be less interested

in, or prohibited from, investing in our common stock.

This may also cause the market price of our common stock to decline.

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

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There is no guarantee that our common stock will appreciate in value.

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

quarterly operating results are likely to fluctuate in the future.

These fluctuations could cause our stock price to decline.

The nature of our business involves variable factors, such as the timing of the research, development and regulatory pathways

of our product candidates, which could cause our operating results to fluctuate.

to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating

results are not a good indication of our future performance.

rights of the holders of common stock may be impaired by the potential issuance of preferred stock.

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among others, which may inhibit an acquisition of our company by a third party:

advance notification

procedures for matters to be brought before stockholder meetings

a limitation on

who may call stockholder meetings

a limitation on

the removal of directors

the ability of our

board of directors to issue up to 5,000,000 shares of preferred stock without a stockholder vote

notification procedures for matters to be brought before stockholder meetings

limitation on who may call stockholder meetings

limitation on the removal of directors

ability of our board of directors to issue up to 5,000,000 shares of preferred stock

without a stockholder vote.

are also subject to provisions of Nevada law that prohibit us from engaging in any business combination with any “interested

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the sole and exclusive forum for each of the following:

any derivative action

or proceeding brought in the name or right of the Company or on its behalf,

any action asserting

a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or

the Company’s stockholders,

any action arising

or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles of incorporation

or bylaws, or

any action asserting

a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce

or determine the validity of our articles of incorporation or bylaws.

derivative action or proceeding brought in the name or right of the Company or on its

action asserting a claim for breach of any fiduciary duty owed by any director, officer,

employee or agent of the Company to the Company or the Company’s stockholders,

action arising or asserting a claim arising pursuant to any provision of NRS Chapters

78 or 92A or any provision of our articles of incorporation or bylaws, or

action asserting a claim governed by the internal affairs doctrine, including, without

limitation, any action to interpret, apply, enforce or determine the validity of our

articles of incorporation or bylaws.

the applicability of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum

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

What changed 10-K

Item 1A. Risk Factors