As filed with the Securities and Exchange
Commission on August 11, 2017
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TONIX PHARMACEUTICALS HOLDING CORP.
(Exact name of registrant as specified in
its charter)
Nevada
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26-1434750
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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509 Madison Avenue, Suite 306
New York, New York 10022
(212) 980-9155
(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive offices)
Seth Lederman
Chief Executive Officer
Tonix Pharmaceuticals Holding Corp.
509 Madison Avenue, Suite 306
New York, New York 10022
(212) 980-9155
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
With copies to:
Marc J. Ross, Esq.
James M. Turner, Esq.
Sichenzia Ross Ference Kesner LLP
61 Broadway, 32nd Floor
New York, New York 10006
(212) 930-9700
(212) 930-9725 (fax)
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement.
If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
¨
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if smaller reporting company)
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Smaller reporting company
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x
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Emerging growth company
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If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
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CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
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Amount to be
Registered
(1)
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Proposed Maximum
Offering Price
Per Unit
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Proposed Maximum
Aggregate Offering
Price (2)
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Amount of
Registration
Fee (3)
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Common Stock, $.001 par value per share
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—
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—
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Preferred Stock, $.001 par value per share
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—
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—
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Warrants
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—
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—
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Units (4)
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—
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—
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Total
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N/A
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N/A
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$
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150,000,000
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$
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11,718.04
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(5)
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(1)
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There are being registered under this registration statement such indeterminate number of shares of common stock and preferred stock; such indeterminate number of warrants to purchase common stock, preferred stock, and/or units; and such indeterminate number of units as may be sold by the registrant from time to time, which together shall have an aggregate initial offering price not to exceed $150,000,000. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. The securities registered hereunder also include such indeterminate number of shares of common stock and preferred stock, and warrants as may be issued upon conversion of or exchange for preferred stock, upon exercise of warrants; or pursuant to the anti-dilution provisions of any such securities. In addition, pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the shares being registered hereunder include such indeterminate number of shares of common stock and preferred stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends, or similar transactions.
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(2)
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The proposed maximum offering price per unit will be determined from time to time by the Registrant in connection with, and at the time of, the issuance of the securities and is not specified as to each class of security pursuant to General Instruction II.D. of Form S-3, as amended.
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(3)
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Calculated pursuant to Rule 457(o) under the Securities Act based on the proposed maximum aggregate offering price of all securities listed.
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(4)
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Each unit will represent an interest in two or more other securities, which may or may not be separable from one another.
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(5)
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As discussed below, pursuant to Rule 415(a)(6) of the Securities Act, this Registration Statement includes a total of $48,895,267 aggregate offering price of unsold securities that were previously registered on a registration statement on Form S-3 (Registration No. 333-197824) and for which the registration fee was previously paid. Accordingly, the $11,718.04 registration fee shown above has been calculated based on the proposed maximum offering price of the additional $101,104,733 of securities registered on this Registration Statement.
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Pursuant
to Rule 415(a)(6) of the Securities Act, the securities registered pursuant to this Registration Statement include $48,895,267
aggregate offering price of unsold securities of the registrant previously registered on its Registration Statement on Form S-3
(Registration No. 333-197824), filed on August 1, 2014 and declared effective on August 15, 2014, which the registrant refers
to as the Prior Registration Statement. The previously paid filing fee relating to such unsold securities under the Prior Registration
Statement will continue to be applied to such unsold securities registered in this Registration Statement. To the extent that,
after the filing date hereof and prior to the effectiveness of this Registration Statement, any such unsold securities are sold
pursuant to the Prior Registration Statement, the registrant will identify in a pre-effective amendment to this Registration Statement
the updated amount of unsold securities from the Prior Registration Statement to be included in this Registration Statement pursuant
to Rule 415(a)(6) and the updated amount of new securities to be registered on this Registration Statement. Pursuant to Rule 415(a)(6),
the offering of the unsold securities registered under the Prior Registration Statement, if not previously terminated, will be
deemed terminated as of the date of effectiveness of this Registration Statement.
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
This
registration statement contains:
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a base prospectus, which covers the offering, issuance and sales by us of up to $150,000,000 in the aggregate of the securities identified above from time to time in one or more offerings; and
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a sales agreement prospectus covering the offer, issuance and sale by us of up to a maximum aggregate offering price of up to $9,000,000 of our common stock that may be issued and sold from time to time under a sales agreement with Cowen and Company, LLC (the “Sales Agreement”).
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The
base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base
prospectus will be specified in a prospectus supplement to the base prospectus. The sales agreement prospectus immediately follows
the base prospectus. The $9,000,000 of common stock that may be offered, issued and sold under the sales agreement prospectus is
included in the $150,000,000 of securities that may be offered, issued and sold by us under the base prospectus. Upon termination
of the Sales Agreement, any portion of the $9,000,000 included in the sales agreement prospectus that is not sold pursuant to the
Sales Agreement will be available for sale in other offerings pursuant to the base prospectus, and if no shares are sold under
the Sales Agreement, the full $9,000,000 of securities may be sold in other offerings pursuant to the base prospectus.
The information in this
prospectus is not complete and may be changed. We may not sell these securities under this prospectus until the registration
statement of which it is a part and filed with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION,
DATED AUGUST 11, 2017
$150,000,000
Common Stock
Preferred Stock
Warrants
Units
We may offer and sell,
from time to time in one or more offerings, any combination of common stock, preferred stock, warrants, or units having an aggregate
initial offering price not exceeding $150,000,000. The preferred stock, warrants, and units may be convertible or exercisable
or exchangeable for common stock or preferred stock or other securities of ours.
Each time we sell a
particular class or series of securities, we will provide specific terms of the securities offered in a supplement to this prospectus.
The prospectus supplement may also add, update or change information in this prospectus. You should read this prospectus
and any prospectus supplement, as well as the documents incorporated by reference or deemed to be incorporated by reference into
this prospectus, carefully before you invest in any securities.
This prospectus
may not be used to offer or sell our securities unless accompanied by a prospectus supplement relating to the offered securities.
Our common stock is
presently listed on The NASDAQ Global Market under the symbol “TNXP”. On August 10, 2017, the last reported sale price
of our common stock was $3.29.
These securities may
be sold directly by us, through dealers or agents designated from time to time, to or through underwriters or dealers or through
a combination of these methods on a continuous or delayed basis. See “Plan of Distribution” in this prospectus.
We may also describe the plan of distribution for any particular offering of our securities in a prospectus supplement. If
any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus is being delivered,
we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The net proceeds we expect
to receive from any such sale will also be included in a prospectus supplement.
As of August 10, 2017,
the aggregate market value of our outstanding common stock held by non-affiliates, or the public float, was $27,825,692, which
was calculated based on 6,324,021 shares of our outstanding common stock held by non-affiliates at a price of $4.40 per share,
the closing price of our common stock on July 5, 2017. Pursuant to General Instruction I.B.6 of Form S-3, in no event will
we sell shares pursuant to this prospectus with a value of more than one-third of the aggregate market value of our common stock
held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held by non-affiliates
is less than $75,000,000. During the 12 calendar months prior to, and including, the date of this prospectus, we have not
sold any securities pursuant to General Instruction I.B.6 of Form S-3.
Investing in our
securities involves various risks. See “Risk Factors” beginning on page 7 of this prospectus and in the applicable
prospectus supplement, as updated in our future filings made with the Securities and Exchange Commission that are incorporated
by reference into this prospectus. You should carefully read and consider these risk factors before you invest in our securities.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This prospectus is dated
, 2017
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is
part of a shelf registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using
a “shelf” registration process. Under this shelf registration process, we may sell any combination of the securities
described in this prospectus in one or more offerings from time to time having an aggregate initial offering price of $150,000,000.
This prospectus provides you with a general description of the securities we may offer. Each time we offer securities, we will
provide you with a prospectus supplement that describes the specific amounts, prices and terms of the securities we offer. The
prospectus supplement also may add, update or change information contained in this prospectus. You should read carefully both this
prospectus and any prospectus supplement together with additional information described below under the caption “Where You
Can Find More Information.”
This prospectus does
not contain all the information provided in the registration statement we filed with the SEC. You should read both this prospectus,
including the section titled “Risk Factors,” and the accompanying prospectus supplement, together with the additional
information described under the heading “Where You Can Find More Information.”
You should rely only
on the information contained or incorporated by reference in this prospectus or a prospectus supplement. We have not authorized
any other person to provide you with different information. If anyone provides you with different or inconsistent information,
you should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities
in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate
as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may
have changed since those dates.
OUR BUSINESS
Except where the
context otherwise requires, the terms, “we,” “us,” “our” or “the Company,” refer
to the business of Tonix Pharmaceuticals Holding Corp., a Nevada corporation and its wholly-owned subsidiaries.
Overview
We are a late clinical-stage
pharmaceutical company dedicated to the development of innovative pharmaceutical products to address public health challenges.
Our most advanced drug development program is focused on delivering an efficacious and safe long-term treatment for posttraumatic
stress disorder, or PTSD. PTSD is characterized by chronic disability, inadequate treatment options, high utilization of healthcare
services, and significant economic burden. We have assembled a management team with significant industry experience to lead the
development of our product candidates. We complement our management team with a network of scientific, clinical, and regulatory
advisors that includes recognized experts in the fields of PTSD and other central nervous system disorders.
In July 2017, the United
States Food and Drug Administration, or FDA, conditionally accepted the proposed trade name Tonmya
®
for TNX-102
SL (cyclobenzaprine HCl sublingual tablets), or TNX-102 SL, for the treatment of PTSD. The FDA's final approval of Tonmya as a
name for TNX-102 SL for the treatment of PTSD is subject to a new drug application, or NDA, approval. The United States Patent
and Trademark Office, or PTO, has granted the federal registration of the Tonmya mark. TNX-102 SL is an investigational new drug
and has not been approved for any indication.
Our lead product candidate,
Tonmya or TNX-102 SL, is a proprietary low-dose cyclobenzaprine sublingual tablet designed for bedtime administration, is in Phase
3 development as a potential treatment for PTSD. We commenced a randomized, double-blind placebo-controlled Phase 3 study, or the
HONOR study, of Tonmya (cyclobenzaprine HCl sublingual tablets), or Tonmya, in approximately 550 participants with military-related
PTSD in the first quarter of 2017. This Phase 3 study is an adaptive design study based on the results of the Phase 2 AtEase study.
The study design is very similar to the Phase 2 AtEase study, except there will be one planned interim analysis and the involvement
of an independent data monitoring committee, or IDMC, to review unblinded interim analysis results. The IDMC will make a recommendation
to continue as planned, to continue but increase the number of recruited participants or to stop for success. Based on the Phase
2 AtEase study results in military-related PTSD, Tonmya was granted Breakthrough Therapy designation by the FDA in December 2016,
for the treatment of PTSD.
Our development pipeline
includes: TNX-601 (tianeptine oxalate), a separate pre-IND (Investigational New Drug Application) candidate designed for daytime
administration for the treatment of PTSD and cognitive dysfunction associated with steroid use; TNX-801, a potential smallpox-preventing
vaccine based on a live synthetic version of horsepox virus, or HPXV; TNX-301 an IND candidate for the treatment of alcohol use
disorders, or AUD; and TNX-701, a biodefense development program for protection from radiation injury. We hold worldwide development
and commercialization rights to all our product candidates.
Our Product Pipeline
Tonmya – Posttraumatic Stress
Disorder Program
Tonmya is a small,
rapidly disintegrating tablet containing cyclobenzaprine, or CBP, for sublingual administration and transmucosal absorption. Tonmya
is a proprietary, Protectic™ protective eutectic formulation of cyclobenzaprine that allows for rapid systemic exposure and
increased bioavailability through the transmucosal delivery. Tonmya is in Phase 3 for the treatment of PTSD.
An estimated 8.6 million
adults in the U.S. suffer from PTSD, a chronic disorder that is characterized by hyperarousal, avoidance, emotional numbing, and
sleep disturbances. People with PTSD suffer significant impairment in their functioning, including occupational activities and
social relations, and are at elevated risk for impulsive, violent behaviors toward others and themselves, including suicide. Many
patients fail to adequately respond to the medications approved for PTSD. Antidepressants, sedative-hypnotics and antipsychotics
not approved for PTSD are commonly prescribed despite generally weak evidence in support of their use. Antianxiety drugs, also
called anxiolytics, are not approved for PTSD, but are commonly prescribed despite the recommendations against their use by many
experts. Anxiolytics are comprised of benzodiazepine and non-benzodiazepine drugs, which carry risks of tolerance and addiction
and are also associated with potential serious side-effects, such as retrograde amnesia.
Phase 2 AtEase Study
In the first quarter
of 2015, we commenced a randomized, double-blind, placebo-controlled, 12-week Phase 2 study of Tonmya in participants with military-related
PTSD, which we refer to as the AtEase study. The primary objective of this study was to evaluate the potential clinical benefit
of using Tonmya to treat military-related PTSD at a dose of 2.8 mg or 5.6 mg. The primary efficacy endpoint was the 12-week mean
change from baseline in the severity of PTSD symptoms as measured by the Clinician-Administered PTSD Scale for the Diagnostic and
Statistical Manual-5, or CAPS-5, between those treated with Tonmya and those receiving placebo. The CAPS-5 scale is a standardized
structured clinician interview and is considered the gold standard in clinical research and regulatory approval for measuring the
symptom severity of PTSD.
In the AtEase study,
participants experienced their index trauma during military service in 2001 or later and had a baseline CAPS-5 score of 29 or higher,
and were randomized in a 2:1:2 ratio to bedtime daily Tonmya 2.8 mg, Tonmya 5.6 mg, or placebo sublingual tablets for 12 weeks,
respectively. The AtEase study was conducted at 24 U.S. centers and enrolled 231 participants in the modified intent-to-treat population.
We reported topline results from the AtEase study in May 2016.
AtEase was adequately
designed to evaluate whether a 2.8 mg dose would be efficacious, which would have provided an opportunity for this study to be
used as one of the two pivotal efficacy studies required to support approval of Tonmya for the treatment of PTSD. Although the
2.8 mg dose trended in the direction of a therapeutic effect, it did not reach statistical significance on the primary endpoint.
The 5.6 mg dose had a therapeutic effect as assessed by the CAPS-5 scale, which was statistically significant by Mixed-effect Model
Repeated Measures, or MMRM, with Multiple Imputation, or MI, analysis (p-value = 0.031), even though this arm of the study, by
design, included only approximately half the number of participants of the 2.8 mg and placebo arms. Tonmya 5.6 mg demonstrated
a dose-effect on multiple efficacy and safety measurements in the AtEase study.
In the AtEase study,
Tonmya was well tolerated and the participant retention rate was 73% on placebo, 79% on Tonmya 2.8 mg and 84% on Tonmya 5.6 mg.
Four distinct serious adverse events, or SAEs, were reported in the study; three were in the placebo group, and one (proctitis/peri-rectal
abscess) in the Tonmya arm, which was determined to be unrelated to Tonmya. The most common non-dose related adverse events were
mild and transient local administration site conditions and of these oral hypoaesthesia, or numbness, was the most frequent and
occurred in 39% of participants treated with the 2.8 mg dose and 36% of the participants treated with the 5.6 mg dose, compared
to 2% of the participants receiving placebo. Oral paresthesia, or tingling, occurred in 16% of participants treated with the 2.8
mg dose and 4% of participants treated with the 5.6 mg dose, compared to 3% of the participants receiving placebo. Glossodynia,
or a burning or stinging sensation in the mouth, occurred in 3% of participants treated with the 2.8 mg dose and 6% of participants
treated with the 5.6 mg dose, compared to 1% of participants receiving placebo. Systemic adverse events that were potentially dose-related
and occurred in greater than or equal to 5% of participants treated with the 5.6 mg dose or placebo included: somnolence in 16%
versus 6% of the participants receiving placebo; dry mouth in 16% versus 11% of the participants receiving placebo; headache in
12% versus 4% of the participants receiving placebo; insomnia in 6% versus 9% of the participants receiving placebo; sedation in
12% versus 1% of the participants receiving placebo; upper respiratory tract infection in 4% versus 5% of the participants receiving
placebo; abnormal dreams in 2% versus 5% of the participants receiving placebo; and weight increase in 2% versus 5% of the participants
receiving placebo. For the participants treated with the 2.8 mg dose, the incidence of the most common systemic adverse events
reported above were less frequent than participants treated with the 5.6 mg dose with the exception of insomnia, which was 8%.
Retrospective analysis of the AtEase study suggested that the subset of participants with CAPS-5 score of
33 or higher was equivalent to the population of PTSD subjects studied in prior FDA registration studies of paroxetine and sertraline
using older versions of the Clinician-Administered PTSD Scale. To confirm this efficacy evidence, our ongoing Phase 3 program
is enrolling participants with baseline CAPS-5 score of 33 or higher. The beneficial effects of Tonmya 5.6 mg were preserved
in the subgroup with PTSD from combat traumas (85% of AtEase population). Also, sustained remission (i.e. satisfying remission
criterion of a CAPS-5 score less than 11 at both week 8 and week 12) was observed in 21% of participants in the Tonmya 5.6 mg group
as compared to 5.2% of participants in the placebo group (p = 0.02, logistic regression). The AtEase study supported the
hypothesized mechanism of sleep quality improvement, since additional retrospective analyses showed that in the subset of participants
with CAPS-5 score of 33 or higher, sleep improvement at week 4, measured by the PROMIS Sleep Disturbance instrument, predicted
treatment response (by improvement in total CAPS-5 score without the sleep item) at week 12 in the Tonmya 5.6 mg group (p = 0.01,
linear regression).
Open-label Extension Study for AtEase
Participants who completed
the AtEase study were eligible to enroll into a three-month open-label extension study with Tonmya 2.8 mg. We conducted this open-label
extension study to obtain additional safety information from participants in the AtEase Study. The clinical phase of this open-label
extension study is complete. Tonmya 2.8 mg was well tolerated for up to six months of treatment and no new safety signals were
revealed in this open-label extension study.
Ongoing Phase 3 Study
We have commenced a
randomized, double-blind placebo-controlled Phase 3 study of Tonmya in approximately 550 participants with military-related PTSD
in the first quarter of 2017. This first Phase 3 study, the “HONOR study,” is an adaptive design study based on the
results of the Phase 2 AtEase study. The study design is very similar to the Phase 2 AtEase study, except there will be one
planned interim analysis and the involvement of an independent data monitoring committee, or IDMC, to review unblinded interim
analysis results. The IDMC will make a recommendation to continue as planned, to continue but increase the number of recruited
participants or to stop for success. In addition, there will be one active dose (5.6 mg administered as 2 x 2.8 mg tablets)
and the entrance criterion is CAPS-5 ≥ 33 in this Phase 3 study. The interim analysis will be conducted when approximately 50%
(approximately 250 – 300 participants) of the initially planned participant enrollment is evaluable for efficacy. We received
FDA acceptance of the Phase 3 HONOR study design in January of 2017. The HONOR study involves approximately 35 U.S. centers. As
in the case of the AtEase study, the primary efficacy endpoint of the HONOR study is the 12-week mean change from baseline in the
severity of PTSD symptoms as measured by the CAPS-5 scale between those treated with Tonmya and those receiving placebo.
Prospective Phase 3 Study
A second, randomized,
double-blind placebo-controlled Phase 3 study of Tonmya in approximately 550 predominantly civilian PTSD participants will follow.
We expect this study to be conducted at approximately 35 U.S. centers. As in the case of the HONOR and AtEase studies, the primary
efficacy endpoint of this second Phase 3 study will be the 12-week mean change from baseline in the severity of PTSD symptoms as
measured by the CAPS-5 scale between those treated with Tonmya and those receiving placebo.
Long-Term Safety
Exposure Study for Tonmya
We plan to conduct
the registration-required open-label extension studies of Tonmya in participants who complete either the HONOR study or the predominantly
civilian PTSD Phase 3 study. The goal of the open-label extension studies is to obtain adequate 6- and 12-month safety exposure
data from the maximum therapeutic dose to support the registration of Tonmya for the treatment of PTSD, a chronic psychiatric condition.
Regulatory Update
We held an End-of-Phase
2 Chemistry, Manufacturing and Controls, or CMC, meeting with the FDA in February 2016 to discuss the quality data requirement
for an NDA submission for Tonmya. In general, our proposed NDA CMC plan for Tonmya was acceptable to the FDA and can be applied
to the PTSD NDA.
Subsequent to reporting
the Phase 2 AtEase study top line result, we held an End-of-Phase 2/Pre-Phase 3 meeting with the FDA in early August 2016 to discuss
the Phase 3 program required to support the registration of Tonmya for the treatment of PTSD and the remaining data package for
the NDA filing. Based on this meeting discussion and the official FDA meeting minutes, we expect that positive results from two
adequate, well-controlled Phase 3 efficacy and safety studies and long-term (six- and 12-month) safety exposure studies would provide
sufficient evidence of efficacy and safety to support the clinical approval of Tonmya for the treatment of PTSD. As described below,
the first Phase 3 study will be in participants with military-related PTSD and the second Phase 3 study will study predominately
civilian PTSD participants.
In December 2016, the
FDA granted Breakthrough Therapy designation to Tonmya for the treatment of PTSD. The Breakthrough Therapy designation request
was based on the preliminary clinical evidence of Tonmya on military-related PTSD in the AtEase study.
Breakthrough
Therapy designation is intended to expedite the development and review of drugs for serious or life-threatening conditions. The
benefits of Breakthrough Therapy designation include the eligibility for priority review of the NDA within six months instead of
10 months and rolling submission of completed portions of the NDA, in addition to an organizational commitment involving FDA's
senior managers contributing significant guidance. The FDA is committing to provide us timely advice and interactive communications
related to the design and efficient execution of our Breakthrough Therapy development program.
In
March 2017, we held the Initial Cross-Disciplinary Breakthrough Therapy Type B meeting with the FDA to discuss the opportunity
to accelerate the development and submission of the Tonmya NDA for the treatment of PTSD. Based on our discussions with the FDA
and the FDA official meeting minutes, a single-study NDA approval could be possible based on topline data from the ongoing HONOR
study. Additionally, due to the lack of evidence of potential abuse in clinical studies of Tonmya, the FDA agreed that studies
in assessing abuse potential of Tonmya are not required to support the Tonmya NDA.
In May 2017, the PTO
issued us U.S. Patent No. 9,636,408. The patent, “Eutectic Formulations of Cyclobenzaprine Hydrochloride and Amitriptyline
Hydrochloride,” claims the composition and manufacture of a unique formulation that characterizes Tonmya. The patent is expected
to provide Tonmya with U.S. market exclusivity until 2034.
In July 2017, the FDA
conditionally accepted the proposed trade name Tonmya for TNX-102 SL (cyclobenzaprine HCl sublingual tablets) for the treatment
of PTSD. A request for review of Tonmya as the proposed name for TNX-102 SL for the management of fibromyalgia has been withdrawn at
the FDA.
Phase 1 Bioequivalence, Bridging
PK, Food-Effect and Dose-Proportionality Studies
Completed Bioequivalence Study
We completed a Phase
1 bioequivalence study that compared the pharmacokinetic profiles of single-dose of Tonmya 2.8 mg tablets manufactured at two facilities:
(i) the facility used to produce Tonmya 2.8 mg tablets for the Phase 2 AtEase study; and (ii) the facility used to produce Tonmya
2.8.mg tablets for our clinical studies required to support the PTSD NDA submission and the to-be-marketed product. This bioequivalence
study demonstrated that the Tonmya 2.8 mg tablets manufactured at these two facilities were bioequivalent, supporting the use of
the AtEase study to support the Phase 3 studies.
Planned Multi-dose Bridging PK Study
We intend to seek FDA
marketing approval for Tonmya pursuant to Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, or FDCA, using AMRIX
®
extended-release
capsules (30 mg) as our reference listed drug, or RLD. As agreed upon by the FDA, we plan to study Tonmya SL 5.6 mg (two 2.8 mg
tablets) in comparison to AMRIX 30 mg extended-release capsules in a multiple-dose bridging PK study to provide a systemic exposure
bridge. If the exposures of Tonmya (2 x 2.8 mg tablets) are less than or comparable to the RLD maximum approved dose (30
mg) for the initial dose and at steady state, the results of this study will provide the necessary systemic exposure bridge of
Tonmya 5.6.mg to AMRIX 30 mg extended-release capsules and the approval of Tonmya for PTSD can rely on the safety findings (clinical
and nonclinical) of the currently approved cyclobenzaprine drug products.
Food Effect and Dose-proportionality
Studies
To support the Tonmya
product registration, a randomized, open-label, 2-way crossover, food-effect, comparative bioavailability study of Tonmya following
a single dose in healthy subjects under fasting and fed conditions and a randomized, open-label, 2-way crossover, dose-proportionality,
comparative bioavailability study of Tonmya following a single dose in healthy subjects under fasting conditions will be completed
for the Tonmya NDA submission.
TNX-102 (Cyclobenzaprine Hydrochloride)
Nonclinical Development
The FDA has accepted
our proposed nonclinical data package to support our PTSD NDA filing. In October 2016, we completed the six-month repeated-dose
toxicology study of TNX-102 in rats and a nine-month repeated-dose toxicology study in dogs required for the NDA filing and to
support Phase 3 clinical studies outside the U.S., if necessary. These chronic toxicity studies were requested by the FDA to augment
the nonclinical information in the AMRIX approved prescribing information, or labeling, which is necessary to support the Tonmya
labeling for long-term use. Based on the prescribing information of AMRIX and the post-marketing surveillance information, there
is no evidence of abuse for cyclobenzaprine. As a result, the FDA has advised that we will not have to assess the abuse potential
of Tonmya to support the Tonmya 505(b)(2) NDA submission for the treatment of PTSD.
Additional Product Candidates
We also have a pipeline
of other drug and biologic candidates, including two pre-IND candidates, TNX-601 for PTSD and TNX-801, a biologic vaccine product
for the prevention of smallpox, as well as an IND candidate, TNX-301, a potential treatment for AUD.
TNX-601
TNX-601 is a novel
oral formulation of tianeptine oxalate in the pre-IND stage of development for the treatment for PTSD. Currently there is no tianeptine-containing
product approved in the U.S., but tianeptine sodium (amorphous) has been marketed in Europe, Asia, and Latin America for the treatment
of depression since 1987. It is effective in various depressive states and also improves depression-associated anxiety and somatic
complaints. We have discovered a novel oxalate salt and polymorph, which we believe may provide improved stability, consistency,
and manufacturability relative to the known forms of tianeptine. Like cyclobenzaprine, tianeptine shares structural similarities
with classic tricyclic antidepressants, but it has unique pharmacological and neurochemical properties. Tianeptine modulates the
glutamatergic system indirectly and reverses the neuroplastic changes that are observed during periods of stress and corticosteroid
use. It is a weak mu-opioid receptor (MOR) agonist, but does not have significant affinity for other known neurotransmitter receptors.
Due to its use in Europe, Asia, and Latin America for several decades, tianeptine has an established safety profile. In addition
to being used to treat depression, several published studies support the potential of tianeptine as a potentially effective and
safe therapy for patients with PTSD. Leveraging our development expertise in PTSD, TNX-601 is being developed for daytime usage
as a first-line monotherapy for PTSD. Tianeptine’s reported pro-cognitive and anxiolytic effects as well as its ability to
attenuate the neuropathological effects of excessive stress responses suggest that it may be used to treat PTSD by a different
mechanism of action than Tonmya.
On April 19, 2016,
we were issued US patent 9,314,469 B2 “Method for treating neurocognitive dysfunction,” which includes using tianeptine
for cognitive dysfunction associated with corticosteroid use. We intend to develop TNX-601 under Section 505(b)(1) of the FDCA
as a potential treatment for PTSD and cognitive dysfunction associated with corticosteroid use. Pharmaceutical development work
on TNX-601 has been initiated.
TNX-801
TNX-801 is a novel
potential smallpox-preventing vaccine based on a live synthetic version of HPXV grown in cell culture. TNX-801 was synthesized
by Professor David Evans and Dr. Ryan Noyce at the University of Alberta, Canada in collaboration with us. HPXV has protective
vaccine activity in mice, using a model of lethal vaccinia infection. Vaccine manufacturing activities have been initiated to support
further nonclinical testing of TNX-801. We are developing TNX-801 as a potential smallpox-preventing vaccine for widespread immunization
and for the U.S. strategic national stockpile. Though it shares structural characteristics with vaccinia-based vaccines, TNX-801
has unique virulence properties that we believe may suggest lower toxicity and potential safety advantages over existing vaccinia-based
vaccines, which have been associated with adverse side effects such as myopericarditis.
We intend to develop
TNX-801 under 21 CFR 601 Subpart H, pursuant to which the FDA may grant marketing approval for a biological product for which safety
has been established in humans and for which the requirements for efficacy are met based on adequate and well-controlled animal
studies, where human studies are not ethical or feasible. This approval pathway has been described as the “Animal Rule”.
In the 1970s, vaccination against smallpox was discontinued in the U.S.; however, smallpox remains a material threat to national
security. We recently filed a patent on the novel virus vaccine. In addition, 12 years of non-patent based exclusivity is expected
under the Patient Protection and Affordable Care Act. Following the recent passage of the 21st Century Cures Act, we believe TNX-801
qualifies as a medical countermeasure, and therefore should be eligible for a Priority Review Voucher upon receiving FDA licensure.
We are currently working to develop a vaccine that meets current Good Manufacturing Practice, or cGMP, quality to support an IND
study.
TNX-301
TNX-301 is a fixed-dose
combination drug product, or CDP, containing two FDA-approved drugs, disulfiram and selegiline. We intend to develop TNX-301 CDP
under Section 505(b)(2) of the FDCA as a potential treatment for AUD, and we have commenced development work on TNX-301 formulations.
A pre-IND meeting was held in February 2016 to discuss the clinical development program of TNX-301 for AUD. At that meeting, the
FDA advised us of the nonclinical studies required for this CDP IND application to support the initiation of the first-in-man study
with TNX-301. IND planning activities are underway.
TNX-701
In addition, we own
rights to intellectual property on a biodefense technology relating to the development of protective agents against radiation exposure,
which we refer to as TNX-701. We have begun nonclinical research and development on TNX-701. Similar to the regulatory pathway
intended for TNX-801, we plan to develop TNX-701 under 21 CFR 601 Subpart H, or the “Animal Rule”. We expect significant
reduction in development costs and risks compared to the development of other new chemical entities, or NCEs, or new biologic candidates.
Corporate Information
We were incorporated
on November 16, 2007 under the laws of the State of Nevada as Tamandare Explorations Inc. On October 11, 2011, we changed our name
to Tonix Pharmaceuticals Holding Corp. Our principal executive offices are located at 509 Madison Avenue, Suite 306, New York,
New York 10022, and our telephone number is (212) 980-9155. Our website addresses are
www.tonixpharma.com, www.tonix.com,
and
www.krele.com
.
The information on our websites is not part of this prospectus. We have included our website addresses as a factual reference and
do not intend them to be active links to our websites.
RISK FACTORS
You should carefully
consider the risks described below before making an investment decision. The risks described below are not the only ones we face.
Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business operations.
Our business could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks,
and you may lose all or part of your investment. In assessing these risks, you should also refer to the other information contained
or incorporated by reference into this prospectus, including our financial statements and related notes.
RISKS RELATED TO OUR BUSINESS
We have a history of operating losses
and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues,
achieve profitability.
We are focused on product
development, and we have not generated any revenues to date. We have incurred losses in each year of our operations, and we expect
to continue to incur operating losses for the foreseeable future. These operating losses have adversely affected and are likely
to continue to adversely affect our working capital, total assets and shareholders’ equity.
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 products that currently have no market acceptance, our ability to establish and expand our brand name, our
ability to expand our operations to meet the commercial demand of our clients, our development of and reliance on strategic and
customer relationships and our ability to minimize fraud and other security risks.
The process of developing
our products requires significant clinical, nonclinical and CMC development, laboratory testing and clinical studies. In addition,
commercialization of our product candidates will require that we obtain necessary regulatory approvals and establish sales, marketing
and manufacturing capabilities, either through internal hiring or through contractual relationships with others. We expect to incur
substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including
costs associated with conducting preclinical and nonclinical testing and clinical studies, and regulatory compliance activities.
Our ability to generate
revenues and achieve profitability will depend on numerous factors, including success in:
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developing and testing product candidates;
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receiving regulatory approvals;
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commercializing our products; and
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establishing a favorable competitive position.
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Many of these factors
will depend on circumstances beyond our control. We cannot assure you that we will ever have a product approved by the FDA, that
we will bring any product to market or, if we are successful in doing so, that we will ever become profitable.
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. The amount of future losses and when, if ever, we will achieve profitability are
uncertain. We have no products that have generated any commercial revenue, do not expect to generate revenues from the commercial
sale of products in the near future, and might never generate revenues from the sale of products. Our ability to generate revenue
and achieve profitability will depend on, among other things, successful completion of the development of our product candidates;
obtaining necessary regulatory approvals from the FDA; establishing manufacturing, sales, and marketing arrangements with third
parties; and raising sufficient funds to finance our activities. 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 have a limited operating history
and 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 are a development-stage
biopharmaceutical company with a limited operating history. Our operations to date have been primarily limited to developing our
technology and undertaking preclinical and nonclinical testing and clinical studies of our clinical-stage product candidate, Tonmya
for PTSD. We have not yet obtained regulatory approvals for Tonmya or any of our other product candidates. Consequently, any predictions
made about our future success or viability may not be as accurate as they could be if we had a longer operating history or commercialized
products. Our financial condition has varied significantly in the past and will continue to fluctuate from quarter-to-quarter or
year-to-year due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute
to these fluctuations include other factors described elsewhere in this annual report and also include:
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our ability to obtain additional funding to develop our product candidates;
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delays in the commencement, enrollment and timing of clinical studies;
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the success of our clinical studies through all phases of clinical development, including studies of our most advanced product candidate Tonmya for PTSD;
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any delays in regulatory review and approval of product candidates in clinical development;
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our ability to obtain and maintain regulatory approval for our product candidate Tonmya for PTSD or any of our other product candidates in the United States and foreign jurisdictions;
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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 risk evaluation and mitigation strategies, or cause an approved drug to be taken off the market;
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our dependence on third party CMOs to supply or manufacture our products;
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our dependence on third party contract research organizations, or CROs, to conduct our clinical studies and nonclinical research;
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our ability to establish or maintain collaborations, licensing or other arrangements;
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market acceptance of our product candidates;
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our ability to establish and maintain an effective sales and marketing infrastructure, either through the creation of a commercial infrastructure or through strategic collaborations;
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competition from existing products or new products that may emerge;
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the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for our products;
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our ability to leverage our proprietary technology platform to discover and develop additional product candidates;
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our ability and our licensors’ abilities to successfully obtain, maintain, defend and enforce intellectual property rights important to our business;
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our ability to attract and retain key personnel to manage our business effectively;
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our ability to build our finance infrastructure and improve our accounting systems and controls;
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potential product liability claims;
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potential liabilities associated with hazardous materials; and
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our ability to obtain and maintain adequate insurance policies.
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Accordingly, the results
of any quarterly or annual periods should not be relied upon as indications of future operating performance.
We have no approved products on the
market and therefore do not expect to generate any revenues from product sales in the foreseeable future, if at all.
To date, we have no
approved product on the market and have generated no product revenues. We have funded our operations primarily from sales of our
securities. We have not received, and do not expect to receive for at least the next couple of years, if at all, any revenues from
the commercialization of our product candidates. To obtain revenues from sales of our product candidates, we must succeed, either
alone or with third parties, in developing, obtaining regulatory approval for, manufacturing and marketing drugs with commercial
potential. We may never succeed in these activities, and we may not generate sufficient revenues to continue our business operations
or achieve profitability.
We are largely dependent on the success
of our clinical-stage product candidate, Tonmya for PTSD, and we cannot be certain that this product candidate will receive regulatory
approval or be successfully commercialized.
We currently have no
products for sale, and we cannot guarantee that we will ever have any drug products approved for sale. We and our product candidates
are subject to extensive regulation by the FDA and comparable regulatory authorities in other countries governing, among other
things, research, testing, clinical studies, manufacturing, labeling, promotion, selling, adverse event reporting and recordkeeping.
We are not permitted to market any of our product candidates in the United States until we receive approval of an NDA for a product
candidate from the FDA or the equivalent approval from a foreign regulatory authority. Obtaining FDA approval is a lengthy, expensive
and uncertain process. We currently have one product candidate, Tonmya, in Phase 3 development for the treatment of PTSD, and the
success of our business currently depends on its successful development, approval and commercialization. Any projected sales or
future revenue predictions are predicated upon FDA approval and market acceptance of Tonmya. 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.
Tonmya has not completed
the clinical development process; therefore, we have not yet submitted an NDA or foreign equivalent or received marketing approval
for this product candidate anywhere in the world. The clinical development program for Tonmya for PTSD may not lead to commercial
products for a number of reasons, including if we fail to obtain necessary approvals from the FDA or foreign regulatory authorities
because our clinical studies fail to demonstrate to their satisfaction that this product candidate is safe and effective or a clinical
program may be put on hold due to unexpected safety issues. We may also fail to obtain the necessary approvals if we have inadequate
financial or other resources to advance our product candidates through the clinical study process. Any failure or delay in completing
clinical studies or obtaining regulatory approvals for Tonmya for PTSD in a timely manner would have a material adverse impact
on our business and our stock price.
We may use our financial and human
resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates
that may be more profitable or for which there is a greater likelihood of success.
Because we have limited
financial and human resources, we are currently focusing on the regulatory approval of Tonmya for PTSD. As a result, we may forego
or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial
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.
We will need additional capital.
If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or
eliminate our research and development programs, reduce our commercialization efforts or curtail our operations.
In 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. We anticipate that our existing cash and cash equivalents will
enable us to maintain our current operations for at least the next 12 months. We anticipate using our cash and cash equivalents
to fund further research and development with respect to our lead product candidate. We will, however, need to raise additional
funding sooner if our business or operations change in a manner that consumes available resources more rapidly than we anticipate.
Our requirements for additional capital will depend on many factors, including:
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successful commercialization of our product candidates;
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the time and costs involved in obtaining regulatory approval for our product candidates;
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costs associated with protecting our intellectual property rights;
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development of marketing and sales capabilities;
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payments received under future collaborative agreements, if any; and
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market acceptance of our products.
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To 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.
We 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.
There 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.
We face intense competition in the
markets targeted by our product candidates. Many of our competitors have substantially greater resources than we do, and we expect
that all of our product candidates under development will face intense competition from existing or future drugs.
We expect that all
of our product candidates under development, if approved, will face intense competition from existing and future drugs marketed
by large companies. These competitors may successfully market products that compete with our products, successfully identify drug
candidates or develop products earlier than we do, or develop products that are more effective, have fewer side effects or cost
less than our products.
Additionally, if a
competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval for our
product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA by the competitor
of patents covering its newly-approved drug product. Periods of non-patent exclusivity for new versions of existing drugs such
as our current product candidates can extend up to three and one-half years.
These competitive factors
could require us to conduct substantial new research and development activities to establish new product targets, which would be
costly and time consuming. These activities would adversely affect our ability to commercialize products and achieve revenue and
profits.
Competition and technological change
may make our product candidates and technologies less attractive or obsolete.
We compete with established
pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same indications we are pursuing
and that have greater financial and other resources. Other companies may succeed in developing products earlier than us, obtaining
FDA approval for products more rapidly, or developing products that are more effective than our product candidates. Research and
development by others may render our technology or product candidates obsolete or noncompetitive, or result in treatments or cures
superior to any therapy we develop. We face competition from companies that internally develop competing technology or acquire
competing technology from universities and other research institutions. As these companies develop their technologies, they may
develop competitive positions that may prevent, make futile, or limit our product commercialization efforts, which would result
in a decrease in the revenue we would be able to derive from the sale of any products.
There can be no assurance
that any of our product candidates will be accepted by the marketplace as readily as these or other competing treatments. Furthermore,
if our competitors' products are approved before ours, it could be more difficult for us to obtain approval from the FDA. 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.
Furthermore, the pharmaceutical
research industry is diverse, complex, and rapidly changing. By its nature, the business risks associated therewith are numerous
and significant. The effects of competition, intellectual property disputes, market acceptance, and FDA regulations preclude us
from forecasting revenues or income with certainty or even confidence.
If we fail to protect our intellectual
property rights, our ability to pursue the development of our technologies and products would be negatively affected.
Our success will depend
in part on our ability to obtain patents and maintain adequate protection of our technologies and products. If we do not adequately
protect our intellectual property, competitors may be able to use our technologies to produce and market drugs using our technologies
and patents in direct competition with us and erode our competitive advantage. Some foreign countries lack rules and methods for
defending intellectual property rights and do not protect proprietary rights to the same extent as the United States. Many companies
have had difficulty protecting their proprietary rights in these foreign countries. We may not be able to prevent misappropriation
of our proprietary rights and intellectual property rights in these and other countries.
We have received, and
are currently seeking, patent protection for numerous compounds and methods of treating diseases. However, the patent process is
subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products
by obtaining and defending patents related to them. These risks and uncertainties include the following: patents that may be issued
or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide us any competitive advantage; our competitors,
many of which have substantially greater resources than we and many of which have made significant investments in competing technologies,
may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell
our potential products either in the United States or in international markets; there may be significant pressure on the United
States government and other international governmental bodies to limit the scope of patent protection both inside and outside the
United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns; and countries
other than the United States may have less robust patent laws than those upheld by United States courts, allowing foreign competitors
the ability to exploit these laws to create, develop, and market competing products using our technologies and patents.
Moreover, any patents
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 any patents
or propriety technologies on products we develop. Additionally, extensive time is required for development, testing and regulatory
review of a potential product. While extensions of patent term due to regulatory delays may be available, it is possible that,
before any of our product candidates can be commercialized, any related patent, even with an extension, may expire or remain in
force for only a short period following commercialization, thereby reducing any advantages to us of the patent.
In addition, the United
States Patent and Trademark Office, or USPTO, and patent offices in other jurisdictions have often required that patent applications
concerning pharmaceutical and/or biotechnology-related inventions be limited or narrowed substantially to cover only the innovations
specifically exemplified in the patent application, thereby limiting the scope of protection against competitive challenges. Thus,
even if we or our licensors are able to obtain patents, the patents may be substantially narrower than anticipated.
Our success depends
on our patents and patent applications that may be licensed exclusively to us and other patents and patent applications to which
we may obtain assignment or licenses. We may not be aware, however, of all patents, published applications or published literature
that may affect our business either by blocking our ability to commercialize our product candidates, by preventing the patentability
of our product candidates to us or our licensors, or by covering the same or similar technologies. These patents, patent applications,
and published literature may limit the scope of our future patent claims or adversely affect our ability to market our product
candidates.
In addition to patents,
we rely on a combination of trade secrets, confidentiality, nondisclosure and other contractual provisions, and security measures
to protect our confidential and proprietary information. These measures may not adequately protect our trade secrets or other proprietary
information. If they do not adequately protect our rights, third parties could use our technology, and we could lose any competitive
advantage we may have. In addition, others may independently develop similar proprietary information or techniques or otherwise
gain access to our trade secrets, which could impair any competitive advantage we may have.
Patent protection and
other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk
that such protections will prove inadequate.
We may be involved in lawsuits to
protect or enforce our patents, which could be expensive and time consuming.
The pharmaceutical
industry has been characterized by extensive litigation regarding patents and other intellectual property rights, and companies
have employed intellectual property litigation to gain a competitive advantage. We may become subject to infringement claims or
litigation arising out of present and future patents and other proceedings of our competitors. The defense and prosecution of intellectual
property suits are costly and time-consuming to pursue, and their outcome is uncertain. Litigation may be necessary to determine
the enforceability, scope, and validity of the proprietary rights of others. An adverse determination in litigation to which we
may become a party could subject us to significant liabilities, require us to obtain licenses from third parties, or restrict or
prevent us from selling our products in certain markets. Although patent and intellectual property disputes might be settled through
licensing or similar arrangements, the costs associated with such arrangements may be substantial and could include our paying
large fixed payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactory terms or at
all.
Competitors may infringe
our patents, and we may file infringement claims to counter infringement or unauthorized use. Third parties may assert that our
patents are invalid and/or unenforceable in these proceedings. Such litigation can be expensive, particularly for a company of
our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid
or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do
not cover its technology. An adverse determination of any litigation or defense proceedings could put one or more of our patents
at risk of being invalidated or interpreted narrowly.
Third parties may also
assert that our patents are invalid in patent office administrative proceedings. These proceedings include oppositions in the European
Patent Office and
inter partes
review and post-grant review proceedings in the USPTO. The success rate of these administrative
challenges to patent validity in the United States is higher than it is for validity challenges in litigation.
Interference or derivation
proceedings brought before the USPTO may be necessary to determine priority of invention with respect to innovations disclosed
in our patents or patent applications. During these proceedings, it may be determined that we do not have priority of invention
for one or more aspects in our patents or patent applications and could result in the invalidation in part or whole of a patent
or could put a patent application at risk of not issuing. Even if successful, an interference or derivation proceeding may result
in substantial costs and distraction to our management.
Furthermore, because
of the substantial amount of discovery required in connection with intellectual property litigation or interference or derivation
proceedings, there is a risk that some of our confidential information could be compromised by disclosure. In addition, there could
be public announcements of the results of hearings, motions or other interim proceedings or developments. If investors perceive
these results to be negative, the price of our common stock could be adversely affected.
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.
If we infringe the rights of third
parties we could be prevented from selling products, forced to pay damages, and defend against litigation.
If our products, methods,
processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may
have to: obtain licenses, which may not be available on commercially reasonable terms, if at all; abandon an infringing product
candidate; redesign our products or processes to avoid infringement; stop using the subject matter claimed in the patents held
by others; pay damages; and/or defend litigation or administrative proceedings which may be costly whether we win or lose, and
which could result in a substantial diversion of our financial and management resources.
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 rely and expect
to continue to rely on third parties, including CROs and outside consultants, to conduct, supervise or monitor some or all aspects
of preclinical and nonclinical testing and clinical studies involving our product candidates. We have less control over the timing
and other aspects of these preclinical and nonclinical testing activities and clinical studies than if we performed the monitoring
and supervision entirely on our own. Third parties may not perform their responsibilities for our preclinical and nonclinical testing
and clinical studies on our anticipated schedule or, for clinical studies, consistent with a clinical study protocol. Delays in
preclinical and nonclinical testing, and clinical studies could significantly increase our product development costs and delay
product commercialization. In addition, many of the factors that may cause, or lead to, a delay in the clinical studies may also
ultimately lead to denial of regulatory approval of a product candidate.
The commencement of
clinical studies can be delayed for a variety of reasons, including delays in:
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demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical study;
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reaching agreement on acceptable terms with prospective CROs and study sites;
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developing a stable formulation of a product candidate;
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manufacturing sufficient quantities of a product candidate; and
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obtaining institutional review board approval to conduct a clinical study at a prospective site.
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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:
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ongoing discussions with the FDA or other regulatory authorities regarding the scope or design of our clinical studies;
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failure to conduct clinical studies in accordance with regulatory requirements;
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lower than anticipated recruitment or retention rate of participants in clinical studies;
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inspection of the clinical study operations or study sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
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lack of adequate funding to continue clinical studies;
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negative results of clinical studies;
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investigational drug product out-of-specification; or
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nonclinical or clinical safety observations, including adverse events and serious adverse events.
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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 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 rely on CROs and
clinical study sites to ensure the proper and timely conduct of our clinical studies. While we have agreements governing their
activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs’
activities. Nevertheless, we will be responsible for ensuring that our clinical studies are conducted in accordance with the applicable
protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We and our CROs are
required to comply with the FDA’s current good clinical practices requirements, or cGCP, for conducting, recording and reporting
the results of clinical studies to assure that data and reported results are credible and accurate and that the rights, integrity
and confidentiality of clinical study participants are protected. The FDA enforces these cGCPs through periodic inspections of
study sponsors, principal investigators and clinical study sites. If we or our CROs fail to comply with applicable cGCPs, the clinical
data generated in our clinical studies may be deemed unreliable and the FDA may require us to perform additional clinical studies
before approving any marketing applications. Upon inspection, the FDA may determine that our clinical studies did not comply with
cGCPs. In addition, our clinical studies, including our ongoing Phase 3 HONOR study in military-related PTSD, will require a sufficiently
large number of test subjects to evaluate the effectiveness and safety of Tonmya. Accordingly, if our CROs fail to comply with
these regulations or fail to recruit a sufficient number of participants, our clinical studies may be delayed or we may be required
to repeat such clinical studies, which would delay the regulatory approval process.
Our CROs are not our
employees, and we are not able to control whether or not they devote sufficient time and resources to our clinical studies. These
CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting
clinical studies, or other drug development activities which could harm our competitive position. If our CROs do not successfully
carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical
data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other
reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for,
or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for such
product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
We also rely on other
third parties to store and distribute drug products for our clinical studies. Any performance failure on the part of our distributors
could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved,
producing additional losses and depriving us of potential product revenue.
We have limited experience in completing
a Phase 3 clinical study and have never submitted an NDA before, and may be unable to do so for Tonmya or other product candidates
we are developing.
We initiated a Phase
3 study in military-related PTSD in the first quarter of 2017. As this study is intended to provide efficacy and safety evidence
to support marketing approval by the FDA, it is considered a pivotal, confirmatory or registration, study. The conduct of pivotal
clinical studies and the submission of a successful NDA is a complicated process. Although members of our management team have
extensive industry experience, including in the development, clinical testing and commercialization of drug candidates, we have
conducted only one pivotal clinical study before (the AFFIRM study in fibromyalgia participants), have limited experience in preparing,
submitting and prosecuting regulatory filings, and have not submitted an NDA before. Consequently, we may be unable to successfully
and efficiently execute and complete this planned clinical study in a way that leads to NDA submission and approval of Tonmya and
other product candidates we are developing. We may require more time and incur greater costs than our competitors and may not succeed
in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our planned
clinical studies would prevent or delay commercialization of Tonmya and other product candidates we are developing.
Our product candidates may cause
serious adverse events or undesirable side effects which may delay or prevent marketing approval, or, if approval is received,
require them to be taken off the market, require them to include safety warnings or otherwise limit their sales.
Serious adverse events
or undesirable side effects from Tonmya or 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, including Tonmya, may show that
our product candidates cause serious adverse events or undesirable side effects, which could interrupt, delay or halt clinical
studies, resulting in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities.
If Tonmya or any of
our other product candidates cause serious adverse events or undesirable side effects or suffer from quality control issues:
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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;
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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;
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we may be required to change the way the product is administered or conduct additional clinical studies;
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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;
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we may be required to limit the patients who can receive the product;
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the FDA may rescind the Breakthrough Therapy designation if the risk outweigh the benefit;
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we may be subject to limitations on how we promote the product;
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we may, voluntarily or involuntarily, initiate field alerts for product recall, which may result in shortages;
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sales of the product may decrease significantly;
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regulatory authorities may require us to take our approved product off the market;
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we may be subject to litigation or product liability claims; and
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our reputation may suffer.
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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
a competing drug shows efficacy in military-related PTSD prior to the FDA approval of Tonmya or if Tonmya fails to confirm the
results of the AtEase Phase 2 study in showing activity in military-related PTSD in the Phase 3 HONOR study, then the FDA may rescind
the Breakthrough Therapy designation.
In December 2016, the FDA granted Tonmya
for PSTD Breakthrough Therapy designation based on several factors, including that Tonmya has the potential to be an improvement
over existing therapies for military-related PTSD. If another therapy is shown to be effective in military-related PTSD before
FDA approval of Tonmya, then the FDA may rescind the designation. In addition, if Tonmya fails to confirm the activity from the
AtEase study in treating military-related PTSD, then the FDA may rescind the Breakthrough Therapy designation.
Breakthrough Therapy designation
for Tonmya may not lead to faster development or regulatory processes nor does it increase the likelihood that Tonmya will receive
marketing approval for PTSD.
There is no guarantee
that the receipt of Breakthrough Therapy designation will result in a faster development, review or approval process for Tonmya
for PTSD or increase the likelihood that Tonmya will be granted marketing approval for PTSD. Likewise, any future Breakthrough
Therapy designation for any other potential indication of Tonmya neither guarantees a faster development process, review or approval
nor improves the likelihood of the granting of marketing approval by the FDA for any such potential indication of Tonmya compared
to drugs considered for approval under conventional FDA procedures. We may seek a Breakthrough Therapy designation for other of
our product candidates, but the FDA may not grant this status to any of our proposed product candidates.
If we are unable to file for approval
of Tonmya under Section 505(b)(2) of the FDCA or if we are required to generate additional data related to safety and efficacy
in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization
timelines.
Our current plans for
filing NDAs for our product candidates include efforts to minimize the data we will be required to generate in order to obtain
marketing approval for our product candidates and therefore reduce the development time. We held a pre-IND meeting with the FDA
in October 2012 to discuss the development of Tonmya in PTSD. Following the results of the AtEase Study, we held an End-of-Phase
2/Pre-Phase 3 meeting with the FDA in August 2016 to discuss the Phase 3 study design and NDA filing requirement. In December 2016,
Tonmya for the treatment of PTSD was granted Breakthrough Therapy designation by the FDA and in March 2017, an Initial Cross-disciplinary
Breakthrough Therapy meeting was held with the FDA to discuss the possibility to accelerate the development and approval of Tonmya
for PTSD. Although our interactions with the FDA have encouraged our efforts to continue to develop Tonmya for PTSD, there is no
assurance that we will satisfy the FDA’s requirements for approval in this indication. The timeline for filing and review
of our NDA for Tonmya for PTSD is based on our plan to submit this NDA under Section 505(b)(2) of the FDCA, which would enable
us to rely in part on data in the public domain or elsewhere. We have not yet filed an NDA under Section 505(b)(2) for any of our
product candidates. Depending on the data that may be required by the FDA for approval, some of the data may be related to products
already approved by the FDA. If the data relied upon is related to products already approved by the FDA and covered by third-party
patents we would be required to certify that we do not infringe the listed patents or that such patents are invalid or unenforceable.
As a result of the certification, the third-party would have 45 days from notification of our certification to initiate an action
against us. In the event that an action is brought in response to such a certification, the approval of our NDA could be subject
to a stay of up to 30 months or more while we defend against such a suit. Approval of our product candidates under Section 505(b)(2)
may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents
to our product candidates. Alternatively, we may elect to generate sufficient additional clinical data so that we no longer rely
on data which triggers a potential stay of the approval of our product candidates. 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 approval for any of our product candidates, to conduct substantial new research and development
activities beyond those we currently plan to engage in order to obtain approval of our product candidates. Such additional new
research and development activities would be costly and time consuming.
We may not be able
to realize a shortened development timeline for Tonmya for PTSD, and the FDA may not approve our NDA based on their review of the
submitted data. If CBP-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 Tonmya, and we may need to fulfill the more extensive requirements of Section
505(b)(1). If we are required to generate additional data to support approval, we may be unable to meet our anticipated development
and commercialization timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable
to obtain marketing approval of our lead product candidate.
We will need to expand our operations
and increase the size of our company, and we may experience difficulties in managing growth.
As we advance our product
candidates through preclinical and nonclinical testing and clinical studies, and develop new product candidates, we will need to
increase our product development, scientific, regulatory and compliance and administrative headcount to manage these programs.
In addition, to meet our obligations as a public company, we will need to increase our general and administrative capabilities.
Our management, personnel and systems currently in place may not be adequate to support this future growth. Our need to effectively
manage our operations, growth and various projects requires that we:
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successfully attract and recruit new employees with the expertise and experience we will require;
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manage our clinical programs effectively, which we anticipate being conducted at numerous clinical sites;
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develop a marketing, distribution and sales infrastructure in addition to a post-marketing surveillance program if we seek to market our products directly; and
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continue to improve our operational, manufacturing, quality assurance, financial and management controls, reporting systems and procedures.
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If we are unable to
successfully manage this growth and increased complexity of operations, our business may be adversely affected.
Our executive officers and other
key personnel are critical to our business, and our future success depends on our ability to retain them.
Our success depends
to a significant extent upon the continued services of Dr. Seth Lederman, our President and Chief Executive Officer and Dr. Gregory
M. Sullivan, our Chief Medical Officer. Dr. 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. Dr.
Sullivan has served as our Chief Medical Officer since 2014 and directed the Phase 2 AtEase study and is directing the Phase 3
HONOR 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.
Any employment agreement
we enter into will not ensure the retention of the employee who is a party to the agreement. In addition, we have only limited
ability to prevent former employees from competing with us. Furthermore, our future success will also depend in part on the continued
service of our key scientific and management personnel and our ability to identify, hire, and retain additional personnel. We experience
intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development
of our business. Moreover, competition for personnel with the scientific and technical skills that we seek is extremely high and
is likely to remain high. Because of this competition, our compensation costs may increase significantly.
If we are unable to hire additional
qualified personnel, our ability to grow our business may be harmed.
Over 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 successful. Attracting and
retaining qualified personnel will be critical to our success.
We rely on third parties to manufacture
the compounds used in our studies, and we intend to rely on them for the manufacture of any approved products for commercial sale.
If these third parties do not manufacture our product candidates in sufficient quantities and at an acceptable cost, clinical development
and commercialization of our product candidates could be delayed, prevented or impaired.
We have no manufacturing
facilities, and we have no experience in the clinical or commercial-scale manufacture of drugs or in designing drug manufacturing
processes. We intend to rely on CMOs to manufacture some or all of our product candidates in clinical studies and our products
that reach commercialization. Completion of our clinical studies and commercialization of our product candidates requires the manufacture
of a sufficient supply of our product candidates. We have contracted with outside sources to manufacture our development compounds,
including Tonmya. If, for any reason, we become unable to rely on our current sources for the manufacture of our product candidates,
either for clinical studies or, at some future date, for commercial quantities, then we would need to identify and contract with
additional or replacement third-party manufacturers to manufacture compounds for nonclinical, preclinical, clinical, and commercial
purposes. Although we are in discussions with other manufacturers we have identified as potential alternative CMOs of Tonmya, we
may not be successful in negotiating acceptable terms with any of them.
We believe that there
are a variety of manufacturers that we may be able to retain to produce these products. However, once we retain a manufacturing
source, if our manufacturers do not perform in a satisfactory manner, we may not be able to develop or commercialize potential
products as planned. Certain specialized manufacturers are expected to provide us with modified and unmodified pharmaceutical compounds,
including finished products, for use in our preclinical and nonclinical testing and clinical studies. Some of these materials are
available from only one supplier or vendor. Any interruption in or termination of service by such sole source suppliers could result
in a delay or interruption in manufacturing until we locate an alternative source of supply. Any delay or interruption in manufacturing
operations (or failure to locate a suitable replacement for such suppliers) could materially adversely affect our business, prospects,
or results of operations. We do not have any short-term or long-term manufacturing agreements with many of these manufacturers.
If we fail to contract for manufacturing on acceptable terms or if third-party manufacturers do not perform as we expect, our development
programs could be materially adversely affected. This may result in delays in filing for and receiving FDA approval for one or
more of our products. Any such delays could cause our prospects to suffer significantly.
Failure by our third-party manufacturers
to comply with the regulatory guidelines set forth by the FDA with respect to our product candidates could delay or prevent the
completion of clinical studies, the approval of any product candidates or the commercialization of our products.
Such third-party manufacturers
must be inspected by FDA for cGMP compliance before they can produce commercial product. We may be in competition with other companies
for access to these manufacturers' facilities and may be subject to delays in manufacture if the manufacturers give other clients
higher priority than they give to us. If we are unable to secure and maintain third-party manufacturing capacity, the development
and sales of our products and our financial performance may be materially affected.
Manufacturers are obligated
to operate in accordance with FDA-mandated requirements. A failure of any of our third-party manufacturers to establish and follow
cGMP requirements and to document their adherence to such practices may lead to significant delays in the availability of material
for clinical studies, may delay or prevent filing or approval of marketing applications for our products, and may cause delays
or interruptions in the availability of our products for commercial distribution following FDA approval. This could result in higher
costs to us or deprive us of potential product revenues.
Complying with cGMP
and non-U.S. regulatory requirements will require that we expend time, money, and effort in production, recordkeeping, and quality
control to assure that the product meets applicable specifications and other requirements. We, or our contracted manufacturing
facility, must also pass a pre-approval inspection prior to FDA approval. Failure to pass a pre-approval inspection may significantly
delay FDA approval of our products. If we fail to comply with these requirements, we would be subject to possible regulatory action
and may be limited in the jurisdictions in which we are permitted to sell our products. As a result, our business, financial condition,
and results of operations may be materially harmed.
Drug manufacturers
are subject to ongoing periodic unannounced inspections by the FDA, the DEA and corresponding state and foreign agencies to ensure
strict compliance with cGMP requirements and other requirements under Federal drug laws, other government regulations and corresponding
foreign standards. If we or our third-party manufacturers fail to comply with applicable regulations, sanctions could be imposed
on us, including fines, injunctions, civil penalties, failure by the government to grant marketing approval of drugs, delays, suspension
or withdrawal of approvals, seizures or recalls of product, operating restrictions and criminal prosecutions.
Corporate and academic collaborators
may take actions to delay, prevent, or undermine the success of our products.
Our operating and financial
strategy for the development, clinical testing, manufacture, and commercialization of drug candidates is heavily dependent on our
entering into collaborations with corporations, academic institutions, licensors, licensees, and other parties. Our current strategy
assumes that we will successfully establish these collaborations, or similar relationships; however, there can be no assurance
that we will be successful establishing such collaborations. Some of our existing collaborations are, and future collaborations
may be, terminable at the sole discretion of the collaborator. Replacement collaborators might not be available on attractive terms,
or at all. The activities of any collaborator will not be within our control and may not be within our power to influence. There
can be no assurance that any collaborator will perform its obligations to our satisfaction or at all, that we will derive any revenue
or profits from such collaborations, or that any collaborator will not compete with us. If any collaboration is not pursued, we
may require substantially greater capital to undertake development and marketing of our proposed products and may not be able to
develop and market such products effectively, if at all. In addition, a lack of development and marketing collaborations may lead
to significant delays in introducing proposed products into certain markets and/or reduced sales of proposed products in such markets.
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.
We rely on third-party
vendors, scientists, and collaborators to provide us with significant data and other information related to our projects, clinical
studies, and our business. If such third parties provide inaccurate, misleading, or incomplete data, our business, prospects, and
results of operations could be materially adversely affected.
Our product candidates are novel
and still in development.
We are a clinical-stage
pharmaceutical company focused on the development of drug product candidates, all of which are still in development. Our drug development
methods may not lead to commercially viable drugs for any of several reasons. For example, we may fail to identify appropriate
targets or compounds, our drug candidates may fail to be safe and effective in clinical studies, or we may have inadequate financial
or other resources to pursue development efforts for our drug candidates. Our drug candidates will require significant additional
development, clinical studies, regulatory clearances and additional investment by us or our collaborators before they can be commercialized.
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; inability
to manufacture on its own, or through any others, product candidates on a commercial scale; and failure to achieve market acceptance.
Because of these risks,
our research and development efforts may not result in any commercially viable products. If a significant portion of these development
efforts are not successfully completed, required regulatory approvals are not obtained or any approved products are not commercially
successfully, our business, financial condition, and results of operations may be materially harmed.
Clinical studies required for our
product candidates are expensive and time-consuming, and their outcome is uncertain.
In order to obtain
FDA approval to market a new drug product, we must demonstrate proof of safety and effectiveness in humans. To meet these requirements,
we must conduct "adequate and well controlled" clinical studies. Conducting clinical studies is a lengthy, time-consuming,
and expensive process. The length of time may vary substantially according to the type, complexity, novelty, and intended use of
the product candidate, and often can be several years or more per study. Delays associated with products for which we are directly
conducting clinical studies may cause us to incur additional operating expenses. The commencement and rate of completion of clinical
studies may be delayed by many factors, including, for example: inability to manufacture sufficient quantities of stable and qualified
materials under cGMP, for use in clinical studies; slower than expected rates of participant recruitment; failure to recruit a
sufficient number of participants; modification of clinical study protocols; changes in regulatory requirements for clinical studies;
the lack of effectiveness during clinical studies; the emergence of unforeseen safety issues; delays, suspension, or termination
of the clinical studies due to the institutional review board responsible for overseeing the study at a particular study site;
and government or regulatory delays or "clinical holds" requiring suspension or termination of the studies.
The results from early
clinical studies are not necessarily predictive of results obtained in later clinical studies. Accordingly, even if we obtain positive
results from early clinical studies, we may not be able to confirm the results in future clinical studies. For example, in our
Phase 3 AFFIRM trial in fibromyalgia, we were not able replicate the results we received from our Phase 2b BESTFIT trial. Clinical
studies may not demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals for product candidates.
Our clinical studies
may be conducted in participants with CNS conditions, and in some cases, our product candidates are expected to be used in combination
with approved therapies that themselves have significant adverse event profiles. During the course of treatment, these participants
could suffer adverse medical events or die for reasons that may or may not be related to our product candidates. We cannot ensure
that safety issues will not arise with respect to our product candidates in clinical development.
The failure of clinical
studies to demonstrate safety and effectiveness for the desired indications could harm the development of that product candidate
and other product candidates. This failure could cause us to abandon a product candidate and could delay development of other product
candidates. Any delay in, or termination of, our clinical studies would delay the filing of our NDAs with the FDA and, ultimately,
our ability to commercialize our product candidates and generate product revenues. Any change in, or termination of, our clinical
studies could materially harm our business, financial condition, and results of operations.
We are subject to extensive and costly
government regulation.
Product candidates
employing our technology are subject to extensive and rigorous domestic government regulation including regulation by the FDA,
the Centers for Medicare and Medicaid Services, other divisions of the United States Department of Health and Human Services, the
United States Department of Justice, state and local governments, and their respective foreign equivalents. The FDA regulates the
research, development, preclinical and nonclinical testing and clinical studies, manufacture, safety, effectiveness, record-keeping,
reporting, labeling, storage, approval, advertising, promotion, sale, distribution, import, and export of biopharmaceutical products.
The FDA regulates small molecule chemical entities as drugs, subject to an NDA under the FDCA. The FDA applies the same standards
for biologics, requiring an IND application, followed by a 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 chemistry, manufacturing and controls. 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 product.
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 contract manufacturers 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; fines; import and/or export restrictions; product recalls or seizures; injunctions; 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; 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
applied for or received the regulatory approvals required for the commercial sale of any of our products in the United States or
in any foreign jurisdiction. None of our product candidates have been determined to be safe and effective, and we have not submitted
an NDA or BLA to the FDA or an equivalent application to any foreign regulatory authorities for any of our product candidates.
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 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, which was enacted as part of the Patient Protection and Affordable Care Act. Under the BPCIA, an application for a biosimilar
product or BLA cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand
product identified as the reference product is approved under a BLA. The BPCIA provides an abbreviated pathway for the approval
of biosimilar and interchangeable biological products. The new abbreviated regulatory pathway establishes legal authority for the
FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable”
based on its similarity to an existing brand product. The new law is complex and is only beginning to be interpreted and implemented
by the FDA. While it is uncertain when any such processes may be fully adopted by the FDA, any such processes could have a material
adverse effect on the future commercial prospects for any of our product candidates that are biologics. There is also a risk that
President Trump’s administration could repeal or amend the BPCIA to shorten this exclusivity period, potentially creating
the opportunity for biosimilar competition sooner than anticipated after the expiration of our patent protection. Although there
is no current discussion of repeal or modification of the BPCIA, the future remains uncertain. Moreover, the extent to which a
biosimilar, once approved, will be substituted for any reference product in a way that is similar to traditional generic substitution
for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still
developing.
Our product candidates
that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for market exclusivity
as drugs under the FDCA. The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S. to the first
applicant to gain approval of an NDA for an NCE. A drug is an NCE if the FDA has not previously approved any other new drug containing
the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period,
the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA, submitted by another company
for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for
approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.
The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical
investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to
be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This
three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA
from approving ANDAs for drugs containing the original active agent.
Even 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.
Even if approved, our products 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.
Even if we obtain regulatory approval
to market our product candidates, our product candidates may not be accepted by the market.
Even if the FDA approves
one or more of our product candidates, physicians and patients may not accept it or use it. Even if physicians and patients would
like to use our products, our products may not gain market acceptance among healthcare payors such as managed care formularies,
insurance companies or government programs such as Medicare or Medicaid. Acceptance and use of our products will depend upon a
number of factors including: perceptions by members of the health care community, including physicians, about the safety and effectiveness
of our drug or device product; cost-effectiveness of our product relative to competing products; availability of reimbursement
for our product from government or other healthcare payors; and effectiveness of marketing and distribution efforts by us and our
licensees and distributors, if any.
The degree of market
acceptance of any pharmaceutical product that we develop will depend on a number of factors, including:
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cost-effectiveness;
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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;
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the timing of market entry as compared to competitive products;
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the rate of adoption of our products by doctors and nurses;
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product labeling or product insert required by the FDA for each of our products;
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reimbursement policies of government and third-party payors;
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effectiveness of our sales, marketing and distribution capabilities and the effectiveness of such capabilities of our collaborative partners, if any; and
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unfavorable publicity concerning our products or any similar products.
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Our product candidates,
if successfully developed, will compete with a number of products manufactured and marketed by major pharmaceutical companies,
biotechnology companies and manufacturers of generic drugs. Our products may also compete with new products currently under development
by others. Physicians, patients, third-party payors and the medical community may not accept and utilize any of our product candidates.
If our products do not achieve market acceptance, we will not be able to generate significant revenues or become profitable.
Because we expect sales
of our current product candidates, if approved, to generate substantially all of our product revenues for the foreseeable future,
the failure of these products to find market acceptance would harm our business and could require us to seek additional financing.
If we fail to establish marketing,
sales and distribution capabilities, or fail to enter into arrangements with third parties, we will not be able to create a market
for our product candidates.
Our strategy with our
product candidates is to control, directly or through contracted third parties, all or most aspects of the product development
process, including marketing, sales and distribution. Currently, we do not have any sales, marketing or distribution capabilities.
In order to generate sales of any product candidates that receive regulatory approval, we must either acquire or develop an internal
marketing and sales force with technical expertise and with supporting distribution capabilities or make arrangements with third
parties to perform these services for us. The acquisition or development of a sales and distribution infrastructure would require
substantial resources, which may divert the attention of our management and key personnel and defer our product development efforts.
To the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts
of others. 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.
Sales 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 control. Significant uncertainty
exists as to the reimbursement status of newly approved health care products. Third-party payors may not reimburse sales of our
products or enable our collaborators to sell them at profitable prices.
Our 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
no experience in marketing or selling pharmaceutical products and currently have no sales, marketing, or distribution infrastructure.
To market any of our products directly, we would need to develop a marketing, sales, and distribution force that both has technical
expertise and the ability to support a distribution capability. The establishment of a marketing, sales, and distribution capability
would significantly increase our costs, possibly requiring substantial additional capital. In addition, there is intense competition
for proficient sales and marketing personnel, and we may not be able to attract individuals who have the qualifications necessary
to market, sell, and distribute our products. There can be no assurance that we will be able to establish internal marketing, sales,
or distribution capabilities. If we are unable to, or choose not to establish these capabilities, or if the capabilities we establish
are not sufficient to meet our needs, we will be required to establish collaborative marketing, sales, or distribution relationships
with third parties.
In the event that we are successful
in bringing any products to market, our revenues may be adversely affected if we fail to obtain acceptable prices or adequate reimbursement
for our products from third-party payors.
Our ability to commercialize
pharmaceutical products successfully may depend in part on the availability of reimbursement for our products from:
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government and health administration authorities;
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private health insurers; and
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other third party payors, including Medicare and Medicaid.
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We cannot predict the
availability of reimbursement for health care products to be approved in the future. Third-party payors, including Medicare and
Medicaid, are challenging the prices charged for medical products and services. Government and other third-party payors increasingly
are limiting both coverage and the level of reimbursement for new drugs whether approved under Section 505(b)(1), 505(b)(2), or
505(j) of the FDCA, through direct payment mechanisms and through cost containment programs such as the Medicaid Drug Rebate Program.
Third-party insurance coverage may not be available to patients for any of our products.
The continuing efforts
of government and third-party payors to contain or reduce the costs of health care may limit our commercial opportunity. If government
and other third-party payors do not provide adequate coverage and reimbursement for any prescription product we bring to market,
doctors may not prescribe them or patients may ask to have their physicians prescribe competing drugs with more favorable reimbursement.
In some foreign markets, pricing and profitability of prescription pharmaceuticals are subject to government control. In the United
States, we expect that there will continue to be federal and state proposals for similar controls. In addition, we expect that
increasing emphasis on managed care in the United States will continue to put pressure on the pricing of pharmaceutical products.
Cost control initiatives could decrease the price that we receive for any products in the future. Further, cost control initiatives
could impair our ability to commercialize our products and our ability to earn revenues from this commercialization.
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.
If Tonmya or any of
our other product candidates are approved for commercialization outside of the United States, we intend to enter into agreements
with third parties to market them on a worldwide basis or in more limited geographical regions. We expect that we will be subject
to additional risks related to entering into international business relationships, including:
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different regulatory requirements for drug approvals;
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reduced protection for intellectual property rights, including trade secret and patent rights;
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unexpected changes in tariffs, trade barriers and regulatory requirements;
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economic weakness, including inflation, or political instability in particular foreign economies and markets;
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compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
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foreign taxes, including withholding of payroll taxes;
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foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
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workforce uncertainty in countries where labor unrest is more common than in the United States;
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production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
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business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, hurricanes, floods and fires; and
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difficulty in importing and exporting clinical study materials and study samples.
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We face the risk of product liability
claims and may not be able to obtain insurance.
Our business exposes
us to the risk of product liability claims that are inherent in the development of drugs. If the use of one or more of our or our
collaborators' drugs harms people, we may be subject to costly and damaging product liability claims brought against us by clinical
study participants, consumers, health care providers, pharmaceutical companies or others selling our products. Our inability to
obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could
prevent or inhibit the commercialization of pharmaceutical products we develop, alone or with collaborators. While we currently
carry clinical study insurance and product liability insurance, we cannot predict all of the possible harms or side effects that
may result and, therefore, the amount of insurance coverage we hold now or in the future may not be adequate to cover all liabilities
we might incur. We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval
for our drug candidates in development, but we may be unable to obtain commercially reasonable product liability insurance for
any products approved for marketing. If we are unable to obtain insurance at an acceptable cost or otherwise protect against potential
product liability claims, we will be exposed to significant liabilities, which may materially and adversely affect our business
and financial position. If we are sued for any injury allegedly caused by our or our collaborators' products, our liability could
exceed our total assets and our ability to pay the liability. A product liability claim or series of claims brought against us
would decrease our cash and could cause our stock price to fall.
We use hazardous chemicals in our
business. Potential claims relating to improper handling, storage or disposal of these chemicals could affect us and be time consuming
and costly.
Our research and development
processes and/or those of our third party contractors may involve the controlled use of hazardous materials and chemicals. These
hazardous chemicals are reagents and solvents typically found in a chemistry laboratory. Our operations also produce hazardous
waste products. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of hazardous
materials. While we attempt to comply with all environmental laws and regulations, including those relating to the outsourcing
of the disposal of all hazardous chemicals and waste products, we cannot eliminate the risk of contamination from or discharge
of hazardous materials and any resultant injury. In the event of such an accident, we could be held liable for any resulting damages
and any liability could materially adversely affect our business, financial condition and results of operations.
Compliance with environmental
laws and regulations may be expensive. Current or future environmental regulations may impair our research, development or production
efforts. We might have to pay civil damages in the event of an improper or unauthorized release of, or exposure of individuals
to, hazardous materials. We are not insured against these environmental risks.
If we enter into collaborations
with third parties, they might also work with hazardous materials in connection with our collaborations. We may agree to indemnify
our collaborators in some circumstances against damages and other liabilities arising out of development activities or products
produced in connection with these collaborations.
In addition, the federal,
state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive
materials and waste products may require us to incur substantial compliance costs that could materially adversely affect our business,
financial condition and results of operations.
Our insurance policies are expensive
and protect us only from some business risks, which will leave us exposed to significant uninsured liabilities.
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 $600,000 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.
If we retain collaborative partners
and our partners do not satisfy their obligations, we will be unable to develop our partnered product candidates.
In the event we enter
into any collaborative agreements, we may not have day-to-day control over the activities of our collaborative partners with respect
to any of these product candidates. Any collaborative partner may not fulfill its obligations under these agreements. If a collaborative
partner fails to fulfill its obligations under an agreement with us, we may be unable to assume the development of the products
covered by that agreement or enter into alternative arrangements with a third party. In addition, we may encounter delays in the
commercialization of the product candidate that is the subject of the agreement. Accordingly, our ability to receive any revenue
from the product candidates covered by these agreements will be dependent on the efforts of our collaborative partner. We could
also become involved in disputes with a collaborative partner, which could lead to delays in or termination of our development
and commercialization programs and time-consuming and expensive litigation or arbitration. In addition, any such dispute could
diminish our collaborators’ commitment to us and reduce the resources they devote to developing and commercializing our products.
Conflicts or disputes with our collaborators, and competition from them, could harm our relationships with our other collaborators,
restrict our ability to enter future collaboration agreements and delay the research, development or commercialization of our product
candidates. If any collaborative partner terminates or breaches its agreement, or otherwise fails to complete its obligations in
a timely manner, our chances of successfully developing or commercializing these product candidates would be materially and adversely
affected. We may not be able to enter into collaborative agreements with partners on terms favorable to us, or at all. Our inability
to enter into collaborative arrangements with collaborative partners, or our failure to maintain such arrangements, would limit
the number of product candidates that we could develop and ultimately, decrease our sources of any future revenues.
We may be unsuccessful in obtaining
a priority voucher for material threat medical countermeasures.
In 2016, the 21st Century
Cures Act, or the Act, was signed into law to support ongoing biomedical innovation. One part of the Act, Section 3086, is aimed
at “Encouraging Treatments for Agents that Present a National Security Threat.” The Act created a new priority review
voucher program for “material threat medical countermeasures.” The Act defines such countermeasures as drugs or 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, and botulism. A priority review
voucher can be applied to any other product; it shortens the FDA review timeline for a new application from 10 months to 6 months.
The recipient of a priority review voucher may transfer it.
We intend to seek a priority voucher for TNX-801 as a material
threat medical countermeasure. However, the structure of voucher programs limits the number of medical countermeasures eligible
for a priority review voucher. Further, the medical countermeasure must qualify for priority review in order to be eligible and
may not include any commercially approved indication. As such, the market for the TNX-801 will be limited if we are successful
in obtaining a priority voucher.
There may not be market interest
in TNX-801.
The 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; a
10 year advance appropriation of $5.6 billion was available to procure successful candidate medical countermeasures. The SRF expired
in 2013 and all funds were used to add 12 new medical countermeasures to the national stockpile. Congress reauthorized the SRF
but adequate funding has not yet followed; the SRF is now appropriated annually and has not kept pace with the need for purchasing
products ready for stockpiling. Further, similar products are being developed by other companies, such as Bavarian Nordic, which
is developing MVA, which may compete with TNX-801. As such, even if TNX-801 were to receive FDA approval, the commercial success
of TNX-801 remains uncertain.
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.
Together with the University of Alberta,
we are consulting with government authorities before publishing work that describes the synthesis of poxviruses, including TNX-801.
Our research collaboration 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 or the University
of Alberta’s research.
We face risks in connection with existing
and future collaborations with respect to the development, manufacture, and commercialization of our product candidates.
We face a number of risks
in connection with our current collaborations, including the University of Alberta. Our collaboration agreements are subject to
termination under various circumstances. Our collaborators may change the focus of their development and commercialization efforts
or may have insufficient resources to effectively assist in the development of our products. Any future collaboration agreements
may have the effect of limiting the areas of research and development that we may pursue, either alone or in collaboration with
third parties. Further, disagreements with collaborators, including disagreements over proprietary rights, contract interpretation,
or the preferred course of development, might cause delays, might result in litigation or arbitration, or might result in termination
of the research, development or commercialization of our products. Any such disagreements would divert management attention and
resources and be time-consuming and costly.
We face risks in connection with the
production and storage of the TNX-801 vaccine.
The TNX-801 vaccine candidate
is a live form of HPXV. We have initiated vaccine-manufacturing activities to support further nonclinical testing of TNX-801. While
it is safer than existing smallpox-preventing vaccines, the production and storage of the synthesized HPXV virus stock may carry
risk of infection and harm to individuals. HPXV, an equine disease caused by a virus and characterized by eruptions in the mouth
and on the skin, is believed to be eradicated. No true HPXV outbreaks have been reported since 1976, at which time the United States
Department of Agriculture obtained the viral sample used for the sequence published in 2006 that allowed the synthesis of TNX-801.
RISKS RELATED TO OUR STOCK
The market price for our common stock
may be volatile, and your investment in our common stock could decline in value.
The stock market in general
has experienced extreme price and volume fluctuations. The market prices of the securities of biotechnology and specialty pharmaceutical
companies, particularly companies like ours without product revenues and earnings, have been highly volatile and may continue to
be highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies.
The following factors, in addition to other risk factors described in this section, may have a significant impact on the market
price of our common stock:
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announcements of technological innovations or new products by us or our competitors;
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announcement of FDA approval or disapproval of our product candidates or other product-related actions;
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developments involving our discovery efforts and clinical studies;
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developments or disputes concerning patents or proprietary rights, including announcements of infringement, interference or other litigation against us or our potential licensees;
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developments involving our efforts to commercialize our products, including developments impacting the timing of commercialization;
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announcements concerning our competitors, or the biotechnology, pharmaceutical or drug delivery industry in general;
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public concerns as to the safety or efficacy of our product candidates or our competitors’ products;
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changes in government regulation of the pharmaceutical or medical industry;
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changes in the reimbursement policies of third party insurance companies or government agencies;
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actual or anticipated fluctuations in our operating results;
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changes in financial estimates or recommendations by securities analysts;
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developments involving corporate collaborators, if any;
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changes in accounting principles;
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the loss of any of our key scientific or management personnel; and
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if a clinical development program granted Breakthrough Therapy designation does not continue to meet the criteria, the FDA may rescind the designation.
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In the past, securities
class action litigation has often been brought against companies that experience volatility in the market price of their securities.
Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s
attention and resources, which could adversely affect our business, operating results and financial condition.
We do not anticipate paying dividends
on our common stock and, accordingly, shareholders must rely on stock appreciation for any return on their investment.
We have never declared
or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is
subject to the discretion of our board of directors and will depend on various factors, including our operating results, financial
condition, future prospects and any other factors deemed relevant by our board of directors. You should not rely on an investment
in our company if you require dividend income from your investment in our company. The success of your investment will likely depend
entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no
guarantee that our common stock will appreciate in value.
We expect that our quarterly results
of operations will fluctuate, and this fluctuation could cause our stock price to decline.
Our 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.
Due to the possibility
of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance.
The rights of the holders of common stock may be impaired
by the potential issuance of preferred stock.
Our articles of incorporation
give our board of directors the right to create new series of preferred stock. As a result, the board of directors may, without
stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely
affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right
to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The
possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no present intention
to issue any shares of preferred stock or to create a series of preferred stock, we may issue such shares in the future.
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 we fail to comply with
the rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we discover material
weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly
and raising capital could be more difficult. Section 404 of the Sarbanes-Oxley Act requires annual management assessments
of the effectiveness of our internal control over financial reporting. If material weaknesses or significant deficiencies are discovered
or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can
conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404
of the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and
are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business
and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price
of our common stock could drop significantly.
Because certain of our stockholders control
a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval.
As of August 10, 2017,
our directors, executive officers and principal stockholders (those beneficially owning in excess of 5%), and their respective
affiliates, beneficially own approximately 17.6% of our outstanding shares of common stock. As a result, these stockholders, acting
together, would have the ability to control the outcome of matters submitted to our stockholders for approval, including the election
of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders,
acting together, would have the ability to control the management and affairs of our company. Accordingly, this concentration of
ownership might harm the market price of our common stock by:
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delaying, deferring or preventing a change in corporate control;
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impeding a merger, consolidation, takeover or other business combination involving us; or
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discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
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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.
The trading market for
our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
Our research coverage by industry and financial analysts is currently limited. Even if our analyst coverage increases, if one or
more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease
coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in
turn could cause our stock price or trading volume to decline.
Our stockholders may experience significant
dilution as a result of the sale of securities offered by this prospectus.
To the extent that we raise
additional funds through the sale of securities offered by this prospectus, our stockholders may experience significant dilution.
Sale of additional equity and/or convertible securities at prices below certain levels will trigger anti-dilution provisions with
respect to certain securities we have previously sold. If additional funds are raised through a credit facility or the issuance
of preferred stock, lenders under the credit facility or holders of preferred stock would likely have rights that are senior to
the rights of holders of our common stock, and any credit facility or additional securities could contain covenants that would
restrict our operations.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains
forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingency,
goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are
based on our current expectations and projections about future events and they are subject to risks and uncertainties known and
unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.
In some cases, you can
identify forward-looking statements by terminology, such as “expects,” “anticipates,” “intends,”
“estimates,” “plans,” “believes,” “seeks,” “may,” “should”,
“could” or the negative of such terms or other similar expressions. Accordingly, these statements involve estimates,
assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Any forward-looking
statements are qualified in their entirety by reference to the factors discussed throughout this prospectus.
You should read this prospectus
and any accompanying prospectus supplement and the documents that we reference herein and therein and have filed as exhibits to
the registration statement, of which this prospectus is part, completely and with the understanding that our actual future results
may be materially different from what we expect. You should assume that the information appearing in this prospectus and
any accompanying prospectus supplement is accurate as of the date on the front cover of this prospectus or such prospectus supplement
only. Because the risk factors referred to above, as well as the risk factors referred to on page 7 of this prospectus
and incorporated herein by reference, could cause actual results or outcomes to differ materially from those expressed in any forward-looking
statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any
forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In
addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the
information presented in this prospectus and any accompanying prospectus supplement, and particularly our forward-looking statements,
by these cautionary statements.
USE OF PROCEEDS
Except as otherwise provided
in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by this prospectus
for general corporate purposes, which may include working capital, capital expenditures, research and development expenditures,
regulatory affairs expenditures, clinical trial expenditures, acquisitions of new technologies and investments, the financing of
possible acquisitions or business expansions, and the repayment, refinancing, redemption or repurchase of future indebtedness or
capital stock.
The intended application
of proceeds from the sale of any particular offering of securities using this prospectus will be described in the accompanying
prospectus supplement relating to such offering. The precise amount and timing of the application of these proceeds will depend
on our funding requirements and the availability and costs of other funds.
THE SECURITIES WE MAY OFFER
The descriptions of the
securities contained in this prospectus, together with the applicable prospectus supplements, summarize all the material terms
and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating
to any securities the particular terms of the securities offered by that prospectus supplement. If we indicate in the applicable
prospectus supplement, the terms of the securities may differ from the terms we have summarized below. We will also include in
the prospectus supplement information, where applicable, about material United States federal income tax considerations relating
to the securities, and the securities exchange, if any, on which the securities will be listed.
We may sell from time to
time, in one or more offerings:
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shares of our common stock;
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shares of our preferred stock;
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warrants to purchase any of the securities listed above; and/or
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units consisting of any of the securities listed above.
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The terms of any securities
we offer will be determined at the time of sale. We may issue securities that are exchangeable for or convertible into common stock
or any of the other securities that may be sold under this prospectus. When particular securities are offered, a supplement to
this prospectus will be filed with the SEC, which will describe the terms of the offering and sale of the offered securities.
DESCRIPTION OF CAPITAL STOCK
The
following is a summary of all material characteristics of our capital stock as set forth in our articles of incorporation and bylaws.
The summary does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation and
bylaws, and to the provisions of the Nevada Business Corporation Act of the State of Nevada, as amended.
Common Stock
We are authorized to issue
up to 150,000,000 shares of our common stock, par value $0.001 per share. As of August 10, 2017, there were 7,508,661 shares of
our common stock issued and outstanding. The outstanding shares of our common stock are validly issued, fully paid and nonassessable.
Holders of our common stock
are entitled to one vote for each share on all matters submitted to a shareholder vote. Holders of our common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of our common stock voting for the election of directors
can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of shareholders.
A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such
as liquidation, merger or an amendment to our articles of incorporation.
Holders of our common stock
are entitled to share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In
the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all
assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over our
common stock. Our common stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions applicable
to our common stock.
Preferred Stock
We are authorized to issue
up to 5,000,000 shares of preferred stock, par value $0.001 per share, none of which are currently outstanding. The shares of preferred
stock may be issued in series, and shall have such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions providing for the issuance of such stock adopted from time to
time by the board of directors. The board of directors is expressly vested with the authority to determine and fix in the resolution
or resolutions providing for the issuances of preferred stock the voting powers, designations, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each such series to the full extent now or hereafter permitted by the laws
of the State of Nevada.
Transfer Agent and Registrar
The Transfer Agent and
Registrar for our common stock is vStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
DESCRIPTION OF WARRANTS
The following description,
together with the additional information we may include in any applicable prospectus supplements, summarizes the material terms
and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and warrant certificates.
While the terms summarized below will apply generally to any warrants that we may offer, we will describe the particular terms
of any series of warrants in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement,
the terms of any warrants offered under that prospectus supplement may differ from the terms described below. If there are
differences between that prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements
we make in this section may not apply to a particular series of warrants. Specific warrant agreements will contain additional
important terms and provisions and will be incorporated by reference as an exhibit to the registration statement which includes
this prospectus.
General
We may issue warrants for
the purchase of common stock and/or preferred stock in one or more series. We may issue warrants independently or together with
common stock and/or preferred stock, and the warrants may be attached to or separate from these securities.
We will evidence each series
of warrants by warrant certificates that we may issue under a separate agreement. We may enter into the warrant agreement with
a warrant agent. Each warrant agent may be a bank that we select which has its principal office in the United States and a combined
capital and surplus of at least $50,000,000. We may also choose to act as out own warrant agent. We will indicate the
name and address of any such warrant agent in the applicable prospectus supplement relating to a particular series of warrants.
We will describe in the
applicable prospectus supplement the terms of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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the currency for which the warrants may be purchased;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;
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the warrant agreement under which the warrants will be issued;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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anti-dilution provisions of the warrants, if any;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire or, if the warrants are not continuously exercisable during that period, the specific date or dates on which the warrants will be exercisable;
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the manner in which the warrant agreement and warrants may be modified;
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the identities of the warrant agent and any calculation or other agent for the warrants;
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federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants;
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any securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants may be listed; and
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before exercising their
warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including
in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon
our liquidation, dissolution or winding up or to exercise voting rights, if any.
Exercise of Warrants
Each warrant will entitle
the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe
in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants
may exercise the warrants at any time up to 5:00 p.m. Eastern Time on the expiration date that we set forth in the applicable
prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Holders of the warrants
may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified
information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth on the reverse side of the warrant certificate, and in the applicable prospectus supplement,
the information that the holder of the warrant will be required to deliver to the warrant agent.
Until the warrant is properly
exercised, no holder of any warrant will be entitled to any rights of a holder of the securities purchasable upon exercise of the
warrant.
Upon receipt of the required
payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such
exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new warrant
certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights By Holders of Warrants
Any warrant agent will
act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or
trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants.
A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or warrant,
including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal
action its right to exercise, and receive the securities purchasable upon exercise of, its warrants in accordance with their terms.
Warrant Agreement Will Not Be Qualified
Under Trust Indenture Act
No warrant agreement will
be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore,
holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect to their
warrants.
Governing Law
Each warrant agreement
and any warrants issued under the warrant agreements will be governed by New York law.
Calculation Agent
Calculations relating to
warrants may be made by a calculation agent, an institution that we appoint as our agent for this purpose. The prospectus
supplement for a particular warrant will name the institution that we have appointed to act as the calculation agent for that warrant
as of the original issue date for that warrant. We may appoint a different institution to serve as calculation agent from time
to time after the original issue date without the consent or notification of the holders.
The calculation agent’s
determination of any amount of money payable or securities deliverable with respect to a warrant will be final and binding in the
absence of manifest error.
DESCRIPTION OF UNITS
We may issue units comprised
of one or more of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder
of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations
of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included
in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The applicable prospectus
supplement will describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any unit agreement under which the units will be issued;
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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The applicable prospectus
supplement will describe the terms of any units. The preceding description and any description of units in the applicable prospectus
supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement
and, if applicable, collateral arrangements and depositary arrangements relating to such units.
PLAN OF DISTRIBUTION
We may sell the securities
being offered pursuant to this prospectus through underwriters or dealers, through agents, or directly to one or more purchasers
or through a combination of these methods. The applicable prospectus supplement will describe the terms of the offering of
the securities, including:
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the name or names of any underwriters, if any, and if required, any dealers or agents;
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the purchase price of the securities and the proceeds we will receive from the sale;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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We may distribute the securities from time to time in one or more transactions at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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prices related to such prevailing market prices; or
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negotiated prices.
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Only underwriters named
in the prospectus supplement are underwriters of the securities offered by the prospectus supplement.
If
underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name
of each underwriter and the terms of the transaction (including any underwriting discounts and other terms constituting compensation
of the underwriters and any dealers) in a prospectus supplement. The securities may be offered to
the public either through underwriting syndicates represented by managing underwriters or
directly by one or more investment banking firms or others, as designated. If an underwriting syndicate is used, the managing underwriter(s) will
be specified on the cover of the prospectus supplement. If underwriters are used in the sale, the offered securities will be acquired
by the underwriters for their own accounts and may be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined at the time of sale. Any public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Unless otherwise set forth
in the prospectus supplement, the obligations of the underwriters to purchase the offered securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all of the offered securities if any are purchased.
We may grant to the underwriters
options to purchase additional securities to cover over-allotments, if any, at the public offering price, with additional underwriting
commissions or discounts, as may be set forth in a related prospectus supplement. The terms of any over-allotment option will be
set forth in the prospectus supplement for those securities.
If we use a dealer in the
sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the securities to the
dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer
at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We may sell the securities
directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities
and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states
otherwise, any agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents
or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering price set forth
in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the
future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts
in the prospectus supplement.
In connection with the
sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the securities for
whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through
dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the securities, and any institutional investors or others that purchase securities directly and then resell the securities,
may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the
securities by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We may provide agents and
underwriters with indemnification against particular civil liabilities, including liabilities under the Securities Act, or contribution
with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters may
engage in transactions with, or perform services for, us in the ordinary course of business.
In addition, we may enter
into derivative transactions with third parties (including the writing of options), or sell securities not covered by this prospectus
to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with such
a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities covered
by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge
securities covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities
or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable
prospectus supplement. The third party in such sale transactions will be an underwriter and will be identified in the applicable
prospectus supplement or in a post-effective amendment.
To facilitate an offering
of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise
affect the market price of the securities. This may include over-allotments or short sales of the securities, which involves the
sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such
persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment
option granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for
or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or
dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization
transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above
that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make
no representation or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented,
may have on the price of our securities.
Any common stock sold pursuant
to a prospectus supplement will be eligible for quotation and trading on The NASDAQ Global Market. Any underwriters to whom securities
are sold by us for public offering and sale may make a market in the securities, but such underwriters will not be obligated to
do so and may discontinue any market making at any time without notice.
In order to comply with
the securities laws of some states, if applicable, the securities offered pursuant to this prospectus will be sold in those states
only through registered or licensed brokers or dealers. In addition, in some states securities may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement
is available and complied with.
LEGAL MATTERS
The validity of the issuance
of the securities offered hereby will be passed upon for us by Sichenzia Ross Ference Kesner LLP, New York, New York.
EXPERTS
The consolidated balance
sheets of Tonix Pharmaceuticals Holding Corp. and subsidiaries as of December 31, 2016 and 2015 and the related consolidated statements
of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended have been audited
by EisnerAmper LLP, independent registered public accounting firm, as stated in their report which is incorporated herein
by reference. Such financial statements have been incorporated herein by reference in reliance on the report of such firm given
upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes
a part of a registration statement on Form S-3 filed under the Securities Act. As permitted by the SEC’s rules,
this prospectus and any prospectus supplement, which form a part of the registration statement, do not contain all the information
that is included in the registration statement. You will find additional information about us in the registration statement.
Any statements made in this prospectus or any prospectus supplement concerning legal documents are not necessarily complete and
you should read the documents that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more
complete understanding of the document or matter.
We file annual, quarterly
and current reports, proxy statements and other information with the SEC. You may read, without charge, and copy the documents
we file at the SEC’s public reference rooms in Washington, D.C. at 100 F Street, NE, Room 1580, Washington, DC 20549.
You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public
at no cost from the SEC’s website at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
We have filed a registration
statement on Form S-3 with the Securities and Exchange Commission under the Securities Act. This prospectus is part of the
registration statement but the registration statement includes and incorporates by reference additional information and exhibits.
The Securities and Exchange Commission permits us to “incorporate by reference” the information contained in documents
we file with the Securities and Exchange Commission, which means that we can disclose important information to you by referring
you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered
to be part of this prospectus and you should read it with the same care that you read this prospectus. Information that we file
later with the Securities and Exchange Commission will automatically update and supersede the information that is either contained,
or incorporated by reference, in this prospectus, and will be considered to be a part of this prospectus from the date those documents
are filed. We have filed with the Securities and Exchange Commission, and incorporate by reference in this prospectus:
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Annual Report on Form 10-K
for the year ended December 31, 2016, filed on April 13, 2017;
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 12, 2017;
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Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 11, 2017;
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Definitive Proxy Statement on Schedule 14A, filed on May 2, 2017;
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Current Reports on Form 8-K, filed on January 10, 2017 (as to Item 8.01 only), January 31, 2017 (as to Item 8.01 only), March 2, 2017 (as to Item 8.01 only), March 14, 2017, March 16, 2017, March 28, 2017, March 30, 2017, April 3, 2017, April 4, 2017, April 11, 2017, April 13, 2017, May 22, 2017, May 30, 2017, June 15, 2017, June 16, 2017, July 6, 2017 (as to Item 8.01 only) and August 1, 2017; and
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The description of our common stock contained in our Form 8-A, filed on July 23, 2013.
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We also incorporate by
reference all additional documents that we file with the Securities and Exchange Commission under the terms of Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act that are made after the initial filing date of the registration statement of which
this prospectus is a part until the offering of the particular securities covered by a prospectus supplement or term sheet has
been completed. We are not, however, incorporating, in each case, any documents or information that we are deemed to furnish and
not file in accordance with Securities and Exchange Commission rules.
You may request, and we
will provide you with, a copy of these filings, at no cost, by contacting us at:
Tonix Pharmaceuticals
Holding Corp.
509 Madison Avenue,
Suite 306
New York, New York
10022
Attention: Investor
Relations
Telephone (212) 980-9155
The
information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until
the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale
is not permitted.
PROSPECTUS (Subject to Completion)
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Dated August 11, 2017
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Up to $9,000,000
Common Stock
On August 1, 2017, we entered
into a certain Sales Agreement, or sales agreement, with Cowen and Company, LLC, or Cowen, relating to shares of our common stock
offered by this prospectus. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock
having an aggregate offering price of up to $9.0 million from time to time through Cowen.
Our common stock is quoted
on The NASDAQ Global Market under the symbol “TNXP.” On August 10, 2017, the last reported sale price of our common
stock was $3.29
per share.
Sales of our common stock,
if any, under this prospectus may be made in sales deemed to be “at the market offerings” as defined in Rule 415
promulgated under the Securities Act of 1933, as amended, or the Securities Act. If authorized by us in writing, Cowen may also
sell shares of our common stock in negotiated transactions at market prices prevailing at the time of sale or at prices related
to such prevailing market prices. Cowen is not required to sell any specific number or dollar amount of securities, but will act
as a sales agent using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed
terms between Cowen and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The compensation to Cowen
for sales of common stock sold pursuant to the sales agreement will be equal to 3.0% of the gross proceeds of any shares of
common stock sold under the sales agreement. In connection with the sale of the common stock on our behalf, Cowen will be deemed
to be an “underwriter” within the meaning of the Securities Act and the compensation of Cowen will be deemed to be
underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Cowen with respect to
certain liabilities, including liabilities under the Securities Act or the Exchange Act of 1934, as amended, or the Exchange Act.
As of August 10, 2017,
the aggregate market value of our outstanding common stock held by non-affiliates, or the public float, was $27,825,692, which
was calculated based on 6,324,021 shares of our outstanding common stock held by non-affiliates at a price of $4.40 per share,
the closing price of our common stock on July 5, 2017. Pursuant to General Instruction I.B.6 of Form S-3, in no event will
we sell shares pursuant to this prospectus with a value of more than one-third of the aggregate market value of our common stock
held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held by non-affiliates
is less than $75,000,000. During the 12 calendar months prior to, and including, the date of this prospectus, we have not
sold any securities pursuant to General Instruction I.B.6 of Form S-3.
Investing
in our common stock involves risks. See “Risk Factors” beginning on page 3 of this prospectus, and under similar
headings in the other documents that are incorporated by reference into this prospectus.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Cowen
_______________, 2017
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This
prospectus relates to the offering of our common stock. Before buying any of the common stock that we are offering, we urge you
to carefully read this prospectus, together with the information incorporated by reference as described under the headings “Where
You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus, and
any free writing prospectus or prospectus supplement that we have authorized for use in connection with this offering. These documents
contain important information that you should consider when making your investment decision.
This
prospectus describes the terms of this offering of common stock and also adds to and updates information contained in the documents
incorporated by reference into this prospectus. To the extent there is a conflict between the information contained in this prospectus,
on the one hand, and the information contained in any document incorporated by reference into this prospectus that was filed with
the Securities and Exchange Commission, or SEC, before the date of this prospectus, on the other hand, you should rely on the information
in this prospectus. If any statement in one of these documents is inconsistent with a statement in another document having a later
date — for example, a document incorporated by reference into this prospectus — the statement in the document having
the later date modifies or supersedes the earlier statement.
We
have not, and the sales agent has not, authorized anyone to provide you with information different than that contained or incorporated
by reference in this prospectus and any free writing prospectus or prospectus supplement that we have authorized for use in connection
with this offering. We take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you. You should assume that the information appearing in this prospectus, the documents incorporated by reference
herein, and in any free writing prospectus or prospectus supplement that we have authorized for use in connection with this offering
is accurate only as of the date of those respective documents. Our business, financial condition, results of operations and prospects
may have changed since those dates. You should read this prospectus, the documents incorporated by reference herein, and any free
writing prospectus or prospectus supplement that we have authorized for use in connection with this offering in their entirety
before making an investment decision.
We
are offering to sell, and are seeking offers to buy, the shares only in jurisdictions where such offers and sales are permitted.
The distribution of this prospectus and the offering of the shares in certain jurisdictions or to certain persons within such jurisdictions
may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves
about and observe any restrictions relating to the offering of the shares and the distribution of this prospectus outside the United
States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an
offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person
to make such an offer or solicitation.
We own or have rights to
various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus
may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners.
Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended
to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service
marks and trade names referred to in this prospectus may appear without the
®
,
TM
or
SM
symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable
law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, including the documents that we incorporate by reference, contain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements include those
that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements
of historical fact. These statements include, but are not limited to, statements regarding:
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our expectations regarding clinical studies, the timing of clinical results, development timelines and regulatory filings and submissions for our product candidates;
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our intention to have one unblinded interim analysis, or IA, by an independent data monitoring committee, or IDMC, when the Phase 3 clinical study, or the HONOR Study, of Tonmya
®
(cyclobenzaprine HCl sublingual tablets), or Tonmya, in participants with military-related posttraumatic stress disorder, or PTSD, from approximately 50% efficacy-evaluable participants, or approximately 275 participants, to occur in the first half of 2018; and, if the IA results require continued enrollment, our expectation of topline results from the 550-participants available in the second half of 2018;
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our liquidity and our expectations regarding our needs for and ability to raise additional capital; and
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the amount, and our expected uses, of the net proceeds of this offering.
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These
forward-looking statements are based on our current expectations and projections about future events and they are subject to risks
and uncertainties known and unknown to us that could cause actual results and developments to differ materially from those expressed
or implied in such statements, including the risks described under “Risk Factors” in this prospectus and our Annual
Report on Form 10-K for the year ended December 31, 2016.
In
some cases, you can identify forward-looking statements by terminology, such as “expects,” “anticipates,”
“intends,” “estimates,” “plans,” “believes,” “seeks,” “may,”
“should”, “could” or the negative of such terms or other similar expressions. Accordingly, these statements
involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them.
Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus.
You
should read this prospectus and the documents that we reference herein and therein, completely and with the understanding that
our actual future results may be materially different from what we expect. You should assume that the information appearing in
this prospectus and the documents incorporated by reference is accurate as of their respective dates. Our business, financial condition,
results of operations and prospects may change. We may not update these forward-looking statements, even though our situation may
change in the future, unless required by law to update and disclose material developments related to previously disclosed information.
We qualify all of the information presented in this prospectus, and particularly our forward-looking statements, by these cautionary
statements.
PROSPECTUS SUMMARY
The following summary
is qualified in its entirety by, and should be read together with, the more detailed information and financial statements and related
notes thereto appearing elsewhere or incorporated by reference in this prospectus. Before you decide to invest in our securities,
you should read the entire prospectus carefully, including the risk factors and the financial statements and related notes included
or incorporated by reference in this prospectus
.
Unless otherwise indicated
or unless the context requires otherwise, this prospectus includes the accounts of Tonix Pharmaceuticals Holding Corp., a Nevada
corporation and its wholly-owned subsidiaries, collectively referred to as “we”, “us”, “Tonix”
or the “Company”.
Overview
We are a late clinical-stage
pharmaceutical company dedicated to the development of innovative pharmaceutical products to address public health challenges.
Our most advanced drug development program is focused on delivering an efficacious and safe long-term treatment for PTSD. PTSD
is characterized by chronic disability, inadequate treatment options, high utilization of healthcare services, and significant
economic burden. We have assembled a management team with significant industry experience to lead the development of our product
candidates. We complement our management team with a network of scientific, clinical, and regulatory advisors that includes recognized
experts in the fields of PTSD and other central nervous system disorders.
Our lead product candidate,
Tonmya, a proprietary low-dose cyclobenzaprine sublingual tablet designed for bedtime administration, is in Phase 3 development
as a potential treatment for PTSD. We commenced the HONOR study, a randomized, double-blind placebo-controlled Phase 3 study of
Tonmya in approximately 550 participants with military-related PTSD in the first quarter of 2017. This Phase 3 study is an adaptive
design study based on the results of the Phase 2 AtEase study. The study design is very similar to the Phase 2 AtEase study, except
there will be one planned IA and the involvement of an IDMC to review unblinded IA results. The IDMC will make a recommendation
to continue as planned, to continue but increase the number of recruited participants or to stop for success. Based on the Phase
2 AtEase study results in military-related PTSD, Tonmya was granted Breakthrough Therapy designation by the United States Food
and Drug Administration, or FDA, for the treatment of PTSD in December 2016. TNX-102 SL is an investigational new drug and has
not been approved for any indication. Tonmya is the proposed proprietary name for TNX-102 SL that has been conditionally accepted
by the FDA.
Our development pipeline
includes: TNX-601 (tianeptine oxalate), a separate pre-IND (Investigational New Drug Application) candidate designed for daytime
administration for the treatment of PTSD and cognitive dysfunction associated with steroid use; TNX-801, a potential smallpox-preventing
vaccine based on a live synthetic version of horsepox virus, or HPXV; TNX-301 an IND candidate for the treatment of alcohol use
disorders, or AUD; and TNX-701, a biodefense development program for protection from radiation injury. We hold worldwide development
and commercialization rights to all our product candidates.
Corporate Information
We were incorporated on
November 16, 2007 under the laws of the State of Nevada as Tamandare Explorations Inc. On October 11, 2011, we changed our name
to Tonix Pharmaceuticals Holding Corp. Our principal executive offices are located at 509 Madison Avenue, Suite 306, New York,
New York 10022, and our telephone number is (212) 980-9155. Our website addresses are
www.tonixpharma.com, www.tonix.com,
and
www.krele.com
.
The information on our websites is not part of this prospectus. We have included our website addresses as a factual reference and
do not intend them to be active links to our websites.
The Offering
Common stock offered by us:
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Shares of our common stock having an aggregate offering price of up to $9.0 million.
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Manner of offering:
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“At the market offering” that may be made from time to time through our sales agent, Cowen. See “Plan of Distribution” on page 6.
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Use of proceeds:
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We intend to use the net proceeds, if any, from this offering for general corporate purposes, which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses. See “Use of Proceeds” on page 5.
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Risk Factors:
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Investing in our common stock involves significant risks. See “Risk Factors” beginning on page 3 of this prospectus and other information included or incorporated by reference into this prospectus for a discussion of factors you should carefully consider before investing in our securities.
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NASDAQ Global Market trading symbol:
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TNXP
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RISK FACTORS
An investment in our
securities involves a high degree of risk. Prior to making a decision about investing in our securities, you should carefully
consider the specific factors discussed below and discussed under the section entitled “Risk Factors” contained in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as updated by our subsequent filings under
the Exchange Act, each of which is incorporated by reference in this prospectus in their entirety, together with all of the other
information contained or incorporated by reference in this prospectus, the documents incorporated by reference herein and therein,
and any related free writing prospectus. The risks and uncertainties we have described are not the only ones we face.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.
The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment in the offered securities.
ADDITIONAL RISKS RELATED TO OUR STOCK
AND THIS OFFERING
Management will have broad discretion
as to the use of the proceeds from this offering and may not use the proceeds effectively.
Because we have not designated
the amount of net proceeds from this offering to be used for any particular purpose, our management will have broad discretion
as to the application of the net proceeds from this offering and could use them for purposes other than those contemplated at the
time of the offering. Our management may use the net proceeds for corporate purposes that may not improve our financial condition
or market value.
You may experience future dilution as
a result of future equity offerings.
In order to raise additional
capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable
for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities
in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors
purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at
which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions
may be higher or lower than the price per share paid by investors in this offering.
The market price for our common stock
may be volatile, and your investment in our common stock could decline in value.
The stock market in general
has experienced extreme price and volume fluctuations. The market prices of the securities of biotechnology and specialty pharmaceutical
companies, particularly companies like ours without product revenues and earnings, have been highly volatile and may continue to
be highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies.
The following factors, in addition to other risk factors described in this section, may have a significant impact on the market
price of our common stock:
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announcements of technological innovations or new products by us or our competitors;
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announcement of FDA approval or disapproval of our product candidates or other product-related actions;
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developments involving our discovery efforts and clinical studies;
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developments or disputes concerning patents or proprietary rights, including announcements of infringement, interference or other litigation against us or our potential licensees;
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developments involving our efforts to commercialize our products, including developments impacting the timing of commercialization;
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announcements concerning our competitors, or the biotechnology, pharmaceutical or drug delivery industry in general;
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public concerns as to the safety or efficacy of our product candidates or our competitors’ products;
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changes in the reimbursement policies of third party insurance companies or government agencies;
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actual or anticipated fluctuations in our operating results;
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developments involving corporate collaborators, if any;
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changes in accounting principles;
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the loss of any of our key scientific or management personnel; and
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the FDA may rescind the designation of a clinical development program granted Breakthrough Therapy designation if it does not continue to meet the criteria.
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In the past, securities
class action litigation has often been brought against companies that experience volatility in the market price of their securities.
Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s
attention and resources, which could adversely affect our business, operating results and financial condition.
We do not anticipate paying dividends
on our common stock and, accordingly, shareholders must rely on stock appreciation for any return on their investment.
We have never declared
or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is
subject to the discretion of our board of directors and will depend on various factors, including our operating results, financial
condition, future prospects and any other factors deemed relevant by our board of directors. You should not rely on an investment
in our company if you require dividend income from your investment in our company. The success of your investment will likely depend
entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no
guarantee that our common stock will appreciate in value.
Sales of a significant number of shares
of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our
common stock.
Sales of a substantial
number of shares of our common stock in the public markets could depress the market price of our common stock and impair our ability
to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common
stock would have on the market price of our common stock.
The common stock offered hereby will
be sold in “at the market offerings”, and investors who buy shares at different times will likely pay different prices.
Investors who purchase
shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their
investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold,
and there is no minimum or maximum sales price. Investors may experience a decline in the value of their shares as a result of
share sales made at prices lower than the prices they paid.
The actual number of shares we will issue
under the sales agreement, at any one time or in total, is uncertain.
Subject to certain limitations
in the sales agreement and compliance with applicable law, we have the discretion to deliver a sales notice to Cowen at any time
throughout the term of the sales agreement. The number of shares that are sold by Cowen after delivering a sales notice will
fluctuate based on the market price of the common shares during the sales period and limits we set with Cowen. Because the
price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is
not possible at this stage to predict the number of shares that will be ultimately issued.
USE OF PROCEEDS
We currently intend to
use the net proceeds from this offering, if any, for general corporate purposes, including working capital, capital expenditures,
other corporate expenses and acquisitions of complementary products, technologies or businesses. We do not have agreements or commitments
for any specific acquisitions at this time.
The timing and amount of
our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. As
of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this
offering. As a result, our management will have broad discretion regarding the timing and application of the net proceeds from
this offering. Pending their ultimate use, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing
instruments.
DIVIDEND POLICY
We
have never declared or paid cash dividends on our capital stock. We currently intend to retain our future earnings, if any, for
use in our business and therefore do not anticipate paying cash dividends in the foreseeable future. Payment of future dividends,
if any, will be at the discretion of our board of directors after taking into account various factors, including our financial
condition, operating results, current and anticipated cash needs and plans for expansion.
DESCRIPTION OF CAPITAL STOCK
The
following is a summary of all material characteristics of our capital stock as set forth in our articles of incorporation and bylaws.
The summary does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation and
bylaws, and to the provisions of the Nevada Business Corporation Act of the State of Nevada, as amended.
Common Stock
We are authorized to issue
up to 150,000,000 shares of our common stock, par value $0.001 per share. As of August 10, 2017, there were 7,508,661 shares of
our common stock issued and outstanding. The outstanding shares of our common stock are validly issued, fully paid and nonassessable.
Holders of our common stock
are entitled to one vote for each share on all matters submitted to a shareholder vote. Holders of our common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of our common stock voting for the election of directors
can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of shareholders.
A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such
as liquidation, merger or an amendment to our articles of incorporation.
Holders of our common stock
are entitled to share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In
the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all
assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over our
common stock. Our common stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions applicable
to our common stock.
Preferred Stock
We are authorized to issue
up to 5,000,000 shares of preferred stock, par value $0.001 per share, none of which are currently outstanding. The shares of preferred
stock may be issued in series, and shall have such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions providing for the issuance of such stock adopted from time to
time by the board of directors. The board of directors is expressly vested with the authority to determine and fix in the resolution
or resolutions providing for the issuances of preferred stock the voting powers, designations, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each such series to the full extent now or hereafter permitted by the laws
of the State of Nevada.
Transfer Agent and Registrar
The Transfer Agent and
Registrar for our common stock is vStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
PLAN OF DISTRIBUTION
On August 1, 2017, we entered
into a sales agreement with Cowen, under which we may issue and sell from time to time up to $9,000,000 of our common stock through
Cowen as our sales agent. Sales of our common stock, if any, will be made at market prices by any method that is deemed to be an
“at the market offering” as defined in Rule 415 under the Securities Act. If authorized by us in writing, Cowen may
also sell our shares of common stock in negotiated transactions, and Cowen may also purchase shares of our common stock as principal.
Cowen will offer our common
stock subject to the terms and conditions of the sales agreement on a daily basis or as otherwise agreed upon by us and Cowen.
We will designate the maximum amount of common stock to be sold through Cowen on a daily basis or otherwise determine such maximum
amount together with Cowen. Subject to the terms and conditions of the sales agreement, Cowen will use its commercially reasonable
efforts to sell on our behalf all of the shares of common stock requested to be sold by us. We may instruct Cowen not to sell common
stock if the sales cannot be effected at or above the price designated by us in any such instruction. Cowen or we may suspend the
offering of our common stock being made through Cowen under the sales agreement upon proper notice to the other party. Cowen and
we each have the right, by giving written notice as specified in the sales agreement, to terminate the sales agreement in each
party’s sole discretion at any time.
The aggregate compensation
payable to Cowen as sales agent equals 3.0% of the gross sales price of the shares sold through it pursuant to the sales agreement.
Cowen may effect sales to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or
commissions from Cowen and/or purchasers of shares of common stock for whom they may act as agents or to whom they may sell as
principal. We have also agreed to reimburse Cowen up to $50,000 of Cowen’s actual outside legal expenses incurred by Cowen
in connection with this offering, and for certain other expenses, including Cowen’s FINRA counsel fees in an amount up to
$12,500. We estimate that the total expenses of the offering payable by us, excluding commissions payable to Cowen under the sales
agreement, will be approximately $125,000.
The remaining sales proceeds,
after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory
organization in connection with the sales, will equal our net proceeds for the sale of such common stock.
Cowen will provide written
confirmation to us following the close of trading on The NASDAQ Global Market on each day in which common stock is sold through
it as sales agent under the sales agreement. Each confirmation will include the number of shares of common stock sold through it
as sales agent on that day, the volume weighted average price of the shares sold, the percentage of the daily trading volume and
the net proceeds to us.
We will report at least
quarterly the number of shares of common stock sold through Cowen under the sales agreement, the net proceeds to us and the compensation
paid by us to Cowen in connection with the sales of common stock.
Settlement for sales of
common stock will occur, unless the parties agree otherwise, on the third business day that is also a trading day following the
date on which any sales were made in return for payment of the net proceeds to us. There is no arrangement for funds to be received
in an escrow, trust or similar arrangement.
In connection with the
sales of our common stock on our behalf, Cowen may be deemed to be an “underwriter” within the meaning of the Securities
Act, and the compensation paid to Cowen may be deemed to be underwriting commissions or discounts. We have agreed in the sales
agreement to provide indemnification and contribution to Cowen against certain liabilities, including liabilities under the Securities
Act. As sales agent, Cowen will not engage in any transactions that stabilizes our common stock.
Our common stock is listed
on The NASDAQ Global Market and trades under the symbol “TNXP.” The transfer agent of our common stock is vStock Transfer,
LLC, 18 Lafayette Place, Woodmere, NY 11598.
Cowen and/or its affiliates
have provided, and may in the future provide, various investment banking and other financial services for us for which services
they have received and, may in the future receive, customary fees.
LEGAL MATTERS
The
validity of the securities offered by this prospectus will be passed upon by Sichenzia Ross Ference Kesner LLP, New York,
New York. Cowen is being represented in connection with this offering by Duane Morris LLP, Newark, New Jersey.
EXPERTS
The
consolidated balance sheets of Tonix Pharmaceuticals Holding Corp. and subsidiaries as of December 31, 2016 and 2015 and the related
consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then
ended have been audited by EisnerAmper LLP, independent registered public accounting firm, as stated in their report which
is incorporated herein by reference. Such financial statements have been incorporated herein by reference in reliance on the report
of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND
MORE INFORMATION
This
prospectus is part of the registration statement on Form S-3 we filed with the Securities and Exchange Commission, or SEC,
under the Securities Act, and does not contain all the information set forth in the registration statement. Whenever a reference
is made in this prospectus to any of our contracts, agreements or other documents, the reference may not be complete, and you should
refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated
by reference into this prospectus for a copy of such contract, agreement or other document. You may inspect a copy of the registration
statement, including the exhibits and schedules, without charge, at the SEC's public reference room mentioned below, or obtain
a copy from the SEC upon payment of the fees prescribed by the SEC.
We file annual, quarterly
and current reports, proxy statements and other information with the SEC. You may read, without charge, and copy the documents
we file at the SEC’s public reference rooms in Washington, D.C. at 100 F Street, NE, Room 1580, Washington, DC 20549.
You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public
at no cost from the SEC’s website at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
We incorporate by reference
the filed documents listed below, except as superseded, supplemented or modified by this prospectus, and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (unless otherwise noted, the SEC file
number for each of the documents listed below is 001-36019):
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·
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Annual Report on Form 10-K for the year ended December 31, 2016, filed on April 13, 2017;
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·
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 12, 2017;
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|
·
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Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 11, 2017;
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·
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Definitive Proxy Statement on Schedule 14A, filed on May 2, 2017;
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|
·
|
Current Reports on Form 8-K, filed on January 10, 2017 (as to Item 8.01 only), January 31, 2017 (as to Item 8.01 only), March 2, 2017 (as to Item 8.01 only), March 14, 2017, March 16, 2017, March 28, 2017, March 30, 2017, April 3, 2017, April 4, 2017, April 11, 2017, April 13, 2017, May 22, 2017, May 30, 2017, June 15, 2017, June 16, 2017, July 6, 2017 (as to Item 8.01 only) and August 1, 2017; and
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|
·
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The description of our common stock contained in our Form 8-A, filed on July 23, 2013.
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We also incorporate by
reference into this prospectus additional documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K
and exhibits on such form that are related to such items) that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act prior to the completion or termination of the offering, including all such documents we may file with the SEC
after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding
any information deemed furnished and not filed with the SEC. Any statements contained in a previously filed document incorporated
by reference into this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus, or in a subsequently filed document also incorporated by reference herein, modifies or supersedes
that statement.
This prospectus may contain
information that updates, modifies or is contrary to information in one or more of the documents incorporated by reference in this
prospectus. You should rely only on the information incorporated by reference or provided in this prospectus. We have not authorized
anyone else to provide you with different information. You should not assume that the information in this prospectus is accurate
as of any date other than the date of this prospectus, or the date of the documents incorporated by reference in this prospectus.
We will provide to each
person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, at no cost to the requester,
a copy of any and all of the information that is incorporated by reference in this prospectus.
You may request, and we
will provide you with, a copy of these filings, at no cost, by contacting us at:
Tonix Pharmaceuticals
Holding Corp.
509 Madison Avenue,
Suite 306
New York, New York
10022
Attention: Investor
Relations
Telephone (212) 980-9155
Up to $9,000,000
Common Stock
PROSPECTUS
Cowen
______________, 2017
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The
expenses in connection with the issuance and distribution of the securities being registered, other than underwriting discounts
and commissions, are estimated below:
SEC registration fee
|
|
$
|
11,718
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FINRA filing fee
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|
|
15,666
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|
NASDAQ listing fee
|
|
|
*
|
|
Legal fees and expenses
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|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Transfer agent fees and expenses
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|
|
*
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|
Printing and engraving expenses
|
|
|
*
|
|
Miscellaneous expenses
|
|
|
*
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|
Total
|
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$
|
*
|
|
*Estimated expenses are presently
not known and cannot be estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our amended and restated
bylaws provide to the fullest extent permitted by Nevada law, our directors or officers shall not be personally liable to us or
our shareholders for damages for breach of such director's or officer's fiduciary duty. The effect of this provision of our bylaws,
as amended, is to eliminate our right and our shareholders (through shareholders' derivative suits on behalf of our company) to
recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches
resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the
indemnification provisions in our bylaws, as amended, are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS
1.01 *
|
Form of Underwriting Agreement.
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|
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1.02
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Sales Agreement, dated August 1, 2017, by and between Tonix Pharmaceuticals Holding Corp. and Cowen and Company, LLC, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on August 1, 2017 and incorporated herein by reference.
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|
|
3.01
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Articles of Incorporation, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on April 9, 2008 and incorporated herein by reference.
|
3.02
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Articles of Merger between Tamandare Explorations Inc. and Tonix Pharmaceuticals Holding Corp., effective October 11, 2011, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on October 17, 2011 and incorporated herein by reference.
|
|
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3.03
|
Third Amended and Restated Bylaws, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on June 3, 2016 and incorporated herein by reference.
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|
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3.04
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Certificate of Change of Tonix Pharmaceuticals Holding Corp., dated March 13, 2017 and effective March 17, 2017, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on March 16, 2017 and incorporated herein by reference.
|
|
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3.03
|
Certificate of Amendment to Tonix Pharmaceuticals Holding Corp.’s Articles of Incorporation, as amended, filed with the Secretary of State of the State of Nevada on June 16, 2017, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on June 16, 2017 and incorporated herein by reference.
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|
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4.01 *
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Specimen Common Stock Certificate of the Registrant.
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4.02 *
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Form of Warrant Agreement, including form of Warrant.
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4.03 *
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Form of Unit Agreement.
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5.01
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Opinion of Sichenzia Ross Ference Kesner LLP.
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|
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23.01
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Consent of EisnerAmper LLP.
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23.02
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Consent of Sichenzia Ross Ference Kesner LLP (included in Exhibit 5.01).
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24.01
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Power of Attorney (contained on the signature pages to the registration statement).
|
*
To
be filed by amendment or as an exhibit to a Current Report on Form 8-K and incorporated herein by reference, if applicable.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To
reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered
(if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in this registration statement
or any material change to such information in this registration statement;
provided, however, that the undertakings set
forth in paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) that are incorporated by reference in this registration statement or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of this registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That,
for the purpose of determining liability under the Securities Act to any purchaser:
(i) If
the registrant is relying on Rule 430B;
(A) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the
date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424 (b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose
of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included
in the registration statement as of the earlier of the date of the Securities Act prospectus is first used after effectiveness
or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B,
for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date; or
(ii) If the registrant
is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.
(5) That, for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(i) Any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion
of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned
registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing of the Registration Statement on Form S-3 and has duly caused this Form S-3 to be signed
on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 11th day of August, 2017.
|
TONIX PHARMACEUTICALS HOLDING CORP.
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Date: August 11, 2017
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By:
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/s/ SETH LEDERMAN
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Seth Lederman
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Chief Executive Officer (Principal Executive
Officer)
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Date: August 11, 2017
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By:
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/s/ BRADLEY SAENGER
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Bradley Saenger
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Chief Financial Officer (Principal Accounting
Officer)
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers
and directors of Tonix Pharmaceuticals Holding Corp., a Nevada corporation, do hereby constitute and appoint Seth Lederman and
Bradley Saenger and each of them his or her true and lawful attorney-in-fact and agent with full power and authority to do any
and all acts and things and to execute any and all instruments which said attorney and agent, determine may be necessary or advisable
or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulations or requirements
of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement, and to any and all instruments or documents filed
as part of or in conjunction with this Registration Statement or amendments or supplements thereof, including post-effective amendments,
to this Registration Statement or any registration statement relating to this offering to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, and each of the undersigned hereby ratifies and confirms that said attorney
and agent, shall do or cause to be done by virtue thereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each
of the undersigned has executed this Power of Attorney. In accordance with the requirements of the Securities Act of 1933, as amended,
this registration statement was signed by the following persons in the capacities and on the dates stated:
Signature
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Title
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|
Date
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|
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/s/ SETH LEDERMAN
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Chief Executive Officer (Principal Executive Officer) and Director
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August 11, 2017
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Seth Lederman
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/s/ BRADLEY SAENGER
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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August 11, 2017
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Bradley Saenger
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/s/ STUART DAVIDSON
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Director
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August 11, 2017
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Stuart Davidson
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/s/ PATRICK GRACE
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Director
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August 11, 2017
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Patrick Grace
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/s/ DONALD W. LANDRY
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Director
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August 11, 2017
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Donald W. Landry
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/s/ ERNEST MARIO
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Director
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August 11, 2017
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Ernest Mario
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/s/ CHARLES MATHER IV
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Director
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August 11, 2017
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Charles Mather IV
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/s/ JOHN RHODES
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Director
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August 11, 2017
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John Rhodes
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/s/ SAMUEL SAKS
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Director
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August 11, 2017
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Samuel Saks
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