Tonix Pharmaceuticals Holding Corp.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM*

To the Board of Directors and Stockholders of

Tonix Pharmaceuticals Holding Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tonix Pharmaceuticals Holding Corp. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has continuing losses and negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accrual and prepaid balance for clinical trial expenses

As described in Note 2 to the consolidated financial statements, at each balance sheet date the Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and under clinical site agreements in connection with conducting clinical trials. The Company accounts for trial expenses according to the timing of various aspects of the trial. The Company’s accrual for clinical trial expenses of approximately $1.8 million is included in accrued expenses and other current liabilities in the December 31, 2024 consolidated balance sheet. The Company also recorded prepaid clinical trial expenses of approximately $0.9 million within prepaid expenses and other in the December 31, 2024 consolidated balance sheet. The amounts recorded for clinical trial expenses represent the Company’s estimates of the unpaid and prepaid clinical trial expenses based on facts and circumstances known to the Company at that time and are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. The estimation of clinical trial expenses was also identified as a critical accounting estimate by management.

We identified the accrual for clinical trial expenses as a critical audit matter due to the significant judgment and estimation required by management in determining progress or state of completion of clinical trials or services completed. This in turn led to a high degree of auditor subjectivity, and significant audit effort was required in performing our procedures and evaluating audit evidence relating to estimates made by management.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. We obtained an understanding of Management’s process and evaluated the design of controls over developing its estimate of accrued and prepaid clinical trial expenses, including the process of estimating the expenses incurred to date based on the status of the clinical trials. Our procedures also included, among others, reading agreements and contract amendments with vendors, consultants and clinical research organizations and clinical site agreements in connection with conducting clinical trials, and evaluating the significant assumptions described above and the methods used in developing the clinical trial estimates and re-calculating the amounts that were unpaid and prepaid at the balance sheet date. We confirmed a sample of contractual commitments for completeness of the contract listing, as well as confirmation of work completed, paid and unpaid directly with the third parties involved in performing the clinical trial services on behalf of the Company. We also made direct inquiries of Company financial personnel regarding the contract amount including change orders, status and progress to completion of clinical trials, amounts paid to date under each contract, and description of future commitments. We also assessed the historical accuracy of management’s estimates by comparing work completed in the current period to work completed in prior-period to identify unusual fluctuations, if any.

Impairment of long-lived assets

As described in Note 2 to the consolidated financial statements, the Company evaluates long-lived assets for impairment, including property and equipment, finite-lived intangible assets and operating lease right-of-use assets whenever events or circumstances indicate that their net book value may not be recoverable. The Company compared the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets, with the difference recorded as an impairment charge. For the year-ended December 31, 2024, the Company recorded impairment charges related to long-lived assets of $48.8 million associated with the decommissioning of the Advanced Development Center, and $9.2 million associated with Zembrace and Tosymra developed technology intangible assets due to a decline in revenues.

We identified the impairment of long-lived assets as a critical audit matter due to the significant judgment and estimation required by management in estimating the undiscounted cash flows and related fair value estimates of each impaired asset group. This in turn led to a high degree of auditor subjectivity, and significant audit effort was required in performing our procedures and evaluating audit evidence relating to estimates made by management.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. We obtained an understanding of Management’s process and evaluated the design of controls over the identification of events or changes in circumstances that indicate the carrying amount of an asset or asset group may not be recoverable, as well as management’s methodology in determining the fair value estimate when triggering events are identified.

Our procedures related to the Advanced Development Center also included, among others, (i) evaluation of whether management appropriately identified events or changes in circumstances that indicated that the carrying amount of certain asset groups may not be recoverable; (ii) evaluation of management’s determination of asset groups at the lowest level of identifiable cash flows; (iii) vouching a selection of invoices to validate acquisition costs, along with physical observation of the underlying land, building, and selected machinery and equipment near the impairment date; and (iv) testing managements fair value estimates. Testing over the fair value estimates involved the assistance of auditor specialists, which included determining the reasonableness of the valuation methodology applied and assumptions used by Management.

Our procedures related to developed technology intangible assets also included, among others, (i) evaluation of whether management appropriately identified events or changes in circumstances that indicated that the carrying amount of certain asset groups may not be recoverable; and (ii) testing managements recoverability test and fair value estimates. Testing over the fair value estimates involved the assistance of auditor specialists, which included determining the reasonableness of the valuation methodology applied and assumptions used by Management. As part of our evaluation, we also considered whether such assumptions were consistent with evidence obtained in other areas of the audit.

We have served as the Company’s auditor since 2010.

EISNERAMPER LLP

Iselin, New Jersey

March 18, 2025