Tonix Pharmaceuticals Holding Corp.

Previous wording

We are a fully-integrated biopharmaceutical company focused on developing, licensing and commercializing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s development portfolio is focused on central nervous system (“CNS”) disorders. Our priority is to advance TNX-102 SL, a product candidate for the management of fibromyalgia, for which New Drug Application (“NDA”) was submitted to the U.S. Food and Drug Administration (“FDA”) based on two statistically significant Phase 3 studies for the management of fibromyalgia and for which a Prescription Drug User Fee Act (“PDUFA”) goal date of August 15, 2025 has been assigned for a decision on marketing authorization. In March 2025 the FDA guided that no Advisory Committee Meeting will be required for this NDA. The FDA has also granted Fast Track designation to TNX-102 SL for the management of fibromyalgia. TNX-102 SL is also being developed to treat acute stress reaction and acute stress disorder under a Physician-Initiated Investigational New Drug application (“IND”) at the University of North Carolina in the OASIS study funded by the U.S. Department of Defense (“DoD”). We are also developing TNX-1300 double-mutant cocaine esterase 200 mg,i.v. solution product as an antidote for cocaine. We discontinued enrollment and terminated the Phase 2 CATALYST study of TNX-1300 for the treatment of cocaine intoxication because enrollment in this emergency department-based study was slower than projected. We are evaluating new study designs and new endpoints for further development of TNX-1300. The CATALYST study was not discontinued for safety or efficacy reasons. Our immunology development portfolio consists of biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is an Fc-modified humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. Our infectious disease portfolio includes TNX-801, a vaccine in development to prevent mpox and smallpox, as well as TNX-4200, a small molecule broad-spectrum antiviral agent targeting CD45 for the prevention or treatment of infections to improve the medical readiness of military personnel in biological threat environments. We have a contract with the DoD’s Defense Threat Reduction Agency (“DTRA”) for up to $34 million over five years to develop TNX-4200. We own and operate a state-of-the art infectious disease research facility in Frederick, Md. Tonix Medicines, our commercial subsidiary, markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg for the treatment of acute migraine with or without aura in adults.

Current wording

We are a fully-integrated biotechnology company focused on developing, licensing and commercializing therapeutics to treat and prevent human disease and alleviate suffering. Our development portfolio is focused on central nervous system (“CNS”) disorders, immunology, immuno-oncology and infectious diseases.

Previous wording

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the sale of our commercialized assets, progress of our research and development efforts and the timing and outcome of regulatory submissions. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make. Since the acquisition of Zembrace and Tosymra on June 30, 2023, we are now reporting product revenue and related costs.

Current wording

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the sale of our commercialized assets, progress of our research and development efforts and the timing and outcome of regulatory submissions. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make.

Previous wording

Revenues. Revenue recognized for the three months ended March 31, 2025 and 2024, was $2.4 million and $2.5 million, respectively.

Current wording

Revenues. Revenue recognized for the three months ended June 30, 2025 and 2024, was $2.0 million and $2.2 million, respectively.

Previous wording

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2025, were $10.1 million, an increase of $0.8 million, or 9%, from $9.3 million incurred in the three months ended March 31, 2024. The increase is primarily due to an increase in sales and marketing of $1.3 million, offset by a decrease in employee related expenses of $0.3 million, due to a reduction in expenditures predominately as a result of the reduction in force earlier in 2024.

Current wording

Selling, general and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2025 were $16.2 million, an increase of $8.7 million, or 116%, from $7.5 million incurred in the three months ended June 30, 2024. The increase is primarily due to an increase in sales and marketing expenses of $5.3 million, employee-related expenses of $1.3 million, professional medical expenses of $0.9 million, and legal expenses of $0.4 million. All increases are a result of the migraine assets program and potential launch of TNX-102 SL.

Previous wording

Net Loss. As a result of the forgoing, the net loss for the three months ended March 31, 2025, was $16.8 million, compared to a net loss of $14.9 million for the three months ended March 31, 2024, an increase of $1.9 million or 13%. The increase in loss is predominately due to the loss incurred on the extinguishment of the debt.

Current wording

Net Loss. As a result of the foregoing, the net loss for the three months ended June 30, 2025 was $28.3 million, a decrease of $50.5 million, or 64%, compared to a net loss of $78.8 million for the three months ended June 30, 2024.

Previous wording

The following table sets forth our operating expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table sets forth our operating expenses for the six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Research and Development Expenses. Research and development expenses for the three months ended March 31, 2025, were $7.4 million, a decrease of $5.5 million, or 43%, from $12.9 million for the three months ended March 31, 2024. The decrease is predominately due to decreased clinical expenses of $2.2 million, non-clinical expenses of $0.5 million, and manufacturing expenses of $0.2 million as a result of fewer trials in the clinic and pipeline prioritization period over period, employee-related expenses of $1.5 million and building related expenses of $1.1 million, due to a reduction in expenditures predominately as a result of the decommission of the ADC and reduction in force earlier in 2024.

Current wording

Research and Development Expenses. Research and development expenses for the six months ended June 30, 2025 were $18.3 million, a decrease of $4.3 million, or 19%, from $22.6 million for the six months ended June 30, 2024. This decrease is predominately due to decreased clinical expenses of $0.9 million as a result of fewer trials in the clinic, employee-related expenses of $2.1, office-related expenses of $1.9 million and regulatory of $1.3 million due to a reduction in expenditures offset by an increase in non-clinal expenses of $1.1 million and manufacturing expenses of $0.6 million as a result of pipeline prioritization period over period.

Previous wording

As of March 31, 2025, we had working capital of $137.4 million, comprised primarily of cash and cash equivalents of $131.7 million, accounts receivable, net of $3.3 million, inventory, net of $8.1 million, and prepaid expenses and other of $6.4 million, offset by $4.2 million of accounts payable, $7.7 million of accrued expenses and other current liabilities, and $0.2 million of lease liabilities, short term. A significant portion of the accounts payable and accrued expenses are due to work performed in relation to our clinical programs, and accruals for gross to net deductions related to our commercial products.

Current wording

As of June 30, 2025, we had working capital of $124.5 million, comprised primarily of cash and cash equivalents of $125.3 million, accounts receivable, net of $2.3 million, inventory of $6.0 million and prepaid expenses and other of $9.9 million, offset by $7.8 million of accounts payable, $11.1 million of accrued expenses, and current lease liabilities of $0.2 million. A significant portion of the accounts payable and accrued expenses are due to work performed in relation to our clinical programs, accruals for gross to net deductions related to our commercial products and potential product launch of TNX-102 SL.

Previous wording

The following table provides a summary of operating, investing and financing cash flows for the quarters ended March 31, 2025, and 2024, respectively (in thousands):

Current wording

The following table provides a summary of operating, investing and financing cash flows for the six months ended June 30, 2025, and 2024, respectively (in thousands):

Previous wording

For the three months ended March 31, 2025, and 2024, we used approximately $16.6 million and $17.6 million of cash in operating activities, respectively, which represents cash outlays for research and development and general and administrative expenses in such periods. The decrease in cash outlays principally resulted from a decrease in research and development activities. For the three months ended March 31, 2025, net cash provided by financing activities were $49.5 million, predominately from the proceeds from the sale of our common stock of $62.2 million, offset by the repayment of the term loan of $9.7 million and repurchase of our common stock of $3.0 million. For the three months ended March 31, 2024, net cash used by financing activities were $0.2 million, predominately from the repayment of the term loan. Cash used by investing activities for the three months ended March 31, 2025, and 2024, was $6,000 and $0.1 million respectively, related to the purchase of property and equipment. The decrease is predominately due to less property and equipment purchases.

Current wording

For the six months ended June, 2025 and 2024, we used approximately $31.4 million and $27.5 million of cash in operating activities, respectively, which represents cash outlays for research and development and general and administrative expenses in such periods. The increase in cash outlays principally resulted from an increase in general and administrative expenses. For the six months ended June 30, 2025, net cash provided from financing activities was $60.5 million and $6.8 million, respectively predominately from the issuance of common stock. Cash used in investing activities for the six months ended June 30, 2025, was $2.5 million related to the issuance of a note and purchase of property and equipment. Cash used in investing activities for the six months ended June 30, 2024, was $0.1 million related to the purchase of property and equipment.

Previous wording

We believe that our cash resources at March 31, 2025 and the net proceeds of $9.9 million that we raised from equity offerings in the second quarter of 2025 (See Note 17) will meet our planned operating and capital expenditure requirements into the second quarter of 2026, but not beyond.

Current wording

We believe that our cash resources at June 30, 2025, and the proceeds that we raised from equity offerings during the third quarter of 2025, will meet our operating and capital expenditure requirements into the third quarter of 2026.

Previous wording

We continue to face significant challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to changes we may make in our research and development spending plans. These factors raise substantial doubt about our ability to continue as a going concern for the one-year period from the date of filing of this Form 10-Q. We must obtain additional funding through public or private financing or collaborative arrangements with strategic partners to increase the funds available to fund operations. Without additional funds, we may be forced to delay, scale back or eliminate some of our research and development activities, or other operations and potentially delay product development to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals would be adversely affected and we may be forced to cease operations.

Current wording

These factors raise substantial doubt about our ability to continue as a going concern. We continue to face significant challenges and uncertainties and must obtain additional funding through public and private financing and collaborative arrangements with strategic partners to increase the funds available to fund operations. However, we may not be able to raise capital on terms acceptable to us, or at all. Without additional funds, we may be forced to delay, scale back or eliminate some or all of our research and development activities or other operations, and potentially delay product development in an effort to maintain sufficient funds to continue operations. If any of these events occurs, our ability to achieve development and commercialization goals will be adversely affected and we may be forced to cease operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Previous wording

We expect to incur losses from operations for the near future. We expect to incur increasing research and development expenses, including expenses related to additional clinical trials and the build out of our research and development operations and manufacturing. We will not have enough resources to meet our operating requirements for the one-year period from filing date of this report.

Current wording

We expect to incur losses from operations for the near future. We expect to increase our operating costs to align the Company’s capital and human resources with its previously announced strategic prioritization of TNX-102 SL product candidate for the management of fibromyalgia. We will not have enough resources to meet our operating requirements for the one-year period from filing date of this report.

Previous wording

Our future capital requirements will depend on a number of factors, including the availability of financing, the timing and outcome of regulatory approvals, the progress of our research and development of product candidates, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, the status of competitive products, and our success in developing markets for our product candidates.

Current wording

Our future capital requirements will depend on a number of factors, including the progress of our research and development of product candidates, the timing and outcome of regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing and our success in developing markets for our product candidates.

Previous wording

We will need to obtain additional capital in order to fund future research and development activities. Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, shareholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock.

Current wording

We will need to obtain additional capital in order to fund future research and development activities and future capital expenditures. Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, shareholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock.

Previous wording

On July 30, 2024, we entered into a Sales Agreement with AGP pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to $250.0 million in the ATM. AGP will act as sales agent and will be paid a 3% commission on each sale under the Sales Agreement. Our common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the three months ended March 31, 2025, we sold approximately 2.7 million shares of common stock under the Sales Agreement, for net proceeds of approximately $59.8 million. Subsequent to March 31, 2025, we sold 0.6 million shares of common stock under the Sales Agreement, for net proceeds of approximately $9.9 million.

Current wording

On July 30, 2024, we entered into a Sales Agreement (the “2024 Sales Agreement”), with AGP pursuant to which we may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $250.0 million in sales. AGP is the sales agent under the ATM and paid a 3% commission on each sale under the 2024 Sales Agreement. Our common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the three and six months ended June 30, 2025, we sold approximately 0.8 million and 3.5 million shares, respectively, of common stock under the 2024 Sales Agreement for net proceeds of approximately $15.5 million and $75.4 million, respectively. Subsequent to June 30, 2025, we sold 0.9 million shares of common stock under the 2024 Sales Agreement, for net proceeds of approximately $37.5 million. We can no longer sell shares under the 2024 Sales Agreement as we have reached the aggregate $250 million in sales.

Previous wording

Additionally, with the closing of the financing on April 1, 2024, we entered into warrant amendments (collectively, the “Warrant Amendments”) with certain holders of our common warrants (referred to herein as the “Existing Warrants”). We agreed to amend the exercise price of each Existing Warrant to $1,056.00 upon approval by our stockholders of a proposal to allow the Existing Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 or, if stockholder approval is not obtained by October 1, 2024, we agreed to automatically amend the exercise price of the Existing Warrants to the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) of our common stock on October 1, 2024 if and only if the Minimum Price is below the then current exercise price. Upon stockholder approval on May 22, 2024, the termination date for the warrants issued August 2023 (the “August Warrants”) to purchase up to an aggregate of 2,172 shares was amended to April 1, 2029; the termination date for Series A Warrants to purchase up to an aggregate of approximately 2,782 shares is April 1, 2029; the termination date for Series B Warrants to purchase up to an aggregate of approximately 2,782 shares is April 1, 2025; the termination date for Series C Warrants to purchase up to an aggregate of approximately 10,884 shares is the earlier of (i) April 1, 2026 and (ii) 10 trading days following notice by we to the Series C Warrant holder of our public announcement of the FDA’s acknowledgement and acceptance of our NDA relating to TNX-102 SL in patients with Fibromyalgia; the termination date for Series D Warrants to purchase up to an aggregate of approximately 10,884 shares is April 1, 2029. The other terms of the Existing Warrants will remain unchanged. On May 22, 2024, at the annual meeting of stockholders, our stockholders approved the proposal to amend the exercise prices of the Existing Warrants to $1,056.00 per share and extend the expiration dates.

Current wording

Additionally, with the closing of the financing on April 1, 2024, we entered into warrant amendments (collectively, the “Warrant Amendments”) with certain holders of our common warrants (referred to herein as the “Existing Warrants”). We agreed to amend the exercise price of each Existing Warrant to $1,056.00 upon approval by our stockholders of a proposal to allow the Existing Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 or, if stockholder approval is not obtained by October 1, 2024, we agreed to automatically amend the exercise price of the Existing Warrants to the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) of our common stock on October 1, 2024, if and only if the Minimum Price is below the then current exercise price. Upon stockholder approval, the termination date for the warrants issued August 2023 (the “August Warrants”) to purchase up to an aggregate of 2,172 shares was amended to April 1, 2029; the termination date for Series A Warrants to purchase up to an aggregate of approximately 2,782 shares is April 1, 2029; the termination date for Series B Warrants to purchase up to an aggregate of approximately 2,782 shares is April 1, 2025; the termination date for Series C Warrants to purchase up to an aggregate of approximately 10,884 shares is the earlier of (i) April 1, 2026 and (ii) 10 trading days following notice by the Company to the Series C Warrant holders of the Company’s public announcement of the FDA’s acknowledgement and acceptance of the Company’s NDA relating to TNX-102 SL in patients with Fibromyalgia; the termination date for Series D Warrants to purchase up to an aggregate of approximately 10,884 shares is April 1, 2029. The other terms of the Existing Warrants remained unchanged.

Previous wording

Upon the closing of the offering, we determined that certain of the Common Warrants did not meet the criteria for equity classification due to the lack of sufficient authorized and unissued shares to settle the instruments. The Company has adopted a sequencing approach under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity to determine the classification of its contracts at issuance and at each subsequent reporting date, whereby shares are allocated based on the earliest issuance date of potentially dilutive instruments, with the earliest issuance date receiving the first allocation of shares. In the event of identical issuance dates, shares are then allocated beginning with instruments with the latest maturity date first. Pursuant to this sequencing approach, we determined that the authorized shares were sufficient to settle all remaining Pre-Funded Warrants and 15,917 Series D Warrants and were therefore classified in equity. The remaining 9,422 Series D Warrants and the Series C Warrants associated with the deficit shares were initially classified as liabilities at fair value and presented within non-current liabilities on the consolidated balance sheet as of December 31, 2023.

Current wording

Upon the closing of the offering, we determined that certain of the Common Warrants did not meet the criteria for equity classification due to the lack of sufficient authorized and unissued shares to settle the instruments. We have adopted a sequencing approach under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity to determine the classification of its contracts at issuance and at each subsequent reporting date, whereby shares are allocated based on the earliest issuance date of potentially dilutive instruments, with the earliest issuance date receiving the first allocation of shares. In the event of identical issuance dates, shares are then allocated beginning with instruments with the latest maturity date first. Pursuant to this sequencing approach, we determined that the authorized shares were sufficient to settle all remaining Pre-Funded Warrants and 15,917 Series D Warrants and were therefore classified in equity. The remaining 9,422 Series D Warrants and the Series C Warrants associated with the deficit shares were initially classified as liabilities at fair value and presented within non-current liabilities on the consolidated balance sheet as of December 31, 2023.

Previous wording

On January 25, 2024, the date our stockholders approved the proposal to file an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 160,000,000 to 1,000,000,000, the liability-classified Series D Warrants and the Series C Warrants were adjusted to fair value and reclassified to equity.

Current wording

On January 25, 2024, the date our stockholders approved the proposal to file an amendment to our Articles of Incorporation to increase the number of authorized shares of common stock from 160,000,000 to 1,000,000,000, the liability-classified Series D Warrants and the Series C Warrants were adjusted to fair value and reclassified to equity.

Previous wording

In September 2024, the Board of Directors approveda 2024 share repurchase program pursuant to which we may repurchase up to $10.0 million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. During the three months ended March 31, 2025, the Company repurchased 250,000 of shares of its common stock outstanding under the 2024 share repurchase at prices ranging from $9.98 to $14.33 per share for a gross aggregate cost of approximately $3.0 million.

Current wording

In September 2024, the Board of Directors approved a 2024 share repurchase program pursuant to which we may repurchase up to $10.0 million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. During the three months June 30, 2025, we repurchased 150,000 of shares of common stock outstanding under the 2024 share repurchase at prices ranging from $18.25 to $20.47 per share for a gross aggregate cost of approximately $2.9 million. The repurchased shares were immediately retired.

Previous wording

Subsequent to March 31, 2025, the Company repurchased 150,000 of shares of common stock under a 2024 share repurchase program at prices ranging from$18.25 to $20.47 per share for a gross aggregate cost of approximately $2.9 million.

Current wording

During the six months June 30, 2025, we repurchased 400,000 of shares of common stock outstanding under the 2024 share repurchase at prices ranging from $9.98 to $20.47 per share for a gross aggregate cost of approximately $5.9 million. The repurchased shares were immediately retired.

Previous wording

The timing and amount of any shares repurchased will be determined based on our evaluation of market conditions and other factors and the share repurchase programmay be discontinued or suspended at any time. Repurchases will be made in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and certain other legal requirements to which the Company may be subject. Repurchasesmay be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so.

Current wording

The timing and amount of any shares repurchased will be determined based on our evaluation of market conditions and other factors and the New Share Repurchase Program may be discontinued or suspended at any time. Repurchases will be made in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and certain other legal requirements to which the Company may be subject. Repurchases may be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so.

Previous wording

Under the terms of the Amended and Restated 2020 Plan, we may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3) stock appreciation rights (“SARs”), (4) restricted stock units, (5) other stock-based awards, and (6) cash-based awards. The Amended and Restated 2020 Plan initially provided for the issuance of up to 50,000 shares of common stock, which amount will be increased to the extent that awards granted under the Plans are forfeited, expire or are settled for cash (except as otherwise provided in the Amended and Restated 2020 Plan). In addition, the Amended and Restated 2020 Plan contains an “evergreen provision” providing for an annual increase in the number of shares of our common stock available for issuance under the Amended and Restated 2020 Plan on January 1 of each year for a period of ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030, in an amount equal to the difference between (x) twenty percent (20%) of the total number of shares of common stock outstanding on December 31 st of the preceding calendar year, and (y) the total number of shares of common stock reserved under the Amended and Restated 2020 Plan on December 31 stof such preceding calendar year (including shares subject to outstanding awards, issued pursuant to awards or available for future awards). The Board of Directors determines the exercise price, vesting and expiration period of the grants under the Amended and Restated 2020 Plan. However, the exercise price of an incentive stock option may not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more shareholder and 100% of fair value for a grantee who is not a 10% shareholder. The fair value of the common stock is determined based on quoted market price or in absence of such quoted market price, by the Board of Directors in good faith. Additionally, the expiration period of grants under the Amended and Restated 2020 Plan may not be more than ten years. As of March 31, 2025, there were 202,890 options available for future grants under the Amended and Restated 2020 Plan.

Current wording

Under the terms of the Amended and Restated 2020 Plan, we may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3) stock appreciation rights (“SARs”), (4) RSUs, (5) other stock-based awards, and (6) cash-based awards. The Amended and Restated 2020 Plan initially provided for the issuance of up to 50,000 shares of common stock, which amount will be increased to the extent that awards granted under the Plans are forfeited, expire or are settled for cash (except as otherwise provided in the Amended and Restated 2020 Plan). In addition, the Amended and Restated 2020 Plan contains an “evergreen provision” providing for an annual increase in the number of shares of our common stock available for issuance under the Amended and Restated 2020 Plan on January 1 of each year for a period of ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030, in an amount equal to the difference between (x) twenty percent (20%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, and (y) the total number of shares of common stock reserved under the Amended and Restated 2020 Plan on December 31 st of such preceding calendar year (including shares subject to outstanding awards, issued pursuant to awards or available for future awards). On May 8, 2025, our stockholders approved the addition of 1,000,000 shares to the Company's Amended and Restated 2020 Plan.

Previous wording

We measure the fair value of stock options on the date of grant, based on the Black Scholes option pricing model using certain assumptions discussed below, and the closing market price of the Company’s common stock on the date of the grant. The fair value of the award is measured on the grant date. One-third of most stock options granted pursuant to the Plans vest 12 months from the date of grant and 1/36 th each month thereafter for 24 months and expire ten years from the date of grant. In addition, the Company issues options to directors which vest over a one-year period. The Company also issues premium options to executive officers which have an exercise price greater than the grant date fair value and has issued performance-based options which vest when target parameters are met or probable of being met, subject in each case to a one year minimum service period prior to vesting. Stock-based compensation expense related to awards is amortized over the applicable service period using the straight-line method.

Current wording

We measure the fair value of stock options on the date of grant, based on the Black Scholes option pricing model using certain assumptions discussed below, and the closing market price of our common stock on the date of the grant. The fair value of the award is measured on the grant date. One-third of most stock options granted pursuant to the Plans vest 12 months from the date of grant and 1/36th each month thereafter for 24 months and expire ten years from the date of grant. In addition, we issue options to directors which vest over a one-year period. We also issue premium options to executive officers which have an exercise price greater than the grant date fair value and has issued performance-based options which vest when target parameters are met or probable of being met, subject in each case to a one year minimum service period prior to vesting. Stock-based compensation expense related to awards is amortized over the applicable service period using the straight-line method.

Previous wording

Stock-based compensation expense relating to options granted of $0.9 million, of which $0.6 million and $0.3 million, related to General and Administration and Research and Development, respectively was recognized for the three months ended March 31, 2025.

Current wording

Stock-based compensation expense relating to options granted of $1.4 million, of which $1.0 million and $0.4 million, related to General and Administration and Research and Development, respectively was recognized for the quarter ended June 30, 2025. Stock-based compensation expense relating to options granted of $1.1 million, of which $0.8 million and $0.3 million, related to General and Administration and Research and Development, respectively was recognized for the quarter ended June 30, 2024.

Previous wording

As of March 31, 2025, we had approximately $7.6 million of total unrecognized compensation cost related to non-vested awards granted under the Plans, which the Company expects to recognize over a weighted average period of 2.26 years.

Current wording

As of June 30, 2025, we had approximately $15.5 million of total unrecognized compensation cost related to non-vested awards granted under the Plans, which we expect to recognize over a weighted average period of 3.08 years.

Previous wording

The 2025 ESPP allows eligible employees to purchase up to an aggregate of 2,000,000 shares of the Company's common stock. Under the 2025 ESPP, on the first day of each offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of the Company's common stock at the end of the offering period. Each offering period under the 2025 ESPP is for six months, which can be modified from time to time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2025 ESPP, subject to the statutory limit under the Code.

Current wording

The 2025 ESPP allows eligible employees to purchase up to an aggregate of 2,000,000 shares of our common stock. Under the 2025 ESPP, on the first day of each offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of our common stock at the end of the offering period. Each offering period under the 2025 ESPP is for six months, which can be modified from time to time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2025 ESPP, subject to the statutory limit under the Code.

Previous wording

The 2023 ESPP allows eligible employees to purchase up to an aggregate of 250 shares of the Company’s common stock. Under the 2023 ESPP, on the first day of each offering period, each eligible employee for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of the Company’s common stock at the end of the offering period. Each offering period under the 2023 ESPP is for six months, which can be modified from time-to-time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee’s accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2023 ESPP, subject to the statutory limit under the Code. As of March 31, 2025, 159 shares were available for future sales under the 2023 ESPP.

Current wording

The 2023 ESPP allows eligible employees to purchase up to an aggregate of 250 shares of our common stock. Under the 2023 ESPP, on the first day of each offering period, each employee eligible for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of our common stock at the end of the offering period. Each offering period under the 2023 ESPP is for six months, which can be modified from time-to-time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee's accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. A participant must designate in his or her enrollment package the percentage (if any) of compensation to be deducted during that offering period for the purchase of stock under the 2023 ESPP, subject to the statutory limit under the Code. As of June 30, 2025, 159 shares were available for future sales under the 2023 ESPP and 2,000,000 shares were available under the 2025 ESPP.

Previous wording

The ESPP Plans are considered compensatory plans with the related compensation cost expensed over the six-month offering period. For the three months ended March 31, 2025, and 2024, $0 and $27,000, respectively, was expensed. In January 2024, 21 shares that were purchased as of December 31, 2023, under the 2022 ESPP, were issued.

Current wording

The ESPP Plans are considered compensatory plans with the related compensation cost expensed over the six-month offering period. For the six months ended June 30, 2025, and 2024, $0 and $27,000, respectively, was expensed. In January 2024, 21 shares that were purchased as of December 31, 2023, under the 2022 ESPP, were issued. As of June 30, 2024, approximately $33,000 of employee payroll deductions had accumulated and had been recorded in accrued expenses. In July 2024, 70 shares that were purchased as of June 30, 2024, under the 2022 ESPP, were issued.

Previous wording

We have entered into contracts with various contract research organizations with outstanding commitments aggregating approximately $21.3 million at March 31, 2025 for future work to be performed.

Current wording

We have entered into contracts with various contract research organizations with outstanding commitments aggregating approximately $21.7 million at June 30, 2025 for future work to be performed.