Tonix Pharmaceuticals Holding Corp.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –BUSINESS

Tonix Pharmaceuticals (“Tonix” or the “Company”) is a fully integrated biopharmaceutical company commercializing and developing innovative therapies for central nervous system (“CNS”) disorders, infectious diseases, and immunology. The Company’s portfolio consists of commercial, development-stage and discovery programs.

TONMYA® (cyclobenzaprine HCl sublingual tablets 2.8 mg), the Company’s flagship internally conceived and developed medicine, is the first new medicine for fibromyalgia in adults approved by the U.S. Food and Drug Administration (“FDA”) in more than 15 years. Tonix’s CNS commercial infrastructure supports its marketed products, including its acute migraine products, Zembrace® SymTouch® (sumatriptan injection 3 mg) and Tosymra® (sumatriptan nasal spray 10 mg). Tonix received approval from the FDA for TONMYA for the treatment of fibromyalgia in adults in August 2025 and commercially launched TONMYA in November 2025. TONMYA is a centrally acting, non-opioid analgesic designed for bedtime administration and long-term use, for which the Company holds worldwide commercialization rights. Tonix’s commercial platform includes sales, marketing, market access, distribution, and patient support capabilities.

Tonix is advancing a diversified pipeline generated through internal discovery, in-licensing, acquisitions, and collaborations with academic and non-profit institutions. The Company’s pipeline addresses conditions that span CNS, infectious disease, immunology, and rare disease, with several programs in clinical and preclinical development.

Clinical Stage Pipeline

TONMYA’s proprietary cyclobenzaprine HCl sublingual tablet formulation is referred to as “TNX-102 SL” outside of the fibromyalgia indication. Tonix is exploring the utility of TNX-102 SL (cyclobenzaprine HCl sublingual tablets) in Phase 2 clinical trials for major depressive disorder (“MDD”) and acute stress disorder (“ASD”)/acute stress reaction (“ASR”). A potentially pivotal Phase 2 study of TNX-102 SL as a first-line monotherapy in adults with MDD, the HORIZON study, commenced in June 2026 and is currently enrolling.

TNX-102 SL is being developed to treat ASD/ASR under an investigator-initiated investigational new drug (“IND”) application at the University of North Carolina (“UNC”) in the ongoing OASIS study funded by a grant UNC received from the U.S. Department of Defense (“DoD”). Topline data from the OASIS study is expected to be reported mid-2027.

Tonix’s clinical-stage infectious disease portfolio includes TNX-4800, a human monoclonal antibody targeting Borrelia OspA, for the prevention of Lyme disease in the U.S., where no vaccines or prophylactics for Lyme disease are approved by the FDA. Tonix received positive, final minutes from the FDA following a Type C meeting in the third quarter of 2026. The minutes support the planned initiation of an adaptive Phase 2 field study in the first quarter of 2027. The Phase 2 study is expected to enroll in the 2027 and 2028 seasons, with the majority of participants enrolled in 2028, pending final FDA review and agreement on the study protocol. If the attack rate is lower than expected, the study could continue enrolling in 2029. TNX-4800 was licensed from UMass Chan Medical School.

Tonix’s clinical-stage immunology development portfolio includes TNX-1500 (provisional international nonproprietary name: mosdaprubart), which is a Phase 2-ready Fc-modified humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of kidney transplant rejection and for the treatment of autoimmune diseases. A Phase 2, open-label, investigator-initiated study to prevent rejection in adult kidney transplant patients at Massachusetts General Hospital (“MGH”) is expected to begin in the first quarter of 2027.

Tonix’s clinical-stage CNS portfolio includes the biologic candidate TNX-1300 (double-mutant cocaine esterase), which is being developed for the treatment of cocaine intoxication. TNX-1300 has been granted Breakthrough Therapy designation by the FDA, and a Phase 2 study has been completed. Tonix met with the FDA in the fourth quarter of 2026 to discuss the clinical design of the next Phase 2 study but does not plan to initiate a study in the near term in order to prioritize its cash and resource allocation toward TONMYA and TNX-4800.

Tonix uses artificial intelligence (“AI”) and computational tools to support scientific research, drug development and corporate activities. The Company’s AI-assisted scientific analyses are subject to appropriate human review and, where relevant, experimental and clinical validation.

The Company is focused on supporting TONMYA’s commercial growth and the advancement of TNX-102 SL in MDD, TNX-4800 for Lyme disease prevention, and TNX-1500 in an investigator-initiated study to prevent kidney transplant rejection.

Research Contract with the U.S. Department of Defense

Tonix is developing a pre-IND infectious disease program designated TNX-4200, which is a small molecule broad-spectrum antiviral agent targeting CD45 to improve the medical readiness of military personnel in biological threat environments. The TNX-4200 program is supported by a $34.1 million contract over five years from the U.S. DoD’s Defense Threat Reduction Agency (“DTRA”). Tonix owns and operates a state-of-the-art research facility in Frederick, Maryland that supports this research.

Our product candidates are investigational and have not been approved for the indications for which they are being developed.

The condensed consolidated financial statements include the accounts of Tonix Pharmaceuticals Holding Corp. and its wholly owned subsidiaries, Tonix Pharmaceuticals, Inc., Krele LLC, Tonix Pharmaceuticals (Canada), Inc., Tonix Medicines, Jenner Institute LLC, Tonix R&D Center LLC, Tonix Pharma Limited and Ixovia Corp. (collectively, the “Company” or “Tonix”). All intercompany balances and transactions have been eliminated in consolidation.

Zembrace SymTouch and Tosymra are registered trademarks of Tonix Medicines. TONMYA is a registered trademark of Tonix Pharma Limited. All other marks are the property of their respective owners. Tonix is led by a management team with significant industry experience in drug development and commercialization.

Going Concern

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and negative cash flows from operating activities. At September 30, 2026, the Company had working capital of approximately $150.1 million. At September 30, 2026, the Company had an accumulated deficit of approximately $988.8 million. The Company held cash and cash equivalents of approximately $162.8 million as of September 30, 2026. The Company believes that its cash resources at September 30, 2026, and the net proceeds of $1.5 million that it raised from equity offerings subsequent to September 30, 2026, will meet its planned operating and capital expenditure requirements into early third quarter of 2027, but will not extend to 12 months from the issuance of these financial statements.

These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues 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, the Company may not be able to raise capital on terms acceptable to the Company, or at all. Without additional funds, it may be forced to delay, scale back, or eliminate some of its research and development activities, or other operations and potentially delay product development in an effort to maintain sufficient funds to continue operations. If any of these events occurs, its ability to achieve development and commercialization goals would be adversely affected and the Company may be forced to cease operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2 –SIGNIFICANT ACCOUNTING POLICIES

Interim financial statements

The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The condensed consolidated balance sheet as of December 31, 2025, contained herein has been derived from audited financial statements.

Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 12, 2026.

Risks and uncertainties

The Company’s primary efforts are devoted to commercializing its approved products and conducting research and development of innovative pharmaceutical and biological products to address public health challenges. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. Further, the Company currently generates revenue from the sale of its commercial products, TONMYA, Zembrace SymTouch and Tosymra. There is no assurance that the Company will be able to generate sufficient cash flow to fund operations from the sale of its commercial products or products in development, if and when approved. In addition, there can be no assurance that the Company’s research and development will be successfully completed or that any product in development will be approved or commercially viable.

Use of estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, impairments, provisions for product returns, coupons, rebates, chargebacks, discounts, allowances, inventory realization, the assumptions used in the fair value of stock-based compensation and other equity instruments, and the percent of completion of research and development contracts.

Cash, Cash Equivalents and Restricted Cash

The Company considers cash equivalents to be those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less when purchased. At September 30, 2026, and December 31, 2025, cash equivalents, which consisted of money market funds and other cash equivalents, amounted to approximately $142.8 million and $148.7 million, respectively. Restricted cash, which is included in Other non-current assets on the consolidated balance sheet, at September 30, 2026, of approximately $0.4 million collateralizes a letter of credit issued in connection with the lease of office space in Berkeley Heights, New Jersey. Restricted cash, which is included in Other non-current assets on the consolidated balance sheets, at December 31, 2025, of approximately $2.2 million collateralizes a letter of credit issued in connection with the lease of office space in Berkeley Heights, New Jersey and Chatham, New Jersey, and restricted cash held by vendors in escrow accounts for patient support services.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows:

Accounts Receivable, net

Accounts receivable consist of amounts due from our wholesale and other third-party distributors and pharmacies, with standard payment terms that generally require payment within 30 to 90 days. For certain customers, the accounts receivable for the customer is net of cash discounts, chargebacks and customer rebates. We provide reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written off against the reserve.

As of September 30, 2026, and December 31, 2025, the Company had $0 and $31,000, respectively, as an allowance for expected credit losses. An allowance for credit losses is determined based on the financial condition and creditworthiness of customers and the Company considers economic factors and events or trends expected to affect future collections experience. Any allowance would reduce the net receivables to the amount that is expected to be collected. The payment history of the Company’s customers will be considered in future assessments of collectability as these patterns are established over a longer period.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents by investing in a broad and diverse range of financial instruments, and we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the financial stability of our primary customers using our products.

We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business.

Inventories

Inventories are recorded at the lower of cost or net realizable value, with cost determined by the first-in-first-out method. The Company periodically reviews the composition of inventory in order to identify excess, obsolete, slow-moving or otherwise non-saleable items taking into account anticipated future sales compared with quantities on hand, and the remaining shelf life of goods on hand. If non-saleable items are observed and there are no alternate uses for the inventory, the Company records a write-down to net realizable value in the period that the decline in value is first recognized. Although the Company makes every effort to ensure the accuracy of forecasts of future product demand, any significant unanticipated decreases in demand could have a material impact on the carrying value of inventories and reported operating results.

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are calculated using the straight-line method over the asset’s estimated useful life, which ranges from 20 to 40 years for buildings,15 years for land improvements and laboratory equipment, three years for computer assets, five years for furniture and all other equipment and theshorter of the useful life or term of lease for leasehold improvements. Depreciation and amortization on an asset begins when the asset is placed in service. Depreciation and amortization expense for the three months ended September 30, 2026, and 2025 was $0.6 million and $0.4 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2026, and 2025 was $1.8 million and $1.4 million, respectively. The Company’s property and equipment is located in the United States.

Impairment testing of long-lived assets

The Company evaluates long-lived assets for impairment, including property and equipment and operating lease right-of-use assets whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. For the nine months ended September 30, 2026 and 2025, the Company believed thatno impairment existed.

Leases

The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the transition date and subsequent lease commencement dates in determining the present value of lease payments. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The operating lease ROU asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments made under operating leases is recognized on a straight-line basis over the lease term.

Revenue Recognition

The Company records and recognizes revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenues primarily result from contracts with customers, which are generally short-term and have a single performance obligation - the delivery of product.

The Company’s performance obligation to deliver products is satisfied at the point in time that the goods are received by the customer, which is when the customer obtains title to and has the risks and rewards of ownership of the products, which is generally upon delivery to the customer as stipulated by the terms of the sale agreements. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Our contractual payment terms are typically 30 to 90 days.

Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring and when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. Shipping and handling activities are considered to be fulfillment activities and not a separate performance obligation.

Many of the Company’s products sold are subject to a variety of deductions. Revenues are recognized net of estimated rebates and chargebacks, cash discounts, distributor fees, sales return provisions and other related deductions. Deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Accruals for these provisions are presented in the consolidated financial statements as reductions to gross sales in determining net sales, and as a contra asset within accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly describes the nature of the Company’s provisions for variable consideration and how such provisions are estimated:

Chargebacks- The Company sells a portion of its products indirectly through wholesaler distributors, and enters into specific agreements with indirect customers to establish pricing for the Company’s products, and in turn, the indirect customers and entities independently purchase these products. Because the price paid by the indirect customers and/or entities is lower than the price paid by the wholesaler, the Company provides a credit, called a chargeback, to the wholesaler for the difference between the contractual price with the indirect customers and the wholesale customer’s purchase price. The Company’s provision for chargebacks is based on expected sell-through levels by the Company’s wholesale customers to the indirect customers and estimated wholesaler inventory levels as well as historical chargeback rates. The Company continually monitors its reserve for chargebacks and adjusts the reserve accordingly when expected chargebacks differ from actual experience.

Rebates- The Company participates in certain government and specific sales rebate programs that provide discounted prescription drugs to qualified recipients and primarily relate to Medicaid and managed care rebates, pharmacy rebates, Tri-Care rebates and discounts, specialty pharmacy program fees and other governmental rebates or applicable allowances.

Prompt-Pay and other Sales Discounts - The Company provides for prompt pay discounts, which are recorded as a reduction of revenue and as a reduction in the accounts receivable at the time of sale based on the customer’s contracted discount rate. Consumer sales discounts represent programs the Company has in place to reduce costs to the patient. This includes copay buy down and eVoucher programs.

Product Returns - Consistent with industry practice, the customer’s right of return commences typically six months prior to product expiration date and ends one year after product expiration date. Products returned for expiration are reimbursed at current wholesale acquisition cost or indirect contract price. The Company estimates the amount of its product sales that may be returned by the Company’s customers and accrues this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company estimates product returns as a percentage of sales to its customers. The rate is estimated by using historical sales information or appropriate industry average for newly launched products. Adjustments are made to the current provision for returns when data suggest product returns may differ from original estimates.

Research and Development Costs

The Company outsources certain of its research and development efforts and expenses these costs as incurred, including the cost of manufacturing products for testing, as well as licensing fees and costs associated with planning and conducting clinical trials. The value ascribed to patents and other intellectual property acquired has been expensed as research and development costs, as such property is related to particular research and development projects and had no alternative future uses.

The Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials.

The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company accounts for trial expenses according to the timing of various aspects of the trial. The Company determines accrual estimates taking into account discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed.

During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors.

Government Grants and Contracts

From time to time, the Company may enter into arrangements with governmental entities for the purpose of obtaining funding for research and development activities. The Company is reimbursed for costs incurred that are associated with specified research and development activities covered by the applicable grant or contract approved by the government authority. U.S. GAAP does not provide specific recognition and measurement guidance for government grants to business entities. The Company applies International Accounting Standard 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance by analogy when accounting for government grants. Under IAS 20, government grants are initially recognized when there is reasonable assurance the conditions of the grant will be met and the grant will be received. After initial recognition, government grants received are recognized in earnings in the same period the underlying costs for which the grant is intended to compensate are incurred. The Company classifies government funding received under these arrangements as either a reduction to the related research and development expense or as contract income in the consolidated statements of operations, depending on the fee structure of the arrangement. The Company also applies the disclosure requirements of ASC 832, Government Assistance.

In August 2022, the Company received a Cooperative Agreement grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to support the development of its TNX-1300 product candidate for the treatment of cocaine intoxication. No funding was received or recognized during the three and nine months ended September 30, 2026. During the three and nine months ended September 30, 2025, the Company recorded $0 million and $0.6 million, respectively, in funding as a reduction of related research and development expense, of which all is included in prepaid expenses and other current assets.

In June 2024, the Company was awarded a prototype Other Transaction Agreement from DTRA, an agency within the U.S. Department of Defense, to fund the Company’s TNX-4200 program for the development of a small molecule broad-spectrum antiviral for the prevention or treatment of viral infections to improve the medical readiness of military personnel in biological threat environments. The DTRA contract provides for payments totaling up to $34.1 million over five years, which is subject to adjustment based on costs, scope, budget, and other factors as the program advances. Funding under the DTRA contract is earned and recognized under a cost-plus-fixed-fee arrangement in which the Company is reimbursed for all direct costs incurred plus allowable indirect costs and a fixed fee. During the three and nine months ended September 30, 2026, $0.7 million and $1.3 million, respectively, were recognized in contract income related to the DTRA contract. During the three and nine months ended September 30, 2025, $1.0 million and $2.9 million, respectively, were recognized in contract income related to the DTRA contract.

Advertising and Promotion Costs

Advertising and promotion costs are expensed as incurred. The Company recorded advertising and promotion expenses of approximately $15.0 million and $9.3 million, respectively, for the three months ended September 30, 2026, and 2025. The Company recorded advertising and promotion expenses of approximately $30.4 million and $13.5 million, respectively, for the nine months ended September 30, 2026, and 2025.

Stock-based Compensation.

All stock-based payments to employees and to nonemployees for their services, including stock options, are measured at fair value on the grant date and recognized in the consolidated statements of operations as compensation expense over the requisite service period. The Company accounts for share-based awards in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation.

Foreign Currency Translation

Operations of the Company’s Canadian subsidiary, Tonix Pharmaceuticals (Canada), Inc., are conducted in local currency, which represents its functional currency. The U.S. dollar is the functional currency of the other foreign subsidiaries. Balance sheet accounts of the Canadian subsidiary were translated from foreign currency into U.S. dollars at the exchange rate in effect at the balance sheet date and income statement accounts were translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process were included in accumulated other comprehensive loss on the consolidated balance sheets.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) represents foreign currency translation adjustments.

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of September 30, 2026, the Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Per Share Data

The computation of basic and diluted loss per share for the three and nine months ended September 30, 2026 and 2025 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. Prefunded warrants are assumed exercised on the date of issuance and are included in the basic earnings per share (“EPS”) calculation and are therefore excluded from the table below.

All warrants (See Note 14) issued participate on a one-for-one basis with common stock in the distribution of dividends, if and when declared by the Board of Directors, on the Company’s common stock. For purposes of computing EPS, these warrants are considered to participate with common stock in earnings of the Company. Therefore, the Company calculates basic and diluted EPS using the two-class method. Under the two-class method, net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed earnings. No income was allocated to the warrants for the three and nine months ended September 30, 2026 and 2025, as results of operations were a loss for the periods.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2026, and 2025, are as follows:

Recently Adopted Accounting Pronouncements

In July 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-05,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides guidance for estimating credit losses under the current expected credit losses (CECL) model for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification 606. The Company has adopted this ASU on a prospective basis, and it did not have a material impact on its consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In December 2025, the FASB issued ASU 2025-10,Government Grants (Topic 832). The amendments in this ASU establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-10 on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06,*Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):*Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends the existing standard to remove all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted as of the beginning of a fiscal year. The amendments can be applied prospectively, retrospectively, or via a modified prospective transition method. The Company is evaluating the impact of adoption on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03,*Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,*to improve transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income Statement. The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of ASU 2024-03 on its financial statements.

NOTE 3 –INVENTORY

The components of inventory consisted of the following (in thousands):

Inventory amounts recognized within Other non-current assets consist almost entirely of raw materials that are not expected to be sold within one year.

NOTE 4 –PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following (in thousands):

NOTE 5 –FAIR VALUE MEASUREMENTS

Fair value measurements affect the Company’s accounting for certain of its financial assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes:

As of September 30, 2026, and December 31, 2025, the Company used Level 1 quoted prices in active markets to value cash equivalents of $142.8 million and $148.7 million, respectively. The Company did not have any material Level 2 or Level 3 assets or liabilities as of September 30, 2026 and December 31, 2025.

NOTE 6 –SEGMENT INFORMATION AND CONCENTRATIONS

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company considers its chief executive officer to be the Company’s CODM. The CODM manages the Company’s operations and allocates resources based on the Company’s consolidated results; therefore, the Company operates asone segment.

The accounting policies of the Company’s single operating and reportable segment are the same as those described in the summary of significant accounting policies. The Company’s method for measuring segment profitability includes net income (loss), which the CODM uses to assess performance and make decisions for resource allocation, consistent with the measurement principles for net income (loss) as reported on the Company’s consolidated statements of operations. The significant segment expenses regularly provided to the CODM are consistent with the operating expenses reported on the Company's condensed consolidated statements of operations. Research and development expenses are provided on a more disaggregated basis, as shown below. Other segment items consist of contract income, loss on extinguishment of debt, interest income, net, and other income (expense), net as presented on the condensed consolidated statements of operations.

Information about significant segment expenses regularly provided to the CODM is as follows (in thousands):

Our direct research and development expenses consist principally of external costs for clinical, nonclinical and manufacturing activities, such as fees paid to contractors, consultants and contract research organizations in connection with our development work. Included in “Internal Staffing, Overhead and Other” are overhead, supplies, research and development employee costs (including stock option expenses), travel, and regulatory and legal costs.

The Company had three products that accounted for $17.2 million and $37.7 million, respectively, representing 100% of total revenues during the three and nine months ended September 30, 2026. The Company had two products that accounted for $3.3 million and $7.7 million, respectively, representing 100% of total revenues during the three and nine months ended September 30, 2025.

As of September 30, 2026, accounts receivable from three customers accounted for 37%,25%, and 24% of accounts receivable. As of December 31, 2025, accounts receivable from three customers accounted for 34%,29%, and 28% of total accounts receivable.

For the three months ended September 30, 2026, revenues from three customers accounted for 29%,24%, and 23% of net product revenues. For the three months ended September 30, 2025, revenues from five customers accounted for 25%,24%,22%,19% and 11% of net product revenues. For the nine months ended September 30, 2026, revenues from three customers accounted for 29%,26%, and 21% of net product revenues. For the nine months ended September 30, 2025, revenues from five customers accounted for 23%,22%,21%,20% and 13% of net product revenues.

NOTE 7 –OTHER BALANCE SHEET INFORMATION

Components of selected captions in the consolidated balance sheets consist of:

NOTE 8 –DEBT FINANCING

On December 8, 2023, the Company entered into a Loan and Guaranty Agreement (the “Loan Agreement”) by and among the Company, Krele LLC, Tonix Pharmaceuticals, Inc., Jenner Institute LLC and Tonix R&D Center LLC (collectively, the “Loan Parties”), with JGB Capital, LP, JGB Partners, LP, JGB (Cayman) Port Ellen Ltd., and any other lender from time to time party hereto (collectively, the “Lenders”), and JGB Collateral LLC, as administrative agent and collateral agent for the Lenders (in such capacity, “JGB Agent”) for a 36-month term loan (the “Term Loan”) in the aggregate principal amount of $11.0 million, with a maturity date of December 8, 2026 (the “Maturity Date”). The Term Loan was funded with an original issue discount of 9% of the principal amount of the Term Loan, or $1.0 million, which was amortized over the term of the debt as an adjustment to the effective interest rate on the outstanding borrowings.

During the first quarter of 2025, the Company paid $9.6 million as a result of a repayment of the above-mentioned Term Loan. The amount paid by the Company in connection with the termination of the Loan Agreement was pursuant to a pay-off letter and included a prepayment fee of $1.0 million in accordance with the terms and provisions of the Loan Agreement. In connection with the repayment of the Term Loan, the Company incurred a loss on extinguishment of the debt amounting to $2.1 million during the nine months ended September 30, 2025.

NOTE 9 –STOCKHOLDERS’ EQUITY

On February 5, 2025, the Company effected a 1-for-100 reverse stock split of its issued and outstanding shares of common stock, whereby 559,044,486 outstanding shares of the Company’s common stock were exchanged for 5,590,667 shares of the Company’s common stock. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect the reverse stock split.

NOTE 10 –REVENUES

Disaggregation of Net Revenues

The Company’s net product revenues are summarized below:

All sales are generated in the United States.

Gross-to-Net Sales Accruals

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

An analysis of the change in reserves for discounts and allowances is summarized as follows (in millions):

NOTE 11 –ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH

On June 30, 2023, the Company completed the acquisition of certain assets from Upsher Smith related to Zembrace SymTouch (sumatriptan injection) 3 mg (“Zembrace”) and Tosymra (sumatriptan nasal spray) 10 mg (“Tosymra”) products.

The Company has assumed certain obligations of Upsher Smith, including the payment of quarterly royalties on annual net sales of the acquired products in the U.S. as follows: for Tosymra,4% for net sales of $0 to $30 million,7% of net sales of $30 to $75 million;9% for net sales of $75 to $100 million;12% for net sales of $100 to $150 million; and 15% for net sales greater than $150 million. Royalty payments with respect to Tosymra are payable until the expiration or termination of the product’s Orange Book listed patent(s) with respect to the United States or, outside the United States, the expiration of the last valid claim covering the product in the relevant country of the territory.

For Zembrace, royalty payments on annual net sales in the U.S. are 3% for net sales of $0 to $30 million,6% of net sales of $30 to $75 million;12% for net sales of $75 to $100 million;16% for net sales greater than $100 million. Such royalty payments were payable until July 19, 2025. Upon the entry of a generic version of the relevant product, the applicable royalty rates shall be reduced by 90% with respect to Zembrace, and by 66.7% for Tosymra. Prior to Purchaser or a licensee filing an application for marketing authorization for either of the products in a permitted country outside the U.S., the parties will negotiate in good faith the royalty payment rates and annual net sales tiers that will apply for such country, based on the market opportunity for the product in such country. If the parties fail to agree, then the royalty payment rates and annual net sales tiers described above will apply.

In addition, the Company has assumed the obligation to pay an additional 3% royalty on net sales of Tosymra, plus an additional 3% if a patent containing certain claims related to Tosymra issues in the U.S., for 15 years from the first commercial sale of Tosymra in the applicable country or for as long as the manufacture, use or sale of Tosymra in such country is covered by a valid claim of a licensed patent, and up to $15 million per Tosymra product on the achievement of sales milestones ranging from $250 million to $1 billion in annual worldwide net sales, which the Company considers remote. These royalty payments are included in cost of sales on the consolidated statement of operations.

NOTE 12 –SALE AND PURCHASE OF COMMON STOCK

2025 Lincoln Park Transaction

On June 11, 2025, the Company entered into a purchase agreement (the “2025 Purchase Agreement”) and a registration rights agreement (the “2025 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Pursuant to the terms of the 2025 Purchase Agreement, Lincoln Park has agreed to purchase from the Company up to $75,000,000 of the Company’s common stock (subject to certain limitations) from time to time during the term of the 2025 Purchase Agreement. Pursuant to the terms of the 2025 Registration Rights Agreement, the Company filed with the SEC a registration statement to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the 2025 Purchase Agreement.

Pursuant to the terms of the 2025 Purchase Agreement, at the time the Company signed the 2025 Purchase Agreement and the 2025 Registration Rights Agreement, the Company issued 48,708 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of the Company’s common stock under the 2025 Purchase Agreement. The commitment shares were valued at $1.8 million and recorded as an addition to equity for the issuance of the common stock and treated as other expense, net on the consolidated statement of operations under the 2025 Purchase Agreement. No shares were sold during the nine months ended September 30, 2026, under the 2025 Purchase Agreement.

The Company evaluated the 2025 Purchase Agreement under ASC 815-40Derivatives and Hedging-Contracts on an Entity’s Own Equityas it represents the right to require Lincoln Park to purchase shares of common stock in the future, similar to a put option. The Company concluded that the 2025 Purchase Agreement represents a freestanding derivative instrument that does not qualify for equity classification and therefore requires fair value accounting. The Company analyzed the terms of the contract and concluded that the derivative instrument had insignificant value as of September 30, 2026 and December 31, 2025.

2025 At-the-Market Offerings

On June 11, 2025, the Company entered into a Sales Agreement (the “2025 Sales Agreement”), with A.G.P./Alliance Global Partners (“AGP”) pursuant to which the Company may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $400.0 million in sales. AGP is the sales agent under the at-the-market (“ATM”) offering program and is paid a 3% commission on each sale under the 2025 Sales Agreement. The Company’s common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the three and nine months ended September 30, 2026, the Company sold 2.3 million and 6.3 million shares, respectively, of common stock under the 2025 Sales Agreement, for net proceeds of approximately $28.1 million and $81.7 million, respectively. Subsequent to September 30, 2026, the Company sold 0.3 million shares of common stock under the 2025 Sales Agreement, for net proceeds of approximately $1.5 million. During both the three and nine months ended September 30, 2025, the Company sold 1.7 million shares of common stock under the 2025 Sales Agreement, for net proceeds of approximately $55.7 million.

2024 At-the-Market Offerings

On July 30, 2024, the Company entered into a Sales Agreement (the “2024 Sales Agreement”), with AGP pursuant to which the Company may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $250.0 million in sales. AGP is sales agent under the ATM and is paid a 3% commission on each sale under the 2024 Sales Agreement. The Company’s common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the three and nine months ended September 30, 2025, the Company sold approximately 0.9 million and 4.5 million shares, respectively, of common stock under the 2024 Sales Agreement for net proceeds of approximately $37.5 million and $112.9 million, respectively. The Company can no longer sell shares under the 2024 Sales Agreement as the Company has reached the aggregate $250 million in sales.

Stock repurchases

In September 2024, the Board of Directors approved a 2024 share repurchase program pursuant to which the Company may repurchase up to $10.0 million in value of its outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors.

During the nine months ended September 30, 2025, the Company repurchased 400,000 shares of its common stock outstanding under the 2024 share repurchase program 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. No shares of common stock were repurchased during the nine months ended September 30, 2026.

The Company repurchased the following capital stock:

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

NOTE 13 –STOCK-BASED COMPENSATION

On May 7, 2026, the Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp. 2026 Stock Incentive Plan (the “2026 Plan”), which replaced the Tonix Pharmaceuticals Holding Corp. Amended and Restated 2020 Stock Incentive Plan.

Under the terms of the 2026 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3) stock appreciation rights (“SARs”), (4) restricted stock units (“RSUs”), (5) other stock-based awards, and (6) cash-based awards. The 2026 Plan initially provided for the issuance of up to 1,000,000 shares of common stock, which amount will be increased to the extent that awards granted under the 2026 Plan are forfeited, expire or are settled for cash (except as otherwise provided in the 2026 Plan). In addition, the 2026 Plan contains an “evergreen provision” providing for an annual increase in the number of shares of the Company’s common stock available for issuance under the 2026 Plan on January 1 of each year for a period of ten years, commencing on January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to the greater of (a) 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 calculated on a fully diluted basis, and (y) the total number of shares of common stock reserved under the 2026 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) and (b) five percent (5%) of the total number of shares of stock outstanding as of December 31st of the preceding calendar year, calculated on a fully diluted basis.

The Board of Directors determines the exercise price, vesting and expiration period of the grants under the 2026 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 the absence of such quoted market price, by the Board of Directors in good faith. Additionally, the expiration period of grants under the 2026 Plan may not be more than ten years. As of September 30, 2026, there were 713,200 shares available for future awards under the 2026 Plan.

General

A summary of the stock option activity and related information for the Plans for the nine months ended September 30, 2026, is as follows:

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s closing stock price at the respective dates.

The weighted average fair value of options granted during the three and nine months ended September 30, 2026, was $9.94 per share and $12.93 per share, respectively. The weighted average fair value of options granted during the three and nine months ended September 30, 2025, was $31.62 per share and $12.72 per share, respectively.

The Company measures the fair value of stock options on the date of grant, based on the Black-Scholes option pricing model using certain assumptions discussed 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 1/36th each month thereafter for 24 months and expireten years from the date of grant. In addition, the Company issues options to directors which vest over aone-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 aone-year minimum service period prior to vesting. Stock-based compensation expense related to awards is amortized over the applicable service period using the straight-line method.

The assumptions used in the valuation of stock options granted during the nine months ended September 30, 2026, and 2025 were as follows:

The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the expected term of the options as of the grant date. The expected term of options is determined using the simplified method, as provided in an SEC Staff Accounting Bulletin, and the expected stock price volatility is based on the Company’s historical stock price volatility.

Stock-based compensation expense related to options granted was $2.2 million for the three months ended September 30, 2026, including $1.7 million in selling, general and administrative expenses and $0.5 million in research and development expenses. Stock-based compensation expense related to options was $1.8 million for the three months ended September 30, 2025, including $1.2 million in selling, general and administrative expenses and $0.6 million in research and development expenses.

Stock-based compensation expense related to options was $6.3 million for the nine months ended September 30, 2026, including $4.6 million in selling, general and administrative expenses and $1.7 million in research and development expenses. Stock-based compensation expense related to options was $4.1 million for the nine months ended September 30, 2025, including $2.8 million in selling, general and administrative expenses and $1.3 million in research and development expenses.

As of September 30, 2026, the Company had approximately $19.5 million of total unrecognized compensation cost related to non-vested awards granted under the Plans, which the Company expects to recognize over a weighted average period of 2.7 years.

Employee Stock Purchase Plans

On May 5, 2023, the Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp. 2023 Employee Stock Purchase Plan (the “2023 ESPP”), which was replaced by the Tonix Pharmaceuticals Holding Corp. 2025 Employee Stock Purchase Plan (the “2025 ESPP”, and together with the 2023 ESPP, the “ESPP Plans”), which was approved by the Company’s stockholders on May 8, 2025.

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

The 2023 ESPP allows eligible employees to purchase up to an aggregate of 250 shares of the Company’s common stock. Under the 2023 ESPP, on the first day of each offering period, each employee eligible for that offering period has the option to enroll for that offering period, which allows the eligible employees to purchase shares of the Company’s common stock at the end of the offering period. Each offering period under the 2023 ESPP is for six months, which can be modified from time-to-time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee’s accumulated payroll deductions for the offering period by the applicable purchase price, which is equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. 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 September 30, 2026,159 shares were available for future sales under the 2023 ESPP and 1,980,596 shares were available under the 2025 ESPP.

The ESPP Plans are considered compensatory plans with the related compensation cost expensed over the six-month offering period. For the nine months ended September 30, 2026 and 2025, $0.2 million and $84,000, respectively, were expensed. As of December 31, 2025, approximately $90,000 of employee payroll deductions had accumulated and had been recorded in accrued expenses. In January 2026,5,883 shares that were purchased as of December 31, 2025, under the 2025 ESPP, were issued. In July 2026,13,521 shares that were purchased as of June 30, 2026, under the 2025 ESPP, were issued. As of September 30, 2026, approximately $68,000 of employee payroll deductions had accumulated and had been recorded in accrued expenses.

NOTE 14 –WARRANTS TO PURCHASE COMMON STOCK

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2026:

During the nine months ended September 30, 2025,13,666 warrants with an exercise price of$1,056 became exercisable,5,758 warrants with an exercise price of$1,776 became exercisable upon FDA acceptance of our NDA filing, and 1 warrant with an exercise price of $364,800 expired.

NOTE 15 –COMMITMENTS AND CONTINGENCIES

Contractual agreements

The Company has entered into contracts with various contract research organizations with outstanding commitments aggregating approximately $43.3 million at September 30, 2026 for future work to be performed.

The Company has entered into various exclusive license agreements with various institutions with the right to sublicense, certain patents, technical information and material, and to develop and commercialize products thereunder. In addition to any upfront payments already paid, the Company may be obligated to pay milestone fees ranging from $25,000 to $5.0 million based on the potential achievement of certain development milestones, as well as milestone fees ranging from $55,000 to $20.0 million based on certain potential commercial achievements, as specified in the respective license agreement. Additionally, for licensed products sold during the applicable royalty term, the Company must pay royalties in the low-to-mid single digits, beginning in the year after the Company completes its first commercial sale of a licensed product. Finally, the Company has the right to grant sublicenses to third parties under each license agreement and is required to pay a sublicense income share based on the stage of development of the licensed product at the time the sublicense is granted. On a quarterly basis, we evaluate developments with claims, whether asserted or unasserted, and legal proceedings that could result in a loss contingency accrual, or an increase or decrease to a previously accrued loss contingency. There were no material loss contingencies accrued as of September 30, 2026 or December 31, 2025.

Defined contribution plan

The Company established a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible employees may participate. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) Plan, subject to defined limitations. The Company is required to make contributions to the 401(k) Plan equal to 100 percent of each participant’s pretax contributions of up tosix percent of his or her eligible compensation. The Company charged operations $0.3 million and $0.9 million for the three and nine months ended September 30, 2026, respectively, and $0.1 million and $0.5 million for the three and nine months ended September 30, 2025, respectively, for contributions under the 401(k) Plan.

NOTE 16 –SUBSEQUENT EVENTS

Subsequent to September 30, 2026, the Company sold 0.3 million shares of common stock under the 2025 Sales Agreement, for net proceeds of approximately $1.5 million.

On October 1, 2026, the Company received a paragraph IV certification notice from Dr. Reddy’s Laboratories Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively, “DRL”) regarding an abbreviated new drug application seeking FDA approval of a generic version of TONMYA (cyclobenzaprine hydrochloride) sublingual tablets, 2.8 mg. DRL alleges that U.S. Patent Nos. 9,636,408, 9,956,188, 10,117,936 and 10,864,175, which are listed in the Orange Book for TONMYA, are invalid, unenforceable and/or will not be infringed by its proposed product. The Company intends to commence patent infringement litigation against DRL within 45 days after receipt of the notice to enforce its patent rights and obtain a 30-month stay of FDA approval of DRL’s application, subject to applicable statutory exceptions and court orders. The Company cannot predict the outcome of this matter.

On October 30, 2026, the Company appointed George Lederman, PhD, as Executive Vice President, Strategy and Transformation. Dr. Lederman is the son of Seth Lederman, MD, the Company’s President and Chief Executive Officer. His appointment was reviewed and approved by the independent members of the Company’s Board of Directors and Audit Committee in accordance with the Company’s related party transactions policy, and his compensation was reviewed and approved by the independent members of the Company’s Board of Directors and Compensation Committee.