Tonix Pharmaceuticals Announces 1-for-32 Reverse Stock Split

Rhea-AI Summary

Tonix Pharmaceuticals announced a 1-for-32 reverse stock split, effective June 10, 2024. This move aims to increase the stock price to meet NASDAQ's $1.00 minimum bid requirement. Each 32 pre-split shares will convert to one post-split share, impacting outstanding common stock, warrants, and stock options. The company's stock will continue trading under the symbol 'TNXP' with a new CUSIP number, 890260847. Shareholders approved this action on May 22, 2024. Fractional shares will be rounded up, and VStock Transfer will manage the exchange process. No cash will be given for fractional shares.

Positive

• Reverse stock split aims to increase TNXP stock price to meet NASDAQ requirements.
• Shareholder approval obtained on May 22, 2024, indicating strong investor support.
• Company continues to trade under TNXP, maintaining brand consistency.

Negative

• Reverse stock split may indicate financial struggles to maintain NASDAQ listing.
• Current shareholders will face a significant reduction in the number of shares held, potentially impacting perceived value.

Insights

Financial Analyst

The announcement of a 1-for-32 reverse stock split by Tonix Pharmaceuticals is a significant move aimed at addressing the company's current low stock price. Primarily, this action is intended to meet the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market. While reverse stock splits don't inherently change a company's market value, they often lead to a psychological shift in how investors perceive the stock. In the short term, this can foster a perception of increased value due to a higher share price, potentially drawing in new institutional investors who may be restricted from purchasing lower-priced stocks.

However, it is important to note that reverse splits can also signal underlying financial distress to the market, particularly if they are not accompanied by strong operational performance or positive news on product pipelines. Investors should closely monitor Tonix's New Drug Application (NDA) submissions and the progress of their clinical trials to gauge future performance effectively.

The rounding up of fractional shares to the nearest whole post-split share is a shareholder-friendly move, ensuring no dilution of value for existing shareholders. Investors should remain cautious and consider the overall financial health of the company and its pipeline developments.

Market Research Analyst

The reverse stock split decision by Tonix Pharmaceuticals could have mixed reactions in the market. On one hand, satisfying the NASDAQ's minimum bid price requirement is important for retaining the stock's listing status, which is essential for maintaining liquidity and visibility among investors. On the other hand, such an action often signals issues within the company, potentially causing existing shareholders to worry about the company's financial stability.

In the broader context of the biopharmaceutical industry, reverse stock splits are not uncommon, especially for companies with significant research and development expenditures and long timelines to market new products. The success of Tonix’s clinical pipeline, including their CNS and immunology portfolios, will be key to justifying this reverse split. If these products, particularly those approaching NDA submission, receive positive outcomes, it could offset any negative sentiment arising from the reverse split.

Investors should also consider the competitive landscape. The pharmaceutical industry is fiercely competitive and any delays or failures in Tonix's product development could exacerbate the negative perceptions following the reverse split.

CHATHAM, N.J., June 06, 2024 (GLOBE NEWSWIRE) -- Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), fully-integrated biopharmaceutical company with marketed products and a pipeline of development candidates, today announced that it will effect a 1-for-32 reverse stock split of its outstanding common stock. The reverse stock split will be effective for trading purposes as of the commencement of trading on June 10, 2024.

The reverse stock split is intended to increase the per share trading price of Tonix’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market (Rule 5550(a)(1)). Tonix’s common stock will continue to trade on the NASDAQ Capital Market under the symbol “TNXP” and under a new CUSIP number, 890260847. As a result of the reverse stock split, every thirty-two pre-split shares of common stock outstanding will become one share of common stock. The reverse split will also apply to common stock issuable upon the exercise of Tonix’s outstanding warrants and stock options. The reverse stock split will not proportionately reduce the number of shares of authorized common stock, as permitted under Nevada law, as shareholder approval for the reverse stock split was obtained on May 22, 2024.

Tonix’s transfer agent, VStock Transfer LLC, which is also acting as the exchange agent for the reverse split, will provide instructions to shareholders regarding the process for exchanging share certificates. Any fractional shares of common stock resulting from the reverse stock split will be rounded up to the nearest whole post-split share and no shareholders will receive cash in lieu of fractional shares.

Tonix Pharmaceuticals Holding Corp.^*

Tonix is 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. Tonix’s priority is to submit a New Drug Application (NDA) to the FDA in the second half of 2024 for Tonmya, a product candidate for which two positive Phase 3 studies have been completed for the management of fibromyalgia. TNX-102 SL is also being developed to treat acute stress reaction as well as fibromyalgia-type Long COVID. Tonix’s CNS portfolio includes TNX-1300 (cocaine esterase) a biologic designed to treat cocaine intoxication with Breakthrough Therapy designation. Tonix’s immunology development portfolio consists of biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. Tonix also has product candidates in development in the areas of rare disease and infectious disease. 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.

*Tonix’s product development candidates are investigational new drugs or biologics and have not been approved for any indication.

Zembrace SymTouch and Tosymra are registered trademarks of Tonix Medicines. All other marks are property of their respective owners.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix's current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; risks related to the failure to successfully market any of our products; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024, and periodic reports filed with the SEC on or after the date thereof. All of Tonix's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Investor Contact

Jessica Morris
Tonix Pharmaceuticals
investor.relations@tonixpharma.com
(862) 904-8182

Peter Vozzo
ICR Westwicke
peter.vozzo@westwicke.com
(443) 213-0505

Media Contact

Katie Dodge
LaVoieHealthScience
kdodge@lavoiehealthscience.com
(978) 360-3151

FAQ

What is the effective date of Tonix Pharmaceuticals' reverse stock split?

The reverse stock split is effective for trading purposes on June 10, 2024.

Why is Tonix Pharmaceuticals implementing a 1-for-32 reverse stock split?

The reverse stock split aims to increase the per-share trading price to meet the NASDAQ Capital Market's $1.00 minimum bid price requirement.

How will the reverse stock split affect TNXP common stock?

Every 32 shares of pre-split common stock will convert into one post-split share.

Will Tonix Pharmaceuticals change its stock symbol after the reverse stock split?

No, Tonix Pharmaceuticals will continue to trade under the symbol 'TNXP'.

What will happen to fractional shares resulting from the reverse stock split?

Fractional shares will be rounded up to the nearest whole post-split share, and no cash will be given in lieu of fractional shares.

When did shareholders approve the reverse stock split for TNXP?

Shareholders approved the reverse stock split on May 22, 2024.