In a move to potentially strengthen its financial position, Tonix Pharmaceuticals Holding Corp. (NASDAQ:TNXP) has entered into a sales agreement with A.G.P./Alliance Global Partners (NYSE:GLP), as announced today. Under this arrangement, Tonix has the option to sell up to $50 million of its common stock over time.
The agreement, effective as of today, allows Tonix to direct A.G.P. to sell shares at the market prices prevailing at the time of each sale. The execution of this plan is contingent on certain conditions, including compliance with federal and state laws, as well as the rules of The Nasdaq Capital Market, where Tonix's shares are traded.
Tonix is not obligated to make any sales but if it does, A.G.P. will receive a commission of 3% of the gross proceeds from each transaction. Additionally, Tonix will reimburse A.G.P. for certain expenses incurred in connection with the sales.
This financing strategy is facilitated by Tonix's existing shelf registration statement, which was previously filed and declared effective by the SEC. The specific terms of the stock sales, when and if they occur, will be detailed in subsequent filings and announcements.
The shares available for sale under this agreement are part of a broader shelf registration statement, which was initially filed on August 19, 2022, and became effective on August 26, 2022. A prospectus supplement related to the sales agreement was also filed with the SEC today.
Tonix Pharmaceuticals, a pharmaceutical company based in Chatham, New Jersey, specializes in developing treatments for central nervous system conditions. The company has not specified how it intends to use the potential proceeds from this equity offering.
In other recent news, Tonix Pharmaceuticals has secured a $34 million contract with the Defense Threat Reduction Agency (DTRA) for the development of broad-spectrum antiviral agents, a significant stride in the company's research and development endeavors. This funding will support the advancement of Tonix's TNX-4200 program, aimed at enhancing the medical readiness of U.S. military personnel against biological threats.
The company is also preparing to file a New Drug Application with the FDA for its fibromyalgia treatment, Tonmya, in the latter half of 2024. This new therapeutic class for fibromyalgia management has shown statistically significant improvements in fibromyalgia pain and sleep quality in recent clinical trials.
Furthermore, Tonix Pharmaceuticals has announced a public offering of approximately 7.1 million shares, expected to raise $4 million before deducting fees and expenses. The funds will be allocated towards working capital and general corporate uses, including advancing Tonmya. Dawson James Securities, Inc. is serving as the sole placement agent for the offering.
Lastly, Noble Capital has maintained an Outperform rating on the stock, but lowered the target to $1.50 from the previous $10.00. These are the recent developments at Tonix Pharmaceuticals.
InvestingPro Insights
As Tonix Pharmaceuticals (NASDAQ:TNXP) explores financial strategies to bolster its position, real-time data and insights from InvestingPro provide a snapshot of the company's current market standing. With a modest market capitalization of $9.95 million and a Price / Book ratio of 0.09 as of Q1 2024, the company trades at a valuation that suggests its assets are potentially undervalued. Despite the challenges, two analysts have revised their earnings upwards for the upcoming period, indicating a possible shift in the company's trajectory.
InvestingPro Tips suggest that Tonix's stock is currently in oversold territory, based on the RSI, and is trading at a low Price / Book multiple. However, the company is quickly burning through cash, which could impact its long-term sustainability. The stock's high price volatility could mean greater risk for investors, but also the potential for rapid gains for those willing to take on more risk. With 16 additional tips available on InvestingPro, interested investors can delve deeper into the company's prospects using the promocode PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Tonix's financial maneuvers, as outlined in the article, are reflected in the company's strategic approach to capitalizing on market opportunities while managing the inherent risks, as highlighted by the InvestingPro data and tips. These insights can be particularly valuable for investors monitoring the company's performance and considering the potential impact of the new sales agreement on the company's stock.
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