Tonix Pharmaceuticals

Kurta Law is investigating broker recommendations of Tonix Pharmaceuticals. These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.

If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.

About Tonix Pharmaceuticals

According to the prospectus, Tonix Pharmaceuticals is a clinical-stage biopharmaceutical company focused on “discovering small molecules and biologics to treat psychiatric, pain, and addiction conditions.” The prospectus also states that the company is also developing biological products to improve biodefense through potential medical countermeasures. The most advanced drug development program purportedly focused on a treatment for long-term posttraumatic stress disorder.

The Offering

The prospectus dated July 16, 2019, announced that Tonix Pharmaceuticals was offering 9,000,000 shares of common stock for $0.60 per share.

Penny stocks are always high-risk investments.

Risks Associated with Tonix Pharmaceuticals Investment

The following risks were clearly identified in the prospectus, which states, “An investment in our common stock is speculative and involves a high degree of risk, including the risk of a loss of your entire investment.”

Future Sales of Shares

Tonix Pharmaceuticals stated that it may issue additional shares of common stock at a discount. Stockholders would experience immediate dilution following such an offering.

Active Trading Market

At the time of the offering, Tonic Pharmaceuticals’ common stock demonstrated varying levels of trading activity. The lack of an active market could impair investors’ ability to sell their shares at a price they consider reasonable.

Potentially Volatile Prices

The market price for this common stock may be volatile. The following factors could influence volatility:

• Announcements of technological innovations or new products by competitors
• Announcement of FDA approval or disapproval of product candidates
• Developments involving discovery efforts and clinical trials
• Developments involving efforts to commercialize products
• Changes in government regulation of the pharmaceutical or medical industry
• Changes in financial estimates or recommendations by securities analysts

Quarterly Results

Quarterly results of operations could fluctuate, and the fluctuation could cause the stock price to decline.

Stockholder Control

The prospectus disclosed that its directors owned approximately 30% of outstanding shares of common stock. As a result, these stockholders could have the ability to control the outcome of matters submitted to stockholders for approval.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.