Tenax Therapeutics, Inc 10-Q for FY2022 Q1

Tenax Therapeutics, Inc. (TENX)

10-Q 2022-05-16 For: 2022-03-31

Added on April 11, 2026

About this 10-Q

Tenax Therapeutics, Inc filed this 10-Q on May 16, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $2.72M; compared with a net loss of $23.75M a year earlier

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Delaware		26-2593535
(State of incorporation)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	TENX	The Nasdaq Stock Market LLC

Large Accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
Emerging growth company	☐

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the three Months Ended March 31, 2022 and 2021	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 6.	Exhibits	26

SIGNATURES		27

	March 31, 2022			December 31, 2021

	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	2,868,684		$	5,583,922
Prepaid expenses		586,987			105,078
Total current assets		3,455,671			5,689,000
Right of use asset		261,435			287,692
Property and equipment, net		12,078			7,108
Other assets		8,435			8,435
Total assets	$	3,737,619		$	5,992,235

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,287,126		$	859,638
Accrued liabilities		460,506			704,340
Note payable		228,762			-
Total current liabilities		1,976,394			1,563,978
Long term liabilities
Lease liability		155,024			183,589
Total long term liabilities		155,024			183,589
Total liabilities		2,131,418			1,747,567

Commitments and contingencies; see Note 8
Stockholders' equity
Preferred stock, undesignated, authorized 4,818,654 shares; See Note 9
Series A Preferred stock, par value $0.0001, issued 5,181,346 shares; outstanding 210 as of March 31, 2022 and December 31, 2021 respectively		-			-
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 25,206,914 as of March 31, 2022 and December 31, 2021 respectively		2,521			2,521
Additional paid-in capital		282,819,401			282,736,332
Accumulated deficit		(281,215,721	)		(278,494,185	)
Total stockholders’ equity		1,606,201			4,244,668
Total liabilities and stockholders' equity	$	3,737,619		$	5,992,235

	Three months ended March 31,
	2022			2021
	(Unaudited)			(Unaudited)

Operating expenses
General and administrative	$	1,540,744		$	1,373,460
Research and development		1,177,895			22,376,202
Total operating expenses		2,718,639			23,749,662

Net operating loss		2,718,639			23,749,662

Interest expense		2,587			613
Other expense (income), net		310			(2,135	)
Net loss	$	2,721,536		$	23,748,140

Unrealized loss on marketable securities		-			332
Total comprehensive loss	$	2,721,536		$	23,748,472

Net loss per share, basic and diluted	$	(0.11	)	$	(1.64	)
Weighted average number of common shares outstanding, basic and diluted		25,206,914			14,515,088

											Accumulated
	Preferred Stock				Common Stock				Additional		other						Total
	Number of Shares		Amount		Number of Shares		Amount		paid-in capital		comprehensive gain (loss)			Accumulated deficit			stockholders' equity

Balance at December 31, 2020		210	$	-		12,619,369	$	1,262	$	250,644,197	$	(70	)	$	(246,019,827	)	$	4,625,562
Common stock and preferred stock issued for asset acquisition		10,232		1		1,892,905		189		21,582,141								21,582,331
Compensation on options issued										91,609								91,609
Exercise of warrants						457,038		46		544,605								544,651
Unrealized loss on marketable securities												(332	)					(332	)
Net loss															(23,748,140	)		(23,748,140	)
Balance at March 31, 2021		10,442	$	1		14,969,312	$	1,497	$	272,862,552	$	(402	)	$	(269,767,967	)	$	3,095,681

Balance at December 31, 2021		210	$	-		25,206,914	$	2,521	$	282,736,332	$	-		$	(278,494,185	)	$	4,244,668
Compensation on options issued										83,069								83,069
Net loss															(2,721,536	)		(2,721,536	)
Balance at March 31, 2022		210	$	-		25,206,914	$	2,521	$	282,819,401	$	-		$	(281,215,721	)	$	1,606,201

	March 31, 2022		December 31, 2021
Operating costs	$	261,384	$	-
Lease liability		110,144		107,192
Employee related		88,978		597,148
	$	460,506	$	704,340

	March 31, 2022		December 31, 2021
Current portion included in accrued liabilities	$	110,144	$	107,192
Long term lease liability		155,024		183,589
	$	265,168	$	290,781

Year ending December 31,
2022	$	95,353
2023		129,797
2024		65,702

Total lease payments	$	290,852
Less: Imputed interest		(25,684	)
Operating lease liability	$	265,168

Fair value of shares of Common Stock issued	$	3,369,371
Fair Value of Series B Convertible Preferred Stock issued at closing		18,212,960
Total fair value of consideration transferred	$	21,582,331

Tangible assets acquired	$	-
Accounts payable assumed		(150,000	)
Total identifiable net assets		(150,000	)
IPR&D expense recognized		21,732,331
Total fair value of consideration	$	21,582,331

Conversion	Subject to the ownership limitations described below, the Series A Stock is convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion ratio determined by dividing the stated value of the Series A Stock by a conversion price of $1.93 per share. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The Company will not affect any conversion of the Series A Stock, nor shall a holder convert its shares of Series A Stock, to the extent that such conversion would cause the holder to have acquired, through conversion of the Series A Stock or otherwise, beneficial ownership of a number shares of common stock in excess of 4.99% (or, at the election of the holder prior to the issuance of any shares of Series A Stock, 9.99%) of the common stock outstanding after giving effect to such exercise.
Dividends	In the event the Company pays dividends on its shares of common stock, the holders of the Series A Stock will be entitled to receive dividends on shares of Series A Stock equal, on an as-if-converted basis, to and in the same form as paid on the common stock. No other dividends will be paid on the shares of Series A Stock.
Liquidation	Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount equal to the amount that a holder of common stock would receive if the Series A Stock were fully converted to common stock, which amounts will be paid pari passu with all holders of common stock.
Voting rights	Shares of Series A Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the then outstanding Series A Stock will be required to amend the terms of the Series A Stock or to take other action that adversely affects the rights of the holders of Series A Stock.

	·	Efficiently conduct clinical development to establish clinical proof of principle in new indications, refine formulation, and commence Phase 3 testing of our current product candidates.

		Levosimendan and imatinib have been approved and prescribed globally for more than 20 years, but we believe their mechanisms of action have not been fully exploited, despite promising evidence they may significantly improve the lives of patients with pulmonary hypertension. We are conducting clinical development with the intent to establish proof of beneficial activity in cardiopulmonary diseases in which these therapeutics would be expected to have benefit for patients with diseases for which either no pharmaceutical therapies are approved at all, or in the case of PAH, where numerous expensive therapies generally offer a modest reduction of symptoms. Our focus is primarily on designing and executing formulation improvements, protecting these innovations with patents and other forms of exclusivity, and employing innovative clinical trial science to establish a robust foundation for subsequent development, product approval, and commercialization.

	·	Efficiently explore new high-potential therapeutic applications, in particular where expedited regulatory pathways are available, leveraging third-party research collaborations and our results from related areas.

		Levosimendan has shown promise in multiple disease areas in its two decades of use following its approval. In order to achieve our objectives of developing these medicines for new groups of patients, we have established collaborative research relationships with investigators from leading research and clinical institutions, and our strategic partners. Additionally, we believe we will be able to leverage clinical safety data and preclinical results from some programs to support accelerated clinical development efforts in other areas, saving substantial development time and resources compared to traditional drug development.

	·	Continue to expand our intellectual property portfolio.

		Our intellectual property, and the confidentiality of all our company information, is important to our business and we take significant steps to protect its value. We have ongoing research and development efforts, both through internal activities and through collaborative research activities with others, which aim to develop new intellectual property and enable us to file patent applications that cover new applications of our existing technologies, alone or in combination with existing therapies, as well as other product candidates.

	·	Enter into licensing or product co-development arrangements.

		In addition to our internal development efforts, an important part of our product development strategy is to work with collaborators and partners to accelerate product development, maintain our low development and business operations costs, and broaden our commercialization capabilities globally.

	Three months ended March 31,				Increase/ (Decrease)			% Increase/ (Decrease)
	2022		2021
Personnel costs	$	582,707	$	795,510	$	(212,803	)		(27	)%
Legal and professional fees		721,548		382,548		339,000			89	%
Other costs		197,847		154,645		43,202			28	%
Facilities		38,642		40,757		(2,115	)		(5	)%

	·	the initiation, progress, timing and completion of clinical trials for our product candidates and potential product candidates;

	·	the outcome, timing and cost of regulatory approvals and the regulatory approval process;

	·	delays that may be caused by the global coronavirus pandemic;

	·	delays that may be caused by changing regulatory requirements;

	·	the number of product candidates that we pursue;

	·	the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;

	·	the timing and terms of future collaboration, licensing, consulting or other arrangements that we may enter into;

	·	the cost and timing of establishing sales, marketing, manufacturing and distribution capabilities;

	·	the cost of procuring clinical and commercial supplies of our product candidates;

	·	the extent to which we acquire or invest in businesses, products or technologies; and

	·	the possible costs of litigation.

Exhibit Number		Description
10.1#		Amendment to the License Agreement of September 20, 2013 by and between Tenax Therapeutics, Inc. and Orion Corporation, dated as of January 25, 2022. (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 28, 2022).

31.1*		Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

31.2*		Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

32.1		Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

Date: May 16, 2022
	TENAX THERAPEUTICS, INC.

	By:	/s/ Eliot M. Lurier
		Eliot M. Lurier Interim Chief Financial Officer (On behalf of the Registrant and as Principal Financial and Accounting Officer)