Tenax Therapeutics, Inc 10-Q for FY2024 Q3

Tenax Therapeutics, Inc. (TENX)

10-Q 2024-11-13 For: 2024-09-30

Added on April 11, 2026

About this 10-Q

Tenax Therapeutics, Inc filed this 10-Q on November 13, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $3.96M; up 100.8% from net income of $1.97M 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 September 30, 2024 (Unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 6.	Exhibits	29

SIGNATURES		30

	September 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	98,310,918		$	9,792,130
Prepaid expenses		1,438,835			1,639,797
Other current assets		33,875			251,583
Total current assets		99,783,628			11,683,510
Other assets		1,117			1,117
Total assets	$	99,784,745		$	11,684,627

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,584,145		$	2,073,149
Accrued liabilities		977,545			1,012,468
Note payable		-			500,903
Total current liabilities		2,561,690			3,586,520
Total liabilities	$	2,561,690		$	3,586,520
Commitments and contingencies; see Note 6
Stockholders' equity
Preferred stock, undesignated, authorized 4,818,654 shares; See Note 7
Series A Preferred stock, par value $0.0001, authorized 5,181,346 shares; issued and outstanding 210, as of September 30, 2024 and December 31, 2023, respectively		-			-
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 3,408,906 as of September 30, 2024 and 298,281 as of December 31, 2023, respectively		341			30
Additional paid-in capital		405,810,449			305,350,830
Accumulated deficit		(308,587,735	)		(297,252,753	)
Total stockholders’ equity	$	97,223,055		$	8,098,107
Total liabilities and stockholders' equity	$	99,784,745		$	11,684,627

	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023

Operating expenses
General and administrative	$	1,506,796		$	1,051,524		$	4,083,858		$	3,363,511
Research and development		3,112,085			1,065,855			8,115,370			1,529,493
Total operating expenses		4,618,881			2,117,379			12,199,228			4,893,004

Net operating loss		4,618,881			2,117,379			12,199,228			4,893,004

Interest expense		6,312			5,337			23,465			21,813
Interest income		(664,724	)		(150,741	)		(887,057	)		(366,877	)
Other income, net		-			-			(654	)		(62,866	)
Net loss	$	3,960,469		$	1,971,975		$	11,334,982		$	4,485,074

Net loss per share, basic and diluted	$	0.19		$	6.61		$	1.37		$	19.36
Weighted average number of common shares and prefunded warrants outstanding, basic and diluted		21,161,143			298,280			8,282,118			231,653

	Preferred Stock				Common Stock				Additional						Total
	Number of Shares		Amount		Number of Shares		Amount		paid-in capital			Accumulated deficit			stockholders' equity

Balance at December 31, 2022		210	$	-		28,647	$	3	$	291,034,818		$	(289,542,080	)	$	1,492,741
Public offering sale of common stock, warrants, and prefunded warrants		-		-		86,994		9		13,896,516			-			13,896,525
Offering costs		-		-		-		-		(282,647	)		-			(282,647	)
Exercise of pre-funded warrants for cash		-		-		18,076		2		511,309			-			511,311
Exercise of pre-funded warrants, cashless		-		-		3,259		-		-			-			-
Exercise of warrants, cashless		-		-		135,069		13		(13	)		-			-
Stock split and fractional shares issued		-		-		174		-		-			-			-
Compensation on options issued		-		-		-		-		66,543			-			66,543
Net loss		-		-		-		-		-			(1,406,760	)		(1,406,760	)
Balance at March 31, 2023		210	$	-		272,219	$	27	$	305,226,526		$	(290,948,840	)	$	14,277,713
Exercise of warrants, cashless		-		-		26,062		3		(3	)					-
Compensation on options issued		-		-		-		-		50,283			-			50,283
Net loss		-		-		-		-		-			(1,106,338	)		(1,106,338	)
Balance at June 30, 2023		210	$	-		298,281	$	30	$	305,276,806		$	(292,055,178	)	$	13,221,658
Compensation on options issued		-		-		-		-		37,012			-			37,012
Net loss		-		-		-		-		-			(1,971,975	)		(1,971,975	)
Balance at September 30, 2023		210	$	-		298,281	$	30	$	305,313,818		$	(294,027,153	)	$	11,286,695

Balance at December 31, 2023		210	$	-		298,281	$	30	$	305,350,830		$	(297,252,753	)	$	8,098,107
Public offering sale of common stock, warrants, and prefunded warrants, net		-		-		421,260		42		6,183,619			-			6,183,661
Exercise of pre-funded warrants for cash		-		-		973,240		97		1,827,036			-			1,827,133
Exercise of pre-funded warrants, cashless		-		-		205,467		21		(21	)		-			-
Stock split and fractional shares issued		-		-		59,997		6		828			-			834
Compensation on options issued		-		-		-		-		118,790			-			118,790
Net loss		-		-		-		-		-			(3,798,840	)		(3,798,840	)
Balance at March 31, 2024		210	$	-		1,958,245	$	196	$	313,481,082		$	(301,051,593	)	$	12,429,685
Compensation on options issued		-		-		-		-		22,060			-			22,060
Net loss		-		-		-		-		-			(3,575,673	)		(3,575,673	)
Balance at June 30, 2024		210	$	-		1,958,245	$	196	$	313,503,142		$	(304,627,266	)	$	8,876,072
Public offering sale of common stock, warrants, and prefunded warrants, net		-		-		1,450,661		145		92,292,719			-			92,292,864
Compensation on options issued		-		-		-		-		14,588			-			14,588
Net loss		-		-		-		-		-			(3,960,469	)		(3,960,469	)
Balance at September 30, 2024		210	$	-		3,408,906	$	341	$	405,810,449		$	(308,587,735	)	$	97,223,055

	Nine months ended September 30
	2024			2023
	(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(11,334,982	)	$	(4,485,074	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		-			2,864
Interest on debt instrument		23,465			21,151
Gain on sale of equipment		-			1,125
Issuance and vesting of compensatory stock options and warrants		155,438			153,838
Changes in operating assets and liabilities
Accounts receivable, prepaid expenses and other assets		418,670			342,834
Accounts payable and accrued liabilities		(546,558	)		(765,730	)
Net cash used in operating activities		(11,283,967	)		(4,728,992	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		-			2,843
Net cash provided by investing activities		-			2,843

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, warrants, and pre-funded warrants, net of offering costs		98,476,525			13,682,128
Proceeds from the exercise of warrants		1,827,133			511,311
Payments on short-term note		(500,903	)		(449,836	)
Net cash provided by financing activities		99,802,755			13,743,603

Net change in cash and cash equivalents		88,518,788			9,017,454
Cash and cash equivalents, beginning of period		9,792,130			2,123,682
Cash and cash equivalents, end of period	$	98,310,918		$	11,141,136

Supplemental Disclosures:
Cash paid for interest	$	23,465		$	21,151
Cash paid for income taxes	$	-		$	-

Non-cash financing activity
Cashless exercise of warrants and prefunded warrants	$	21		$	16

	As of nine months ended September 30,
	2024		2023

Warrants to purchase common stock		19,886,360		21,528
Options to purchase common stock		1,731		936
Convertible preferred shares outstanding		210		210

	September 30, 2024		December 31, 2023
Operating costs	$	105,823	$	236,878
Employee related		871,722		775,590
	$	977,545	$	1,012,468

	Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2023		19,694	$	1,095.27
Issued		19,866,666		4.69
Exercised		-		-
Outstanding at September 30, 2024		19,886,360	$	5.77

Remaining estimated term	1.8 Years
Risk free interest rate		3.83	%
Expected dividends		-
Expected Volatility		177.27	%

Remaining contractual term	5 Years
Risk free interest rate		4.12	%
Expected dividends		-
Expected Volatility		131.87	%

	Shares Available for Grant
Balances at December 31, 2023		1,000
Additional Shares reserved		400,000
Options cancelled/forfeited		-
Options granted		(794	)
Balances at September 30, 2024		400,206

	Outstanding Options
	Number of Shares		Weighted Average Exercise Price
Balances at December 31, 2023		331	$	992.00
Options cancelled/forfeited		-		-
Options granted		794		3.55
Balances at September 30, 2024		1,125	$	294.63

	Three months ended September 30				Increase/ (Decrease)		% Increase/ (Decrease)
	2024		2023
Operating expenses
General and administrative	$	1,506,796	$	1,051,524	$	455,272		43	%
Research and development		3,112,085		1,065,855		2,046,230		192	%
Total operating expenses	$	4,618,881	$	2,117,379	$	2,501,502		118	%

	Three months ended September 30				Increase/ (Decrease)			% Increase/ (Decrease)
	2024		2023
Personnel costs	$	642,150	$	439,622	$	202,528			46	%
Legal and professional fees		681,594		412,121		269,473			65	%
Other costs		180,516		196,820		(16,304	)		(8	)%
Facilities		2,536		2,961		(425	)		(14	)%
Total general and administrative expenses	$	1,506,796	$	1,051,524	$	455,272			43	%

	·	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 changing regulatory requirements;

	·	the number of product candidates 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;

	·	delays that may be caused by another outbreak of an infectious disease or other global societal disruptions; and

	·	the possible costs of litigation.

Exhibit Number		Description

4.1		Form of Pre-Funded Warrant to Purchase Common Stock (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2024).
4.2		Form of Warrant to Purchase Shares of Common Stock or Pre-Funded Warrants (incorporated herein by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on August 6, 2024).
10.1+		Amendment No. 2 to the Tenax Therapeutics, Inc. 2022 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on October 30, 2024).
10.2		Form of Securities Purchase Agreement, dated August 6, 2024, by and among Tenax Therapeutics, Inc. and the investors signatory thereto (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2024).
10.3		Form of Registration Rights Agreement (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2024).
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.

	TENAX THERAPEUTICS, INC.

	By:	/s/ Lawrence R. Hoffman
		Lawrence R. Hoffman
		Interim Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer and Accounting Officer)

	1.	I have reviewed this Quarterly Report on Form 10-Q of Tenax Therapeutics, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.