Tenax Therapeutics, Inc 10-Q for FY2022 Q3

Tenax Therapeutics, Inc. (TENX)

10-Q 2022-11-10 For: 2022-09-30

Added on April 11, 2026

About this 10-Q

Tenax Therapeutics, Inc filed this 10-Q on November 10, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $2.92M; down 23.2% from net income of $3.8M 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, 2022 (Unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 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	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	29

SIGNATURES		30

	September 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,806,399		$	5,583,922
Prepaid expenses		707,194			105,078
Total current assets		4,513,593			5,689,000
Right of use asset		207,359			287,692
Property and equipment, net		9,633			7,108
Other assets		8,435			8,435
Total assets	$	4,739,020		$	5,992,235

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	265,407		$	859,638
Accrued liabilities		424,415			704,340
Total current liabilities		689,822			1,563,978
Long term liabilities
Lease liability		95,347			183,589
Total long term liabilities		95,347			183,589
Total liabilities		785,169			1,747,567

Commitments and contingencies; see Note 7
Stockholders' equity
Preferred stock, undesignated, authorized 4,818,654 shares; See Note 8
Series A Preferred stock, par value $0.0001, issued 5,181,346 shares; outstanding 210, as of September 30, 2022 and December 31, 2021, respectively		-			-
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 29,980,183 as of September 30, 2022 and 25,206,914 as of December 31, 2021, respectively		2,998			2,521
Additional paid-in capital		290,944,132			282,736,332
Accumulated deficit		(286,993,279	)		(278,494,185	)
Total stockholders’ equity		3,953,851			4,244,668
Total liabilities and stockholders' equity	$	4,739,020		$	5,992,235

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Operating expenses
General and administrative	$	1,377,283		$	2,639,920		$	4,255,454		$	5,284,658
Research and development		1,540,205			1,162,370			4,242,565			24,231,794
Total operating expenses		2,917,488			3,802,290			8,498,019			29,516,452

Net operating loss		2,917,488			3,802,290			8,498,019			29,516,452

Interest expense		372			-			4,443			949
Other income, net		(1,323	)		(3,642	)		(3,368	)		(253,597	)
Net loss	$	2,916,537		$	3,798,648		$	8,499,094		$	29,263,804

Unrealized gain on marketable securities		-			(276	)		-			(72	)
Total comprehensive loss	$	2,916,537		$	3,798,372		$	8,499,094		$	29,263,732

Net loss per share, basic and diluted	$	(0.11	)	$	(0.15	)	$	(0.33	)	$	(1.54	)
Weighted average number of common shares outstanding, basic and diluted		26,330,085			25,201,312			25,585,418			19,017,311

	Preferred Stock						Common Stock				Additional			Accumulated 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
Common stock issued for convertible preferred stock		(10,232	)		(1	)		10,232,000		1,023		(1,022	)								-
Compensation on options issued												92,339									92,339
Unrealized loss on marketable securities															128						128
Net loss																		(1,717,016	)		(1,717,016	)
Balance at June 30, 2021		210		$	-			25,201,312	$	2,520	$	272,953,869		$	(274	)	$	(271,484,983	)	$	1,471,132
Pre-funded warrants and warrants sold, net of offering costs												9,192,624									9,192,624
Compensation on options issued												373,259									373,259
Unrealized loss on marketable securities															276						276
Net loss																		(3,798,648	)		(3,798,648	)
Balance at September 30, 2021		210		$	-			25,201,312	$	2,520	$	282,519,752		$	2		$	(275,283,631	)	$	7,238,643

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
Pre-funded warrants and warrants sold, net of offering costs												7,928,591									7,928,591
Compensation on options issued												110,031									110,031
Net loss																		(2,861,021	)		(2,861,021	)
Balance at June 30, 2022		210		$	-			25,206,914	$	2,521	$	290,858,023		$	-		$	(284,076,742	)	$	6,783,802
Exercise of pre-funded warrants								4,773,269		477											477
Compensation on options issued												86,109									86,109
Net loss																		(2,916,537	)		(2,916,537	)
Balance at September 30, 2022		210		$	-			29,980,183	$	2,998	$	290,944,132		$	-		$	(286,993,279	)	$	3,953,851

	September 30, 2022		December 31, 2021
Operating costs	$	230,480	$	-
Lease liability		116,243		107,192
Employee related		77,692		597,148
	$	424,415	$	704,340

	September 30, 2022		December 31, 2021
Current portion included in accrued liabilities	$	116,243	$	107,192
Long term lease liability		95,347		183,589
	$	211,590	$	290,781

Year ending December 31,
2022	$	32,047
2023		129,797
2024		65,702

Total lease payments	$	227,546
Less: Imputed interest		(15,956	)
Operating lease liability	$	211,590

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

	Warrants			Weighted Average Exercise Price
Outstanding at December 31, 2021		20,928,767		$	1.45
Issued		10,596,027			0.63
Amended and restated		(9,206,120	)		1.72	⁽¹⁾
Amended and restated		9,206,120			0.63	⁽¹⁾
Outstanding at September 30, 2022		31,524,794		$	0.86

	Shares Available for Grant
Balances, at December 31, 2021		-
Shares reserved under 2022 Plan		1,100,000
Shares rolled over from 2016 Plan		819,750
Options granted		(571,250	)
Options cancelled/forfeited		195,000
Balances, at September 30, 2022		1,543,500

	Outstanding Options
	Number of Shares		Weighted Average Exercise Price
Balances at December 31, 2021		-	$	-
Options granted		571,250	$	0.62
Balances at September 30, 2022		571,250	$	0.62

	For the nine months ended September 30, 2022

Risk-free interest rate (weighted average)		3.08	%
Expected volatility (weighted average)		102.01	%
Expected term (in years)		7
Expected dividend yield		0.00	%

	·	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 have been 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 has been 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 had 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. On January 4, 2022, the Company was issued US Pat. No. 11,213,524, entitled PHARMACEUTICAL COMPOSITIONS FOR SUBCUTANEOUS ADMINISTRATION OF LEVOSIMENDAN, which is directed towards the use of levosimendan via subcutaneous administration for treating a subject having a health condition of any kind, such as heart failure, pulmonary hypertension including PH-HFpEF, chronic kidney disease, stroke, or other health conditions. The patent is expected to expire no earlier than 2039, exclusive of any possible extensions. The Company also has a PCT international application pending, with a U.S. counterpart already under examination, that describes and claims methods of treating the Company’s first intended clinical indication, PH-HFpEF, by providing levosimendan by any route of administration.

	·	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 September 30,				Increase/ (Decrease)			% Increase/ (Decrease)
	2022		2021
Personnel costs	$	489,369	$	1,898,685	$	(1,409,316	)		(74	)%
Legal and professional fees		668,172		527,603		140,569			27	%
Other costs		180,390		174,229		6,161			4	%
Facilities		39,352		39,403		(51	)		(0	)%

	·	explore, evaluate and pursue any alternatives in connection with the strategic process we have initiated;

	·	reduce any personnel and incur associated costs, if any;

	·	terminate any contracts associated with the development of our products and business operations; and

	·	seek to maintain and protect our intellectual property portfolio.

Exhibit Number		Description

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/ Eliot M. Lurier
		Eliot M. Lurier Interim Chief Financial Officer (On behalf of the Registrant and as Principal Financial 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.

	(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods covered by the Report.