Tenax Therapeutics, Inc 10-Q for FY2023 Q3

Tenax Therapeutics, Inc. (TENX)

10-Q 2023-11-13 For: 2023-09-30

Added on April 11, 2026

About this 10-Q

Tenax Therapeutics, Inc filed this 10-Q on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $1.97M; down 32.4% from net income of $2.92M 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.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022	3
	Condensed Consolidated Statement of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 6.	Exhibits	29

SIGNATURES		30

	September 30, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	11,141,136		$	2,123,682
Prepaid expenses		474,866			738,927
Other current assets		267,084			345,856
Total current assets		11,883,086			3,208,465
Right of use asset		-			179,503
Property and equipment, net		4,706			7,189
Other assets		1,117			9,552
Total assets	$	11,888,909		$	3,404,709

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	134,787		$	448,425
Accrued liabilities		292,961			775,045
Note Payable		174,466			624,302
Total current liabilities		602,214			1,847,772
Long term liabilities
Lease liability		-			64,196
Total long term liabilities		-			64,196
Total liabilities		602,214			1,911,968

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 259,068 shares; issued and outstanding 210, as of September 30, 2023 and December 31, 2022, respectively		-			-
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 23,862,434 as of September 30, 2023 and 2,291,809 as of December 31, 2022, respectively		2,386			229
Additional paid-in capital		305,311,462			291,034,592
Accumulated deficit		(294,027,153	)		(289,542,080	)
Total stockholders’ equity		11,286,695			1,492,741
Total liabilities and stockholders' equity	$	11,888,909		$	3,404,709

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022

Operating expenses
General and administrative	$	1,051,524		$	1,377,283		$	3,363,511		$	4,255,454
Research and development		1,065,855			1,540,205			1,529,493			4,242,565
Total operating expenses		2,117,379			2,917,488			4,893,004			8,498,019

Net operating loss		2,117,379			2,917,488			4,893,004			8,498,019

Interest expense		5,337			372			21,813			4,443
Interest income		(150,741	)		-			(366,877	)		-
Other expense (income), net		-			(1,323	)		(62,866	)		(3,368	)
Net loss	$	1,971,975		$	2,916,537		$	4,485,074		$	8,499,094

Net loss per share, basic and diluted	$	(0.08	)	$	(2.22	)	$	(0.24	)	$	(6.64	)
Weighted average number of common shares outstanding, basic and diluted		23,862,434			1,316,504			18,532,270			1,279,271


	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, 2021		210	$	-		1,260,346	$	126	$	282,738,727		$	(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	$	-		1,260,346	$	126	$	282,821,796		$	(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	$	-		1,260,346	$	126	$	290,860,418		$	(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	$	-		6,033,615	$	603	$	290,946,527		$	(286,993,279	)	$	3,953,851
Balance at December 31. 2022		210	$	-		2,291,809	$	230	$	291,034,591		$	(289,542,080	)	$	1,492,741
Public offering sale of common stock and warrants, net of offering costs		-		-		6,959,444		696		13,895,829			-			13,896,525
Offering costs		-		-		-		-		(282,647	)		-			(282,647	)
Exercise of pre-funded warrants for cash		-		-		1,446,110		145		511,166			-			511,311
Exercise of pre-funded warrants, cashless		-		-		260,722		26		(26	)		-			-
Exercise of warrants, cashless		-		-		10,805,503		1,081		(1,081	)		-			-
Stock split and fractional shares issued		-		-		13,846		-		-			-			-
Compensation on options issued		-		-		-		-		66,543			-			66,543
Net loss		-		-		-		-		-			(1,406,760	)		(1,406,760	)
Balance at March 31, 2023		210	$	-		21,777,434	$	2,178	$	305,224,375		$	(290,948,840	)	$	14,277,713
Exercise of warrants, cashless		-		-		2,085,000		208		(208	)					-
Compensation on options issued		-		-		-		-		50,283			-			50,283
Net loss		-		-		-		-		-			(1,106,338	)		(1,106,338	)
Balance at June 30, 2023		210	$	-		23,862,434	$	2,386	$	305,274,450		$	(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	$	-		23,862,434	$	2,386	$	305,311,462		$	(294,027,153	)	$	11,286,695

	Nine months ended September 30,
	2023			2022
	(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(4,485,074	)	$	(8,499,094	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		2,864			3,798
Interest on debt instrument		21,151			4,443
Amortization of right of use asset		-			80,332
Gain on sale of equipment		1,125			-
Issuance and vesting of compensatory stock options and warrants		153,838			279,686
Changes in operating assets and liabilities
Accounts receivable, prepaid expenses and other assets		342,834			(606,559	)
Accounts payable and accrued liabilities		(765,730	)		(874,156	)
Long term portion of lease liability		-			(88,241	)
Net cash used in operating activities		(4,728,992	)		(9,699,791	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase (proceeds) from sale of property and equipment		2,843			(6,323	)
Net cash provided by (used in) investing activities		2,843			(6,323	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, warrants and pre-funded warrants, net of issuance costs		14,193,439			7,928,591
Proceeds from the issuance of note payable		-			364,546
Payments on short-term note		(449,836	)		(364,546	)
Net cash provided by financing activities		13,743,603			7,928,591

Net change in cash and cash equivalents		9,017,454			(1,777,523	)
Cash and cash equivalents, beginning of period		2,123,682			5,583,922
Cash and cash equivalents, end of period	$	11,141,136		$	3,806,399

	September 30, 2023		December 31, 2022
Operating costs	$	245,545	$	245,391
Lease liability		-		119,393
Employee related		47,416		410,261
	$	292,961	$	775,045

	Warrants			Weighted Average Exercise Price
Outstanding at December 31, 2022		1,576,240		$	17.13
Issued		17,333,332			2.25
Exercised		(17,187,332	)		2.25
Outstanding at September 30, 2023		1,722,240		$	15.87

Remaining contractual term	5 Years
Risk free interest rate		2.23	%
Expected dividends		-
Expected Volatility		105.69	%

	Shares Available for Grant
Balances, at December 31, 2022		77,616
Options cancelled/forfeited		2,359
Balances, at September 30, 2023		79,975

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances at December 31, 2022		28,163		$	12.40
Options cancelled/forfeited		(1,650	)	$	12.40
Balances at September 30, 2023		26,513		$	12.40

	Three months ended September 30,				Increase/ (Decrease)			% Increase/ (Decrease)
	2023		2022
Operating expenses
General and administrative	$	1,051,524	$	1,377,283	$	(325,759	)		(24	)%
Research and development		1,065,855		1,540,205		(474,350	)		(31	)%
Total operating expenses	$	2,117,379	$	2,917,488	$	(800,109	)		(27	)%

	·	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 the global coronavirus pandemic or similar global societal disruptions; and

	·	the possible costs of litigation.

Exhibit Number		Description

3.1		Fourth Amended and Restated Bylaws of Tenax Therapeutics, Inc. (incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on August 15, 2023).
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:	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.