S-1/A: Tenax Therapeutics Files Amendment for Proposed Public Offering

Tenax Therapeutics files an amendment to its S-1 registration statement related to a proposed public offering of common stock, warrants, and pre-funded warrants.

Summary

• Tenax Therapeutics has filed Amendment No. 2 to its Form S-1 registration statement.
• The amendment is solely for the purpose of filing Inline eXtensible Business Reporting Language (XBRL) exhibits.
• The company is planning a public offering involving shares of common stock, warrants to purchase common stock, and pre-funded warrants.
• The offering aims to raise up to $12 million.
• Roth Capital Partners, LLC is engaged as the exclusive placement agent for the offering.
• The offering is expected to be completed within two business days following commencement.
• The offering will terminate on February 14, 2024, unless terminated earlier.
• The company intends to use the net proceeds from this offering to initiate additional research sites and advance the enrollment and treatment of patients in the LEVEL trial, as well as working capital, capital expenditures, and other general corporate purposes.

Sentiment

Score: 5

Explanation: The document is neutral. It describes a financial transaction and provides necessary information without expressing strong positive or negative sentiment.

Positives

• The offering could provide Tenax Therapeutics with additional capital to fund its LEVEL trial and other corporate activities.
• The company has patents covering the use of IV and oral levosimendan in patients with PH-HFpEF.

Negatives

• The offering is a best efforts offering, and there is no guarantee that the company will raise the full $12 million.
• The company has incurred losses since its inception and expects to continue to incur losses in the foreseeable future.
• The company's independent registered public accounting firm's report includes an explanatory paragraph stating that there is substantial doubt about the company's ability to continue as a going concern.
• The company received a letter from Nasdaq regarding compliance with Nasdaq Listing Rule 5550(a)(4) (the Public Float Rule), which requires the Company to have a minimum of 500,000 publicly held shares.

Risks

• Investment in the company's securities is highly speculative and involves substantial risk.
• The company's share price has been volatile, and may continue to be volatile, which may subject the company to securities class action litigation in the future.
• The company's survival depends on its success with a small number of product opportunities.
• The company is subject to uncertainty relating to healthcare reform measures and reimbursement policies that, if not favorable to its products, could hinder or prevent its products commercial success, if any of its product candidates are approved.

Future Outlook

The company expects to continue to incur losses and will need to generate significant net product sales, royalty and other revenues to achieve profitability.

Industry Context

The pharmaceutical and biotechnology industries are intensely competitive, with many companies actively engaged in similar research and development activities.

Comparison to Industry Standards

• Novartis developed imatinib for PAH and conducted a Phase 3 trial that in 2013 succeeded in meeting its primary endpoint.
• Several other companies are developing new therapies to treat PAH, including some that may also be disease-modifying.
• Other companies are developing an inhaled route of administration as their strategy to mitigate gastric intolerance.

Legal Proceedings

• The company is subject to litigation in the normal course of business, none of which management believes will have a material adverse effect on the company's consolidated financial statements.

Related Party Transactions

• On May 17, 2022, the company entered into a securities purchase agreement with a then-affiliate Armistice Capital, LLC, pursuant to which we agreed to sell and issue to the investor 6,623 units in a private placement at a purchase price of $1,240 per unit.

Stakeholder Impact

• The offering will dilute existing shareholders.
• The company's ability to continue as a going concern depends on its ability to raise additional capital, which could impact stakeholders.

Next Steps

• Initiate additional research sites and advance the enrollment and treatment of patients in the LEVEL trial.
• Continue to explore strategic alternatives, including a sale of the company, merger, other business combination or recapitalization.

Key Dates

Keywords

Tenax Therapeutics, public offering, common stock, warrants, pre-funded warrants, LEVEL trial, Roth Capital Partners, securities, TNX-103, PH-HFpEF, levosimendan, imatinib