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Tenax Therapeutics(TENX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements Tenax Therapeutics reported a net loss of $10.4 million in Q1 2025, with $111.4 million in cash and sufficient funds for 12 months, primarily developing cardiopulmonary therapies Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $111,447 | $94,851 | | Total current assets | $112,059 | $96,686 | | Total assets | $112,059 | $96,686 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $2,768 | $4,693 | | Total liabilities | $2,768 | $4,693 | | Accumulated deficit | $(325,263) | $(314,855) | | Total stockholders' equity | $109,291 | $91,993 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $5,683 | $2,676 | | General and administrative | $5,655 | $1,233 | | Total operating expenses | $11,338 | $3,909 | | Net operating loss | $(11,338) | $(3,909) | | Interest income | $930 | $118 | | Net loss | $(10,408) | $(3,799) | | Net loss per share, basic and diluted | $(0.28) | $(3.12) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,967) | $(5,166) | | Net cash provided by financing activities | $23,563 | $7,923 | | Net change in cash and cash equivalents | $16,596 | $2,757 | | Cash and cash equivalents, end of period | $111,447 | $12,549 | - The company is a Phase 3, development-stage pharmaceutical company focused on novel cardiopulmonary therapies, with management believing it has sufficient funds for at least the next 12 months of operations, based on its cash position of $111.4 million as of March 31, 20252021 - In February 2024, the company amended its license with Orion Corporation, gaining global rights for oral and subcutaneous levosimendan for PH-HFpEF, increasing milestone payments to Orion upon US regulatory approval ($10.0M) and Japan approval ($5.0M), and adding commercialization milestones up to $45.0M35 - In March 2025, the company raised gross proceeds of $25.0 million ($23.2 million net) through a private placement of common stock and pre-funded warrants43 Management's Discussion and Analysis of Financial Condition and Results of Operations Operating expenses surged to $11.3 million in Q1 2025, driven by R&D and G&A, with recent financing funding operations through 2027 - The company is a clinical-stage pharmaceutical firm focused on developing cardiopulmonary therapies, with levosimendan as its prioritized product candidate for the ongoing Phase 3 LEVEL clinical trial77 - A private placement in March 2025 raised gross proceeds of approximately $25.0 million, with the company believing its resources as of March 31, 2025, are sufficient to continue operations through 20277899 Operating Expenses Comparison (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Increase/(Decrease) | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $5,683 | $2,676 | $3,007 | 112% | | General and administrative | $5,655 | $1,233 | $4,422 | 359% | | Total operating expenses | $11,338 | $3,909 | $7,429 | 190% | - Net cash used in operating activities increased to $7.0 million in Q1 2025 from $5.2 million in Q1 2024, primarily due to higher clinical trial expenses96 - Net cash from financing activities was $23.6 million in Q1 2025, mainly from the March 2025 Offering, compared to $7.9 million in Q1 2024 from the February 2024 Offering98 Results of Operations Total operating expenses surged to $11.3 million in Q1 2025, driven by R&D and G&A increases, alongside higher interest income - R&D expenses increased by $3.0 million (112%) YoY, with clinical and preclinical development costs rising by $1.8 million due to the ongoing Phase 3 LEVEL trial for oral levosimendan7980 - G&A expenses increased by $4.4 million (359%) YoY, primarily driven by a $3.3 million increase in stock-based compensation and a $0.8 million rise in legal and professional fees related to capital market activities8384 - Interest income increased by $813 thousand in Q1 2025 compared to Q1 2024, mainly due to higher interest earned on increased cash deposits following recent offerings87 Liquidity, Capital Resources and Plan of Operation With an accumulated deficit of $325.3 million, the company secured $109.3 million in working capital from recent financings, sufficient through 2027 - As of March 31, 2025, the company had an accumulated deficit of $325.3 million and working capital of $109.3 million8890 - The company has prioritized the development of levosimendan and will need substantial additional capital in the future to finalize its development and commence commercialization89 Recent Financing Activities (Net Proceeds) | Offering Date | Net Proceeds | | :--- | :--- | | March 2025 | $23.2 million | | August 2024 | $92.3 million | | February 2024 | $8.0 million | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Tenax Therapeutics is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, Tenax Therapeutics is exempt from the requirement to provide quantitative and qualitative disclosures about market risk104 Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal financial reporting controls - The President and CEO and Interim CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025107 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls108 PART II. OTHER INFORMATION Legal Proceedings The company is not a party to any material pending legal proceedings, nor is its property subject to such - There are no material pending legal proceedings to which the company is a party or to which any of its property is subject112 Risk Factors No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for FY2024 - The risks faced by the company have not materially changed from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024113 Exhibits This section lists key exhibits filed with the Form 10-Q, including warrants, purchase agreements, and officer certifications - Exhibits filed with the report include: - Form of Pre-Funded Warrant to Purchase Common Stock - Securities Purchase Agreement, dated March 4, 2025 - Registration Rights Agreement, dated March 5, 2025 - CEO and CFO certifications pursuant to Sarbanes-Oxley Act115 Signatures Signatures The Quarterly Report on Form 10-Q was signed on May 14, 2025, by Thomas A. McGauley, Interim Chief Financial Officer - The report was signed on May 14, 2025, by Thomas A. McGauley, Interim Chief Financial Officer118