Tenax Therapeutics risk analysis
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Tenax Therapeutics (TENX) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 31, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Our bylaws contain an exclusive forum provision, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, any North Carolina state court that has jurisdiction, or the Delaware Court of Chancery shall, to the fullest extent permitted by law, be the sole and exclusive forum any internal corporate claims, including without limitation (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, and (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said court having personal jurisdiction over the indispensable parties named as defendants in such action. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or the Securities Act, or any other claim for which federal courts have exclusive jurisdiction. This exclusive forum provision may limit a stockholder's ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find the exclusive forum provision in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.
- Share Price & Shareholder Rights - Risk 2The issuance of shares of our common stock upon conversion of outstanding Series B convertible preferred stock issued in connection with our acquisition of PHPM would result in substantial dilution to the interests of our other stockholders.
As part of the consideration for our acquisition of 100% of the equity of PHPM on January 15, 2021, or the PHPM Acquisition, we issued 10,232 shares of our Series B convertible preferred stock to the stockholders of PHPM. Those 10,232 shares of Series B convertible preferred stock are convertible into up to an aggregate of 10,232,000 shares of our common stock, except that 1,212,492 of the 10,232,000 issuable upon conversion of the Series B convertible preferred stock will be held back as security for certain indemnification obligations of PHPM and the former stockholders of PHPM. Each share of Series B convertible stock will automatically convert into (i) 881.5 shares of our common stock following receipt of the approval of our stockholders for the conversion of the Series B convertible preferred stock, and (ii) 118.5 shares of our common stock on January 15,2023, subject to reduction for indemnification claims. We are required to hold a meeting of our stockholders no later than July 31, 2021 for purposes of obtaining a stockholder vote on the conversion of the Series B convertible preferred stock. If stockholder approval is not obtained at such meeting, we must call a meeting every 90 days thereafter to seek stockholder approval for the conversion of the Series B convertible preferred stock until either stockholder approval for the conversion is obtained or the Series B convertible preferred stock is no longer outstanding. The issuance of shares of our common stock upon conversion of our outstanding Series B convertible preferred stock would result in substantial dilution to the interests of other stockholders.
- Accounting & Financial Operations - Risk 3Our independent registered public accounting firm auditors' report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
As a result of our historical operating losses and expected future negative cash flows from operations, we have concluded that there is substantial doubt about our ability to continue as a going concern. Similarly, the report of our independent registered public accounting firm on our consolidated financial statements included in this Annual Report on Form 10-K includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock and make it more difficult to obtain financing. Our consolidated financial statements included in this Annual Report on Form 10-K have been prepared assuming we will continue as a going concern and do not include any adjustments that might result from uncertainty about our ability to continue as a going concern.
- Accounting & Financial Operations - Risk 4We have incurred losses since our inception, expect to continue to incur losses in the foreseeable future, and may never become profitable.
We have incurred losses since inception. For the years ended December 31, 2020 and 2019, we incurred net losses of $9.9 million and $8.4 million, respectively. As of December 31, 2020, we had an accumulated deficit of $246.0 million. We have funded our operations since September 1990 principally through the issuance of debt and equity securities and loans from stockholders. We will continue to incur losses until we generate sufficient revenue to offset our expenses, and we anticipate that we will continue to incur net losses for at least the next several years. We expect to incur additional expenses related to our development and potential commercialization of levosimendan for pulmonary hypertension and other potential indications, as well as identifying and developing other potential product candidates, and as a result, we will need to generate significant net product sales, royalty and other revenues to achieve profitability.
- Debt & Financing - Risk 5Our PPP Loan may not be forgiven or may subject us to challenges and investigations regarding qualification for the loan.
On April 30, 2020, we received a Paycheck Protection Program loan, or PPP Loan, in the principal amount of $244,657 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, as administered by the U.S. Small Business Administration, or SBA. The PPP Loan was disbursed by First Horizon Bank, or the Lender, matures in April 2022, and has an annual interest rate of 1.00%. Monthly principal and interest payments are deferred for sixteen months. Beginning September 30, 2021, the Company is required to make monthly payments of principal and interest of approximately $31,100 to the Lender. Pursuant to the terms of the CARES Act, we may apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for qualifying expenses, which include payroll costs, rent, and utility costs. We cannot provide any assurance that we will be eligible for loan forgiveness, that we will ultimately apply for forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the SBA. Additionally, the PPP Loan application required us to certify that the current economic uncertainty made the PPP Loan request necessary to support our ongoing operations. While we made this certification in good faith after analyzing, among other things, our financial situation and access to alternative forms of capital and believe that we satisfied all eligibility criteria for the PPP Loan and that our receipt of the PPP Loan is consistent with the broad objectives of the Paycheck Protection Program of the CARES Act, the certification described above does not contain any objective criteria and is subject to interpretation. In addition, the SBA has stated that it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith. The lack of clarity regarding loan eligibility under the program has resulted in significant media coverage and controversy with respect to public companies applying for and receiving loans. If, despite our good faith belief that we satisfied all eligibility requirements for the PPP Loan, we are found to have been ineligible to receive the PPP Loan or in violation of any of the laws or regulations that apply to us in connection with the PPP Loan, including the False Claims Act, we may be subject to penalties, including significant civil, criminal and administrative penalties and could be required to repay the PPP Loan. In the event that we seek forgiveness of all or a portion of the PPP Loan, we will also be required to make certain certifications which will be subject to audit and review by governmental entities and could subject us to significant penalties and liabilities if found to be inaccurate. In addition, our receipt of the PPP Loan may result in adverse publicity and damage to our reputation, and a review or audit by the SBA or other government entity or claims under the False Claims Act could consume significant financial and management resources. Any of these events could harm our business, results of operations and financial condition.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 35
- Share Price & Shareholder Rights - Risk 1Our Bylaws contain an exclusive forum provision, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, any North Carolina state court that has jurisdiction, or the Delaware Court of Chancery shall, to the fullest extent permitted by law, be the sole and exclusive forum for any internal corporate claims, including without limitation (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, and (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said court having personal jurisdiction over the indispensable parties named as defendants in such action. This provision would not apply to suits brought to enforce a duty or liability created by the Securities and Exchange Act of 1934, as amended (the "Exchange Act") or the Securities Act of 1933, as amended (the "Securities Act"), or any other claim for which federal courts have exclusive jurisdiction. This exclusive forum provision may limit a stockholder's ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees or could result in increased costs for our stockholders to bring a claim in the chosen forum. If a court were to find the exclusive forum provision in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.
- Share Price & Shareholder Rights - Risk 2Anti-takeover provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult, which could discourage takeover attempts and lead to management entrenchment, and the market price of our common stock may be lower as a result.
Certain provisions in our Amended and Restated Certificate of Incorporation (the "Charter") and our Fourth Amended and Restated Bylaws (the "Bylaws"), may make it difficult for a third party to acquire, or attempt to acquire, control of the Company, even if a change in control was considered favorable by the stockholders. For example, our Board of Directors has the authority to issue up to 10,000,000 shares of preferred stock. The Board can fix the price, rights, preferences, privileges and restrictions of the preferred stock without any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control of other stockholders. Our organizational documents also contain other provisions that could have an anti-takeover effect, including provisions that: - provide that vacancies on the Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum;- eliminate cumulative voting in the election of directors;- grant the Board of directors the authority to increase or decrease the size of the Board;- prohibit stockholders from calling a special meeting of stockholders;- require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; and - authorize the Board, by a majority vote, to amend the Bylaws. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which limit the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in stockholder best interests. These provisions may also prevent changes in our management or limit the price that certain investors are willing to pay for our stock.
- Share Price & Shareholder Rights - Risk 3Investors may experience dilution of their ownership interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.
For the foreseeable future, to finance our operations, including possible acquisitions or strategic transactions, we expect to issue equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 400,000,000 shares of common stock and 10,000,000 shares of preferred stock. As of December 31, 2025, there were 9,314,130 shares of common stock outstanding, 16,895,111 shares underlying warrants with a weighted average exercise price of $5.66 per share, 33,102,778 shares underlying pre-funded warrants with an exercise price of $0.01 per share, and 6,616,432 shares underlying options with a weighted average exercise price of $6.21 per share. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees, or for other business purposes. The future issuance of any such additional shares of common stock or common stock equivalents may create downward pressure on the trading price of our common stock.
- Share Price & Shareholder Rights - Risk 4Our share price has been volatile, and may continue to be volatile, which may subject us to securities class action litigation in the future.
Our stock price has in the past been, and is likely to be in the future, volatile. The stock market in general, and the market for biopharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our existing stockholders may not be able to sell their stock at a favorable price. The market price for our common stock may be influenced by many factors, including: - actual or anticipated fluctuations in our financial condition and operating results;- share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;- status and/or results of our clinical trials;- status of ongoing litigation;- results of clinical trials of our competitors' products, or comments made on the observed results of their, or our, products;- regulatory actions with respect to our products or our competitors' products;- actions and decisions by our collaborators or partners;- actual or anticipated changes in our growth rate relative to our competitors;- actual or anticipated fluctuations in our competitors' operating results or changes in their growth rate;- competition from existing products or new products that may emerge, or on which development work is terminated for safety, efficacy or other reasons;- issuance of new or updated research or reports by securities analysts;- fluctuations in the valuation of companies perceived by investors to be comparable to us;- market conditions for biopharmaceutical stocks in general;- status of our search and selection of future management and leadership; and - general economic and market conditions, including as a result of disruptive events broadly affecting society, and as a result of geopolitical uncertainties, including in the Middle East and the Russian invasion of and war against the country of Ukraine. Some companies that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such lawsuits, should they be filed against us in the future, could result in substantial costs and a diversion of management's attention and resources. This could have a material adverse effect on our business, results of operations and financial condition.
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