Item 1.01. Entry into a Material Definitive Agreement.
On
March 11, 2020, Tenax Therapeutics, Inc. (the
“Company”) entered into a Securities Purchase Agreement
(the “Purchase Agreement”) with an institutional
investor (the “Investor”), pursuant to which the
Company agreed to issue in a registered direct offering 750,000
shares of the Company’s common stock, $0.0001 par value per
share, at a purchase price of $1.1651 per share and pre-funded
warrants to purchase up to 1,610,313 shares of common stock at a
purchase price of $1.1650 per pre-funded warrant for gross proceeds
of approximately $2.75 million. In a concurrent private placement,
the Company has agreed to issue to the Investor unregistered common
stock warrants (the “Unregistered Warrants”) to
purchase up to 2,360,313 shares of common stock (such registered
direct offering and private placement, collectively, the
“Offerings”).
The
pre-funded warrants have an exercise price of $0.0001 per share of
common stock, are immediately exercisable, may be exercised at any
time until exercised in full and are subject to customary
adjustments. The Unregistered Warrants have an exercise price of
$1.04 per share of common stock, are immediately exercisable, will
expire five and one-half years from the date of issuance and are
subject to customary adjustments.
The
pre-funded warrants and Unregistered Warrants may not be exercised
if the aggregate number of shares of the Company’s common
stock beneficially owned by the holder (together with its
affiliates) would exceed 4.99% (or 9.99% at the holder's election)
of the Company’s outstanding common stock immediately after
exercise. However, a holder may increase or decrease such
percentage, but not in excess of 9.99%, upon at least 61
days’ prior notice from the holder to the
Company.
The
Company intends to use the net proceeds from the Offerings to
further its clinical trials of levosimendan, for research and
development and for general corporate purposes, including working
capital and potential acquisitions.
H.C.
Wainwright & Co., LLC (the “Placement Agent’) was
engaged by the Company to act as its exclusive agent for the
Offerings. The Company agreed to pay the Placement Agent a cash fee
equal to 7.5% of the gross proceeds received by the Company in the
Offerings, totaling approximately $206,250. The Company also has
agreed to pay the Placement Agent $75,000 for non-accountable
expenses, a management fee equal to 1.0% of the gross proceeds
raised in the Offerings and up to $12,900 for clearing fees. In
addition, the Company has agreed to issue to the Placement Agent or
its designees warrants to purchase up to 177,023 shares of common
stock (representing 7.5% of the aggregate number of shares of
common stock (or common stock equivalents) sold in the Offerings)
(the “Placement Agent Warrants”). The Placement Agent
Warrants have substantially the same terms as the Unregistered
Warrants, except that the Placement Agent Warrants have an exercise
price equal to $1.4564, or 125% of the offering price per share of
common stock, and will be exercisable for five years from the
effective date of the Offerings.
The
Company offered the shares of common stock and pre-funded warrants
(and the shares underlying the pre-funded warrants) in the
registered direct offering pursuant to the Company’s
registration statement on Form S-3 (File No. 333-224951) filed with
the Securities and Exchange Commission (the
“Commission”) and declared effective by the Commission
on May 15, 2018. A prospectus supplement relating to the shares of
common stock and pre-funded warrants (and the shares
underlying the pre-funded warrants) offered pursuant to the
registered direct offering was filed with the Commission on March
13, 2020 (the “Prospectus Supplement”).
The
issuance and sale of the Unregistered Warrants, the Placement Agent
Warrants and the shares of common stock issuable upon exercise of
the Unregistered Warrants and Placement Agent Warrants are not
being registered under the Securities Act of 1933, as amended (the
“Securities Act”), are not being offered pursuant to
the registration statement and are being offered pursuant to the
exemption provided in Section 4(a)(2) under the Securities Act and
Rule 506(b) promulgated thereunder.
A copy
of the legal opinion of K&L Gates LLP relating to the shares of
common stock and the pre-funded warrants, and the consent included
therein, is attached to this Current Report on Form 8-K as Exhibit
5.1.
The
Purchase Agreement includes customary representations, warranties
and covenants by the Company. The foregoing descriptions of the
pre-funded warrants, the Unregistered Warrants, the Placement Agent
Warrants and the Purchase Agreement are qualified by reference to
the full text of such agreements, which are attached to this
Current Report on Form 8-K as Exhibits 4.1, 4.2, 4.3 and 10.1,
respectively, and are incorporated herein by
reference.