Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of Report (Date of earliest event reported): January 15,
2021
Tenax
Therapeutics, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
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001-34600
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26-2593535
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(State
or other jurisdiction of incorporation)
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(CommissionFile
Number)
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(IRS
EmployerIdentification No.)
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ONE Copley Parkway, Suite 490
Morrisville, NC 27560
(Address
of principal executive offices) (Zip Code)
919-855-2100
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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Common
Stock, $0.0001 par value per share
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TENX
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The
Nasdaq Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17
CFR 240.12b-2).
Emerging growth
company
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act.
Item 1.01. Entry into a Material Definitive Agreement.
The
applicable information set forth in Item 2.01 of this Current
Report on Form 8-K is incorporated by reference in this Item
1.01.
Item 2.01. Completion of Acquisition or Disposition of
Assets.
On
January 15, 2021, Tenax Therapeutics, Inc. (the
“Company”), Life Newco II, Inc., a Delaware corporation
and a wholly-owned, direct subsidiary of the Company (“Life
Newco”), PHPrecisionMed Inc., a Delaware corporation
(“PHPM,”) and Dr. Stuart Rich, solely in his capacity
as holders’ representative (in such capacity, the
“Representative”), entered into an Agreement and Plan
of Merger, dated January 15, 2021 (the “Merger
Agreement”), pursuant to which, subject to the satisfaction
or waiver of the conditions set forth in the Merger Agreement, the
Company would acquire 100% of the equity of PHPM. Under the terms
of the Merger Agreement, Life Newco would merge with and into PHPM,
with PHPM surviving as a wholly-owned subsidiary of the Company
(the “Merger”). On January 15, 2021, the Company
completed the acquisition contemplated by the Merger Agreement (the
“Acquisition”).
As
consideration for the Merger, the stockholders of PHPM received (i)
1,892,905 shares of the Company’s common stock (“Common
Stock”), and (ii) 10,232 shares of the Company’s Series
B convertible preferred stock, which are convertible into up to an
aggregate of 10,232,000 shares of Common Stock (“Preferred
Stock”) (collectively, the “Merger
Consideration”). The issuance of 1,212,492 shares of Common
Stock issuable upon conversion of the Preferred Stock, representing
approximately 10% of the Merger Consideration, will be delayed as
security for closing adjustments and post-closing indemnification
obligations of PHPM and the stockholders of PHPM. Each share of
Preferred Stock will automatically convert into (i) 881.5 shares of
Common Stock following receipt of the approval of the stockholders
of the Company for the Conversion (as defined herein), and (ii)
118.5 shares of Common Stock 24 months after the date of issuance
of the Preferred Stock, subject to reduction for indemnification
claims. The number of shares of Common Stock into which the
Preferred Stock converts is subject to adjustment in the case of
stock splits, stock dividends, combinations of shares and similar
recapitalization transactions. The Preferred Stock does not carry
dividends or a liquidation preference. The Preferred Stock carries
voting rights aggregating 4.99% of the Company’s Common Stock
voting power immediately prior to the closing of the Merger. The
rights, preferences and privileges of the Preferred Stock are set
forth in the Certificate of Designation of Series B Convertible
Preferred Stock that the Company filed with the Secretary of State
of the State of Delaware on January 15, 2021 (the
“Certificate of Designation”).
Pursuant
to the Merger Agreement, the Company must, no later than July 31,
2021, take all action necessary to call, convene and hold a meeting
of the Company’s stockholders to vote upon the conversion of
the Preferred Stock pursuant to the Certificate of Designation (the
“Conversion”). If stockholder approval is not obtained
at such meeting, the Company must call a meeting every 90 days
thereafter to seek stockholder approval for the Conversion until
the earlier of the date stockholder approval for the Conversion is
obtained or the Preferred Stock is no longer
outstanding.
The
terms of the Merger Agreement also require the board of directors
of the Company (the “Board”) to, subject to the
Board’s fiduciary duties under applicable law, (i) recommend
to the Company’s stockholders that they approve the
Conversion at any meeting of the Company’s stockholders
called for the approval of the Conversion, and (ii) use reasonable
best efforts to solicit from the Company’s stockholders, the
affirmative vote of the holders of shares representing a majority
of the shares of the Company’s capital stock voting in person
or by proxy at any such meeting. A vote on the Conversion is
expected to take place at the Company’s next annual meeting
of stockholders. In addition, (i) at the Company’s first
regularly scheduled Board meeting following the closing of the
Merger, the Board must appoint one director designated by
the
Representative to serve on the Board, and (ii) as promptly as
practicable after the Company has obtained stockholder approval for
the Conversion, the Board must appoint two additional directors
designated by the Representative to serve on the Board. Dr. Stuart
Rich, the co-founder and Chief Executive Officer, and a
stockholder, of PHPM, is expected to be appointed to the Board at
the next regularly scheduled Board meeting, while two other
designees of the Representative will be appointed to the Board
following receipt of stockholder approval for the
transaction.
In
connection with the closing of the Merger, Dr. Stuart Rich was also
appointed Chief Medical Officer of the Company. In
addition, pursuant to the Merger Agreement, certain of PHPM's
stockholders, including Dr. Rich, entered into restrictive covenant
agreements that contain provisions restricting such stockholders
from competing with the Company or soliciting employees or
customers for five years from the closing of the
Merger.
The
foregoing summaries of the Merger Agreement and the Preferred Stock
do not purport to be complete and are subject to, and qualified in
their entirety by, the full text of the Merger Agreement and the
Certificate of Designation, respectively, copies of which are
attached to this Current Report on Form 8-K as Exhibit 2.1 and
Exhibit 4.1, respectively, and are incorporated herein by
reference.
The
Merger Agreement is incorporated by reference to provide investors
and security holders with information regarding its terms. It is
not intended to provide any other factual information about the
Company, PHPM or their respective subsidiaries and affiliates. The
Merger Agreement contains representations and warranties by each of
the parties to the Merger Agreement, which were made only for
purposes of that agreement and as of specified dates. The
representations, warranties and covenants in the Merger Agreement
were made solely for the benefit of the parties to the Merger
Agreement, are subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing
these matters as facts, and may be subject to standards of
materiality applicable to the contracting parties that may differ
from those applicable to investors. Investors should not rely on
the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the Company, PHPM or any of their respective
subsidiaries or affiliates.
Item 3.02. Unregistered Sales of Equity Securities.
The
applicable information set forth in Item 2.01 of this Current
Report on Form 8-K is incorporated by reference in this Item
3.02.
The
Common Stock and Preferred Stock issued as Merger Consideration
were issued and sold without registration under the Securities Act
of 1933, as amended (the “Securities Act”) in reliance
on the exemptions provided by Section 4(a)(2) of the Securities Act
and/or Rule
506 of Regulation D promulgated thereunder in that (i)
the securities were issued to accredited investors or not more than
35 unaccredited investors, (ii) the disclosure requirements of Rule
502(b) of Regulation D were met, and (iii) the offer and sale of
the shares were not accomplished by means of any general
solicitation or general advertising.
Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On
January 15, 2021, the Board appointed Dr. Stuart Rich as the
Company’s Chief Medical Officer.
Dr.
Rich, age 71, joined the Company from PHPM, where he was a
co-founder and held the positions of Chief Executive Officer and
Director from October 2018 until January 2021. Prior to PHPM, Dr.
Rich served as the Chief Medical Officer (part-time) of United
Therapeutics from October 2003 until December 2004. Dr. Rich
currently serves as Professor of Medicine at Northwestern
University Feinberg School of Medicine and as Director of the
Pulmonary Vascular Disease Program at the Bluhm Cardiovascular
Institute, a U.K. based charity, and of the Cardiovascular Medical
and Research Foundation, a U.S. based charity. Prior to
Northwestern University, Dr. Rich was the Professor of Medicine and
Chief of the Section of Cardiology at the University of Illinois
College of Medicine in Chicago from July 1980 until July 1996, was
Professor of Medicine at the Rush Heart Institute of the Rush
University School of Medicine from July 1996 until September 2004,
and was Professor of Medicine at the Section of Cardiology of the
University of Chicago Pritzker School of Medicine from September
2004 until July 2015. Dr. Rich received his B.S. in Biology at the
University of Illinois and his M.D. at Loyola University Stritch
School of Medicine, and he completed his residency in medicine at
the Washington University of St. Louis and his fellowship in
cardiology at the University of Chicago.
In
connection with his appointment, the Company entered into an
employment agreement with Dr. Rich, effective January 15, 2021 (the
“Employment Agreement”). Under the Employment
Agreement, Dr. Rich will receive an annual base salary of $300,000,
and will also receive participation in medical insurance, dental
insurance, and other benefit plans on the same basis as the
Company’s other officers. Under the Employment Agreement, Dr.
Rich is eligible for an annual target cash bonus of 40% of his base
salary, based on 100% achievement of annual goals (with no cap on
the bonus for greater than 100% achievement of goals). Pursuant to
Employment Agreement, Dr. Rich received as an inducement award a
one-time non-statutory stock option grant of 250,000 shares of
Common Stock. The option
award will vest as follows: 25% upon initiation of a Phase 3 trial
(the “Trial”); 25% upon database lock of the Trial; 25%
upon acceptance for review of an Investigational New Drug
Application; and 25% upon approval. The options have a 10-year term
and an exercise price of $1.78 per share, the January 15, 2021
closing price of the Company's common stock.
The
Employment Agreement is effective for a one-year term, and
automatically renews for additional one-year terms, unless the
Employment Agreement is terminated in advance of renewal or either
party gives notice at least 90 days prior to the end of the then
current term of an intention not to renew. If Dr. Rich is
terminated without cause, if he terminates his employment for good
reason, or if the Company elects not to renew the Employment
Agreement, Dr. Rich would be entitled to receive (i) one-year of
his then current base salary, (ii) a pro-rated amount of the annual
bonus that he would have received had 100% of goals been achieved,
(iii) acceleration of vesting of all outstanding equity-based
compensation awards held by Dr. Rich, and (iii) one-year of COBRA
reimbursements or benefits payments, as applicable. Dr.
Rich’s entitlement to these payments is conditioned upon
execution of a release of claims.
For
purposes of the Employment Agreement: (i) “cause”
includes (a) a willful material breach of the Employment Agreement
by Dr. Rich, (b) material misappropriation of Company property, (c)
material failure to comply with Company policies, (d) abuse of
illegal drugs or abuse of alcohol in a manner that materially
interferes with the performance of the officer’s duties, (e)
dishonest or illegal action that is materially detrimental to the
Company, and (f) failure to disclose material conflicts of
interest, and (ii) “good reason” includes (a) a
material reduction in base salary, (b) a material reduction of the
officer’s authority, duties or responsibility, or (c) a
material breach of the Employment Agreement by the
Company.
The
Employment Agreement with Dr. Rich is filed as Exhibit 10.1 to this
Current Report on Form 8-K. The foregoing summary of the terms of
the Employment Agreement is subject to, and qualified in its
entirety by, such documents, which are incorporated herein by
reference. Other than pursuant to the Merger Agreement and the
Employment Agreement, the Company is not aware of any transactions
involving Dr. Rich that would be required to be disclosed pursuant
to Item 404(a) of Regulation S-K.
Item 7.01. Regulation FD Disclosure.
On
January 19, 2021, the Company issued a press release regarding the
consummation of the Acquisition and Dr. Rich’s appointment as
the Company’s Chief Medical Officer. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated by
reference herein.
The
information set forth under this Item 7.01, including
Exhibit 99.1, shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or incorporated by
reference in any filing under the Securities Act or the Exchange
Act, except as shall be expressly set forth by specific reference
in such a filing.
Item 9.01. Financial Statements and Exhibits.
(a)
Financial
statements of business acquired.
The
financial statements required to be filed as part of this Current
Report on Form 8-K will be filed by amendment to this Current
Report as soon as practicable but not later than March 31,
2021.
(b)
Pro
forma financial information.
The pro
forma financial information required to be filed as part of this
Current Report on Form 8-K will be filed by amendment to this
Current Report as soon as practicable but not later than March 31,
2021.
(d)
Exhibits.
Exhibit No.
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Description
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Agreement
and Plan of Merger among PHPrecisionMed Inc., Tenax Therapeutics,
Inc., Life Newco II, Inc., and Dr. Stuart Rich dated January 15,
2021.
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Certificate
of Designation of Series B Convertible Preferred
Stock.
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Employment
Agreement with Dr. Stuart Rich dated January 15, 2021.
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Press
Release dated January 19, 2021.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: January 19, 2021
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Tenax Therapeutics, Inc.
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By: /s/ Michael B. Jebsen
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Michael
B. Jebsen
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President
and Chief Financial Officer
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