Tenax Therapeutics Announces Reverse Stock Split
- None.
- The reverse stock split may lead to a decrease in the company's stock price, making it less attractive to potential investors.
Insights
The reverse stock split announced by Tenax Therapeutics is a strategic move aimed at maintaining compliance with Nasdaq's minimum bid price requirement. This action is often employed by companies facing delisting due to their stock price falling below the exchange's minimum threshold. By consolidating shares, the nominal stock price is artificially increased, which can make the stock more appealing to institutional investors and help avoid the negative stigma associated with low-priced stocks.
From a financial perspective, while the reverse split does not directly affect the company's market capitalization, it may have psychological implications on investor perception. Historically, reverse splits can be associated with underperformance, but they can also be a precursor to improved financial health if accompanied by a solid turnaround strategy. For current shareholders, the impact is neutral in terms of percentage ownership, except for the rounding up of fractional shares, which could result in a minimal increase in their holdings.
It is critical to monitor the stock's performance post-split to gauge market reaction. Additionally, the reduced number of shares outstanding could lead to increased volatility. Investors should evaluate this action in the context of Tenax's overall strategy and operational performance.
Reverse stock splits are often viewed as a last resort measure for companies struggling to meet exchange listing requirements. The market's response to such corporate actions can be mixed. Some investors might interpret the reverse split as a sign of proactive management, while others may see it as an indicator of deeper issues within the company. For Tenax Therapeutics, which operates in the highly competitive biopharmaceutical sector, maintaining a listing on a major exchange like Nasdaq is critical for visibility and access to capital.
In the short term, the market may respond positively if the reverse split succeeds in stabilizing the stock's price above Nasdaq's minimum bid price. However, in the long term, the company's value will depend on its ability to develop and commercialize products that address unmet medical needs in cardiovascular and pulmonary diseases. The success of its product pipeline and any subsequent regulatory approvals will be the true drivers of shareholder value.
Stakeholders should also consider the potential for increased investor interest if the stock maintains its compliance and potentially attracts more institutional investors due to the higher per-share price post-split.
The reverse stock split process is governed by both corporate bylaws and securities regulations. Tenax Therapeutics has followed the necessary legal protocols by obtaining stockholder approval and determining the final ratio through its Board of Directors. The adherence to these formalities, including the dissemination of information through a proxy statement, is crucial for ensuring transparency and compliance with regulatory requirements.
It is important to note that the reverse stock split does not alter the number of authorized shares or the par value per share, which indicates no immediate intention to dilute current shareholders' interests through the issuance of additional shares. The adjustment of terms for stock options and warrants is a standard procedure to maintain the economic interests of the holders after such corporate actions.
For shareholders with physical certificates, the process of exchanging old shares for new ones is an administrative step that, while straightforward, requires attention to detail to ensure accurate reflection of their holdings post-split.
CHAPEL HILL, N.C., Dec. 29, 2023 (GLOBE NEWSWIRE) -- Tenax Therapeutics, Inc. (Nasdaq: TENX), a specialty pharmaceutical company focused on identifying, developing and commercializing products that address cardiovascular and pulmonary diseases with high unmet medical need, announced today that it will be executing a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-80. The reverse stock split will become effective at 5:00 pm Eastern Time on January 2, 2024. The Company’s common stock will begin trading on the Nasdaq Capital Market on a split-adjusted basis beginning upon market open on January 3, 2024, under the Company’s existing trading symbol “TENX”.
The reverse stock split was previously approved by the Company’s stockholders at a special meeting of stockholders held on November 30, 2023, with the final ratio determined by the Company’s Board of Directors. The reverse stock split is intended to bring the Company into compliance with Nasdaq’s minimum bid price requirement. The new CUSIP number following the reverse stock split will be 88032L605.
As a result of the reverse split, every 80 shares of Company common stock will be automatically combined into one share of Company common stock. The reverse stock split will affect all stockholders uniformly and will not alter any stockholder’s percentage ownership interest in the Company’s equity, except for minor changes to the treatment of fractional shares as described below. The reverse stock split will reduce the number of shares of common stock issued and outstanding from 23,862,434 to approximately 292,281.
No fractional shares will be issued following the reverse stock split, and the stock will be rounded up to the nearest whole share.
As of the effective date of the reverse stock split, the number of shares of common stock available for issuance under the Company’s equity incentive plans and issuable upon the exercise of stock options and warrants outstanding immediately prior to the reverse stock split will be proportionately affected by the reverse stock split. The exercise prices of the Company’s outstanding options and warrants will be adjusted in accordance with their respective terms.
There will be no change to the number of authorized shares or the par value per share.
Additional information concerning the reverse stock split can be found in the Company’s proxy statement filed with the Securities and Exchange Commission on October 27, 2023.
The Company’s transfer agent, Issuer Direct Corporation (“Issuer Direct”), is also acting as the exchange agent for the reverse stock split. Stockholders owning shares electronically in book-entry form via a bank, broker or other nominee will have their positions automatically adjusted to reflect the reverse stock split and will not be required to take further action in connection with the reverse stock split, subject to their brokers’ particular processes. Stockholders holding physical certificates will have their post-split positions reflected in the Company’s stockholder records with Issuer Direct and should contact Issuer Direct at (801) 272-9294 ex. 711 or Julie.Felix@issuerdirect.com for information on how to exchange their old certificated shares, if they wish to do so.
About Tenax Therapeutics
Tenax Therapeutics, Inc. is a specialty pharmaceutical company focused on identifying, developing, and commercializing products that address cardiovascular and pulmonary diseases with high unmet medical need. The Company owns North American rights to develop and commercialize subcutaneous and oral formulations of levosimendan. Tenax Therapeutics is also developing a unique oral formulation of imatinib. For more information, visit www.tenaxthera.com. Tenax’s common stock is listed on The Nasdaq Stock Market LLC under the symbol “TENX”.
Caution Regarding Forward-Looking Statements
Except for historical information, all of the statements, expectations and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: risks related to the effect of the reverse stock split and our continued listing on Nasdaq; risks related to our business strategy, including the prioritization of product candidates; risks of our clinical trials, including, but not limited to, the timing, delays, costs, design, initiation, enrollment, and results of such trials; our ability to raise additional money to fund our operations for at least the next 12 months as a going concern; any delays in regulatory review and approval of product candidates in development; reliance on third parties, including Orion Corporation, our manufacturers and CROs; risks regarding the formulation, production, marketing, customer acceptance and clinical utility of our product candidates; our estimates regarding the potential market opportunity for our product candidates; the potential advantages of our product candidates; our competitive position; intellectual property risks; our ability to maintain our culture and recruit, integrate and retain qualified personnel and advisors, including on our Board of Directors; volatility and uncertainty in the global economy and financial markets in light of the COVID-19 pandemic or similar health epidemics and geopolitical uncertainties such as in Ukraine and the Middle East; changes in legal, regulatory and legislative environments in the markets in which we operate and the impact of these changes on our ability to obtain regulatory approval for our products; and other risks and uncertainties set forth from time to time in our SEC filings. Tenax Therapeutics assumes no obligation and does not intend to update these forward-looking statements except as required by law.
Contacts
Investor Contact:
John Mullaly
Managing Director
LifeSci Advisors, LLC
C: 617-429-3548
jmullaly@lifesciadvisors.com
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