TENAX THERAPEUTICS, INC.
10-Ks and 10-Qs
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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by the Registrant ☒
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by a Party other than the Registrant ☐
Check
the appropriate box:
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14a-6(e)(2))
☒
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☐
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☐
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Pursuant to Rule 14a-12
TENAX THERAPEUTICS, INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
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Date
Filed:
TENAX THERAPEUTICS, INC.
ONE Copley Parkway, Suite 490
Morrisville, North Carolina 27560
January 16
, 2018
Dear
Stockholders:
It is
my pleasure to invite you to a Special Meeting of Stockholders of
Tenax Therapeutics, Inc., to be held on February
15, 2018
, at 9:00 a.m. at the offices of
Tenax Therapeutics, Inc. located at ONE Copley Parkway, Suite 490,
Morrisville, North Carolina, 27560. This booklet includes the
Notice of Special Meeting of Stockholders and Proxy Statement. The
Proxy Statement provides information about the business we will
conduct at the meeting. We hope you will be able to attend the
meeting, where you can vote in person.
The
matters to be acted upon at the meeting are described in the
accompanying Notice of Special Meeting of Stockholders and Proxy
Statement.
Whether
or not you plan to attend the Special Meeting personally, and
regardless of the number of shares you own, it is important that
your shares be represented at the Special Meeting. We need more
than half of our outstanding common shares to be represented at the
Special Meeting to establish a quorum. Every vote counts!
Accordingly, we urge you to complete the enclosed proxy and return
it to our vote tabulators promptly in the envelope provided. If you
do attend the Special Meeting and wish to vote in person, you may
withdraw your proxy at that time. You may also elect to vote your
shares by telephone or electronically via the Internet. With
respect to shares held through a broker, bank or nominee, please
follow the separate instructions from your broker, bank or nominee
on how to vote your shares.
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Sincerely,
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/s/
Michael
B. Jebsen
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Michael B. Jebsen |
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Interim Chief
Executive Officer
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YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN AND RETURN THE ENCLOSED
PROXY, VOTE YOUR SHARES BY TELEPHONE OR INTERNET, OR ATTEND THE
SPECIAL MEETING IN PERSON.
TENAX THERAPEUTICS, INC.
ONE Copley Parkway, Suite 490
Morrisville, North Carolina 27560
Notice of Special Meeting of Stockholders
To Be Held on
February 15,
2018
January 16
, 2018
To the
Stockholders:
The
stockholders of Tenax Therapeutics, Inc. will hold a Special
Meeting of Stockholders (the “Special Meeting”) on
February
15, 2018
, at 9:00 a.m.
at the offices of Tenax Therapeutics, Inc. located at ONE Copley
Parkway, Suite 490, Morrisville, North Carolina,
27560.
The
purpose of the meeting is to propose and act upon the following
matters:
1.
to approve an
amendment to our certificate of incorporation to effect a reverse
stock split (the “reverse stock split”) at a ratio of
not less than one-for-five and not more than one-for-fifty at any
time prior to December 31, 2018, with such ratio and the
implementation and timing of such reverse stock split to be
determined by our board of directors in its sole discretion
(“Proposal No. 1”); and
2.
to approve a
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies for any proposal if
there are not sufficient votes to approve Proposal No. 1
(“Proposal No. 2”).
At the
Special Meeting we may transact such other business as may properly
come before the meeting or any adjournment or postponement
thereof.
The
above matters are described in the Proxy Statement accompanying
this notice.
The
Board has fixed the close of business on January 12,
2018
as the record date for determining
those stockholders who will be entitled to notice of and to vote at
the Special Meeting. Representation of at least a majority in
voting interest of our common stock, either in person or by proxy,
is required to constitute a quorum for purposes of voting on the
proposals set forth above.
It
is important that your shares be represented at the Special Meeting
to establish a quorum.
WHETHER
OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. Your proxy may be revoked at any time prior to the time
it is voted at the Special Meeting.
Your
vote is important, and we appreciate your cooperation in
considering and acting on the matters presented.
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By order of the
Board of Directors,
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/s/
Nancy
J. Hecox
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Nancy J. Hecox,
Corporate Secretary
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January 16
, 2018
TENAX THERAPEUTICS, INC.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy
Materials
For the Stockholder Meeting to be held on
February 15, 2018
The Notice of Special Meeting of Stockholders, Proxy Statement, and
Form of Proxy are available at
www.iproxydirect.com/TENX.
The
board of directors (the “Board of Directors” or the
“Board”) of Tenax Therapeutics, Inc. is asking for your
proxy for use at the Special Meeting of Stockholders (the
“Special Meeting”) and any adjournments of the meeting.
The meeting will be held at the offices of
Tenax Therapeutics, Inc. located at ONE Copley
Parkway, Suite 490, Morrisville, North Carolina, 27560
on
February 15, 2018
, at 9:00 a.m.
local time, to approve an amendment to our certificate of
incorporation to effect the reverse stock split at a ratio of not
less than one-for-five and not more than one-for-fifty at any time
prior to December 31, 2018, with such ratio and the implementation
and timing of such reverse stock split to be determined by our
board of directors in its sole discretion, to approve a proposal to
adjourn the special meeting, if necessary or appropriate, to
solicit additional proxies for any proposal if there are not
sufficient votes to approve Proposal No. 1 and to conduct such
other business as may be properly brought before the
meeting.
The Board of Directors recommends that you vote FOR the amendment
to our certificate of incorporation to effect the reverse stock
split at a ratio of not less than one-for-five and not more than
one-for-fifty at any time prior to December 31, 2018, with such
ratio and the implementation and timing of such reverse stock split
to be determined by our board of directors in its sole discretion
and FOR the authorization to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies for if
there are not sufficient votes to approve Proposal No.
1.
This
proxy statement and the accompanying proxy card are first being
delivered to stockholders on or about
January
16
, 2018
.
All
references in this Proxy Statement to “Tenax,”
“we,” “our,” and “us” mean
Tenax Therapeutics, Inc.
What is the difference between holding shares as a stockholder of
record and as a beneficial owner?
Many of
our stockholders hold their shares through a broker, bank or other
nominee rather than directly in their own name as the stockholder
of record. As summarized below, there are some distinctions between
shares held of record and those owned beneficially.
Stockholder of Record
. If your shares
are registered directly in your name with our transfer agent,
Interwest Transfer Company
(“Interwest”)
, you are considered, with respect
to those shares, the stockholder of record, and these proxy
materials are being sent directly to you by Interwest on our
behalf. As the stockholder of record, you have the right to grant
your voting proxy directly to us or to vote in person at the
Special Meeting. We have enclosed a proxy card for you to
use.
Beneficial Owner
. If your shares are
held in a stock brokerage account or by a bank or other nominee,
you are considered the beneficial owner of shares held in street
name and the proxy materials are being sent to you by your broker
or nominee who is considered, with respect to those shares, the
stockholder of record. As the beneficial owner, you have the right
to direct your broker or nominee on how to vote and are also
invited to attend the Special Meeting. However, since you are not
the stockholder of record, you may not vote these shares in person
at the meeting unless you receive a proxy from your broker or
nominee. Your broker or nominee has enclosed a voting instruction
card for you to use. If you wish to attend the Special Meeting and
vote in person, please mark the box on the voting instruction card
received from your broker or nominee and return it to them so that
you can receive a legal proxy to present at the Special
Meeting.
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How many votes do I have?
You
are entitled to one vote for each share of our common stock that
you hold.
How is the vote counted?
Votes cast by proxy or in person at the Special
Meeting will be counted by persons appointed by us to act as
tellers for the meeting. The tellers will count shares represented
by proxies as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. Abstentions and
broker non-votes with respect to Proposal No. 1 will be counted for
purposes of establishing a quorum and, if a quorum is present, will
have the same practical effect as a vote against this proposal.
Shares properly voted to “abstain” and broker non-votes
on Proposal No. 2 are considered as shares that are entitled to
vote for the purpose of determining a quorum but
are
generally not
treated as votes cast
for the matter. A broker non-vote occurs when a broker holding
shares for a customer does not vote on a particular proposal
because the broker has not received voting instructions on the
matter from its customer and is barred by stock exchange rules from
exercising discretionary authority to vote on the
matter.
How do I vote?
If
you are a stockholder of record, you may vote using any of the
following methods:
●
Proxy Vote by Mail.
Return the enclosed proxy form by mail
using the enclosed prepaid envelope. Be sure to complete, sign and
date the form before mailing. If you are a stockholder of record
and you return your signed proxy form but do not indicate your
voting preferences, the persons named in the proxy form will
vote
FOR
the amendment to our certificate of incorporation
to effect the reverse stock split at a ratio of not less than
one-for-five and not more than one-for-fifty at any time prior to
December 31, 2018, with such ratio and the implementation and
timing of such reverse stock split to be determined by our board of
directors in its sole discretion,
FOR
the authorization to adjourn the
special meeting, if necessary or appropriate, to solicit additional
proxies for if there are not sufficient votes to approve Proposal
No. 1, and at the discretion of the persons named in the proxy on
any other matter that comes before the meeting for a
vote.
●
Proxy Vote by Internet.
You may use the Internet to transmit
your voting instructions up until 11:59 p.m. Eastern Standard Time
on February 14, 2018 by going to the website
http://
www.iproxydirect.com/TENX
.
Please have your proxy card in hand when you
access the website and follow the instructions to obtain your
records and to create an electronic voting instruction
form.
●
Proxy Vote by Phone.
You may use any touch-tone telephone
to transmit your voting instructions up until 11:59 p.m.
Eastern
Standard
Time on February 14, 2018
by calling the toll-free number (866) 752-VOTE (8683). Have your
proxy card in hand when you call and then follow the
instructions.
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In Person at the Special
Meeting.
All stockholders may
vote in person at the Special Meeting. You may also be represented
by another person at the meeting by executing a proper proxy
designating that person.
If
you are a beneficial owner because your shares are held in a stock
brokerage account or by a bank or other nominee, to vote your
shares you must direct your broker, bank or nominee how to vote
your shares by using the voting instructions included in the
mailing you received, or attend the Special Meeting by following
the directions below under “Who Can Attend the Special
Meeting?”
What can I do if I change my mind after I vote my
shares?
If
you are a stockholder of record, you may revoke your proxy at any
time before it is voted at the Special Meeting by:
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sending
written notice of revocation to our Corporate
Secretary;
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●
submitting
a new, proper proxy by mail (not by Internet or phone) after the
date of the revoked proxy; or
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attending
the Special Meeting and voting in person.
If
you are a beneficial owner of shares, you may submit new voting
instructions by contacting your broker, bank or
nominee.
When is the record date for the Special Meeting?
The
Board has fixed the record date for the Special Meeting as of the
close of business on January 12, 2018.
How many votes can be cast by all stockholders?
There were 28,236,775
shares of our
common stock outstanding on the record date and entitled to vote at
the Special Meeting. Each share of common stock is entitled to one
vote on each matter
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What constitutes a quorum?
A majority of the outstanding shares present or
represented by proxy, or 14,118,388
shares,
constitutes a quorum for the purpose of adopting proposals at the
Special Meeting. If you submit a properly executed proxy, then you
will be considered part of the quorum.
What vote is required to approve each item?
The amendment to our certificate of incorporation
to effect the reverse stock split requires approval by a majority
of the outstanding shares of common stock entitled to vote on the
proposal.
The adjournment of the special meeting, if
necessary or appropriate, to solicit additional proxies for any
proposal if there are not sufficient votes to approve Proposal No.
1
requires approval by a majority of
the total votes cast in person or by proxy.
If
the Special Meeting is adjourned or postponed for any purpose, at
any subsequent reconvening of the Special Meeting your proxy will
be voted in the same manner as it would have been voted at the
original convening of the Special Meeting unless you withdraw or
revoke your proxy. Your proxy may be voted in this manner even
though it may have been voted on the same or any other matter at a
previous session of the Special Meeting.
Who can attend the Special Meeting?
All
stockholders as of
January 12,
2018
may attend the Special Meeting. If you are listed as
stockholder of record you may attend the Special Meeting if you
bring proof of identification. If you are the beneficial owner of
shares held in street name, you will need to bring proof of
identification and provide proof of ownership by bringing either a
copy of a brokerage statement or a letter from the record holder
indicating that you owned the shares as of
January
12, 2018
.
What does it mean if I receive more than one proxy card or voting
instruction form?
It
means that you have multiple accounts at the transfer agent or with
brokers. Please complete and return all proxy cards or voting
instruction forms to ensure that all of your shares are
voted.
Where can I find more information about Tenax?
We file
periodic reports with the Securities and Exchange Commission (the
“SEC”) pursuant to Section 13(a) of the Securities
Exchange Act of 1934 (the “Exchange Act”). Our SEC
filings are available from the SEC’s Internet site at
http://www.sec.gov, which contains reports and other information
regarding issuers that file electronically. Our filings with the
SEC are available without charge on our website
(http://www.tenaxthera.com) as soon as reasonably practicable after
filing. Further, the reports filed with the SEC may be inspected
without charge at the SEC’s Public Reference Room at 100 F
Street N.E., Washington, D.C. 20549. Please call the SEC at (800)
732-0330 for further information on the Public Reference
Room.
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Who can help answer my questions about the Special Meeting or how
to submit or revoke my proxy?
If you
are the stockholder of record, please contact:
Tenax
Therapeutics, Inc.
Attn:
Investor Relations
ONE
Copley Parkway, Suite 490
Morrisville, NC
27560
Telephone: (919)
855-2100
If your
shares are held in street name, please call the telephone number
provided on your voting instruction form or contact your broker
directly.
5
PROPOSAL 1: APPROVAL OF THE REVERSE STOCK SPLIT
General
At the
Special Meeting, our stockholders will be asked to approve an
amendment to our certificate of incorporation to effect a reverse
stock split of the issued and outstanding shares of our common
stock at a ratio of not less than one-for-five and not more than
one-for-fifty at any time prior to December 31, 2018, with such
ratio and the implementation and timing of such reverse stock split
to be determined by our board of directors in its sole discretion.
Upon the effectiveness of the amendment to our certificate of
incorporation effecting the reverse stock split, the outstanding
shares of our common stock will be reclassified and combined into a
lesser number of shares such that one share of our common stock
will be issued for a specified number of shares.
If
Proposal No. 1 is approved by the stockholders as proposed, the
Board would have the sole discretion to effect the amendment and
reverse stock split at any time prior to December 31, 2018, and to
fix the specific ratio for the reverse stock split, provided that
the ratio would be not less than one-for-five and not more than
one-for-fifty. By approving the reverse stock split, our
stockholders are approving individual amendments to our certificate
of incorporation for each number in such range. After the Board has
selected the number in such range to effect the reverse stock
split, we will abandon all amendments to the certificate of
incorporation except the amendment with respect to the number
selected by the Board. The Board would also have the discretion to
abandon the amendment entirely prior to its effectiveness. We
believe that enabling the board to fix the specific ratio of the
reverse stock split within the stated range will provide us with
the flexibility to implement it in a manner designed to maximize
the anticipated benefits for our stockholders. The Board’s
determination of the ratio of the reverse stock split will be based
on a number of factors, including market conditions, existing and
expected trading prices for our common stock and listing
requirements set forth by the
Nasdaq
Stock Market, LLC (“Nasdaq”)
. Even if the
stockholders approve the reverse stock split, we reserve the right
not to effect the reverse stock split if the Board
does not deem the reverse stock
split to be in the best interests of the Company and its
stockholders.
The reverse
stock split, if approved by our stockholders, would become
effective upon the filing of the amendment to our certificate of
incorporation with the Secretary of State of the State of Delaware,
or at the later time set forth in the amendment. The exact timing
of the amendment will be determined by the Board based on its
evaluation as to when such action will be the most advantageous to
the Company and our stockholders. In addition, the board reserves
the right, notwithstanding stockholder approval and without further
action by the stockholders, to abandon the amendment and the
reverse stock split if, at any time prior to the effectiveness of
the filing of the amendment with the Secretary of State, the Board,
in its sole discretion, determines that it is no longer in our best
interest and the best interests of our stockholders to
proceed.
The
form of the proposed amendment to our certificate of incorporation
to effect the reverse stock split is attached as Annex A to this
proxy statement. Any amendment to our certificate of incorporation
to effect the reverse stock split will include the reverse stock
split ratio fixed by the board, within the range approved by our
stockholders. The amendment to our certificate of incorporation
will not change the number of authorized shares, or the par value,
of our common stock.
Reasons for the Proposed Amendment
The
Board’s primary reasons for approving and recommending the
reverse stock split are that the Board believes that:
●
the reverse stock
split is the most effective means of increasing the per-share
market price of our common stock in order to maintain our listing
on the Nasdaq Capital Market; and
●
a higher per-share
market price of our common stock could encourage investor interest
in the Company and promote greater liquidity for our
stockholders.
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Our
common stock is currently listed on the Nasdaq Capital Market under
the symbol “TENX.” We believe our listing on the Nasdaq
Capital Market supports and maintains the liquidity of our common
stock for our stockholders.
In
order for our common stock to continue to be quoted on the Nasdaq
Capital Market, we must satisfy the continued listing requirements
established by Nasdaq. Among other requirements, we are required to
maintain a minimum bid price of $1.00 per share for our common
stock.
On
March 15, 2017, we received a notification letter from
Nasdaq’s Listing Qualifications Department indicating that we
were not in compliance with Nasdaq Listing Rule 5550(a)(2), because
the minimum bid price of our common stock on the Nasdaq Capital
Market had closed below $1.00 per share for 30 consecutive business
days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were
given 180 calendar days, or until September 11, 2017, to regain
compliance with the minimum $1.00 bid price per share
requirement.
On
September 12, 2017, we received a notice from Nasdaq’s
Listing Qualifications Department indicating that, while we had not
regained compliance with the minimum bid price requirement, we were
eligible for an additional 180-day compliance period, or until
March 12, 2018, to regain compliance with the minimum $1.00 bid
price per share requirement for continued listing on the Nasdaq
Capital Market due to our meeting the continued listing requirement
for market value of publicly held shares and all other applicable
requirements for initial listing on the Nasdaq Capital Market, with
the exception of the bid price requirement, and due to our written
notice of our intention to cure the deficiency during the second
compliance period by effecting a reverse stock split, if
necessary.
To
regain compliance, anytime before March 12, 2018, the bid price of
our common stock must close at $1.00 per share or more for a
minimum of 10 consecutive business days. If we do not regain
compliance by March 12, 2018, we expect that Nasdaq will provide
written notification to us that our common stock will be subject to
delisting. Upon such notice, we may appeal Nasdaq’s delisting
determination to a Nasdaq hearings panel, pursuant to the
procedures set forth in the applicable Nasdaq Marketplace Rules.
There can be no assurance that, if we appeal the Nasdaq
Staff’s determination, such appeal would be successful.
During the appeal process, our common stock would continue to trade
on Nasdaq. If we are delisted and cannot obtain listing or
quotation on another major market or exchange, our stock’s
liquidity would likely suffer, and we would likely experience
reduced investor interest. Such factors may result in a decrease in
our stock’s trading price. Delisting from The Nasdaq Capital
Market also may restrict us from issuing additional securities or
securing additional financing.
An
objective of the Board of Directors in proposing the reverse stock
split is to increase the per-share market price of our common stock
in order to maintain our listing on The Nasdaq Capital Market.
Effecting the reverse stock split would reduce our total shares of
common stock outstanding, which the Board believes will increase
the price per share of our common stock and therefore, better
enable us to maintain the listing of our common stock on The Nasdaq
Capital Market. However, the effect of the reverse stock split on
the market value of our common stock cannot be predicted with any
certainty, and there can be no assurance that the market price per
post-split share will either exceed or remain in excess of the
$1.00 minimum bid price for a sustained period of time. The reverse
stock split itself does not affect our market value, and the market
price of our common stock may also be based on other factors that
are unrelated to the number of shares outstanding, including our
future performance.
Potential Effects of the Reverse Stock Split
As of
January 16
, 2018
,
a date prior to the effective time of the reverse stock split, we
have
371,763,225
authorized but unissued shares of common stock. After the effective
time of the reverse stock split, we will have between approximately
394,352,645
and
399,435,264
authorized but unissued shares of common stock, depending on the
ratio for the reverse stock split selected by the Board. Based on
our current working capital, we believe we have sufficient capital
on hand to continue to fund operations through our fiscal year
ending December 31, 2018. We will need to find alternative sources
of capital to continue as a going concern, including potential
issuances of additional shares of common stock, though there can be
no assurance that such funding will be available on favorable terms
or at all. While we may issue shares of common stock from time to
time following the reverse stock split, we currently have no plans,
arrangements or understandings, whether written or oral, to issue
any of the shares that will be newly available following the
reverse stock split (meaning those shares available following the
reverse stock split in excess of those available prior to the
reverse stock split).
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If the
stockholders approve the proposal to implement the reverse stock
split and the Board implements the reverse stock split, we will
amend our certificate of incorporation to effect the reverse stock
split. The text of the form of the proposed amendment to our
certificate of incorporation is attached to this proxy statement as
Annex A.
The
reverse stock split will be effected simultaneously for all
outstanding shares of our common stock. The reverse stock split
will affect all of our stockholders uniformly and will not affect
any stockholder’s percentage ownership interests in the
Company, except to the extent that the reverse stock split results
in any of our stockholders owning a fractional share. Common stock
issued pursuant to the reverse stock split will remain fully paid
and nonassessable. The reverse stock split will not affect our
continuing to be subject to the periodic reporting requirements of
the Exchange Act.
As of
the effective time of the reverse stock split, we will adjust and
proportionately decrease the number of shares of our common stock
reserved for issuance upon exercise of, and adjust and
proportionately increase the exercise price of, all options and
warrants and other rights to acquire our common stock. In addition,
as of the effective time of the reverse stock split, we will adjust
and proportionately decrease the total number of shares of our
common stock that may be the subject of the future grants under our
stock option plans.
Assuming reverse
stock split ratios of one-for-fifty and one-for-five, which are
ratios based on whole numbers of shares at the high end and low end
of the range that our stockholders are being asked to approve, the
following table sets forth the number of shares of our common stock
that would be (i) issued and outstanding, (ii) reserved for
issuance and (iii) authorized for issuance and neither issued nor
reserved for issuance, in each case, after the reverse stock split,
based on information as of
January
16
, 2018
, the last practicable date before
the printing of this proxy statement.
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Reverse Stock Split
Ratio of
One-for-Fifty
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Reverse Stock Split
Ratio of
One-for-Five
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Number of Shares of
Common Stock Issued and Outstanding
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564,736
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5,647,355
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Number of Shares of
Common Stock Reserved for Issuance
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206,020
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2,060,199
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Number of Shares of
Common Stock Authorized for Issuance and Neither Issued nor
Reserved for Issuance
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399,229,244
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392,292,446
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After the
effective time of the reverse stock split, the post-split market
price of our common stock may be less than the pre-split price
multiplied by the reverse stock split ratio. In addition, a
reduction in number of shares outstanding may impair the liquidity
for our common stock, which may reduce the value of our common
stock.
Procedure for Effecting the Reverse Stock Split and Exchange of
Stock Certificates
If our
stockholders approve the proposal to effect the reverse stock
split, and if the Board still believes that a reverse stock split
is in the best interests of the Company and its stockholders, the
Board will determine the ratio of the reverse stock split to be
implemented. We will file the certificate of amendment with the
Secretary of State of the State of Delaware. The Board may delay
effecting the reverse stock split without resoliciting stockholder
approval. Beginning on the effective date of the reverse stock
split, each certificate representing pre-split shares will be
deemed for all corporate purposes to evidence ownership of
post-split shares.
8
As soon
as practicable after the effective date of the reverse stock split,
stockholders will be notified that the reverse stock split has been
effected. We expect that our transfer agent will act as exchange
agent for purposes of implementing the exchange of stock
certificates. Holders of pre-split shares will be asked to
surrender to the exchange agent certificates representing pre-split
shares in exchange for certificates representing post-split shares
in accordance with the procedures to be set forth in a letter of
transmittal to be sent by us. No new certificates will be issued to
a stockholder until such stockholder has surrendered such
stockholder’s outstanding certificate(s) together with the
properly completed and executed letter of transmittal to the
exchange agent. Any pre-split shares submitted for transfer,
whether pursuant to a sale or other disposition, or otherwise, will
automatically be exchanged for post-split shares. STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT
ANY CERTIFICATE(S) UNLESS AND UNTIL REQUESTED TO DO
SO.
Fractional Shares
We will not
issue fractional shares in connection with the reverse stock split.
Instead, stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of shares not evenly
divisible by the reverse stock split ratio will automatically be
entitled to receive an additional fraction of a share of common
stock to round up to the next whole post-split share.
Accounting Matters
The
reverse stock split will not affect the par value of our common
stock. As a result, at the effective time of the reverse stock
split, the stated capital on our balance sheet attributable to the
common stock will be reduced in the same proportion as the reverse
stock split ratio, and the additional paid-in capital account will
be credited with the amount by which the stated capital is reduced.
The per share net income or loss and net book value of our common
stock will be increased because there will be fewer shares of our
common stock outstanding. Prior periods’ per share amounts
will be restated to reflect the reverse stock split.
Appraisal Rights
Under
the Delaware General Corporation Law, our stockholders are not
entitled to appraisal rights with respect to the reverse stock
split, and we do not intend to independently provide stockholders
with any such right.
Certain Material U.S. Federal Income Tax Consequences of the
Reverse Stock Split
The
following summary describes certain material U.S. federal income
tax consequences of the reverse stock split to holders of our
common stock. This summary is based upon current provisions of the
Internal Revenue Code of 1986, as amended (the “Code”),
existing Treasury Regulations and current administrative rulings
and court decisions, all of which are subject to change and to
differing interpretations, possibly with retroactive effect. This
discussion does not take into account or address any impact from
the recently enacted tax legislation.
This
summary addresses the tax consequences only to a “U.S.
person,” which is a beneficial owner of our common stock that
is either:
●
a citizen or
resident of the United States;
●
a corporation (or
other entity taxable as a corporation for U.S. federal income tax
purposes) organized under the laws of the United States, any state
thereof or the District of Columbia;
●
an estate, the
income of which is subject to U.S. federal income taxation
regardless of its source; and
●
a trust if either
(i) a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more
U.S. persons have the authority to control all substantial
decisions of such trust or (ii) the trust has a valid election in
effect to be treated as a U.S. person for U.S. federal income tax
purposes.
9
If a
partnership (or other entity classified as a partnership for U.S.
federal income tax purposes) is the beneficial owner of our common
stock, the U.S. federal income tax treatment of a partner will
generally depend on the status of the partner and the activities of
the partnership. If you are a partner of a partnership holding our
common stock, you should consult your tax advisor.
This
summary assumes that our stockholders hold their shares of our
common stock as capital assets within the meaning of Section 1221
of the Code (generally, property held for investment). No attempt
has been made to comment on all U.S. federal income tax
consequences of the reverse stock split that may be relevant to
particular holders, including holders:
●
who are subject to
special treatment under U.S. federal income tax rules such as
dealers in securities, financial institutions, non-U.S. persons,
mutual funds, regulated investment companies, real estate
investment trusts, insurance companies, tax-exempt entities, U.S.
expatriates, or traders in securities who elect to mark to
market;
●
who acquired their
shares in connection with stock option or stock purchase plans or
in other compensatory transactions;
●
who hold their
shares as qualified small business stock within the meaning of
Section 1202 of the Code;
●
who hold their
shares as part of an integrated investment such as a hedge or as
part of a hedging, straddle or other risk reduction strategy;
or
●
who do not hold
their shares as capital assets.
In
addition, the following discussion does not address the tax
consequences of the reverse stock split under state, local and
foreign tax laws or under the alternative minimum tax provisions of
the Code. Furthermore, the following discussion does not address
any of the tax consequences of transactions effectuated before,
after or at the same time as the reverse stock split, whether or
not they are in connection with the reverse stock split, including,
without limitation, transactions in which shares of our common
stock are acquired or disposed of.
Accordingly,
holders of our common stock are advised and expected to consult
their own tax advisors regarding the U.S. federal income tax
consequences of the reverse stock split to them in light of their
personal circumstances and the consequences of the reverse stock
split under state, local and foreign tax laws.
The
reverse stock split is intended to qualify as a
“reorganization” under Section 368 of the Code.
Assuming the reverse stock split qualifies as a reorganization, and
subject to the note below regarding the receipt of an additional
fraction of a share, a U.S. holder generally will not recognize
gain or loss upon the exchange of pre-split shares for post-split
shares. The aggregate tax basis of the post-split shares received
by a U.S. holder in the reverse stock split will be the same as the
aggregate tax basis in the pre-split shares surrendered by such
U.S. holder. The holding period for the post-split shares received
by a U.S. holder in the reverse stock split will include the period
during which the pre-split shares surrendered by such U.S. holder
in the reverse stock split were held.
As
noted above, we will not issue fractional shares in connection with
the reverse stock split. Instead, stockholders who otherwise would
be entitled to receive fractional shares because they hold a number
of shares not evenly divisible by the reverse stock split ratio
will automatically be entitled to receive an additional fraction of
a share of common stock to round up to the next whole post-split
share. The U.S. federal income tax consequences of the receipt of
such an additional fraction of a share of common stock is not
clear.
It is possible
that the receipt of such an additional fraction of a share of
common stock may be treated as a distribution taxable as a dividend
or as an amount received in exchange for our common stock.
Stockholders should consult their own tax advisors if they receive
such an additional fraction of a share of common
stock.
10
Required Vote for Approval
This
proposal will be approved if the number of shares voted in favor of
the proposal constitute at least a majority of our common stock
issued and outstanding and entitled to vote thereon
. Abstentions and broker non-votes with respect to
this proposal will be counted for purposes of establishing a quorum
and, if a quorum is present, will have the same practical effect as
a vote against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE
STOCK SPLIT AT A RATIO OF NOT LESS THAN ONE-FOR-FIVE AND NOT MORE
THAN ONE-FOR-FIFTY AT ANY TIME PRIOR TO DECEMBER 31, 2018, WITH
SUCH RATIO AND THE IMPLEMENTATION AND TIMING OF SUCH REVERSE STOCK
SPLIT TO BE DETERMINED BY OUR BOARD OF DIRECTORS IN ITS SOLE
DISCRETION.
11
OWNERSHIP OF
SECURITIES
Principal Stockholders and Share Ownership by
Management
The following table sets forth, as of
December 28, 2017
, the number and percentage of the outstanding
shares of common stock and warrants and options that, according to
the information supplied to us, were beneficially owned by (i) each
person who is currently a director, (ii) each named executive
officer, (iii) all current directors and executive officers as a
group and (iv) each person who, to our knowledge, is the beneficial
owner of more than five percent of the outstanding common stock.
Except as otherwise indicated, the persons named in the table have
sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
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Beneficial Owner
Name and
Address
(1)
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Amount and Nature of
Beneficial Ownership
(2)
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Percent of Class
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Principal Stockholders
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JP SPC3 OXBT FUND
(3)
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2,180,643
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7.18
%
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Rue
Du Mont-Blanc
Geneva,
Switzerland 1201
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Doug
Randall
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1,613,121
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5.62
%
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Douglas
Hay
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1,413,121
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4.93
%
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John P. Kelley
(4)
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1,282,932
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4.54
%
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Officers and Directors
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Gregory Pepin
(5)
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2,225,477
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7.87
%
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Michael B. Jebsen, CPA
(6)
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554,047
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1.93
%
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Ronald R. Blanck, DO
(6)
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66,785
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*
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James Mitchum
(6)
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61,000
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*
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Anthony DiTonno
(6)
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47,252
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*
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Chris A. Rallis
(6)
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56,853
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*
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Gerald T. Proehl
(6)
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74,882
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*
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All officers and directors as a group (7
persons)
(6)
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3,086,296
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9.92
%
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* Less than 1%
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(1)
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Unless
otherwise noted, all addresses are in care of Tenax Therapeutics,
Inc. at ONE Copley Parkway, Suite 490, Morrisville, North Carolina
27560.
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(2)
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Based
upon 28,236,775 shares of common stock outstanding on
December 28,
2017
. The number and percentage of shares beneficially owned
is determined in accordance with Rule 13d-3 of the Exchange Act and
the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rule, beneficial
ownership includes any shares as to which the person has sole or
shared voting power or investment power and also any shares that
the person has the right to acquire within 60 days of
December 28,
2017
through the
exercise of any stock options or other rights. Any shares that a
person has the right to acquire within 60 days are deemed to be
outstanding for the purpose of computing the percentage ownership
of such person but are not deemed outstanding for the purpose of
computing the percentage ownership of any other
person.
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(3)
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Includes
30,898
shares of common stock,
and
2,149,745
shares of common
stock subject to warrants that are exercisable or convertible, as
applicable within 60 days of
December 28,
2017
.
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(4)
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On
April 3, 2017, Mr. Kelley resigned as our Chief Executive Officer
and as a director effective immediately;
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(5)
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Includes
14,834
shares of restricted
common stock and 30,000 shares of common stock subject to options
that are vested, vesting, exercisable or convertible, as
applicable, within 60 days of
December 28,
2017
.
Mr. Pepin is a
co-founder of EOS, an investment company, which serves as the
Investment Manager and Managing Director for JP SPC3 OXBT Fund
(“OXBT Fund”), and consequently he may be deemed to be
the beneficial owner of shares held by OXBT Fund. Mr. Pepin
disclaims beneficial ownership of the shares held by OXBT Fund
except to the extent of his pecuniary interest
therein.
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(6)
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With
respect to Dr. Blanck, includes
5,129
shares of common stock subject to
warrants and
40,507
shares of
common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of
December 28,
2017
;
With
respect to Mr. DiTonno, includes
2,565
shares of common stock subject to
warrants and
41,488
shares of
common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of
December 28,
2017
;
With
respect to Mr. Rallis, includes 2,565 shares of common stock
subject to warrants
and
39,798
shares of common stock subject to options that are vested, vesting,
exercisable or convertible, as applicable, within 60 days of
December 28,
2017
;
With
respect to Mr. Jebsen, includes
485,783
shares of common stock subject to
options that are vested, vesting, exercisable or convertible, as
applicable, within 60 days of
December 28,
2017
;
With
respect to Mr. Proehl, includes 4
5,000
shares of common stock subject to
options that are vested, vesting, exercisable or convertible, as
applicable, within 60 days of
December 28, 2017
and 29,882 shares for which voting and
investment power is shared with Mr. Proehl’s
spouse
;
With
respect to Mr. Mitchum, includes 35,000 shares of common stock
subject to options that are vested, vesting, exercisable or
convertible, as applicable, within 60 days of
December 28, 2017
and 26,000 shares for which voting and
investment power is shared with Mr. Mitchum’s spouse
;
and
With
respect to all officers and directors as a group, includes 10,259
shares of common stock subject to warrants and 717,576 shares of
common stock subject to options that are vested, vesting,
convertible, or exercisable, as applicable, within 60 days of
December 28,
2017
.
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12
PROPOSAL 2: ADJOURNMENT
The
special meeting may be adjourned to another time or place, if
necessary or appropriate, to permit, among other things, further
solicitation of proxies in favor of the approval of Proposal No.
1.
If, at
the special meeting, the number of shares of common stock present
or represented and voting in favor of Proposal No. 1 is
insufficient to approve such proposal, we may move to adjourn the
special meeting in order to enable the Board to solicit additional
proxies in favor of Proposal No. 1.
In this
Proposal No. 2, we are asking stockholders to authorize the holder
of any proxy solicited by the Board to vote in favor of granting
discretionary authority to the proxy holders, and each of them
individually, to adjourn the special meeting to another time and
place for the purpose of soliciting additional proxies. If the
stockholders approve the proposal to adjourn the special meeting,
we could adjourn the special meeting and any adjourned session of
the special meeting and use the additional time to solicit
additional proxies, including the solicitation of proxies from
stockholders who have previously voted, for any
proposal.
Required Vote for Approval
Assuming the
existence of a quorum, this proposal will be approved if the number
of shares voted in favor of the proposal exceeds the number of
shares voted against the proposal. As such, abstentions and broker
non-votes will not affect the outcome of the vote.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL
TO ADJOURN THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL
PROXIES.
13
OTHER MATTERS
Other Business
As of the date of this proxy statement, the Board
knows of no other matters that may come before the Special Meeting.
However, if any matters other than those referred to herein should
be presented properly for consideration and action at the Special
Meeting, or any adjournment or postponement thereof, the proxies
will be voted with respect thereto in accordance with the best
judgment and in the discretion of the proxy
holders.
Stockholder Proposals
As
disclosed in our proxy statement for our 2017 Annual Meeting dated
April 28, 2017:
Under
certain conditions, stockholders may request us to include a
proposal for action at a forthcoming meeting of our stockholders in
the proxy materials for such meeting. All stockholder proposals
intended to be presented at our 2018 Annual Meeting of Stockholders
must have been received by us no later than
December 29, 2017
for inclusion in the
proxy statement and proxy card relating to such meeting.
However, if the date of the 2018
Annual Meeting is changed by more than 30 days from the date
of the first anniversary of the 2017 Annual Meeting, then the
deadline is a reasonable time before we begin to print and mail our
proxy statement for the 2018 Annual Meeting.
In
addition, our bylaws require that we be given advance notice of
stockholder nominations for election to the Board of Directors and
of other matters that stockholders wish to present for action at an
annual meeting of stockholders, other than matters included in our
proxy statement. The required notice must be in writing, include
the information set forth in the bylaws and be received by our
corporate secretary at our principal offices not less than 120 days
nor more than 150 days prior to the one-year anniversary of the
preceding year’s annual meeting, provided, however, that if
the date of the annual meeting is more than 30 days before or more
than 60 days after the one-year anniversary of the preceding
year’s annual meeting, a stockholder’s notice must be
received not later than the 90
th
day prior to such
annual meeting, or if later, the 10
th
day following the
day on which public disclosure of the date of the annual meeting
was first made. The date of our 2018 Annual Meeting of Stockholders
has not yet been established, but assuming it is held on June 14,
2018, in order to comply with the time periods set forth in our
bylaws, appropriate notice for the 2018 Annual Meeting must have
been provided to our corporate secretary no later than February 14,
2018.
However, if the date of the 2018
Annual Meeting is changed by more than 30 days before or more
than 60 days after the date of the first anniversary of the 2017
Annual Meeting, then the deadline is
the 90
th
day prior to such
annual meeting, or if later, the 10
th
day following the
day on which public disclosure of the date of the annual meeting
was first made
.
Costs of Soliciting Proxies
We will
bear the cost of this solicitation, including the preparation,
printing, and mailing of the proxy statement, proxy card, and any
additional soliciting materials sent by us to stockholders. Our
directors, officers, and employees may solicit proxies personally
or by telephone without additional compensation. In addition, we
have engaged
Issuer
Direct
, to assist in soliciting proxies. We will
pay the costs of soliciting proxies, including a fee of
approximately $
15,000
for
its services. We will also reimburse
Issuer Direct
for
its reasonable out-of-pocket expenses, and will reimburse brokerage
firms and other persons representing beneficial owners of shares
for reasonable expenses incurred in forwarding proxy soliciting
materials to the beneficial owners.
Where You Can Find More Information
We file
periodic reports with the SEC pursuant to Section 13(a) of the
Exchange Act. Our SEC filings are available from the SEC’s
Internet site at http://www.sec.gov, which contains reports and
other information regarding issuers that file electronically. Our
filings with the SEC are available without charge on our website
(http://www.tenaxthera.com) as soon as reasonably practicable after
filing. Further, the reports filed with the SEC may be inspected
without charge at the SEC’s Public Reference Room at 100 F
Street N.E., Washington, D.C. 20549. Please call the SEC at (800)
732-0330 for further information on the Public Reference
Room.
14
Stockholders Sharing the Same Last Name and Address
Only
one annual report or proxy statement, as applicable, may be
delivered to multiple stockholders sharing an address unless we
have received contrary instructions from one or more of the
stockholders. We will deliver promptly upon written or oral request
a separate copy of the annual report or proxy statement, as
applicable, to a stockholder at a shared address to which a single
copy was delivered. Requests for additional copies should be
directed to Investor Relations by e-mail addressed to
n.hecox@tenaxthera.com, by mail addressed to Tenax Therapeutics,
Inc., Attn: Investor Relations, ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560, or by telephone at (919)
855-2100. Stockholders sharing an address and currently receiving a
single copy may contact Investor Relations as described above to
request that multiple copies be delivered in future years.
Stockholders sharing an address and currently receiving multiple
copies may request delivery of a single copy in future years by
contacting Investor Relations as described above.
REQUESTS FOR DIRECTIONS TO OUR COMPANY’S SPECIAL
MEETING
The
Special Meeting of Stockholders will be held at the offices of
Tenax Therapeutics, Inc. located at
ONE Copley Parkway, Suite 490, Morrisville, North Carolina,
27560
at
9:00 a.m.,
Eastern Standard Time on
February 15,
2018
. Requests for directions to the meeting location may be
directed to Tenax Therapeutics, Inc., Attn: Investor Relations, ONE
Copley Parkway, Suite 490, Morrisville, North Carolina
27560.
15
Annex A
Tenax
Therapeutics, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware,
does hereby certify:
FIRST
: That at a meeting of the Board of
Directors of Tenax Therapeutics, Inc., resolutions were duly
adopted approving a proposed amendment of the Certificate of
Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution adopted by
the Board of Directors stating the proposed amendment is as
follows:
RESOLVED
, The Certificate of
Incorporation of the corporation be amended by adding the following
paragraph to ARTICLE IV thereof:
J. The
issued and outstanding Common Stock of the corporation, $0.0001 par
value, shall, at 5:00 p.m., Eastern Standard Time, on [_____], 2018
(the “2018 Effective Time”), be deemed to be
“reverse stock split,” and in furtherance thereof,
there shall, after the 2018 Effective Time, be deemed to be issued
and outstanding one (1) share of the Common Stock of the
Corporation for and instead of each [_____] ([__]) shares of the
Common Stock of the Corporation issued and outstanding immediately
prior to the 2018 Effective Time. To the extent that any
stockholder shall be deemed after the 2018 Effective Time as a
result of this Amendment to own a fractional share of Common Stock,
such fractional share shall be deemed to be one whole share. Each
stockholder as of the 2018 Effective Time shall be entitled to
receive from the Corporation’s transfer agent a certificate
representing the number of shares of the Common Stock to which such
stockholder is entitled hereunder upon delivery to the
Corporation’s transfer agent of a certificate or certificates
representing the number of shares owned by such stockholder as of
the 2018 Effective Time.
SECOND
: That pursuant to resolution of
its Board of Directors, a special meeting of the stockholders of
said corporation was duly called and held upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the
amendment.
THIRD
: That said amendment was duly
adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
FOURTH
: That the corporation’s
number of shares of authorized capital stock of all classes, and
the par value thereof, shall not be changed or affected under or by
reason of said amendment.
FIFTH
: That said amendment shall be
effective at 5:00 p.m., Eastern Standard Time, on [_____],
2018.
IN WITNESS WHEREOF
, said corporation has
caused this certificate to be signed this [__] day of [_____],
2018.
A-1
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TENAX THERAPEUTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS – FEBRUARY 15, 2018 AT 9:00AM
LOCAL TIME
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CONTROL ID:
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REQUEST ID:
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The undersigned stockholder of Tenax Therapeutics, Inc. hereby
appoints Nancy J.M. Hecox and Michael B. Jebsen, or either of them
as proxies, each with full powers of substitution, to represent and
to vote as proxy, as designated, all shares of common stock of
Tenax Therapeutics, Inc. held of record by the undersigned on
January 12, 2018, at the Special Meeting of Stockholders (the
“Special Meeting”) on February 15, 2018, at 9:00 a.m.
at the offices of Tenax Therapeutics, Inc. located at ONE Copley
Parkway, Suite 490, Morrisville, North Carolina, 27560, or at any
adjournment or postponement thereof. The undersigned
hereby revokes all prior proxies.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please mark, sign, date, and return this Proxy Card promptly using
the enclosed envelope.
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INTERNET:
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https://www.iproxydirect.com/TENX
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PHONE:
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1-866-752-VOTE (8683)
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SPECIAL MEETING OF THE STOCKHOLDERS OF TENAX THERAPEUTICS,
INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR
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AGAINST
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ABSTAIN
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To approve an amendment to our certificate of incorporation to
effect a reverse stock split (the “reverse stock
split”) at a ratio of not less than one-for-five and not more
than one-for-fifty at any time prior to December 31, 2018, with
such ratio and the implementation and timing of such reverse stock
split to be determined by our board of directors in its sole
discretion.
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CONTROL ID:
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REQUEST ID:
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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To approve a proposal to adjourn the special meeting, if necessary
or appropriate, to solicit additional proxies for any proposal if
there are not sufficient votes to approve Proposal No.
1.
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE
STOCK SPLIT AND “FOR” THE PROPOSAL TO ADJOURN THE
SPECIAL MEETING IF NECESSARY TO SOLICIT ADDITIONAL
PROXIES.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
SPECIFIED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED “FOR” ALL PROPOSALS. THE
PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING OF STOCKHOLDERS IN ACCORDANCE WITH
THEIR JUDGMENT.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
___________________________
___________________________
___________________________
IMPORTANT:
Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2018
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(Print Name of Stockholder and/or Joint Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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TABLE OF CONTENTS