On April 30, 2020, Tenax Therapeutics, Inc., a Delaware corporation (the “Company”), received a loan to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as administered by the U.S. Small Business Administration (the “SBA”). The loan in the principal amount of $244,657 (the “PPP Loan”) was disbursed by First Horizon Bank (the “Lender”) to a promissory note issued by the Company (the “Note”).
The Note has a two-year term and bears interest at a fixed rate of 1.00% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence on December 30, 2020. The Company did not provide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations, and material adverse effects. The Company may prepay the principal of the PPP Loan at any time, subject to certain notice requirements.
Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, and covered utilities during the eight-week period beginning on the approval date of the PPP Loan. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25% of the forgiven amount may be for non-payroll costs. Although the Company currently believes that its use of the PPP Loan will meet the conditions for forgiveness of the loan, the Company cannot assure that the PPP Loan will be forgiven, in whole or in part.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on management’s beliefs and assumptions and on information currently available to them. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of such terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, financial market conditions; actions by the PPP Loan parties; changes by, or new guidelines or interpretations by, the SBA or other governmental authorities regarding the CARES Act, the Payroll Protection Program, or related administrative matters; the Company’s ability to comply with the terms of the PPP Loan and the CARES Act, including to use the proceeds of the PPP Loan as described herein; and the risks discussed in the Company’s Form 10-K for the fiscal year ended December 31, 2019 that may cause the Company’s or its industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of such statements. The Company is under no duty to update any of the forward-looking statements after the date of filing of this report or to conform such statements to actual results, except as may be required by law.
About Tenax Therapeutics, Inc. (NASDAQ:TENX)
Tenax Therapeutics, Inc. is a specialty pharmaceutical company. The Company is focused on identifying, developing and commercializing products for the critical care market. The Company’s main product is levosimendan. Levosimendan is a calcium sensitizer developed for intravenous use in hospitalized patients with acutely decompensated heart failure. Levosimendan represents therapeutic modalities for the treatment of Low Cardiac Output Syndrome (LCOS), septic shock and other critical care conditions. The therapeutic effects of levosimendan are mediated through increased cardiac contractility by calcium sensitization of troponin C, resulting in a positive inotropic effect, which is not associated with substantial increases in oxygen demand; opening of potassium channels in the vasculature smooth muscle, resulting in a vasodilatory effect on all vascular beds, and opening of mitochondrial potassium channels in cardiomyocytes, resulting in a cardioprotective effect.
