10-K: TNF Pharmaceuticals Details Capital Stock Structure in 10-K Filing

TNF Pharmaceuticals provides a summary of its capital stock, including common and preferred shares, in its latest 10-K filing.

Summary

• TNF Pharmaceuticals' 10-K filing details the structure of its capital stock.
• The authorized capital stock consists of 250,000,000 shares of Common Stock with a par value of $0.001 per share, and 50,000,000 shares of preferred stock with a par value of $0.001 per share.
• The company has designated portions of its preferred stock into various series, including Series C, D, E, F, F-1 and G Convertible Preferred Stock.
• Common stockholders have one vote per share and do not have cumulative voting rights.
• The company has not paid cash dividends on its Common Stock and does not intend to in the foreseeable future.
• The Common Stock is listed on The Nasdaq Capital Market under the symbol TNFA.
• The board of directors has the authority to issue preferred stock in one or more series and to fix the designation, powers, preferences and rights of the shares of each series.
• The company is developing Isomyosamine and Supera-CBD as therapeutic platforms.
• A Phase 2b clinical trial of isomyosamines efficacy in sarcopenia is planned for early in the first quarter of 2025.
• The company has entered into a collaborative agreement with Renova Health for a planned trial of Isomyosamine as a treatment for GLP-1-induced sarcopenia and frailty.

Sentiment

Score: 5

Explanation: The document is primarily descriptive, outlining the company's capital structure and various agreements. While it mentions potential risks and challenges, it also highlights positive aspects like ongoing clinical trials and intellectual property protection. The sentiment is neutral overall.

Positives

• The company has an active IND with the Endocrinology Division at the FDA for other autoimmune diseases.
• The DEA has determined that Supera-CBD is not a controlled substance, which may expedite research.
• The company has broad commercial rights to its product candidates.
• The company continues to strengthen and expand its intellectual property portfolio.

Negatives

• The company has not paid cash distributions or dividends on its Common Stock and does not currently intend to pay cash dividends on its Common Stock in the foreseeable future.
• So long as any shares of Series F Preferred Stock, Series G Preferred Stock or Series F-1 Preferred Stock are outstanding, the company is not able to declare or pay any cash dividend or distribution on any of its capital stock (other than as required by the Certificate of Designations) without the prior written consent of the Required Holders.
• The company does not currently have sales and marketing infrastructure to support the launch of its products.
• The company has a history of operating losses, and it may not achieve or sustain profitability.
• The company must raise additional capital to fund its operations in order to continue as a going concern.

Risks

• The market price of the company's Common Stock may be subject to significant fluctuations and volatility.
• The company may issue additional equity securities in the future, which may result in dilution to existing investors.
• The concentration of the capital stock ownership with insiders of the company will likely limit the ability of its stockholders to influence corporate matters.
• The company may not be able to adequately protect or enforce its intellectual property rights, which could harm its competitive position.
• An active trading market for the company's Common Stock may not be sustained.
• The company's business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in its cyber-security or those of third-party providers.
• If the company is unable to develop, obtain regulatory approval for and commercialize Isomyosamine, Supera-CBD, or other future product candidates, or if it experiences significant delays in doing so, its business will be materially harmed.
• The company faces significant competition in an environment of rapid pharmacological change and it is possible that its competitors may achieve regulatory approval before it or develop therapies that are more advanced or effective than its, which may harm its business, financial condition and its ability to successfully market or commercialize Isomyosamine, Supera-CBD and its other product candidates.
• The manufacture of drugs is complex, and the company's third-party manufacturers may encounter difficulties in production.
• Enacted and future legislation may increase the difficulty and cost for the company to commercialize and obtain marketing approval of its product candidates and may affect the prices it may set.
• The FDA's ability to review and approve new products may be hindered by a variety of factors, including budget and funding levels, ability to hire and retain key personnel, statutory, regulatory and policy changes and global health concerns.
• The company's operations and relationships with future customers, providers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose it to penalties including criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Future Outlook

TNF plans to launch a Phase 2b clinical trial of isomyosamines efficacy in sarcopenia early in the first quarter of 2025 and is focused on extending healthy life span through the development and commercialization of novel drug platforms based on well-defined therapeutic targets.

Management Comments

• TNF's strategy is to focus on extending healthy life span through the development and commercialization of novel drug platforms based on well-defined therapeutic targets.

Industry Context

The biotechnology and biopharmaceutical industries are characterized by rapid evolution of technologies, fierce competition and vigorous defense of intellectual property.

Comparison to Industry Standards

• The global market for TNFblockers was estimated at $41.6 billion in 2020 and is projected to reach $45.5 billion by 2027.
• Currently, there is one FDA-approved drug with plant-derived CBD as an active ingredient, Epidiolex, which is being commercialized by GW Pharmaceuticals, plc (GWPH) to treat seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age and older.
• The reported revenues from Epidiolex in fiscal year 2019 were approximately $296 million.

Legal Proceedings

• Raymond F. Akers, Jr., Ph.D. filed a lawsuit against the Company (f/k/a Akers Biosciences, Inc.) in the Superior Court of New Jersey, Law Division, Gloucester County (the First Raymond Akers Action).
• Mr. Akers asserts one common law whistleblower retaliation claim against the Company.
• On March 1, 2022, Mr. Akers filed a second action against the Company in the Superior Court of New Jersey, Law Division, Gloucester County (the Second Raymond Akers Action) again asserting one common law whistleblower retaliation claim against the Company.

Related Party Transactions

• The company is a party to two Amended and Restated Confirmatory Patent Assignment and Royalty Agreements, both dated November 11, 2020, with SRQ Patent Holdings and SRQ Patent Holdings II, under which the Company (or its successor) will be obligated to pay to SRQ Patent Holdings or SRQ Patent Holdings II (or its designees) certain royalties on product sales or other revenue received on products that incorporate or are covered by the intellectual property that was assigned to the Company.
• SRQ Patent Holdings and SRQ Patent Holdings II are affiliates of Mr. Williams.
• On April 14, 2023, the Company issued a reimbursement payment to Mr. Jonnie Williams, Sr. in the amount $500,000.
• Mr. Williams is an immediate family member of a stockholder who beneficially holds more than 5% of our Common Stock.
• On May 20, 2024, pursuant to the Series G Purchase Agreement, we issued to: (i) PharmaCyte, a Company controlled by Joshua Silverman, a director of the Company, 7,000 shares of our Series G Preferred Stock, Long-Term Series G Warrants to purchase up to 3,854,626 shares of Common Stock at an initial exercise price of $1.816 per share and Short-Term Series G Warrants to purchase up to 3,854,626 shares of Common Stock at an initial exercise price of $1.816 per share.

Stakeholder Impact

• The market price of the company's Common Stock may be subject to significant fluctuations and volatility, and the stockholders of the Company may be unable to resell their shares at a profit and may incur losses.
• The company may issue additional equity securities in the future, which may result in dilution to existing investors.
• The concentration of the capital stock ownership with insiders of the company will likely limit the ability of its stockholders to influence corporate matters.
• The company may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of its assets or merge with another entity if it is unable to raise sufficient capital to fund its operations.
• The company does not anticipate paying cash dividends on its Common Stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment.

Next Steps

• TNFA plans to launch a Phase 2b clinical trial of isomyosamines efficacy in sarcopenia early in the first quarter of 2025.
• The study will further explore the drugs efficacy in sarcopenia/frailty following statistically significant positive results from an earlier Phase 2 clinical study.
• On October 19 2024, the Company announced that it has entered into a collaborative agreement with Renova Health for a planned trial of its TNF-alpha (TNF-) inhibitor drug Isomyosamine as a treatment for GLP-1-induced sarcopenia and frailty.
• The fully funded study is expected to evaluate TNFlevels in patients receiving GLP-1 agonist Wegovy or Ozempic who show signals for increased inflammation associated with sarcopenia.

Key Dates

Keywords

Common Stock, Preferred Stock, Isomyosamine, Supera-CBD, Convertible, Warrants, Pharmaceuticals, Clinical Trials, FDA, TNFA, Stock