TENX US Equity☆

ITEM 7—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with the consolidated financial statements and the related notes to those statements included in Part II, Item 8 – “Financial Statements and Supplementary Data”. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

Tenax Therapeutics is a Phase 3, development-stage pharmaceutical company leveraging clinical insights to develop novel cardiopulmonary therapies. We employ a clinician-driven drug development approach, led by key opinion leaders and advised by thought leaders who are pulmonary hypertension and heart failure experts and informed by their clinical insights to precisely target disease pathophysiology. We are currently actively conducting the LEVEL and LEVEL-2 clinical trials to evaluate levosimendan as our prioritized product candidate, and have deprioritized a Phase 3 clinical trial of imatinib, two drugs supported by promising evidence that they may significantly improve the lives of patients with pulmonary hypertension. Importantly, both levosimendan and imatinib have already been approved in other indications and prescribed around the world for more than 20 years, and we believe their mechanisms of action are uniquely suitable to target and treat pulmonary hypertension. We believe this derisked approach of using already-approved drugs that provide well-established safety profiles from millions of patients, combined with a development path led by preeminent cardiovascular and pulmonary hypertension experts, puts us in a strong position to deliver breakthrough cardiopulmonary therapies designed to improve patients’ functioning and quality of life.

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Recent Events

In March 2025, we closed a private placement financing raising gross proceeds of approximately $25.0 million. We intend to use the net proceeds from the March 2025 Offering, in addition to approximately $100.0 million raised in August 2024, to advance our Phase 3 oral levosimendan program. Specifically, we plan to complete our ongoing Phase 3 LEVEL study of TNX-103 in PH-HFpEF. We also plan to advance our second global Phase 3 study, LEVEL-2, which commenced in December 2025. Following completion of the two Phase 3 levosimendan trials, we intend to submit marketing authorization applications. We also plan to submit an application for imatinib following completion of a single Phase 3 trial, when appropriate.

Our Phase 3 LEVEL study continues, with high rates of study and therapy continuation during the blinded and open-label extension stages. We achieved our target enrollment of 230 patients in March of 2026. LEVEL is being conducted in the United States and Canada.

Based on our current operating plan, we believe that our existing cash and cash equivalents as of December 31, 2025 will be sufficient to fund our planned operations through at least the end of 2027.

Comparison of the Years Ended December 31, 2025 and 2024 (in thousands)

The year ended December 31, Increase/ % Increase/

Operating expenses:

Other segment items

Interest expense - (23 ) 23 (100 ) %

Other (expense) income, net (33 ) 1 (34 ) (3,400 ) %

Research and Development Expenses

Research and development expenses include, but are not limited to, (i) expenses incurred under agreements with CROs and investigative sites, which conduct a substantial portion of our pre-clinical and our clinical studies; (ii) the cost of supplying clinical trial materials; (iii) payments to contract service organizations as well as consultants; (iv) employee-related expenses, which include salaries and benefits; and (v) facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities and equipment, depreciation of leasehold improvements, equipment, and other supplies. All research and development expenses are expensed as incurred. Research and development expenses and percentage changes for the years ended December 31, 2025 and 2024, respectively, are as follows (in thousands):

Year ended December 31, Increase/ % Increase/

Clinical and preclinical development costs increased $14.9 million for the year ended December 31, 2025 as compared to the same period in the prior year. Clinical and preclinical development costs for the year ended December 31, 2025 consists primarily of expenses associated with our ongoing Phase 3 LEVEL trial and our second global Phase 3 study, LEVEL-2, which commenced in December 2025, compared with costs for the year ended December 31, 2024,

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associated with the planning of LEVEL and the early progress initiating LEVEL sites and enrolling the first LEVEL patients.

Salary and benefits expense increased $1.1 million for the year ended December 31, 2025 as compared to the same period in the prior year primarily due the increased number of employees as we expanded our LEVEL trial and designed, planned, and commenced our LEVEL-2 trial. Stock-based compensation expense increased $3.6 million for the year ended December 31, 2025, as compared to the same period in the prior year due to stock option grants made late in 2024 and during 2025.

Other costs increased $0.3 million for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to higher regulatory costs over the prior year as we expanded our clinical trial during 2024.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for executive, finance, legal and administrative personnel, including non-cash stock-based compensation. Other general and administrative expenses include facility costs not otherwise included in research and development expenses, legal and accounting services, and other professional and consulting services. General and administrative expenses and percentage changes for the years ended December 31, 2025 and 2024, respectively, are as follows (in thousands):

Year ended December 31, Increase/ % Increase/

Salary and benefits expense remained relatively unchanged for the year ended December 31, 2025, as compared to the same period in the prior year due to lower bonuses offsetting salary increases and new employee salaries. Stock-based compensation expense increased $14.4 million for the year ended December 31, 2024 due to stock option grants in late 2024 and during 2025.

Legal fees consist of the cost of our legal counsel as well as legal costs related to our intellectual property. Professional fees consist of the costs incurred for accounting fees, capital market expenses, consulting fees and investor relations services, as well as fees paid to the members of our Board of Directors. Legal and professional fees increased $1.7 million for the year ended December 31, 2025 compared to the same period in the prior year primarily related to increased capital market expenses, consulting expenses, and accounting expenses, offset by a decrease in intellectual property related legal costs.

Other costs increased $0.7 million for the year ended December 31, 2025 compared to the same period in the prior year. Other costs include expenses incurred for franchise and other taxes, travel, supplies, insurance, depreciation and other miscellaneous charges. The increase was primarily attributable to increased costs for franchise and other taxes.

Interest Income, Interest Expense, and Other Income (Expense), net

Interest income increased $1.9 million for the year ended December 31, 2025 as compared to the same period in the prior year primarily related to higher interest income on increased cash deposits as a result of the March 2025 Offering and warrant exercises during 2025, and increased interest rates. The Company had no interest expense for the year ended December 31, 2025 and an immaterial amount for the prior year. Other income (expense) was immaterial.

Liquidity and Capital Resources

We have incurred losses since our inception and, as of December 31, 2025, we had an accumulated deficit of $367.5 million. We will continue to incur losses until we generate sufficient revenue to offset our expenses, and we anticipate that we will continue to incur net losses for at least the next several years. We expect to incur additional expenses related to our development and potential commercialization of levosimendan and, over the long term, imatinib for

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PAH, and other potential indications, as well as identifying and developing other potential product candidates, and as a result, we will need to generate significant net product sales, royalty and other revenues to achieve profitability.

The process of conducting preclinical studies and clinical trials necessary to obtain approval from the FDA is costly and time consuming. The probability of success for each product candidate and clinical trial may be affected by a variety of factors, including, among other things, the quality of the product candidate’s early clinical data, investment in the program, competition, manufacturing capabilities and commercial viability. As a result of the uncertainties discussed above, uncertainty associated with clinical trial enrollment and risks inherent in the development process, we are unable to determine the duration and completion costs of current or future clinical stages of our product candidates or when, or to what extent, we will generate revenues from the commercialization and sale of any of our product candidates. Development timelines, probability of success and development costs vary widely. We are currently focused on developing our two product candidates, levosimendan and imatinib, and have prioritized levosimendan; however, we will need substantial additional capital in the future in order to finalize the development of levosimendan, commence its commercialization, potentially develop imatinib, and to continue with the development of other potential product candidates.

Liquidity

We have financed our operations since September 1990 through the issuance of debt and equity securities and loans from stockholders. We had total current assets of $104.2 million and $96.7 million and working capital of $97.1 million and $92.0 million as of December 31, 2025 and December 31, 2024, respectively. Our practice is to invest excess cash, where available, in short-term money market investment instruments and high quality corporate and government bonds.

We are currently conducting the LEVEL trial and intend to recruit patients into the first half of 2026 and we commenced our LEVEL-2 trial in December 2025 and are currently enrolling patients. Our ability to continue to pursue development of our products, including completion of a second Phase 3 oral levosimendan trial, beyond 2027, will depend on obtaining license income, income from warrants exercised by investors should they elect to do so, or outside financial resources. There is no assurance that we will obtain any license agreement or outside financing or that we will otherwise succeed in obtaining any necessary resources.

Financings

On March 5, 2025, we sold in the March 2025 Offering an aggregate of 378,346 shares of our common stock and pre-funded warrants to purchase an aggregate of 3,760,726 shares of our common stock at an offering price of $6.04 per share of common stock and $6.03 per pre-funded warrant, resulting in gross proceeds of $25.0 million. The pre-funded warrants do not expire and have an exercise price of $0.01. Net proceeds from the offering were $23.2 million, after deducting the placement agent fees and offering expenses payable by the Company.

On August 8, 2024, we sold in a private placement financing an aggregate of 1,450,661 shares of our common stock, and pre-funded warrants to purchase an aggregate of 31,882,671 shares of our common stock, and accompanying warrants to purchase up to an aggregate of 16,666,666 shares of our common stock with an exercise price of $4.50, at a combined offering price of $3.00 per share of common stock and accompanying warrant, or $2.99 per pre-funded warrant and accompanying warrant, resulting in gross proceeds of $99.7 million. Net proceeds from the offering were $92.3 million, after deducting the placement agent fees and offering expenses payable by the Company.

On February 8, 2024, we sold in a registered public offering (the “February 2024 Offering”) an aggregate of 421,260 shares of our common stock and pre-funded warrants to purchase an aggregate of 1,178,740 shares of our common stock and (ii) accompanying warrants to purchase up to an aggregate of 3,200,000 shares of our common stock with an exercise price of $5.65, at a combined offering price of $5.65 per share of common stock and accompanying warrant, or $5.649 per pre-funded warrant and accompanying warrant, resulting in gross proceeds to the Company of $9.0 million. Net proceeds of the offering were $8.0 million, after deducting the placement agent fees and offering expenses payable by the Company.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated (in thousands):

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Year ended December 31,

Net cash (used in) operating activities $ (35,800 ) $ (14,811 )

Net cash provided by investing activities - -

Net cash provided by financing activities 38,514 99,870

Operating Activities

Net cash used in operating activities was $35.8 million for the year ended December 31, 2025, compared to $14.8 million for the year ended December 31, 2024. The increase in cash used for operating activities was primarily due to higher study expense activity and increased employee hiring in the year ended December 31, 2025 as compared to the prior year.

Investing Activities

There was no net cash provided or consumed by investing activities for the years ended December 31, 2025 and December 31, 2024.

Financing Activities

Net cash provided by financing activities was $38.5 million for the year ended December 31, 2025, as compared to $99.9 million in the year ended December 31, 2024. During the year ended December 31, 2025, the Company received proceeds of $23.2 million net cash provided from the sale of common stock and pre-funded warrants in the March 2025 Offering and $15.3 million from the exercise of warrants and pre-funded warrants. During the year ended December 31, 2024 the Company received proceeds of a total of $98.5 million from the August 8, 2024 and February 8, 2024 sales of common stock, and pre-funded warrants and accompanying warrants, and $1.8 million from the exercise of warrants and pre-funded warrants, offset by the principal payment of $0.5 million related to a short-term note.

Operating Capital and Capital Expenditure Requirements

Our future capital requirements will depend on many factors that include, but are not limited to the following:

•

the initiation, design, progress, timing and completion of clinical trials for our product candidates and potential product candidates;

•

the outcome, timing and cost of regulatory approvals and the regulatory approval process;

•

delays that may be caused by changing regulatory requirements;

•

the number of product candidates we pursue;

•

the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;

•

the timing and terms of future collaboration, licensing, consulting or other arrangements that we may enter into;

•

the cost and timing of establishing sales, marketing, manufacturing and distribution capabilities;

•

the cost of procuring clinical and commercial supplies of our product candidates;

•

the extent to which we acquire or invest in businesses, products or technologies; and

•

the possible costs of litigation.

Based on our working capital on December 31, 2025, we believe we have sufficient capital on hand to continue to fund operations through the end of 2027.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

Summary of Critical Accounting Policies

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Use of Estimates—The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Preclinical Study and Clinical Accruals—We estimate our preclinical study and clinical trial expenses based on the services received pursuant to contracts with several research institutions and CROs that conduct and manage preclinical and clinical trials on our behalf. The financial terms of the agreements vary from contract to contract and may result in uneven expenses and payment flows. Preclinical study and clinical trial expenses include the following:

•

fees paid to CROs in connection with clinical trials;

•

fees paid to research institutions in conjunction with preclinical research studies; and

•

fees paid to contract manufacturers and service providers in connection with the production and testing of active pharmaceutical ingredients and drug materials for use in preclinical studies and clinical trials.

Warrants for Common Shares and Derivative Financial Instruments—Warrants for shares of common stock and other derivative financial instruments are classified as equity if the contracts: (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts are classified as equity or liabilities if the contracts: (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions that do not qualify for the scope exception. The Company assesses the classification of its warrants for shares of common stock and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024. The Company adopted and applied the amendments of this ASU to its disclosures. The application of this ASU did not have a material impact on the Company's financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220-40), which addresses the disaggregation of income statement expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements.

ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies are not required to provide the information required by this item.

ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the financial statements included at the end of this report beginning on page F-1.

ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A—CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

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As required by paragraph (b) of Rules 13a-15 and 15d-15 promulgated under the Exchange Act, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Interim Chief Financial Officer, we conducted an evaluation as of the end of the period covered by this Annual Report on Form 10-K, of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e).

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on their evaluation, our President and Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K, in that they provide reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the SEC and is accumulated and communicated to our management, including our President and Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We routinely review our internal controls over financial reporting and from time to time make changes intended to enhance the effectiveness of our internal control over financial reporting. We will continue to evaluate the effectiveness of our disclosure controls and procedures and internal controls over financial reporting on an ongoing basis and will take action as appropriate.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Rule 13a-15(f) and Rule 15(d)-15(f) under the Exchange Act, is a process designed by, or under the supervision of, our President and Chief Executive Officer and Interim Chief Financial Officer and affected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and

•

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting can also be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making its assessment, management used the criteria established by the Committee of Sponsoring Organizations of

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the Treadway Commission in its 2013 Internal Control — Integrated Framework. Based on its assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

Attestation Report of Registered Public Accounting Firm

Our independent registered public accounting firm has not assessed the effectiveness of our internal control over financial reporting and, under SEC rules, will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as a “non-accelerated filer”.

ITEM 9B—OTHER INFORMATION

(a) None.

(b) None.

ITEM 9C—DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

ITEM 10— DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Information required by this Item concerning our directors is incorporated by reference from the sections captioned “Election of Directors” and “Corporate Governance Matters” contained in our proxy statement related to the 2026 Annual Meeting of Stockholders currently scheduled to be held on June 18, 2026, which we intend to file with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

The information required by this Item concerning our Audit and Compliance Committee is incorporated by reference from the section captioned “Corporate Governance Matters – Standing Committees – Audit and Compliance Committee” contained in our proxy statement related to the 2026 Annual Meeting of Stockholders.

We have adopted a Code of Ethics and Business Conduct (the “Code of Ethics”) applicable to all of our officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. A copy of this Code of Ethics is available free of charge and is posted on our website at http://investors.tenaxthera.com/corporate-governance. In the event the Code of Ethics is revised, or any waiver is granted under the Code of Ethics with respect to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions, notice of such revision or waiver will be posted on our website or disclosed on a current report on Form 8-K as required.

We have also adopted an Insider Trading Policy governing the purchase, sale, and other dispositions of our securities by our directors, officers, and employees, and by the Company. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K and is also available on our website at http://investors.tenaxthera.com/corporate-governance.

The information required by this Item concerning our executive officers is set forth at the end of Part I of this Annual Report on Form 10-K.

The information required by this Item, if any, concerning compliance with Section 16(a) of the Exchange Act will be incorporated by reference from the section of the proxy statement captioned “Delinquent Section 16(a) Reports”.

ITEM 11— EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the information under the sections captioned “Executive Compensation” and “Director Compensation” in our proxy statement.

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ITEM 12— SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2025.

Amended and Restated 1999 Amended Stock Plan, as amended 11 $ 50,830.55 -

Equity compensation plans not approved by security holders:

Employee Inducement Stock Option Grants (1) 250,314 $ 10.22 -

(1)Consists of (a) an option award for 250,000 shares of common stock to a new employee on January 21, 2025, which vests in four equal annual installments beginning on the first anniversary of the date of issuance, subject to the employee’s continued employment, with a 10-year term and an exercise price of $6.45 per share; and (b) options to purchase 314 shares of common stock, with a weighted average exercise price of $3,008, pursuant to the Plan for Employee Inducement Stock Options, which is filed as Exhibit 10.13 to this Annual Report on Form 10-K. The Plan became effective on July 6, 2021 when approved by the members of the Company’s Compensation Committee. These option awards were each granted in accordance with the employment inducement award exemption provided by Nasdaq Listing Rule 5635(c)(4) and therefore were not awarded under the Company’s stockholder approved equity plan.

The other information required by this Item is incorporated by reference to the information under the section captioned “Security Ownership of Certain Beneficial Owners and Management” contained in our proxy statement.

ITEM 13— CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference to the information under the section captioned “Certain Relationships and Related Transactions” and Corporate Governance Matters” in our proxy statement.

ITEM 14— PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated by reference to the information under the section captioned “Audit and Compliance Committee Report” in our proxy statement.

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PART IV

ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

List of documents filed as part of this report:

i.

Financial Statements:

The financial statements of the Company and the related reports of the Company’s independent registered public accounting firm thereon have been filed under Item 8 hereof.

ii.

Financial Statement Schedules:

None.

iii.

Exhibit Index

The following exhibits have been or are being filed herewith and are numbered in accordance with Item 601 of Regulation S-K:

Incorporated by Reference(Unless Otherwise Indicated)

Exhibit Number Exhibit Title Form File Exhibit Filing Date

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4.16 Description of Common Stock. - - Filed herewith

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and between Tenax Therapeutics, Inc. and the Investor.

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101.INS XBRL Instance Document. - - - Filed herewith

101.SCH XBRL Taxonomy Extension Schema Document. - - - Filed herewith

101.LAB XBRL Taxonomy Extension Label Linkbase Document. - - - Filed herewith

+ Management contract or compensatory plan.

* Certain confidential portions and/or the schedules and attachments to this exhibit have been omitted from this filing pursuant to a confidential treatment request filed with the SEC, or Item 601(a)(5) or 601(b)(10)of Regulation S-K, as applicable. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon request.

ITEM 16—FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 10, 2026 TENAX THERAPEUTICS, INC.

By: /s/ Thomas A. McGauley

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name Title Date

Christopher T. Giordano (Principal Executive Officer)

/s/ Thomas A. McGauley Interim Chief Financial Officer March 10, 2026

/s/ Gerald Proehl Chairman of the Board and Director March 10, 2026

Gerald Proehl

/s/ June Almenoff, MD Director March 10, 2026

June Almenoff, MD

/s/ Michael Davidson, MD Director March 10, 2026

Michael Davidson, MD

/s/ Declan Doogan, MD Director March 10, 2026

Declan Doogan, MD

/s/ Robyn M. Hunter Director March 10, 2026

Robyn M. Hunter

/s/ Stuart Rich, MD Director March 10, 2026

Stuart Rich, MD

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TENAX THERAPEUTICS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 00677) F-2

CONSOLIDATED BALANCE SHEETS F-5

CONSOLIDATED STATEMENTS OF OPERATIONS F-6

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-9

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Tenax Therapeutics, Inc

Chapel Hill, North Carolina

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tenax Therapeutics, Inc. and Subsidiaries (the “Company”) as of December 31, 2025and 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Capital Raise Transaction Involving Equity Instruments

Description of Matter

As disclosed in Note 4 to the consolidated financial statements, the Company participated in a significant capital raise transaction during the year, which involved the issuance of shares of the Company’s common stock and pre-funded warrants to purchase shares of the Company’s common stock. The accounting for the transaction was complex and a valuation of the freestanding warrants was required, which involved estimation of the fair value, and evaluation of the appropriate classification of the pre-funded warrants in the consolidated financial statements.

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How We Addressed the Matter in Our Audits

Our audit procedures included the following:

•

We obtained an understanding of the internal controls and processes in place over management’s process for recording transactions involving equity instruments.

•

We obtained and read the underlying agreements.

•

We confirmed shares outstanding with the stock transfer agent as of December 31, 2025.

•

We verified proper approval of equity transactions by the Board of Directors.

•

We evaluated the Company’s selection of the valuation methodology and significant assumptions used by the Company and evaluated the completeness and accuracy of the underlying data supporting the significant assumptions.

•

We tested management’s application of the relevant accounting guidance.

Prepaid or Accrued Clinical Trial Expenses

Description of Matter

The Company’s total prepaid expenses and other current assets totaled $5.6 million, which included amounts in advance of services incurred pursuant to clinical trials in the amount of approximately $4.8 million.

As discussed in Note 2 to the consolidated financial statements, when the third party contract research organizations and other vendor billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of its obligations to those vendors, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials, and preclinical studies costs incurred in a given accounting period and record accruals at the end of the period.

The Company bases its estimates on its knowledge of the research and development programs, services performed for the period, past history for related activities, and the expected duration of the vendor service contracts, where applicable. Payments for these activities are based on the terms of the individual arrangements and may result in payment terms that differ from the pattern of costs incurred. There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of the clinical expense.

Auditing the Company’s prepaid or accrued clinical trial expenses is especially challenging due to the large volume of information received from multiple vendors that perform services on the Company’s behalf. While the Company’s estimates of prepaid or accrued clinical trial expenses are primarily based on information received related to each study from its vendors, the Company may need to make an estimate for additional costs incurred. Additionally, due to the long duration of clinical trials and the timing of invoicing received from vendors, the actual amounts incurred are not typically known at the time the consolidated financial statements are issued.

How We Addressed the Matter in Our Audits

Our audit procedures included, among others, the following:

•

Obtained an understanding of the internal controls and processes in place over the Company’s process used in determining the existence and completeness of prepaid or accrued clinical trial expenses.

•

Tested the accuracy and completeness of the underlying data used in determining the prepaid or accrued clinical trial expenses and evaluating the assumptions and estimates used by management to adjust the actual information received. We corroborated the schedules of the underlying data used in the accrual calculation with the Company’s third party contract research organizations who oversees the clinical trials. To evaluate the

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completeness of any required accrual, we also tested subsequent invoices received to assess the impact to the accrual.

/s/ Cherry Bekaert LLP

We have served as the Company’s auditor since 2009.

Raleigh, North Carolina

March 10, 2026

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TENAX THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

ASSETS

Current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Commitments and contingencies; see Note 5

Stockholders' equity

Preferred stock, undesignated, authorized 4,818,654 shares

Total liabilities and stockholders' equity $ 104,227 $ 96,686

The accompanying notes are an integral part of these consolidated financial statements.

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TENAX THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

For the Year Ended December 31,

Operating expenses

Interest expense - (23 )

Other (expense) income, net (33 ) 1

Net loss per share, basic and diluted $ (1.34 ) $ (1.15 )

The accompanying notes are an integral part of these consolidated financial statements.

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TENAX THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share data)

Preferred Stock Common Stock

Exercise of pre-funded warrants - - 1,178,707 - 1 - 1

Stock split and fractional shares issued - - 59,997 - - - -

Stock-based compensation expense - - - - 1,125 - 1,125

Stock-based compensation expense - - - - 19,163 - 19,163

The accompanying notes are an integral part of these consolidated financial statements.

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TENAX THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Year ended December, 31

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net loss to net cash used in operating activities

Interest on debt instrument - 23

Changes in operating assets and liabilities

Prepaid expenses and other current assets (4,827 ) 58

Net cash used in operating activities (35,800 ) (14,811 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the exercise of warrants 15,298 68

Payments on short-term note - (501 )

Net cash provided by financing activities 38,514 99,870

Net change in cash and cash equivalents 2,714 85,059

Cash and cash equivalents, beginning of period 94,851 9,792

Cash and cash equivalents, end of period $ 97,565 $ 94,851

Supplemental Disclosures:

Cash paid for interest $ - $ 23

The accompanying notes are an integral part of these consolidated financial statements.

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TENAX THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—DESCRIPTION OF BUSINESS

Tenax Therapeutics, Inc., together with its subsidiaries (collectively “Tenax” or the “Company”), is a Phase 3, development-stage pharmaceutical company using clinical insights to develop novel cardiopulmonary therapies.

The Company is incorporated in Delaware and is headquartered in Chapel Hill, North Carolina.

Liquidity and Capital Resources

The Company has financed its operations since September 1990 primarily through the sale of equity and debt securities and loans from stockholders. The Company had an accumulated deficit of $367.5 million at December 31, 2025 and incurred losses of $52.6 million and $17.6 million during the years ended December 31, 2025 and 2024, respectively. The Company expects to continue to incur expenses related to the development of levosimendan for pulmonary hypertension and other potential indications and, over the long term, imatinib for pulmonary arterial hypertension (“PAH”), as well as identifying and developing other potential product candidates. At December 31, 2025, the Company had cash and cash equivalents of $97.6 million and received an additional $14.5 million subsequent to year end from the exercise of pre-funded warrants and warrants. Based on its resources on December 31, 2025 and cash received subsequent to year end, Company management believes that it has sufficient funds for the Company to continue its operations over at least the next 12 months from the date these consolidated financial statements were available to be issued.

To the extent that the Company raises additional funds by issuing shares of its common stock or other securities convertible or exchangeable for shares of common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to restrictive covenants in the related transaction documents that may affect the manner in which the Company conducts its business. To the extent that the Company raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to its technologies or product candidates or grant licenses on terms that may not be favorable to the Company. Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company has prepared its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) promulgated by the Financial Accounting Standards Board (“FASB”).

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted.

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Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity date of three months or less, when acquired, to be cash equivalents. The Company’s cash and cash equivalents include holdings in money market funds, checking and overnight sweep accounts at December 31, 2025 and bank certificates of deposit through CDARS (Certificate of Deposit Account Registry Service), as well as money market funds, at December 31, 2024. These accounts are measured at fair value on a recurring basis. As of December 31, 2025 and 2024, the balances of cash and cash equivalents were $97.6 million and $94.9 million, respectively, which approximate fair value and were determined based upon Level 1 inputs. The money market and sweep accounts are valued using quoted market prices with no valuation adjustments applied. Accordingly, these financial instruments are categorized as Level 1.

Concentrations of Credit Risk and Off-Balance Sheet Risk

The Federal Deposit Insurance Corporation (the “FDIC”) insurance limits are $250 thousand per depositor per insured bank. The Company had cash balances of $97.0 million and $1.0 million uninsured by the FDIC as of December 31, 2025 and 2024, respectively. At December 31, 2024, the Company utilized the IntraFi network of commercial banks which deposits $250,000 in each of its member banks to maintain the FDIC insurance limit.

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents. The Company mitigates its risk with respect to cash and cash equivalents by maintaining its deposits and investments at high-quality financial institutions. The Company invests any excess cash in money market funds and certificates of deposit, and the management of these investments is not discretionary on the part of the financial institution. Substantially all of the Company's cash and cash equivalents are held at JP Morgan and First Horizon Bank, and the amounts frequently exceed federally insured limits.

The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Preclinical Study and Clinical Accruals

The Company estimates its preclinical study and clinical trial expenses based on the services received pursuant to contracts with several research institutions and contract research organizations (“CROs”) that do or may conduct and manage preclinical and clinical trials on its behalf. The financial terms of the agreements vary from contract to contract, may be estimated by the Company and outside advisors prior to contracting with a CRO, and may result in uneven expenses and payment flows. Preclinical study and clinical trial expenses include the following:

- fees paid to CROs in connection with clinical trials,

- fees paid to research institutions in conjunction with preclinical and clinical research studies, and

- fees paid to contract manufacturers and service providers in connection with the production and testing of active pharmaceutical ingredients and drug materials for use in preclinical studies and clinical trials.

Research and Development Costs

Research and development costs include, but are not limited to, (i) expenses incurred under agreements with CROs and investigative sites, which conduct our clinical trials; (ii) the cost of supplying clinical trial materials; (iii) payments to contract service organizations, as well as consultants; (iv) employee-related expenses, which include salaries and benefits; and (v) depreciation and other allocated expenses, which include direct and allocated expenses for equipment, laboratory and other supplies. All research and development expenses are expensed as incurred.

Income Taxes

Deferred tax assets and liabilities are recorded for differences between the financial statement and tax bases of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense

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is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.

Stock-Based Compensation

The Company accounts for stock-based awards to employees in accordance with ASC 718, Compensation — Stock Compensation, which provides for the use of the fair value-based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Fair values of equity securities are determined by management based predominantly on the trading price of the Company’s common stock. The values of these awards are based upon their grant-date fair value. That cost is recognized over the period during which the employee is required to provide service in exchange for the reward.

The Company accounts for equity instruments issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The Company records equity instruments at their fair value on the measurement date and periodically adjust them as the underlying equity instruments vest.

Warrants for Common Shares and Derivative Financial Instruments

Warrants for shares of common stock and other derivative financial instruments are classified as equity if the contracts: (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts are classified as equity or liabilities if the contracts: (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions that do not qualify for the scope exception. The Company assesses the classification of its warrants for shares of common stock and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

Offering Costs

Offering costs consists of the costs incurred with the issuance of common stock. warrants, and pre-funded warrants. Costs include placement agent, legal, advisory, accounting and filing fees.

Loss Per Share

Basic loss per share, which excludes antidilutive securities, is computed by dividing net loss by the weighted-average number of common shares outstanding for that particular period. In contrast, diluted loss per share considers the potential dilution that could occur from other equity instruments that would increase the total number of outstanding shares of common stock. Such amounts include shares potentially issuable under outstanding options, restricted stock and warrants.

The following outstanding options, convertible preferred shares and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect.

Year ended December 31,

Convertible preferred shares outstanding 210 210

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease. Leases with a term greater than one year are recognized on the consolidated balance sheet as a right-of-use (“ROU”) asset and current and non-current lease liabilities, as applicable. The Company has made an accounting policy election,

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known as the short-term lease recognition exemption, which allows the Company to not recognize ROU assets and lease liabilities that arise from short-term leases (12 months or less); The Company has applied this election to all classes of underlying assets. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew or options to cancel a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew or will not cancel, respectively. The Company monitors its material leases on a quarterly basis.

Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected remaining lease term. Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Certain adjustments to the ROU asset may be required for items such as lease prepayments or incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. The Company has elected to account for the lease and non-lease components together for all leases.

Fair Value

The Company determines the fair value of its financial assets and liabilities in accordance with ASC 820, Fair Value Measurements. The Company’s balance sheet includes the following financial instruments: cash and cash equivalents and money market funds. The Company considers the carrying amount of its cash and cash equivalents and money market funds to approximate fair value due to the short-term nature of these instruments.

Accounting for fair value measurements involves a single definition of fair value, along with a conceptual framework to measure fair value, with a fair value defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. The fair value measurement hierarchy consists of three levels:

The Company applies valuation techniques that (1) place greater reliance on observable inputs and less reliance on unobservable inputs and (2) are consistent with the market approach, the income approach and/or the cost approach, and include enhanced disclosures of fair value measurements in the Company’s consolidated financial statements.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024. The application of this ASU did not have a material impact on the Company's financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220-40), which addresses the disaggregation of income statement expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements.

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NOTE 3—BALANCE SHEET COMPONENTS

Prepaid expenses and other current assets consist of the following (in thousands):

Prepaid assets:

Other current assts:

Cash from warrant exercise held at transfer agent $ 949 $ -

Miscellaneous other current assets 70 64

Total other current assets $ 1,019 $ 64

Accrued liabilities consist of the following (in thousands):

NOTE 4—STOCKHOLDERS’ EQUITY

Common Stock and Preferred Stock

Common Stock

The Company’s Certificate of Incorporation, as amended, authorizes it to issue 400,000,000 shares of $0.0001 par value common stock. As of December 31, 2025, and December 31, 2024, there were 9,314,130 and 3,420,906 shares of common stock issued and outstanding, respectively.

Preferred Stock

Under the Company’s Certificate of Incorporation, as amended, the Board of Directors is authorized, without further stockholder action, to provide for the issuance of up to 10,000,000 shares of preferred stock, par value $0.0001 per share, in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. Of the potential 10,000,000 shares of preferred stock, 5,181,346 are designated as Series A Stock and 4,818,654 remain undesignated. As of December 31, 2025 and 2024, there were 210 shares of Series A Stock outstanding, convertible into an aggregate of one share of common stock.

Common Stock and Pre-Funded Warrants

March 2025 Private Placement Financing (the “March 2025 Offering”)

On March 4, 2025, the Company entered into a securities purchase agreement with certain accredited investors for the purchase and sale, in a private placement financing by the Company, of an aggregate of 378,346 shares of its common stock, and pre-funded warrants to purchase an aggregate of 3,760,726 shares of common stock at an offering price of $6.04 per share of common stock and $6.03 per pre-funded warrant, resulting in gross proceeds of $25.0 million. The pre-funded warrants do not expire and have an exercise price of $0.01. The net proceeds of the March 2025 Offering, after deducting placement agent fees and direct offering expenses were $23.2 million. The relative fair value allocated to the common stock and pre-funded warrants was $2.3 million and $22.7 million, respectively.

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Also, on March 5, 2025 and in connection with the March 2025 Offering, the Company entered into a registration rights agreement (the “March 2025 Registration Rights Agreement”) with the purchasers, pursuant to which the Company agreed to register for resale the shares of common stock issued in the March 2025 Offering and the shares of common stock issuable upon exercise of the pre-funded warrants issued in the March 2025 Offering within 45 days of the closing date. Pursuant to the March 2025 Registration Rights Agreement, on April 15, 2025, the Company filed a resale registration statement on Form S-3 with the SEC, which went effective on April 23, 2025.

The March 2025 Registration Rights Agreement includes liquidated damages provisions that meet the definition of a registration payment arrangement that is within the scope of ASC 825-20. The Company determined at the initial issuance of the pre-funded warrants that it is not probable that a payment would be required as it has both the intent and ability to satisfy the March 2025 Registration Rights Agreement. Therefore, the Company did not record a liability at inception but will evaluate the contingency at each reporting period. As of December 31, 2025, no events had occurred that would change our initial assessment of this provision.

August 2024 Private Placement Financing (the “August 2024 Offering”)

On August 6, 2024, the Company entered into a securities purchase agreement with certain accredited investors for the purchase and sale, in a private placement financing by the Company, of (i) an aggregate of 1,450,661 shares of its common stock and pre-funded warrants to purchase an aggregate of 31,882,671 shares of common stock and (ii) accompanying warrants to purchase up to an aggregate of 16,666,666 shares of its common stock (or, in lieu thereof, additional pre-funded warrants) at a combined offering price of $3.00 per share of common stock and accompanying warrant, or $2.99 per pre-funded warrant and accompanying warrant, resulting in gross proceeds of $99.7 million. The pre-funded warrants do not expire and have an exercise price of $0.01. The net proceeds of the August 2024 Offering after deducting placement agent fees and direct offering expenses were $92.3 million. The relative fair value allocated to the common stock, pre-funded warrants, and warrants was $3.2 million, $69.4 million, and $27.1 million, respectively.

Also, on August 6, 2024 and in connection with the August 2024 Offering, the Company entered into a registration rights agreement (the “August 2024 Registration Rights Agreement”) with the purchasers, pursuant to which the Company agreed to register for resale the shares of common stock issued in the August 2024 Offering and the shares of common stock issuable upon exercise of the warrants issued in the August 2024 Offering within 60 days following the effective date of the August 2024 Registration Rights Agreement. Pursuant to the August 2024 Registration Rights Agreement, on August 30, 2024, the Company filed a resale registration statement on Form S-3 with the SEC, which went effective on September 12, 2024.

The August 2024 Registration Rights Agreement includes liquidated damages provisions that meet the definition of a registration payment arrangement that is within the scope of ASC 825-20. The Company determined at the initial issuance of the pre-funded warrants and accompanying warrant that it is not probable that a payment would be required as it has both the intent and ability to satisfy the August 2024 Registration Rights Agreement. Therefore, the Company did not record a liability at inception but will evaluate the contingency at each reporting period. As of December 31, 2025 no events have occurred that would change our initial assessment of this provision.

February 2024 Registered Public Offering (the “February 2024 Offering”)

On February 8, 2024, the Company entered into a securities purchase agreement with certain purchasers for the purchase and sale, in a registered public offering by the Company, of (i) an aggregate of 421,260 shares of its common stock and pre-funded warrants to purchase an aggregate of 1,178,740 shares of common stock and (ii) accompanying warrants to purchase up to an aggregate of 3,200,000 shares of its common stock at a combined offering price of $5.65 per share of common stock and associated warrant, or $5.649 per pre-funded warrant and associated warrant, resulting in gross proceeds of $9.0 million. The net proceeds of the February 2024 Offering after deducting placement agent fees and direct offering expenses were $8.0 million. The relative fair value allocated to the common stock, pre-funded warrants and warrants was $0.9 million, $2.4 million, and $5.7 million, respectively.

Pre-Funded Warrants Activity

The following table summarizes the Company’s pre-funded warrant activity for the years ended December 31, 2025 and 2024:

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Prefunded Warrants WeightedAverageExercise Price

Outstanding at December 31, 2023 - $ —

Canceled - —

Warrants

The following table summarizes the Company’s warrant activity for the years ended December 31, 2025 and 2024, not including pre-funded warrants:

Warrants WeightedAverageExercise Price

Canceled — —

Issued — —

August 2024 Warrants

As described above, as part of the August 2024 Offering, the Company issued unregistered warrants to purchase 16,666,666 shares of its common stock at an exercise price of $4.50 per share. The warrants expire at the earlier of (i) 30 trading days following the date of the Company’s initial public announcement of topline data from its Phase 3 LEVEL trial (the “Topline Data Announcement”), (ii) immediately upon the exercise of the August 2024 pre-funded warrants if such exercise is prior to the Topline Data Announcement, provided that if the pre-funded warrant is not exercised in full, the warrant expires proportionally to the extent the pre-funded warrant is exercised, and (iii) August 8, 2029. The warrants have an estimated term of 1.8 years. The unregistered warrants were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D promulgated thereunder. In accordance with ASC 815, Derivatives and Hedging, these warrants are classified as equity and their relative fair value of $27.1 million was recognized as additional paid in capital. The estimated fair value is determined using the Black-Scholes option pricing model using the following assumptions: remaining estimated term of 1.8 years, risk free interest rate of 3.83%, expected dividends of zero, and expected volatility of 177.27%.

February 2024 Warrants

As described above, as a part of the February 2024 Offering, the Company issued registered warrants to purchase 3,200,000 shares of its common stock at an exercise price of $5.65 per share and contractual term of five years. In accordance with ASC 815, Derivatives and Hedging, these warrants are classified as equity and their relative fair value of $5.7 million was recognized as additional paid in capital. The estimated fair value was determined using the Black-Scholes option pricing model using the following assumptions: remaining estimated term of 5.0 years, risk free interest rate of 4.12%, expected dividends of zero, and expected volatility of 131.87%.

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Stock-Based Compensation

Stock Incentive Plans

In June 2022, the Company adopted the 2022 Stock Incentive Plan, as amended on June 7, 2024 and October 25, 2024, (the “2022 Plan”), with the outstanding shares available for future grants under prior plans, as well as outstanding awards under prior plans that subsequently expire, terminate or are surrendered or forfeited, generally being assumed by the 2022 Plan. Unexpired awards granted under certain prior plans may be subject to the terms of such prior plans.

Under the 2022 Plan, with the approval of the Board of Director’s Compensation Committee, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards or other stock-based awards. Stock options granted under the 2022 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the 2022 Plan may be granted with a term of up to ten years and at prices no less than fair market value at the time of grant. Stock options granted generally vest over one to four years.

The number of shares of common stock authorized for issuance under the 2022 Plan is 8,337,252 shares and a total of 1,721,121 shares remained available for issuance as of December 31, 2025.

Summary of Stock Option Activity

Transactions during the years ended December 31, 2025 and 2024 related to stock options granted to employees and directors under Company option plans were as follows:

Exercised - -

Exercised - -

The following table summarizes all options issued under the Company's stock plans that are outstanding as of December 31, 2025:

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The Company used the following assumptions to estimate the fair value of options granted for the year ended December 31, 2025.

For the year ended December 31,

Risk-free interest rate (weighted average) 4.18 % 4.09 %

Expected volatility (weighted average) 122.16 % 131.33 %

Expected term (in years) 5.9 5.0

Expected dividend yield 0.00 % 0.00 %

The Company recorded compensation expense for non-inducement stock options of $18.8 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, there were unrecognized compensation costs of $14.7 million related to non-vested stock option awards that will be recognized on a straight-line basis over the weighted average remaining vesting period of 1.47 years.

Inducement Stock Options

The Company granted an employment inducement stock option award for 250,000 shares of common stock to a new employee on January 21, 2025. This employment inducement stock option was awarded in accordance with the employment inducement award exemption provided by Nasdaq Listing Rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity plan. The option award vests in four equal annual installments beginning on the first anniversary of the date of issuance, subject to the employee's continued employment with the Company through each applicable vesting date. The option has a 10-year term and an exercise price of $6.45 per share, the January 21, 2025 closing price of the Company’s common stock. The estimated fair value of the inducement stock option award was $1.4 million using the Black-Scholes option pricing model based on market prices and the following assumptions at the date of inducement option grant: risk-free interest rate of 4.49%, dividend yield of 0%, volatility factor for our common stock of 123.41% and an expected life of 6 years.

The Company granted an employment inducement stock option award for 157 shares of common stock, to its then-new President and Chief Executive Officer on July 6, 2021. The employment inducement stock option award was granted in accordance with the employment inducement award exemption provided by Nasdaq Listing Rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity plan. This award vested in four equal installments beginning on the first anniversary of the date of issuance, subject to continued employment. The option has a 10-year term and an exercise price of $3,152 per share, the July 6, 2021 closing price of our common stock. As of December 31, 2025, the option was fully vested. The estimated fair value of this inducement stock option award was $403 thousand using the Black-Scholes option pricing model based on market prices and the following assumptions at the date of inducement option grant: risk-free interest rate of 1.13%, dividend yield of 0%, volatility factor for our common stock of 99.36% and an expected life of 7 years.

The Company also granted an employment inducement stock option award for 157 shares of common stock to its then-new Chief Medical Officer on January 15, 2021. This employment inducement stock option was awarded in accordance with the employment inducement award exemption provided by Nasdaq Listing Rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity plan. The option award will vest as follows: 25% upon initiation of a Phase 3 trial; 25% upon database lock; 25% upon acceptance for review of an investigational NDA; and 25% upon approval. The option has a 10-year term and an exercise price of $2,848 per share, the January 15, 2021 closing price of our common stock, as adjusted for the subsequent reverse stock splits. As of December 31, 2025, two of the vesting milestones have been achieved. The estimated fair value of the inducement stock option award granted was $403 thousand using the Black-Scholes option pricing model based on market prices and the following assumptions at the date of inducement option grant: risk-free interest rate of 11%, dividend yield of 0%, volatility factor for our common stock of 103.94% and an expected life of 10 years.

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Inducement stock option compensation expense totaled $0.4 million and $0.1 million for the years ended December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025, there was $1.1 million of remaining unrecognized compensation expense related to these inducement stock options.

NOTE 5—COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company owns no real property. Beginning November 1, 2022, the Company maintains a membership providing dedicated office space, as well as shared services and shared space for meetings, catering, and other business activities, at its' principal executive office.

Simdax License Agreement

On November 13, 2013, the Company acquired certain assets of Phyxius Pharma, Inc. (“Phyxius”) pursuant to an asset purchase agreement by and among the Company, Phyxius and the stockholders of Phyxius, dated October 21, 2013. Among these assets was a license with Orion Corporation (“Orion”) for the exclusive, sublicensable right to develop and commercialize pharmaceutical products containing levosimendan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial in the United States and Canada (as amended from time to time, the “License”). On October 9, 2020 and January 25, 2022, the Company entered into amendments to the License to include in the scope of the License two new product formulations containing levosimendan, in capsule and solid dosage form (TNX-103) and a subcutaneously administered dosage form (TNX-102), subject to specified limitations (together, the “Product”).

On February 19, 2024, the Company entered into an amendment to the License providing global rights to oral and subcutaneous formulations of levosimendan used in the treatment of pulmonary hypertension in heart failure with preserved ejection fraction (“PH-HFpEF”). The amendment also reduced the tiered royalties based on worldwide net sales of the product by the Company and its sublicensees, increased the License’s existing milestone payment due to Orion upon the grant of United States Food and Drug Administration approval of a levosimendan-based product to $10.0 million and added a milestone payment to Orion of $5.0 million due upon the grant of regulatory approval for a levosimendan-based product in Japan. The amendment also (i) increased the Company’s obligations to make certain non-refundable commercialization milestone payments to Orion, aggregating to up to $45.0 million, contingent upon achievement of certain cumulative worldwide sales of the product by the Company, and (ii) reduced the maximum price per capsule payable by the Company to Orion, under a yet-to-be-negotiated supply agreement, for the commercial supply of oral levosimendan-based product. Pursuant to the License, the Company and Orion will agree to a new trademark when commercializing levosimendan in either of the dosage forms.

On September 3, 2025, the Company entered into an amendment License providing exclusive worldwide rights to develop, commercialize, manufacture, and have manufactured any orally-administered pharmaceutical product containing levosimendan and, in addition to the Company’s existing rights to develop and commercialize subcutaneously administered products containing levosimendan, to manufacture or have manufactured such products. The amendment also calls for Orion to supply the Company with levosimendan to the extent reasonably necessary or useful to manufacture orally-administered products containing levosimendan for purposes of developing such products, and sets forth the terms for such supply, including the price of levosimendan ordered by the Company of low triple-digit thousands in Euros per kilogram, payment terms, and active pharmaceutical ingredient specifications.

The term of the License extends until 10 years after the launch of the Product in the territory, provided that the License will continue after the end of the term in each country in the territory until the expiration of Orion’s patent rights in the Product in such country. In the event that no regulatory approval for the Product has been granted in the United States on or before September 20, 2030, however, either party will have the right to terminate the License with immediate effect.

The License also grants the Company a right of first refusal to commercialize new developments of the Product, including developments as to the formulation, presentation, means of delivery, route of administration, dosage or indication but, pursuant to the February 2024 amendment, excluding new applications of levosimendan for neurological diseases and disorders developed by Orion.

As of December 31, 2025, the Company has not met any of the developmental milestones under the License and,

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accordingly, has not recorded any liability for the contingent payments due to Orion.

Litigation

The Company is subject to litigation in the normal course of business, none of which management believes will have a material adverse effect on the Company’s consolidated financial statements.

NOTE 6—401(k) BENEFIT PLAN

The Company sponsors a 401(k) Retirement Savings Plan (the “401(k) Plan”) for all eligible employees. Full-time employees over the age of 18 are eligible to participate in the 401(k) Plan after 90 days of continuous employment. Participants may elect to defer earnings into the 401(k) Plan up to the annual IRS limits and the Company provides a matching contribution up to 5% of the participants’ annual salary in accordance with the 401(k) Plan documents. A third-party trustee manages the 401(k) Plan.

For the years ended December 31, 2025 and 2024, the Company recorded $118 thousand and $63 thousand for matching contributions expense, respectively.

NOTE 7—INCOME TAXES

The Company has not recorded any income tax expense (benefit) for the period ended December 31, 2025 due to its history of net operating losses. The Company has adopted ASU 2023-09 “Income Taxes (Topic 740) Improvements to Income Tax Disclosures for the year-ended December 31, 2025.

The amounts of cash income taxes paid (received) by the Company for both federal and state income tax for the years ended December 31, 2025 and December 31, 2024 was zero.

The reconciliation of income tax expenses (benefit) at the statutory federal income tax rate of 21% for the period ended December 31, 2024 is as follows (in thousands):

December 31,

U.S. federal tax benefit at statutory rate $ (3,696 )

State income tax benefit, net of federal benefit (94 )

Stock compensation 256

Other nondeductible, including IPR&D expense 1

Change in state tax rate -

Expiration of NOL Carryforward 564

Net operating loss adjustments -

Other, including effect of tax rate brackets (54 )

Change in valuation allowance 3,023

$ -

The reasons for the difference between actual income tax benefit for the years ended December 31, 2025 and the amount computed by applying the statutory federal income tax rate to losses before income tax benefit after the adoption of ASU 2023-09 are as follows (in thousands):

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Amount % of Pre-Tax Loss

U.S. federal statutory tax rate $ (11,045 ) 21.0%

State and local income taxes, net of federal income tax (51 ) 0.1 %

Effect of changes in tax laws or rates enacted in the current period - -

Tax credits - -

Change in valuation allowance 8,682 (16.51%)

Nontaxable or nondeductible items

Incentive stock option expense 167 (0.32%)

Sec. 162(m) impact on stock compensation 2,775 (5.27%)

Changes in Unrecognized Tax Benefits - -

Other adjustments

Provision to return - -

Effective tax Rate $ - 0.0%

The tax effects of temporary differences and carry forwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):

December 31,

Capital loss carryforwards - 1

Stock compensation 1,366 -

Net deferred tax assets - -

Deferred Tax Liabilities

Other liabilities - -

Net Deferred Tax Liabilities $ - $ -

The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time that it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. The net increase in the valuation allowance during 2025 was approximately $8.7 million.

As of December 31, 2025, the Company had federal and state net operating loss carryforwards of approximately $208.5 million and $172.4 million available to offset future federal and state taxable income, respectively. Federal net operating losses of $120.7 million begin to expire in 2026, while the remaining $87.8 million carryforward indefinitely. State net operating losses begin to expire in 2026. The Company’s only material state income tax activity for the years 2025 and 2024 is related to the North Carolina jurisdiction.

Utilization of the net operating loss carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of the net operating losses before utilization or substantial restrictions on the use of such net operating losses.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (OBBBA), which includes several changes to U.S. federal income tax law, including temporary and permanent extension, of expiring provisions of the Tax Cuts and Jobs Act of 2017. Significant provisions for corporate taxpayers include permanent 100% bonus

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depreciation for qualified property, immediate expensing of domestic R&D expenditures, and changes to the limitation on business interest expense deductions under Section 163(j). None of these provisions have a material impact on the Company’s 2025 income tax provision. The main provision impacting the Company’s tax profile is the allowance for current expensing of domestic R&D expenditures.

We have U.S. federal net operating loss carryforwards, or NOLs, which expire in various years if not utilized. Under Sections 382 and 383 of Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research tax credits, to offset its future post-change income and taxes may be limited. In general, an “ownership change” occurs if there is a cumulative change in our ownership by “5% shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. We have not performed a formal study to determine whether any of our NOLs are subject to these limitations. We have recorded deferred tax assets for our NOLs and research and development credits and have recorded a full valuation allowance against these deferred tax assets. In the event that it is determined that we have in the past experienced additional ownership changes, or if we experience one or more ownership changes as a result of future transactions in our stock, then we may be further limited in our ability to use our NOLs and other tax assets to reduce taxes owed on the net taxable income that we earn in the event that we attain profitability. Any such limitations on the ability to use our NOLs and other tax assets could adversely impact our business, financial condition, and operating results in the event that we attain profitability.

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There were no uncertain tax positions as of December 31, 2025 and 2024.

The Company files U.S. and state income tax returns with varying statutes of limitations. The tax years 2005 and forward remain open to examination due to the carryover of unused net operating losses or tax credits.

NOTE 8—SEGMENTS

Operating segments are identified as components of an entity about which separate discrete financial information is available for evaluation by the CODM, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company's CODM, the President and Chief Executive Officer, views the Company's operations as one operating segment, which is focused on identifying and developing therapeutics that address cardiovascular and pulmonary diseases with high unmet medical need, with an initial therapeutic focus on pulmonary hypertension. The Company does not have revenue in the current comparative period, incurs expenses primarily in North America and manages the business activities on a consolidated basis.

The accounting policies of the cardiovascular and pulmonary therapeutics segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the cardiovascular and pulmonary therapeutics segment and decides how to allocate resources based on net loss that also is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the balance sheet as cash and cash equivalents.

The Company has not generated any product revenue in the current period and expects to continue to incur significant expenses and operating losses for the foreseeable future as the Company advances its product candidates through all stages of development and clinical trials.

As such, the CODM uses cash forecast models in deciding how to invest into the cardiovascular and pulmonary therapeutics segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results, net cash used in operating activities for the period and cash on hand are used in assessing performance of the segment.

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The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31, 2025 and 2024 (in thousands).

The year ended December 31,

Operating expenses:

Other segment items (a)

Interest expense - (23 )

Other income, net (33 ) 1

(a) Other segment items included in segment loss includes interest income and interest expense.

(b) The Company is a single operating segment and therefore the measure of segment net loss is the same as consolidated net loss and does not require reconciliation.

For the year ended December 31, 2025 and 2024, the net cash used in operating activities was $35.8 million and $14.8 million, respectively. The table below summarizes the significant asset categories regularly reviewed by the CODM for the years ended December 31, 2025 and 2024 (in thousands).

The year ended December 31,

Assets:

NOTE 9—SUBSEQUENT EVENTS

Subsequent to December 31, 2025, the Company received a total of $14.5 million from the exercise of pre-funded warrants for 4,730,575 shares of common stock and warrants for 3,152,908 shares of common stock.

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