TNON US Equity☆

Item 1A Risk Factors 16

Item 1B Unresolved Staff Comments 46

Item 1C Cybersecurity 47

Item 2 Properties 47

Item 3 Legal Proceedings 47

Item 4 Mine Safety Disclosures 47

PART II

Item 6 [Reserved] 49

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 55

Item 8 Financial Statements and Supplementary Data F-1

Item 9A Controls and Procedures 56

Item 9B Other Information 56

Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 56

PART III

Item 10 Directors, Executive Officers and Corporate Governance 57

Item 11 Executive Compensation 64

Item 14 Principal Accountant Fees and Services 70

PART IV

Item 15 Exhibit and Financial Statement Schedules 71

i

CAUTIONARY

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This

Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation

Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the

Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely

on our current expectations and projections about future events and financial trends impacting the financial condition of our business.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications

of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available

at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are

subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested

by the forward-looking statements.

Forward-looking

statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms

such as “may,” “will,” “should,” “could,” “would,” “expect,”

“intend,” “seek,” “plan,” “anticipate,” “believe,” “estimate,”

“project,” “predict,” “potential,” “might,” “forecast,” “continue,”

or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking

statements include, but are not limited to, statements about:

● Our ability to effectively operate our business segments;

Should

one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ

significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors

or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of

them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements

in this Annual Report on Form 10-K should not be regarded as representations that the results or conditions described in such statements

will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness

of any of these forward-looking statements.

Use

of Certain Defined Terms

Except

where the context otherwise requires and for the purposes of this report only:

● “year” or “fiscal year” means the year ending December 31st;

● “Exchange Act” refers the Securities Exchange Act of 1934, as amended;

● “SEC” refers to the Securities and Exchange Commission; and

● “Securities Act” refers to the Securities Act of 1933, as amended.

ii

Risk

Factors Summary

Our

business is subject to numerous risks and uncertainties, any one of which could materially adversely affect our results of operations,

financial condition or business. These risks include, but are not limited to, those listed below. This list is not complete, and should

be read together with Item 1A, “Risk Factors” and should not be relied upon as an exhaustive summary of the material risks

we face.

iii

iv

PART

I

Item

1. Business

Introduction

Tenon

Medical, Inc. (“we” or the “Company”) was incorporated in the State of Delaware on June 19, 2012 and was headquartered

in San Ramon, California until June 2021 when it relocated to Los Gatos, California. We are a medical device company dedicated to transforming

care for patients with certain sacro-pelvic disorders. We currently offer two systems to treat a diseased sacroiliac joint (the “SI

Joint”). We have developed The Catamaran®TM SI Joint Fusion System (“The Catamaran System”) that

offers a novel, less invasive approach to the SI Joint using a single, robust, titanium implant for treatment of the most common types

of SI Joint disorders that cause lower back pain. We received U.S. Food and Drug Administration (“FDA”) clearance in 2018

for The Catamaran System and are currently focused on the US market. Since the national launch of The Catamaran System in October 2022,

we have been focused on three commercial opportunities: 1) Primary SI Joint procedures, 2) Revision procedures of failed SI Joint implants

and 3) SI Joint fusion adjunct to a spine fusion construct.

In

August 2025, we acquired substantially all of the assets of SiVantage, Inc. and SIMPL Medical, LLC, including the SImmetry+®

SI Joint Fusion System (“The SImmetry+ System”) that treats disorders of the SI Joint through minimally invasive

lateral access solution that incorporates well-established orthopedic fusion principles-including joint decortication, bone graft placement,

and rigid fixation-with the goal of achieving a true biological fusion across the SI Joint.

Recent

Developments

March

2026 Financing

On

March 11, 2026, we entered into securities purchase agreements with certain accredited investors pursuant to which we issued and sold

in a private placement 20% original issue discount senior convertible promissory notes (the “Convertible Promissory Notes”)

in an aggregate principal amount of approximately $5.2 million for aggregate gross proceeds of approximately $4.3 million. The Convertible Promissory

Notes have a maturity date of September 11, 2026, which, at our option, can be extended to December 11, 2026. Following the 6-month anniversary

of the issuance date, the Convertible Promissory Notes will be convertible at any time at the option of the holder into shares of our

common stock at a conversion price per share equal to the greater of 80% of the VWAP for the three trading days immediately prior to

the date of conversion and $0.1567, subject to adjustment for stock splits and pro rata distributions as provided in the Convertible

Promissory Notes. If the maturity date of the Convertible Promissory Notes is extended, their outstanding principal amount will be increased

by 5%. Any prepayment of the Convertible Promissory Notes will be paid at 102.5% of the principal amount being prepaid. In addition,

we are required to prepay the Convertible Promissory Notes from 15% of the net proceeds we may receive from future securities financing

transactions less certain amounts attributable to the original issue discount.

WallachBeth

Capital LLC acted as our placement agent in connection with this offering and received a cash fee equal to 7.0% of the aggregate gross

proceeds raised in the offering and reimbursement of certain expenses in the amount of $65,000.

Nasdaq

Notice

On

February 25, 2026, we received a letter from the Nasdaq Listing Qualifications Department notifying us that, for the 30 consecutive business

day period between January 9, 2026 through February 24, 2026, our common stock had not maintained a minimum closing bid price of $1.00

per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price

Rule”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until August

24, 2026 (the “Compliance Period”), to regain compliance with the Bid Price Rule. In order to regain compliance with the

Bid Price Rule, our common stock is required to maintain a minimum closing bid price of $1.00 for a minimum of ten consecutive business

days during the Compliance Period prior to August 24, 2026. If we do not regain compliance with the Bid Price Rule by August 24, 2026,

we may be eligible for an additional 180-day period to regain compliance.

As

of the date of this report, our common stock has not regained compliance with the Bid Price Rule. If we cannot regain compliance during

the Compliance Period or any subsequently granted compliance period, our common stock will be subject to delisting. At that time, we

may appeal the delisting determination to a Nasdaq hearings panel.

The

notice from Nasdaq has no immediate effect on the listing of our common stock, which will continue to be listed on The Nasdaq Capital

Market under the symbol “TNON.” We are currently evaluating our options for regaining compliance with the Bid Price Rule.

1

November

2025 PIPE Financing

On

November 10, 2025, we entered into securities purchase agreements with certain accredited investors in an at-the-market private investment

in public equity financing (the “PIPE Financing”) pursuant to which we agreed to issue and sell an aggregate of 2,217,904

shares of common stock and/or pre-funded common stock purchase warrants, and common stock purchase warrants, each exercisable for one

share of our common stock, at a combined offering price of $1.285 per share and warrant to purchase one share of common stock. The warrants

have an exercise price of $1.16 per share and expire 3 years from the date of issuance. The PIPE Financing closed on November 14, 2025,

and we issued to the investors 2,217,904 shares of common stock and 2,217,904 common stock purchase warrants. Pursuant to the purchase

agreements, we received proceeds, net of transaction expenses, of approximately $2.7 million. Steven Foster, the Company’s Chief

Executive Officer and Director, Nathaniel Grawey, the Company’s Chief Commercial Officer, and Wyatt Geist, the Company’s

Chief Innovation Officer, participated in the PIPE Financing as investors. The shares of our common stock and the shares underlying warrants

issued in the PIPE Financing are entitled to customary resale registration rights.

The

Opportunity

We

estimate that over 30 million American adults have chronic lower back pain. Published clinical studies have shown that 15% to 30% of

all chronic lower back pain is associated with the SI Joint. For patients whose chronic lower back pain stems from the SI Joint, our

experience in both clinical trials and commercial settings indicates the system to be introduced by Tenon could be beneficial for patients

who are properly diagnosed and screened for surgery by trained healthcare providers.

In

2019, approximately 475,000 patients in the United States were estimated to have received an aesthetic injection to temporarily alleviate

pain emanating from the SI Joint and/or to diagnose SI Joint pain. Additionally, several non-surgical technologies have been introduced

in the past 10 years to address patients who do not respond to conservative options, including systemic oral medications, opioids, physical

therapy and injection therapy.

To

date, the penetration of a surgical solution for this market has been relatively low (5-7%). We believe this is due to complex surgical

approaches and suboptimal implant design of existing options. The penetration of this market with an optimized surgical solution is Tenon’s

focus.

We

believe the SI Joint is the last major joint to be successfully addressed by the spine implant industry. Studies have shown that disability

resulting from disease of the SI Joint is comparable to the disability associated with a number of other serious spine conditions, such

as knee and hip arthritis and degenerative disc disease, each of which has surgical solutions where an implant is used, and a multi-billion-dollar

market exists.

The SI

Joint

2

The

SI Joint is a strong weight bearing synovial joint situated between the lumbar spine and the pelvis and is aligned along the longitudinal

load bearing axis of the human spine when in an upright posture. It functions as a force transfer conduit where it transfers axial loads

bi-directionally from the spine to the pelvis and lower extremities and allows forces to be transmitted from the extremities to the spine.

It also provides load sharing between the hip and spine to contribute towards attenuation of impact shock and stress from activities

of daily living.

The

SI Joint is a relatively immobile joint that connects the sacrum (the spinal segment that is attached to the base of the lumbar spine

at the L5 vertebra) and the ilium of the pelvis. Each SI Joint is approximately 2-4mm wide and irregularly shaped.

Motion

of the SI Joint features vertical shear and rotation. Although the rotational forces about the SI Joint are relatively low, repetitive

motions created by daily activities such as walking, jogging, twisting at the hips, and jumping can increase the stresses on the SI Joint.

If the SI Joint is compromised through injury or degeneration, the load bearing and motion restraints from the surrounding anatomical

structures of the SI Joint will be compromised resulting in abnormal stress transfers across the joint to these structures, thereby further

augmenting the degenerative cascade of the SI Joint. Eventual pain and cessation of an individual’s normal activities due to a

painful and unstable SI Joint have led to an increase in the recent development of SI Joint stabilization devices.

Non-Surgical Treatment

of Sacroiliac Joint Disease

Several non-surgical treatments

exist for suspected sacroiliac joint pain. These conservative steps often provide desired relief for the patient. Non-surgical treatments

include:

● Physical Therapy.

When

conservative steps fail to deliver sustained pain relief and return to quality of life, specific diagnostic protocols are utilized to

explore if a surgical option should be considered.

Diagnosis

Historically,

diagnosing pain from the SI Joint was not routinely a focus of orthopedic or neurosurgery training during medical school or residency

programs. Due to its invasiveness, post-operative pain, and muscle disruption along with a difficult procedure overall, the open SI Joint

fusion procedure was rarely taught in these settings.

The

emergence of various less invasive SI Joint surgical technologies has generated a renewed discussion of SI Joint issues. Of particular

focus is the diagnostic protocol utilized to properly select patients for SI Joint surgery. Patients with low back pain typically start

with primary care physicians who often refer to pain specialists. Here, the patient will undergo traditional physical therapy combined

with oral medications (anti-inflammatory, narcotic, etc.). If the patient fails to respond to these steps the pain specialist may move

to therapeutic injections of the SI Joint. These injections may serve to lessen inflammation to the point that the patient is satisfied.

However, the impact from these injections is often transient. In this case the patient is often referred to a clinician to determine

if the patient may be a candidate for surgical intervention. A series of provocative tests in clinic, combined with a specific injection

protocol to isolate the SI Joint as the pain generator is then utilized to confirm the need for surgical intervention. Published literature

has shown this technique to be a very effective step to determine the best treatment to alleviate pain.

Limitations

of Existing Treatment Options

Surgical

fixation and fusion of the SI Joint with an open surgical technique was first reported in 1908, with further reports in the 1920s. The

open procedure uses plates and screws, requires a 6 to 12-inch incision and is extremely invasive. Due to the high

invasiveness and associated morbidity, the use of this procedure is limited to cases involving significant trauma, tumor, etc.

Less

invasive surgical options along with implant design began to emerge over the past 15 years. These options feature a variety of approaches

and implant designs and have been met with varying degrees of adoption. Lack of a standard and accepted diagnostic approach, complexity

of approach, high morbidity of approach, abnormally high complication rates and inability to radiographically confirm fusion have all

been cited as reasons for low adoption of these technologies.

Commercialization

Tenon’s

Catamaran and SImmetery+ Systems make up the Company’s growing portfolio of advanced SI Joint technologies. Together,

these platforms uniquely position Tenon with multiple surgical approaches – lateral and inferior-posterior – both designed

to be minimally invasive, enable authentic arthrodesis and supported by robust clinical evidence, including the published prospective

MainsailTM and EVoluSIonTM SI Joint fusion studies. We anticipate that these differentiated technologies will enable physicians

to customize treatment plans for their patients with an innovative portfolio that spans SI Joint, spinal fusion, and deformity adjuncts

— each solution engineered to deliver fusion outcomes more reliably. We believe that this multi-platform, multi-approach strategy

strengthens Tenon’s competitive advantage in the expanding SI Joint fusion market and underscores the Company’s commitment

to delivering effective, durable outcomes for physicians and patients.

3

The

Catamaran System

Tenon

initiated its national commercial launch of The Catamaran System in October 2022 to address what we believe is a large market opportunity.

The Catamaran System includes instruments and implants designed to prepare and fixate the SI Joint for fusion. The Catamaran System is

distinct from other competitive offerings in the following ways:

● Trans-articular placement across the SI Joint

● Inferior-posterior sacroiliac fusion approach

● Reduced approach morbidity

● Direct visualization to the SI Joint

● Single implant technique

● Insertion trajectory away from the neural foramen

● Insertion trajectory away from major lateral vascular structures

● Autologous bone grafting in the ilium, sacrum and bridge

● Radiographic confirmation of bridging bone fusion of the SI Joint

The

fixation device and its key features are shown below:

Key Features

● Robust single titanium implant

● Incorporates fusion principles to facilitate long-term fixation

● Immediate stabilization along the long axis of the joint.

● Fenestrated pontoons designed to facilitate bony in-growth.

● “Pontoons and Bridge window” filled with autologous bone from drilling process

The

Catamaran System represents a novel less invasive approach to treat SI Joint dysfunction. Its trans-articular placement, combined with

a design rooted in fusion principles, ensures immediate fixation and stabilization supported by peer reviewed clinical and radiographic

evidence of fusion with a compelling safety profile. The Catamaran System is a singular implant designed with several proprietary components

which allow for it to be explicitly formatted to address the SI Joint with a single, less invasive approach and implant. This contrasts

with several competitive implant systems that require multiple approach pathways and implants to achieve fixation. In addition, the inferior-posterior

approach is designed to be direct to the joint and through limited anatomical structures which may minimize the morbidity of the approach.

The implant features a patented dual pontoon open cell design which enables the clinician to pack the pontoons with the patient’s

own autologous bone designed to promote bone fusion across the joint. The Catamaran System is designed specially to resist vertical shear

and rotation of the joint in which it was implanted, helping stabilize the joint in preparation for eventual fusion.

The

instruments we have developed are proprietary to The Catamaran System and specifically designed to transfix the SI Joint and facilitate

an inferior-posterior approach that is unique to the system.

Tenon

also has developed a proprietary 2D radiographic placement protocol as well as a protocol for 3D navigation utilizing the latest techniques

in spine surgery. These Tenon advancements are intended to further enhance the safety and ease of the procedure and encourage more physicians

to adopt the procedure.

In

October 2022, we received Institutional Review Board (“IRB”) approval from WCG IRB for two separate Tenon-sponsored post

market clinical studies of The Catamaran System. The approval by WCG allows designated Catamaran study centers to begin recruiting and

enrolling patients into the clinical studies. The first approval from WCG IRB supports a prospective, multi-center, single arm post market

study that will evaluate the clinical outcomes of patients with sacroiliac joint disruptions or degenerative sacroiliitis treated with

The Catamaran System. Patients will be followed out to 24 months assessing various patient reported outcomes, radiographic assessments,

and adverse events. The second prospective, multi-center, Catamaran study will evaluate 6-to-12-month radiographic outcomes to assess

fusion of patients that have already undergone treatment with The Catamaran System. In addition, retrospective and prospective clinical

outcomes will be evaluated.

4

The

SImmetry+ System

In

August 2025, we acquired The SImmetry+ System, which affords an efficient and effective minimally invasive technique to effect

a true arthrodesis of the SI Joint in the following way:

● Minimally invasive lateral access for safety and control

● System designed with well-established orthopedic fusion principles

● Bone graft delivery to the prepared joint to facilitate fusion

The

Market

Based

on market research and internal estimates, Tenon believes the potential market for surgical intervention of SI Joint dysfunction to be

270,000 procedures annually in the U.S. alone, for a potential annual market of approximately $2.1 billion. These estimates are driven

by coding data for SI Joint injections to treat pain and informed assumptions relative to surgical intervention candidacy

Based

on public information, we believe that the largest clinical device supplier in this market does approximately 16,000 SI Joint fixations

a year representing the largest market share. The other competitive devices that are offered are all products generally part of much

larger companies with a variety of orthopedic devices and as such do not specifically call out the number of specific SI Joint procedures

performed with their products. It is our belief that all other competitive devices represent approximately another 5,000 potential SI

Joint procedures.

Based

on this analysis we believe the market is vastly underserved and only penetrated 5-7%, leaving tremendous upside for a next generation

device that meets the needs of this market.

Competitive

Landscape

By

expanding the Tenon portfolio to include both the Catamaran and SImmetry+ systems, we have created a differentiated market position with

multiple approaches to SI Joint fusion backed by clinical outcomes including:

● Pain reduction,

● Patient satisfaction, and

● Independent confirmation of bridging bone fusion across the joint.

In

our view, this differentiated market position strengthens our ability to drive adoption, increase procedure volumes, and capture a larger

share of this rapidly expanding market

The following

are the primary factors on which companies compete in our industry:

● product and clinical procedure effectiveness;

● ease of surgical technique and use of associated instruments;

● safety;

● published clinical outcomes and evidence;

● sales force knowledge and service levels;

● product support and service, and customer service;

● comprehensive training, including disease, anatomy, diagnosis, and treatment;

● product innovation and the speed of innovation;

● intellectual property;

5

● accountability and responsiveness to customers’ demands;

● pricing and reimbursement;

● scientific (biomechanics) data; and

● attracting and retaining key personnel.

Tenon

believes providing physicians innovative SI Joint system choices, backed by clinical outcomes, will open the door to enhanced adoption

and further penetration of this important market.

The

Catamaran®TM SI Joint Fusion System Solution

Until

October 2022, Tenon sold The Catamaran System to a limited number of clinician advisors to refine the product for a full commercial launch.

In October 2022, Tenon initiated a full commercial launch at the NASS meeting in Chicago. The Catamaran System includes instruments and

implants designed to prepare and fixate the SI Joint for fusion. We believe The Catamaran System will address a large market opportunity

with a superior product and is distinct from other competitive offerings in the following ways:

● Trans-articular placement across the SI Joint

● Inferior-posterior sacroiliac fusion approach

● Less invasive surgical approach

● Direct visualization to the SI Joint

● Single implant technique

● Insertion trajectory away from the neural foramen

● Insertion trajectory away from major vascular structures

● Autologous bone grafting in the ilium, sacrum and bridge

● Radiographic confirmation of bridging bone fusion of the SI Joint

The

Catamaran System is a singular implant designed with several proprietary components which allow for it to be explicitly formatted to

transfix the SI Joint with a single approach and implant. This contrasts with several competitive implant systems that require multiple

approach pathways and implants to achieve fixation. In addition, the Inferior-Posterior approach is designed to be direct to the joint

and through limited anatomical structures which may minimize the morbidity of the approach. The implant features a patented dual pontoon

open cell design which enables the clinician to pack the pontoons with the patient’s own autologous bone designed to promote bone

fusion across the joint. The Catamaran System is designed specially to resist vertical shear and rotation of the joint in which it was

implanted, helping stabilize the joint in preparation for eventual fusion.

The

instruments we have developed are proprietary to The Catamaran System and specifically designed to facilitate an Inferior Posterior approach

that is unique to the system.

Tenon

also has developed a proprietary 2D placement protocol as well as a protocol for 3D navigation utilizing the latest techniques in spine

surgery. These Tenon advancements are intended to further enhance the safety of the procedure and encourage more physicians to adopt

the procedure.

The

Procedure

We

believe The Catamaran System and its differentiated characteristics allow for an efficient and effective procedure designed to deliver

short-term stabilization and long-term fusion that can be confirmed radiographically. Shown below is an illustration demonstrating the

unique placement of The Catamaran System inserted Inferior-Posterior and coming directly down to and transfixing the joint.

The

Catamaran System procedure is typically performed under general anesthesia using a specially designed instrument set we provide to prepare

for the Inferior-Posterior access to the SI Joint. Specially designed imaging and navigation protocols are designed to ensure the clinician

has the proper entry point, trajectory, angle and depth so that the pontoons of The Catamaran System are placed for maximum fixation.

The Catamaran System incorporates two pontoons and is designed so that when the system is impacted into the bone one pontoon is on the

Illum side and the other is in the Sacrum side with the bridge spanning the joint, preventing shear and rotation of the joint. The device

also features an open cell design where the patient’s own (autologous) bone is packed into the pontoons and the bridge to facilitate

fusion across the joint. The leading edge of the bridge is designed to act as an osteotome, providing a self-created deficit upon insertion.

These features are designed to create an ideal environment for bone ingrowth and fusion. Below is a fluoroscopic image of an implanted

Catamaran Fixation Device spanning the SI Joint.

6

Tenon

believes the surgical approach and implant design it has developed, along with the 2D and 3D protocols for proper implantation will be

received well by the clinician community who have been looking for a next generation device. Our initial clinical results indicate that

The Catamaran System is promoting fusion across the joint as evidenced by post-op CT scans (the recognized gold standard widely accepted

by the Clinical community).

A

preliminary 18 case series (Michael Joseph Chaparro, MD, F.A.A.N.S., F.A.C.S.) has documented that The Catamaran System does in fact

promote fusion across the SI Joint, which many of our competitors have not been able to demonstrate. While products from some of our

competitors use screws and triangular wedges to treat the SI Joint, most do not effectively resist the vertical shear and twisting within

the joint. This 18 patient series was presented at the North American Spine Society Annual Meeting in Chicago, IL in October 2022.

An

independent biomechanical study (Lisa Ferrara, Ph.D. OrthoKinetic Technologies, LLC now part of Element) demonstrated that a single Catamaran

SIJ Fixation Device was superior to predicate device in the areas of Fixation Strength, Shear Stiffness, Dynamic Endurance and Pullout

Strength. We hold issued patents on The Catamaran System and its unique features including the dual pontoons and the open cell structure

for bone graft packing. We also hold an issued patent for the method of placing The Catamaran System into the SI Joint where one pontoon

is in the ilium and the other in the sacrum.

The

Catamaran System’s unique design has already demonstrated radiographically confirmed fusion in initial patients. We believe that

this beneficial advantage along with a simpler, safer, and less painful procedure will make this the procedure of choice for most physicians.

Tenon has initiated a post market, IRB controlled clinical trial to demonstrate this technology delivers on these advantages. The MainsailTM

Study is an ongoing prospective, single-arm, multi-center, post-market study evaluating clinical and radiographic outcomes of adult patients

with sacroiliac joint disruptions or degenerative sacroiliitis treated with the Catamaran SI Joint Fusion System. The target enrollment

for this study is up to 50 patients with up to 24-month follow-up. There have been two published interim analysis of the study with robust

and sustainable clinical outcomes out to 12 months. These outcomes include the following:

● Statistically significant reduction in SI Joint pain at 12 months

● Robust safety profile

● High patient satisfaction throughout all follow-up timepoints

● Continued definitive evidence of fusion response at 12 months

● Efficient surgical technique and procedural workflow

The

SImmetry+ SI Joint Fusion System Solution

In

August 2025, we acquired The SImmetry+ System, which affords an efficient and effective minimally invasive technique to effect

a true arthrodesis of the SI Joint in the following way:

● Minimally invasive lateral access for safety and control

● Bone graft delivery to the prepared joint to facilitate fusion

● Joint fixation with threaded 3D printed titanium implants

The

Procedure

The

SImmetry+ procedure is designed to:

● Stabilize the SI Joint

● Promote true bony fusion

● Reduce pain and improve function in appropriately selected patients

This

approach combines immediate fixation with biologically driven fusion, aligning with long-standing orthopedic fusion principles while

utilizing a minimally invasive surgical technique.

7

The

Simmetry+ System procedure is typically performed under general anesthesia using a specially designed instrument set we provide

to prepare for lateral access to the SI Joint. Specially designed imaging and navigation protocols are designed to ensure the clinician

has the proper entry point, trajectory, angle and depth of the implant for maximum fixation. The SImmetry+ SI Joint Fusion

procedure is a minimally invasive surgical technique designed to achieve true bony fusion of the sacroiliac joint. Through a small lateral

incision and fluoroscopic guidance, the joint is accessed and prepared using specialized decortication instruments to expose bleeding

bone surfaces. Bone graft material is then placed within the joint to promote biological fusion, followed by placement of titanium implants

across the ilium and sacrum to provide immediate mechanical stabilization. This combination of joint preparation, bone grafting, and

fixation is intended to support durable fusion while minimizing surgical disruption.

The

SImmetry+ System was part of the EVoluSIon study which was a prospective, multi-center clinical study evaluating up to 250

patients treated with The SImmetry+ System. At 12 months, patients demonstrated statistically significant reductions in pain

and disability, meaningful reductions in opioid use, and approximately 69% showed radiographic evidence of fusion on CT. As one of the

largest clinical datasets in minimally invasive SI Joint fusion, EVoluSIon supports the safety, effectiveness, and true fusion approach

of the SImmetry+ platform.

Coverage

and Reimbursement

When

a Tenon procedure utilizing The Catamaran System or The SImmetry+ System is performed, the healthcare facility, either

a hospital (inpatient or outpatient clinic), and the clinician submit claims for reimbursement to the patient’s insurer. Generally,

the facility obtains a lump sum payment, or facility fee, for SI Joint fusions. Our products are purchased by the facility, along with

other supplies used in the procedure. The facility must also pay for its own fixed costs of operation, including certain operating room

personnel involved in the procedure, ICD and other medical services care. If these costs exceed the facility reimbursement, the facility’s

managers may discourage or restrict clinicians from performing the procedure in the facility or using certain technologies, such as The

Catamaran System or The SImmetry+ System, to perform the procedure.

The

Medicare 2025 national average hospital outpatient clinic payment was $17,914. We believe that insurer payments to facilities are generally

adequate for these facilities to offer The Catamaran System and The SImmetry+ System procedures.

Physicians

are reimbursed separately for their professional time and effort to perform a surgical procedure. Depending on the surgical approach,

the incision size, type and extent of imaging guidance, indication for procedure, and the insurer, The Catamaran System and The SImmetry+

System procedures may be reported by the physician using CPT® codes 27279 and 27280. The Medicare 2026 payment rates for CPT®

codes 27279 and 27280 are $759 and $1,284, respectively.

For

some governmental programs, such as Medicaid, coverage and reimbursement differ from state to state, and some state Medicaid programs

may not pay an adequate amount for the procedures performed with our products, if any payment is made at all. Similar to Medicaid, many

private payors’ coverage and payment may differ from one payer to another.

We

believe that some clinicians view the current Medicare reimbursement amount as insufficient for current SI Joint procedures, given the

work effort involved with the procedure, including the time to diagnose the patient and obtain prior authorization from the patient’s

health insurer when necessary. Many private payors require extensive documentation of a multi-step diagnosis before authorizing SI Joint

fusion for a patient. We believe that some private payors apply their own coverage policies and criteria inconsistently, and clinicians

may experience difficulties in securing approval and coverage for sacroiliac fusion procedures. Additionally, many private payors limit

coverage for open SI Joint fusion to trauma, tumors or extensive spine fusion procedures involving multiple levels.

Sales

and Marketing

We

market and sell The Catamaran System and The SImmetry+ System primarily through independent distributors and sales representatives

specializing in orthopedics and spine sales. Our target customer base includes approximately 12,000 physicians who perform spine and/or

pelvic surgical procedures.

We

provide general sales and marketing training to our independent sales representative along with comprehensive, hands-on cadaveric and

dry-lab training sessions focusing on the clinical benefits of The Catamaran System and The SImmetry+ System and the importance

of using the 2D and 3D protocols we have developed. We believe many clinicians have already been trained using one of the alternative

products but have not been satisfied with the approach, outcomes, and technology. This provides us with an opportunity to demonstrate

to an already-trained-clinician the unique attributes of The Catamaran System and The SImmetry+ System.

8

Our

business objective is to introduce the next generation of implants for SI Joint fixation and fusion. The past 10 years have seen an acceleration

in recognition and discussion of the SI Joint as a cause of pain that can be treated. However, adoption has been hindered by complexity

of the procedure as evidenced by the significant number of reported Medical Device Records (MDR’s). The need for multiple implants

and resulting post-op pain has also contributed to low adoption numbers. Our strategy is to provide a safer, faster, and better surgical

experience and a significant pain reduction benefit for the patient. Our goals are simple but impactful and as such we plan on the following:

● Continue to grow our existing intellectual property portfolio.

Regulatory

Status

We

have received FDA 510(k) clearance to market and sell both The Catamaran System and The SImmentry+ System for sacroiliac joint

fusion for conditions including sacroiliac joint disruptions and degenerative sacroiliitis. Additionally, The Catamaran System received

an expanded indication from the FDA in March 2025 to augment immobilization and stabilization of the SI Joint in patients undergoing

sacropelvic fixation as part of a lumbar fusion procedure.

Research

& Development

Our

initial development of The Catamaran System has incorporated several differentiating features which we believe will make an important

contribution for many patients suffering from SI Joint pain. To our knowledge, no other competitive product incorporates the following

next generation features:

● Dual Pontoon implant that trans-articulates across the targeted joint;

● Bridge design between the dual pontoons for enhanced strength;

Our

development plan is to expand The Catamaran System offering by introducing various sizes in length and width so that the clinician has

a full complement of sized implants to choose from depending on the patient’s anatomy. These product enhancements will enable the

clinician to optimize the size of each implant to ensure full fixation based on anatomy. We believe, based on literature searches of

prior SI Joint fixation technologies, that adverse event incidence where the implant has loosened or been mal-placed thereby requiring

a revision surgery could reach 20%. We believe that our ability to offer The Catamaran System implants in various sizes will benefit

many patients requiring a revision surgery and thus reduce the associated challenges and variability found in this type of procedure.

The Catamaran System’s patented titanium implant incorporates the Catamaran SI Joint Fixation Device pontoon design and the open

cell configuration which we believe, when filled with the patient’s autologous bone, promotes fusion.

Our

mission continues to be developing enhancements to The Catamaran System and its instrument system to meet our customers’ changing

needs and to improve the surgery’s effectiveness. This includes revision surgery options as well as options as an adjunct to long

fusion constructs in the lumbar spine.

9

Additionally,

we will initiate various post marketing clinical studies in accordance with FDA cleared indications for use. Since we have already received

FDA 510(k) clearance to market The Catamaran System, our clinical study activities will be focused on capturing post-market safety and

efficacy data. Tenon has received IRB approval for two post-market trials, including a 50 patient, 10 center multi-center trial and a

prospective CT trial (the Mainsail Study) to demonstrate fusion in patients who have been treated with The Catamaran System. Clinical

study endpoints may include but are not limited to; pain scoring, length of surgical procedure, blood loss, post-op pain, length of stay,

duration of non-weight-bearing post-op, radiographic confirmation of fusion and surgical complication rates. Statistical analysis plans

may be designed to demonstrate non-inferiority to historical control, as reported in published literature, which may be used for submission

to peer reviewed articles, posters and presentations, etc.

We

believe that our 2025 acquisition of the strategic assets of SiVantage provides a robust pipeline of innovative technologies designed

to further strengthen and expand our portfolio for the treatment of SI Joint disease. Ongoing enhancements to the SImmetry+

Instrument System are expected to improve procedural efficiency and streamline surgical workflow. In addition, we expect that The SImmetry+

System will broaden its implant portfolio with expanded length and diameter options to better accommodate varying patient anatomies.

In addition to enhancements to The SImmetry+ System, we are advancing novel and potentially disruptive technology platforms

that introduce additional approaches to treating the SI Joint, while remaining firmly grounded in the orthopedic principles of fusion

that underpin each new platform.

Intellectual

Property

Developing

and maintaining a strong intellectual property position is an important element of our business. We maintain the intellectual property

through a combination of patent protection, trademarks, and trade secrets. We have sought, and will continue to seek, patent protection

for our technology, for improvements to our technology, as well as for any of our other technologies where we believe such protection

will be advantageous.

As

of March 27, 2026, we own 31 issued U.S. utility patents, 13 pending U.S. utility patent applications, 9 issued foreign utility patents

in Australia, Canada, Japan and Israel, and 19 pending foreign utility patent applications in the European Community, Brazil and Japan.

We have 1 licensed U.S. patent. We also have 14 registered U.S. trademarks and 6 foreign trademarks and 1 pending trademark application

in the U.S.

Our

utility patents and patent applications are directed to several different aspects of our SI Joint stabilization technology and related

patent platform. By way of example, our granted patents and pending patent applications cover various structural features of our unique

Catamaran SI Joint prosthesis and means for employing same to stabilize a dysfunctional SI Joint.

The

term of individual patents depends on the legal term for patents in the countries in which they are granted. In most countries, including

the United States, the patent term for a utility patent is generally 20 years from the earliest claimed filing date of a nonprovisional

patent application in the applicable country. Our issued U.S. and foreign utility patents are anticipated to naturally expire around

2031, and our U.S. pending utility patent applications, if issued into patents, are similarly anticipated to naturally expire around

2031, excluding any additional patent term adjustment(s) or extension(s), and assuming payment of all applicable maintenance or annuity

fees. Once a patent expires, patent protection ends and an invention enters the public domain allowing anyone to commercially exploit

the invention without infringing the patent.

We

cannot guarantee that patents will be issued from any of our pending applications or that issued patents will be of sufficient scope

or strength to provide meaningful protection for our technology. Notwithstanding the scope of the patent protection available to us,

a competitor could develop methods or devices that are not covered by our patents or circumvent these patents. Furthermore, although,

at present, we are unaware of any patent applications that may result in one or more issued patents that our existing products or technologies

may be alleged to infringe, since U.S. and foreign applications can take many months to publish, there may be applications unknown to

us that may result in one or more issued patents that our existing products or technologies may be alleged to infringe.

As

of March 27, 2026, we also have priority rights in and to several significant trademarks that support our products and brand, including

seven registered U.S. trademarks, twelve U.S. trademark applications and six foreign trademark applications in the European Community

(excluding the United Kingdom), Australia and Japan.

Regulation

Domestic

Regulation of Our Products and Business. Our research, development and clinical programs, as well as our manufacturing and marketing

operations, are subject to extensive regulation in the United States and other countries. Most notably, all of our products sold in the

United States are subject to the federal Food, Drug and Cosmetic Act (the “FDCA”), as implemented and enforced by the FDA.

The FDA governs the following activities that we perform or that are performed on our behalf, to ensure that medical products distributed

domestically or exported internationally are safe and effective for their intended uses:

● product design, development, and manufacture;

● product safety, testing, labeling, and storage;

10

● record keeping procedures;

● product marketing, sales, distribution and export; and

There

are numerous FDA regulatory requirements governing the clearance or approval and marketing of our products. These include:

● regulations pertaining to voluntary recalls; and

● notices of corrections or removals.

The

FDA has broad post-market and regulatory enforcement powers. We and our contract manufacturers are subject to announced and unannounced

inspections by the FDA to determine our compliance with the QSR and other regulations and these inspections may include the manufacturing

facilities of our suppliers. Tenon has a robust Supplier Qualification and Audit process as part of our quality system that ensures contract

manufacturers, and their suppliers meet all requirements.

An

FDA pre-approval inspection is not required for The Catamaran System or The SImmetry+ System due to its lower device classification,

class II versus the higher class III. As is the case for most medical device firms, Tenon is subject to routine and “for cause”

FDA inspections. Routine inspectionsare mandated by law every 2 years for class II and class III device manufacturers and

make up the majority of FDA’s inspections. If a serious public health risk is identified during a routine inspection, the inspection

may convert to a “for cause” inspection. In the current environment, FDA has limited compliance resources and has not

been able to perform routine inspections in accordance with the 2-year mandate. Therefore, FDA uses a risk-based approach when deciding

which firms should be selected for a routine inspection. Using the Establishment Registration and Device Listing databases, FDA identifies

who manufactures and/or distributes which devices. The firms are then prioritized by risk, class III > class II > class I. Firms

that have recently introduced a new device to the market also are given higher priority, as well as those that have had significant prior

violations and complaints. At present, Tenon has not been selected for an FDA inspection. Tenon uses best practices to secure