TENAX THERAPEUTICS, INC.

Previous wording

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with the audited condensed consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025. All references in this Quarterly Report to “Tenax Therapeutics,” “we,” “our” and “us” means Tenax Therapeutics, Inc.

Current wording

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025. All references in this Quarterly Report to “Tenax Therapeutics,” “we,” “our” and “us” mean Tenax Therapeutics, Inc.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to them. In some cases, you can identify forward-looking statements by words such as “might,” “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. These statements reflect our current view with respect to future events and are subject to risks, uncertainties and assumptions related to various factors that could cause actual results and the timing of events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included in our most recent Annual Report on Form 10-K filed with the SEC. Furthermore, such forward-looking statements speak only as of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to them. In some cases, you can identify forward-looking statements by words such as “might,” “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. These statements reflect our current view with respect to future events and are subject to risks, uncertainties and assumptions related to various factors that could cause actual results and the timing of events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included in this Quarterly Report on Form 10-Q and in our most recent Annual Report on Form 10-K filed with the SEC. Furthermore, such forward-looking statements speak only as of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Previous wording

Tenax Therapeutics is a Phase 3, development-stage pharmaceutical company using clinical insights to develop novel cardiopulmonary therapies. We employ a clinician-driven drug development approach, led by key opinion leaders and 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. Currently, we do not have any significant imatinib development activities ongoing. Importantly, both levosimendan and imatinib have already been approved in other indications and prescribed around the world starting more than 25 years ago, 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.

Current wording

Tenax Therapeutics is a Phase 3, development-stage pharmaceutical company using clinical insights to develop novel cardiopulmonary therapies. We employ a clinician-driven drug development approach, led by key opinion leaders and pulmonary hypertension and heart failure experts and informed by their clinical insights to precisely target disease pathophysiology. We are currently conducting the LEVEL-2 clinical trial, to evaluate levosimendan as our prioritized product candidate, although its enrollment is currently paused as we implement a protocol amendment. We have deprioritized a Phase 3 clinical trial of imatinib, which, along with levosimendan, is a drug supported by promising evidence that may significantly improve the lives of patients with pulmonary hypertension. Currently, we do not have any significant imatinib development activities ongoing. Importantly, both levosimendan and imatinib have already been approved in other indications and prescribed around the world starting more than 25 years ago, 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.

Previous wording

Based on our current operating plan, we believe that our existing cash and cash equivalents as of June 30, 2026, along with cash received from warrant exercises subsequent to quarter end, will be sufficient to fund our planned operations through the second quarter of 2028.

Current wording

Based on our current operating plan, we believe that our existing cash and cash equivalents as of September 30, 2026 will be sufficient to fund our planned operations through fiscal 2028. Our current operating plan is subject to change pending the outcome of our Type C meeting with the FDA.

Previous wording

Financial Overview – Three and Six Months Ended June 30, 2026 (in thousands)

Current wording

Financial Overview – Three and Nine Months Ended September 30, 2026 (in thousands)

Previous wording

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 CROs 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 three and six months ended June 30, 2026 and 2025 are as follows (in thousands):

Current wording

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 CROs 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 three and nine months ended September 30, 2026 and 2025 are as follows (in thousands):

Previous wording

Clinical and preclinical development costs increased $6.5 million and $12.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in the prior year. Clinical and preclinical development costs for the three and six months ended June 30, 2026 consist primarily of expenses associated with our ongoing Phase 3 LEVEL trial and our second, larger, global, Phase 3 clinical trial, LEVEL-2, which began in December 2025, as compared to the three and six months ended June 30, 2025, which consisted primarily of costs associated with our Phase 3 LEVEL trial.

Current wording

Clinical and preclinical development costs increased $1.4 million and $13.7 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year. Clinical and preclinical development costs for the three and nine months ended September 30, 2026 consist primarily of expenses associated with our Phase 3 LEVEL trial and our second, larger, global, Phase 3 clinical trial, LEVEL-2, which began in December 2025, as compared to the three and nine months ended September 30, 2025, which consisted primarily of costs associated with our Phase 3 LEVEL trial.

Previous wording

Salary and benefits costs increased by $0.5 million and $1.0 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in the prior year primarily due to the hiring of additional development personnel resulting in higher salary and benefit costs.

Current wording

Salary and benefits costs increased by $0.4 million and $1.4 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year primarily due to the hiring of additional development personnel resulting in higher salary and benefit costs.

Previous wording

Selling, general and administrative expenses consist primarily of compensation for executive, commercial and administrative personnel, including non-cash stock-based compensation. Other selling, 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. Selling, general and administrative expenses and percentage changes for the three and six months ended June 30, 2026 and 2025 are as follows (in thousands):

Current wording

Selling, general and administrative expenses consist primarily of compensation for executive, commercial and administrative personnel, including non-cash stock-based compensation. Other selling, 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. Selling, general and administrative expenses and percentage changes for the three and nine months ended September 30, 2026 and 2025 are as follows (in thousands):

Previous wording

Salary and benefits increased $0.5 million and $0.8 million for the three and six months ended June 30, 2026, compared to the same period in 2025. The change was primarily attributable to increased personnel and their related compensation and benefits.

Current wording

Salary and benefits increased $0.5 million and $1.2 million for the three and nine months ended September 30, 2026, compared to the same period in 2025. The change was primarily attributable to increased personnel and their related compensation and benefits.

Previous wording

Non-cash stock-based compensation expense decreased $1.0 million and $1.9 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in 2025 primarily due to stock options granted in December 2024, for which the expense was amortized over a one-year vesting term, which was partially offset by new option grants made in 2026.

Current wording

Non-cash stock-based compensation expense decreased $2.1 million and $4.0 million for the three and nine months ended September 30, 2026, respectively, as compared to the same period in 2025 primarily due to stock options granted in December 2024, for which the expense was amortized over a one-year vesting term, which was partially offset by new option grants made in 2026.

Previous wording

Legal and professional fees consist of general legal costs, those related to our intellectual property, accounting fees, consulting fees and investor relations services, as well as fees paid to the members of our Board of Directors. Legal and professional fees increased $0.6 million and $0.7 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in the prior year.

Current wording

Legal and professional fees consist of general legal costs, intellectual property costs, accounting fees, consulting fees and investor relations services, as well as fees paid to the members of our Board of Directors. Legal and professional fees increased $0.6 million and $1.3 million for the three and nine months ended September 30, 2026, respectively, as compared to the same period in the prior year.

Previous wording

Other costs include expenses incurred for franchise and other taxes, travel, supplies, insurance, depreciation, and other miscellaneous charges. As we advance the development of levosimendan, our selling, general and administrative expenses have been increasing. We recently began to incur commercial costs, and with levosimendan continuing through Phase 3 development and progressing closer to commercial availability, we expect our selling, general and administrative expenses to increase in future periods.

Current wording

Other costs include expenses incurred for franchise and other taxes, travel, supplies, insurance, depreciation, and other miscellaneous charges. We recently began to incur commercial costs, and with levosimendan continuing through Phase 3 development and progressing closer to commercial availability, we expect our selling, general and administrative expenses to increase in future periods.

Previous wording

Interest income and other expense was flat for the three and six months ended June 30, 2026, as compared to the same periods in the prior year.

Current wording

Interest income and other expense were flat for the three and nine months ended September 30, 2026, as compared to the same periods in the prior year.

Previous wording

We have incurred losses since our inception and, as of June 30, 2026, we had an accumulated deficit of $401.0 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, potentially, imatinib for 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 product sales, royalty and other revenues to achieve profitability.

Current wording

We have incurred losses since our inception and, as of September 30, 2026, we had an accumulated deficit of $417.7 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, potentially, imatinib for 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 product sales, royalty and other revenues to achieve profitability.

Previous wording

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. We will need substantial additional capital in the future in order to finalize the development of levosimendan, commence its commercialization, potentially reinitiate the development of imatinib, and to continue with the development of other potential product candidates.

Current wording

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 these uncertainties, as well as 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. We will require substantial additional capital to finalize the development of levosimendan, commence its commercialization, potentially reinitiate the development of imatinib, and to continue with the development of other potential product candidates.

Previous wording

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 $121.7 million and $104.2 million and working capital of $113.6 million and $97.1 million as of June 30, 2026 and December 31, 2025, respectively. Warrant exercises resulted in approximately $13.4 million and $43.8 million of cash for the Company in the three and six months ended June 30, 2026, respectively. There is the potential to raise an additional $34 million if all outstanding warrants from the August 2024 Offering and February 2024 Offering as of June 30, 2026 are exercised. Our practice is to invest excess cash, where available, in short-term money market investment instruments and high quality corporate and government bonds.

Current wording

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 $117.0 million and $104.2 million and working capital of $108.7 million and $97.1 million as of September 30, 2026 and December 31, 2025, respectively. Warrant exercises resulted in approximately $8.2 million and $52.0 million of cash for the Company in the three and nine months ended September 30, 2026, respectively. Our practice is to invest excess cash, where available, in short-term money market investment instruments and high quality corporate and government bonds.

Previous wording

We completed randomization in the LEVEL trial at the end of the first quarter of 2026 and expect to report topline data in August 2026. We began our LEVEL-2 trial in December 2025 and are currently enrolling patients, with enrollment completion anticipated by the end of 2027. Our ability to continue to pursue development of our products beyond the second quarter of 2028, including completion of this second Phase 3 oral levosimendan trial (LEVEL-2), will depend on obtaining license income, income from warrants exercised by investors should they elect to do so, or other financial resources. There is no assurance that we will obtain any license agreement or other financing or that we will otherwise succeed in obtaining any necessary resources.

Current wording

We began our LEVEL-2 trial in December 2025 and temporarily paused enrollment in October 2026, with patient enrollment expected to resume upon each individual site implementing a recently communicated protocol amendment. Our ability to continue to pursue development of our products beyond fiscal 2028, including completion of this second Phase 3 oral levosimendan trial (LEVEL-2) and LEVEL-SET, an open label extension study, will depend on obtaining additional capital. Our current operating plan is subject to change pending the outcome of our Type C meeting with the FDA. There is no assurance that we will obtain additional capital or that we will otherwise succeed in obtaining any necessary resources.

Previous wording

Net cash used in operating activities was $23.5 million for the six months ended June 30, 2026, compared to $13.2 million for the six months ended June 30, 2025. The increase in cash used in operating activities was primarily due to increased expenses as we expanded our clinical trials and increased payroll costs. The increase in payroll costs was primarily driven by the addition of new employees and targeted salary adjustments, reflecting a necessary investment to support our expanded clinical trial activity during the six months ended June 30, 2026 as compared to the prior year period.

Current wording

Net cash used in operating activities was $35.9 million for the nine months ended September 30, 2026, compared to $22.4 million for the nine months ended September 30, 2025. The increase in cash used in operating activities was primarily due to increased expenses as we expanded our clinical trials and increased payroll costs. The increase in payroll costs was primarily driven by the addition of new employees and targeted salary adjustments, reflecting a necessary investment to support our expanded clinical trial activity during the nine months ended September 30, 2026 as compared to the prior year period.

Previous wording

There was no net cash provided or consumed by investing activities for the six months ended June 30, 2026 or the six months ended June 30, 2025.

Current wording

There was no net cash provided or consumed by investing activities for the nine months ended September 30, 2026 or the nine months ended September 30, 2025.

Previous wording

Net cash provided by financing activities was $43.9 million for the six months ended June 30, 2026, compared to $23.8 million for the six months ended June 30, 2025, an increase of $20.0 million. During the six months ended June 30, 2026, the Company received proceeds of $43.8 million from the exercise of warrants and pre-funded warrants. During the six months ended June 30, 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 $0.6 million from the exercise of warrants and pre-funded warrants.

Current wording

Net cash provided by financing activities was $52.1 million for the nine months ended September 30, 2026, compared to $26.9 million for the nine months ended September 30, 2025, an increase of $25.2 million. During the nine months ended September 30, 2026, the Company received proceeds of $52.0 million from the exercise of warrants and pre-funded warrants. During the nine months ended September 30, 2025, the Company received net proceeds of $23.2 million from the sale of common stock and pre-funded warrants in the March 2025 Offering and $3.7 million from the exercise of warrants and pre-funded warrants.

Previous wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates under different assumptions or conditions. For information regarding our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 2 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates under different assumptions or conditions. For information regarding our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting