	·	our inability to recruit and retain adequate numbers of effective sales and marketing personnel;
	·	the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products;
	·	the lack of complementary ~~products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and~~ - ~~unforeseen costs and expenses associated with creating and sustaining an independent sales and marketing organization.~~ ~~Failure to successfully commercialize our products or to do so on a cost-effective basis would likely result in failure of our business.~~ We may enter into distribution arrangements and marketing alliances for certain products and any failure to successfully identify and implement these arrangements on favorable terms, if at all, may impair our ability to commercialize our product candidates. ~~We do not anticipate having the resources in the foreseeable future to develop sales and marketing capabilities for all of the~~ products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
	·	unforeseen costs and expenses associated with creating and sustaining an independent sales and marketing organization.

Further, we ~~develop, if any. We~~ may pursue arrangements regarding the sales and marketing and distribution of one or more of our product candidates and our future revenues may depend, in part, on our ability to enter into and maintain arrangements with other companies having sales, marketing and distribution capabilities and the ability of such companies to successfully market and sell any such products. Any failure to enter into such arrangements and marketing alliances on favorable terms, if at all, could delay or impair our ability to commercialize our product candidates and could increase our costs of commercialization. Any use of distribution arrangements and marketing alliances to commercialize our product candidates will subject us to a number of risks, including the following:

	·	we may be required to relinquish important rights to our products or product candidates;
	·	we may not be able to control the amount and timing of resources that our distributors or collaborators may devote to the commercialization of our product candidates;
	·	our distributors or collaborators may experience financial difficulties;
	·	our distributors or collaborators may not devote sufficient time to the marketing and sales of our products; and
	·	business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement.

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If we ~~may be required~~are unable to ~~relinquish important rights~~implement our own sales and marketing capability or are unable to ~~our products~~contract with one or ~~product candidates;~~

more third parties for such services on acceptable terms or at all, we may not be able to ~~control~~successfully commercialize our products in certain markets. Any failure or delay in the ~~amount~~development of our internal or external sales, marketing and ~~timing of resources that our distributors or collaborators may devote to~~distribution capabilities would adversely impact the commercialization of our ~~product candidates;~~

products. If we are not successful in commercializing our ~~distributors~~products, either on our own or ~~collaborators may experience financial difficulties;~~

~~our distributors~~through collaborations with one or ~~collaborators may not devote sufficient time to the marketing and sales of our products; and~~

~~business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement.~~

~~We may need to enter into additional co-promotion arrangements with~~more third parties, ~~where~~ our ~~own sales force is neither well situated nor large enough to achieve maximum penetration in the market. We may not be successful in entering into any co-promotion arrangements,~~future product revenue will suffer and ~~the terms of any co-promotion arrangements~~ we ~~enter into may not be favorable to us.~~

would incur significant additional losses.

Risks ~~Relating~~Related to Intellectual Property

~~It is difficult~~

Our success will depend in part on obtaining and ~~costly to protect~~maintaining effective patent and other intellectual property protection for our product candidates and proprietary ~~rights, and we may not be able to ensure their protection.~~

technology.

Our commercial success will depend in part on obtaining and maintaining effective patent protection and ~~trade secret~~other intellectual property protection of our ~~future~~ product candidates ~~if any,~~ and the methods used to manufacture them, as well as successfully defending these patents against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell or importing our products, isif any, will be dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

We ~~license certain intellectual property from Orion~~are pursuing a multi-faceted IP strategy for levosimendan that ~~covers~~includes filing patent applications in the U.S. and Canada that, if granted, could protect the use of levosimendan for subcutaneous administration, levosimendan use in the treatment of PH-HFpEF patients, as well as levosimendan use in combination with various approved drugs to treat cardiovascular conditions. In January 2022, the USPTO granted Tenax Therapeutics a patent protecting the subcutaneous administration of various cyclodextrin based formulations of levosimendan. Our other patent applications are in various stages of review.

Our strategy to maximize market exclusivity for imatinib relies on two forms of exclusivity. First, we have been granted Orphan Drug Designation for the treatment of PAH by the FDA which would provide seven years of regulatory exclusivity in the U.S. if our ~~product candidate levosimendan. The principal United States patents that~~imatinib formulation is the first to receive FDA approval for PAH. In addition, we ~~license from Orion expired in September 2020. We rely on Orion~~expect to file ~~prosecute and maintain~~one or more applications for patent ~~applications and otherwise protect the intellectual property~~ to ~~which we have~~cover our imatinib development. If granted, a ~~license, and we have not had and do not have primary control over these activities~~patent would provide protection for certain of these patents or patent applications and other intellectual property rights. We cannot be certain that such activities by third parties have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. Our enforcement of certain of these licensed patents or defense of any claims asserting the invalidity of these patents would also be subject to the cooperation of the third parties.

20 years from its filing date.

The patent positions of pharmaceutical and biopharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in biopharmaceutical patents has emerged to date in the United States. The biopharmaceutical patent situation outside the United States is ~~even more uncertain.~~less certain still. Changes in either the patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in the patents we ~~own or to which we have a license from a third party.~~own. Further, if any of our patents are deemed invalid and unenforceable, it could impact our ability to commercialize or license our technology.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

~~others may be able to make compositions or formulations that are similar to our product candidates but that are not covered by the claims of our patents;~~

~~we might not have been the first to make the inventions covered by our issued patents or pending patent applications;~~

~~we might not have been the first to file patent applications for these inventions;~~

~~others may independently develop similar or alternative technologies or duplicate any of our technologies;~~

~~it is possible that our pending patent applications will not result in issued patents;~~

~~our issued patents may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties;~~

~~we may not develop additional proprietary technologies that are patentable; or~~

~~the patents of others may have an adverse effect on our business.~~

	·	others may be able to make compositions or formulations that are similar to our product candidates but that are not covered by the claims of our patents;
	·	we might not have been the first to make the inventions covered by our issued patents or pending patent applications;
	·	we might not have been the first to file patent applications for these inventions;
	·	others may independently develop similar or alternative technologies or duplicate any of our technologies;
	·	it is possible that our pending patent applications will not result in issued patents;
	·	our issued patents may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties;
	·	we may not develop additional proprietary technologies that are patentable; or
	·	the patents of others may have an adverse effect on our business.

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We also may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

We rely on confidentiality agreements that, if breached, may be difficult to enforce and could have a material adverse effect on our business and competitive position.

Our policy is to enter into agreements relating to the non-disclosure and non-use of confidential information with third parties, including our contractors, consultants, advisors and research collaborators, as well as agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them. However, these agreements can be difficult and costly to enforce. Moreover, to the extent that our contractors, consultants, advisors and research collaborators apply or independently develop intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to the intellectual property. If a dispute arises, a court may determine that the right belongs to a third party, and enforcement of our rights can be costly and unpredictable. In addition, we rely on trade secrets and proprietary know-how that we seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others. Despite the protective measures we employ, we still face the risk that:

~~these agreements may be breached;~~

~~these agreements may not provide adequate remedies for the applicable type of breach; or~~

~~our trade secrets or proprietary know-how will otherwise become known.~~

	·	these agreements may be breached;
	·	these agreements may not provide adequate remedies for the applicable type of breach; or
	·	our trade secrets or proprietary know-how will otherwise become known.

Any breach of our confidentiality agreements or our failure to effectively enforce such agreements would have a material adverse effect on our business and competitive position.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights and we may be unable to protect our rights to, or use, our technology.

If we or our partners choose to go to court to stop someone else from using the inventions claimed in our patents, that individual or company has the right to ask the court to rule that these patents are invalid and/or should not be enforced against that third party. These lawsuits are expensive and would consume time and other resources even if we were successful in stopping the infringement of these patents. In addition, there is a risk that the court will decide that these patents are not valid and that we do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity of these patents is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our rights to these patents.

Furthermore, a third party may claim that we or our manufacturing or commercialization partners are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and technical personnel. There is a risk that a court would decide that we or our commercialization partners are infringing the third party’s patents and would order us or our partners to stop the activities covered by the patents. In addition, there is a risk that a court will order us or our partners to pay the other party damages for having violated the other party’s patents. We have agreed to indemnify certain of our commercial partners against certain patent infringement claims brought by third parties. The biotechnology industry has produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our products or methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid, and we may not be able to do this. Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

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Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pending applications, or that we were the first to invent the technology. Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours. Any such patent application may have priority over our patent applications or patents, which could further require us to obtain rights to issued patents by others covering such technologies. If another party has filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the U.S. Patent and Trademark Office, or USPTO, to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our U.S. patent position with respect to such inventions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

~~Our collaborations with outside scientists and consultants may be subject to restriction and change.~~

We work with chemists, biologists and other scientists at academic and other institutions, and consultants who assist us in our research, development, regulatory and commercial efforts, including the members of our scientific advisory board. These scientists and consultants have provided, and we expect that they will continue to provide, valuable advice on our programs. These scientists and consultants are not our employees, may have other commitments that would limit their future availability to us and typically will not enter into non-compete agreements with us. If a conflict of interest arises between their work for us and their work for another entity, we may lose their services. In addition, we will be unable to prevent them from establishing competing businesses or developing competing products. For example, if a key scientist acting as a principal investigator in any of our clinical trials identifies a potential product or compound that is more scientifically interesting to his or her professional interests, his or her availability to remain involved in our clinical trials could be restricted or eliminated.

Under current law, we may not be able to enforce all employees’ covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.

We have entered into non-competition agreements with certain of our employees. These agreements prohibit our employees, if they cease working for us, from competing directly with us or working for our competitors for a limited period. Under current law, we may be unable to enforce these agreements against certain of our employees and it may be difficult for us to restrict our competitors from gaining the expertise our former employees gained while working for us. If we cannot enforce our employees’ non-compete agreements, we may be unable to prevent our competitors from benefiting from the expertise of our former employees.

We may infringe or be alleged to infringe intellectual property rights of third parties.

Our products or product candidates may infringe on, or be accused of infringing on, one or more claims of an issued patent or may fall within the scope of one or more claims in a published patent application that may be subsequently issued and to which we do not hold a license or other rights. Third parties may own or control these patents or patent applications in the United States and abroad. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

If we are found to infringe the patent rights of a third party, or in order to avoid potential claims, we or our collaborators may choose or be required to seek a license from a third party and be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable to enter into licenses on acceptable terms.

There have been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including interference proceedings declared by the USPTO and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to our products. Our products, after commercial launch, may become subject to Paragraph IV certification under the Hatch-Waxman Act, thus forcing us to initiate infringement proceedings against such third-party filers. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

~~Many~~

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Some of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. We try to ensure that our employees do not use the proprietary information or know-how of others in their work for us. We may, however, be subject to claims that we or these employees have inadvertently or otherwise used or disclosed intellectual property, trade secrets or other proprietary information of any such employee’s former employer. Litigation may be necessary to defend against these claims and, even if we are successful in defending ourselves, could result in substantial costs to us or be distracting to our management. If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

~~Product liability lawsuits against us could cause us to incur substantial liabilities, limit sales of our existing products and limit commercialization of any products that we may develop.~~

Our business exposes us to the risk of product liability claims that are inherent in the manufacturing, distribution, and sale of biotechnology products. We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and an even greater risk when we commercially sell any products. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

~~decreased demand for our products and any product candidates that we may develop;~~

~~injury to our reputation;~~

~~withdrawal of clinical trial participants;~~

~~costs to defend the related litigation;~~

~~substantial monetary awards to trial participants or patients;~~

~~loss of revenue; and~~

~~the inability to commercialize any products that we may develop.~~

We currently maintain limited product liability insurance coverage for our clinical trials in the total amount of $3 million. However, our profitability will be adversely affected by a successful product liability claim in excess of our insurance coverage. There can be no assurance that product liability insurance will be available in the future or be available on reasonable terms.

~~Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.~~

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, and damage to our reputation, and the further development of our product candidates could be delayed.

Our disclosure controls and procedures address cybersecurity and include elements intended to ensure that there is an analysis of potential disclosure obligations arising from security breaches. We also maintain compliance programs to address the potential applicability of restrictions against trading while in possession of material, nonpublic information generally and in connection with a cyber-security breach. However, a breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and could have a material adverse effect on our financial position and value of our stock.

Risks Related to Owning Our Common Stock

~~The issuance~~

Future sales and issuances of shares of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

Additional capital will be needed in the future to continue our planned operations, including conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating as a public company. As of December 31, 2021, we had $5.6 million of cash and cash equivalents. Our ability to continue as a going concern is dependent upon ~~conversion~~our ability to raise additional capital and to achieve sustainable revenues and profitable operations. To raise capital, we may, among other things, sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner, we determine from time to time.

Additionally, as of December 31, 2021, we had exercisable outstanding ~~Series B convertible preferred~~options and warrants (excluding out-of-the-money stock ~~issued in connection with our acquisition of PHPM~~options and warrants) that if exercised would result in ~~substantial dilution to~~ the ~~interests~~issuance of ~~our other stockholders.~~

~~As part of the consideration for our acquisition of 100% of the equity of PHPM on~~ ~~January 15, 2021~~, or the PHPM Acquisition, we issued 10,232 shares of our Series B convertible preferred stock to the stockholders of PHPM. Those 10,232 shares of Series B convertible preferred stock are convertible into up to an aggregate of 10,232,00020.2 million shares of our common stock. Further, we are authorized to grant equity awards, including stock ~~except that 1,212,492~~grants and stock options, to our employees, directors and consultants. As of December 31, 2021, there were 819,750 shares available for future issuance under the ~~10,232,000 issuable upon conversion~~2016 Stock Incentive Plan, as amended.

Future sales or issuances of the Series B convertible preferred stock will be held back as security for certain indemnification obligations of PHPM and the former stockholders of PHPM. Each share of Series B convertible stock will automatically convert into (i) 881.5 shares of our common stock, ~~following receipt of the approval of~~convertible securities or other equity securities, may cause investors to be materially diluted, and new investors could gain rights, preferences and privileges senior to our ~~stockholders for the conversion of the Series B convertible preferred stock, and (ii) 118.5 shares of our common stock on January 15,2023, subject to reduction for indemnification claims.~~

We are required to hold a meeting of our stockholders no later than July 31, 2021 for purposes of obtaining a stockholder vote on the conversion of the Series B convertible preferred stock. If stockholder approval is not obtained at such meeting, we must call a meeting every 90 days thereafter to seek stockholder approval for the conversion of the Series B convertible preferred stock until either stockholder approval for the conversion is obtained or the Series B convertible preferred stock is no longer outstanding.

~~The issuance of shares of our common stock upon conversion of our outstanding Series B convertible preferred stock would result in substantial dilution to the interests of other~~existing stockholders.

Our share price has been volatile, and may continue to be volatile, which may subject us to securities class action litigation in the future.

Our stock price has in the past been, and is likely to be in the future, volatile. The stock market in general, and the market for biopharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our existing stockholders may not be able to sell their stock at a favorable price. The market price for our common stock may be influenced by many factors, including:

~~actual or anticipated fluctuations in our financial condition and operating results;~~

~~status and/or results of our clinical trials;~~

~~status of ongoing litigation;~~

~~results of clinical trials of our competitors’ products;~~

~~regulatory actions with respect to our products or our competitors’ products;~~

~~actions and decisions by our collaborators or partners;~~

~~actual or anticipated changes in our growth rate relative to our competitors;~~

~~actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate;~~

~~competition from existing products or new products that may emerge;~~

~~issuance of new or updated research or reports by securities analysts;~~

~~fluctuations in the valuation of companies perceived by investors to be comparable to us;~~

~~share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;~~

~~market conditions for biopharmaceutical stocks in general;~~

~~status of our search and selection of future management and leadership; and~~

~~general economic and market conditions, including as a result of pandemics, epidemics, or outbreaks of an infectious disease, such as COVID-19.~~

	·	actual or anticipated fluctuations in our financial condition and operating results;
	·	status and/or results of our clinical trials;
	·	status of ongoing litigation;
	·	results of clinical trials of our competitors’ products;
	·	regulatory actions with respect to our products or our competitors’ products;
	·	actions and decisions by our collaborators or partners;
	·	actual or anticipated changes in our growth rate relative to our competitors;
	·	actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate;
	·	competition from existing products or new products that may emerge;
	·	issuance of new or updated research or reports by securities analysts;
	·	fluctuations in the valuation of companies perceived by investors to be comparable to us;
	·	share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
	·	market conditions for biopharmaceutical stocks in general;
	·	status of our search and selection of future management and leadership; and
	·	general economic and market conditions, including as a result of pandemics, epidemics, or outbreaks of an infectious disease, such as COVID-19, or other similar disrupting illnesses, and as a result of geopolitical uncertainties, including tensions in Ukraine.

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Some companies that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such lawsuits, should they be filed against us in the future, could result in substantial costs and a diversion of management’s attention and resources. This could have a material adverse effect on our business, results of operations and financial condition.

Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock.

Our common stock is currently listed on The Nasdaq Capital Market. In order to maintain this listing, we must satisfy minimum financial and other requirements. On ~~April 24, 2020,~~February 17, 2022, we received a notification letter from Nasdaq’s Listing Qualifications Department indicating that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), because the minimum bid price of our common stock on the Nasdaq Capital Market closed below $1.00 per share for 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we ~~would~~ have ~~had~~ 180 calendar days to regain compliance with the minimum bid ~~requirement; however, due to the market disruption caused by the ongoing COVID-19 pandemic, Nasdaq tolled the~~ requirement, ~~for meeting the minimum bid price until June 30, 2020. As such, we would have had 180 days from July 1, 2020,~~ or until ~~December 28, 2020,~~August 16, 2022, to achieve compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock ~~had to~~must meet or exceed $1.00 per share for at least ten consecutive business days before ~~December~~August 16, 2022.

In addition, on September 9, 2021, we notified Nasdaq that as a result of James Mitchum’s resignation from the Company’s Board of Directors and the Audit and Compliance Committee of the Board, the Company was no longer in compliance with Nasdaq Listing Rule 5605(c)(2)(A), which requires the company’s Audit Committee to be composed of at least three independent directors. The resignation of Mr. Mitchum left the Audit Committee with two independent directors. On September 10, 2021, the Company received a response from Nasdaq acknowledging the Company’s non-compliance with Nasdaq Listing Rule 5605(c)(2)(A). Such letter further provided that pursuant to Nasdaq Listing Rule 5605(c)(4)(B), the Company was entitled to a cure period to regain compliance with Nasdaq Listing Rule 5605(c)(2)(A) through the earlier of the Company’s next annual stockholders’ meeting or September 8, 2022. Effective January 28, ~~2020.~~

~~On June 2, 2020,~~2022, the Board appointed Robyn M. Hunter as a member of the Board and as a member and Chair of the Audit and Compliance Committee. As a result of her appointment, on February 17. 2022, we received a letter from Nasdaq notifying us that Nasdaq determined that ~~our stock price had traded above at least $1.00 for at least 10 consecutive business days since the April 24, 2020 notice, and therefore,~~ we had regained compliance with Nasdaq ~~listing rule 5550(a)~~Listing Rule 5605(c)(2)(A).

While we intend to engage in efforts to maintain compliance, and thus maintain our listing, there can be no assurance that we will continue to meet all applicable Nasdaq Capital Market requirements in the future. ~~In the event of future noncompliance, and if Nasdaq determines to delist~~If our common stock were removed from listing with The Nasdaq Capital Market, it may be subject to the ~~delisting could substantially decrease trading in~~so-called “penny stock” rules. The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely. For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. If our common ~~stock; adversely affect the market liquidity~~stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock ~~as a~~ on the secondary market.

If our common stock is delisted and there is no longer an active trading market for our shares, it may, among other things:

	·	cause stockholders difficulty in selling our shares without depressing the market price for the shares or selling our shares at all;
	·	substantially impair our ability to raise additional funds;
	·	result in a loss of institutional investor interest and fewer financing opportunities for us; and/or
	·	result in potential breaches of representations or covenants of agreements pursuant to which we made representations or covenants relating to our compliance with applicable listing requirements. Claims related to any such breaches, with or without merit, could result in costly litigation, significant liabilities and diversion of our management’s time and attention and could have a material adverse effect on our financial condition, business and results of operations.

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A delisting would also reduce the value of ~~the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; adversely affect~~our equity compensation plans, which could negatively impact our ability to obtain financing on acceptable terms, if at all; and may result in the potential loss of confidence by investors, suppliers, customers, and employees and fewer business development opportunities. Additionally, the market price of our common stock may decline and stockholders may lose some or all of their investment.

retain key employees.

We have a significant ~~securityholder,~~security holder, which could exert substantial influence over our business.

As of March ~~25, 2021,~~28, 2022, to our knowledge, Armistice Capital, LLC, or Armistice, held 2,019,995 shares of our common stock, warrants to purchase up to 4,773,269 shares of our common stock at an exercise price of $1.97 per share, warrants to purchase up to 2,072,538 shares of our common stock at an exercise price of $1.93 per share, warrants to purchase up to 2,360,313 shares of our common stock at an exercise price of $1.04 per share, warrants to purchase up to 7,783,616 shares of our common stock at an exercise price of $0.903 per share, and pre-funded warrants to purchase up to ~~5,260,005~~10,033,274 shares of our common stock at an exercise price of $0.0001 per share. In addition, two members of our Board of Directors are affiliates of Armistice. Under the terms of the warrants and pre-funded warrants issued to Armistice, Armistice is not permitted to exercise such warrants to the extent that such exercise would result in Armistice (and its affiliates) beneficially owning more than ~~19.99%~~9.99% (or 4.99% in the case of the warrants with the $1.04 and $1.93 exercise prices per share) of the number of shares of our common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such warrants. After giving effect to the beneficial ownership limitations currently in effect with respect to the warrants and pre-funded warrants held by Armistice to our knowledge, as of March ~~25, 2021,~~28, 2022, Armistice beneficially owned ~~19.99%~~9.99% of our outstanding common stock. If the warrants and pre-funded warrants held by Armistice could be exercised without the beneficial ownership limitations, then as of March ~~25, 2021,~~28, 2022, Armistice would have beneficially owned ~~60.09%~~53.5% of our common stock.

Additionally in connection with a sale of the Company, Armistice would be entitled to receive, with respect to each share of common stock issuable upon exercise of the warrants then held by it and without regard to the beneficial ownership limitations imposed on the conversion or exercise of such securities, the same amount and kind of securities, cash or property as it would have been entitled to receive if such securities had been converted into or exercised for shares of our common stock immediately prior to such sale of our company. Because Armistice would receive this sale consideration with respect to warrants not included in its reported beneficial ownership of our common stock, in the event of a sale of our Company, it would be entitled to receive a significantly larger portion of the total proceeds distributable to the holders of our securities than is represented by its reported beneficial ownership of our common stock.

Although there are contractual limitations on the beneficial ownership of Armistice, if Armistice were to exercise its warrants for common stock, it could be able to exert substantial influence over our business, including, for example, the ability to delay, defer or prevent a change of control, entrench our management and our Board of Directors or delay or prevent a merger, consolidation or other business ~~combination~~.

combination.

Anti-takeover provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult, which could discourage takeover attempts and lead to management entrenchment, and the market price of our common stock may be lower as a result.

Certain provisions in our certificate of incorporation and bylaws may make it difficult for a third party to acquire, or attempt to acquire, control of the Company, even if a change in control was considered favorable by the stockholders. For example, our Board of Directors has the authority to issue up to 10,000,000 shares of preferred stock. The Board can fix the price, rights, preferences, privileges and restrictions of the preferred stock without any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other stockholders.

Our organizational documents also contain other provisions that could have an anti-takeover effect, including provisions that:

	·	provide that vacancies on the Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum;
	·	eliminate cumulative voting in the election of directors;
	·	grant the Board of directors the authority to increase or decrease the size of the Board;
	·	prohibit stockholders from calling a special meeting of stockholders;
	·	require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; and
	·	authorize the Board of Directors, by a majority vote, to amend the bylaws.

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In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which limit the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in stockholder best interests. These provisions may also prevent changes in our management or limit the price that certain investors are willing to pay for our stock.

Our bylaws contain an exclusive forum provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, any North Carolina state court that has jurisdiction, or the Delaware Court of Chancery shall, to the fullest extent permitted by law, be the sole and exclusive forum for any internal corporate claims, including without limitation (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, and (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said court having personal jurisdiction over the indispensable parties named as defendants in such action. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or the Securities Act, or any other claim for which federal courts have exclusive ~~jurisdiction~~.

jurisdiction.

This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find the exclusive forum provision in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.

We ~~are likely~~have not paid cash dividends in the past and do not expect to ~~attempt~~pay dividends in the future. Any return on investment may be limited to ~~raise additional capital through issuances~~the value of ~~debt or equity securities, which~~our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the near future. The payment of dividends on our common stock will depend on our earnings and financial condition and other business and economic factors affecting us at such time as the Board of Directors may ~~cause~~consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on investment will only occur if our stock price appreciates.

Our ability to ~~decline, dilute~~use our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be subject to certain limitations.

We have U.S. federal net operating loss carryforwards, or NOLs, which expire in various years if not utilized. In addition, we have federal research and development credit carryforwards. The federal research and development credit carryforwards 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 ~~interests~~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 ~~existing stockholders, and/or limit~~NOLs are subject to these limitations. We have recorded deferred tax assets for our ~~financial flexibility.~~

~~Historically~~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 ~~financed~~in the past experienced additional ownership changes, or if we experience one or more ownership changes as a result of future transactions in our ~~operations through the issuance of equity securities and debt financings, and~~stock, then we expect to continue to do so for the foreseeable future. As of December 31, 2020, we had $6.7 million of cash and cash equivalents, including the fair value of our marketable securities on hand. Based on our current operating plans, we believe our existing cash and cash equivalents willmay be sufficient to fund our projected operating requirements through the third quarter of calendar year 2021. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution of their ownership interests. Debt financing, if available, may involve restrictive covenants that limit our financial flexibility or otherwise restrictfurther limited in our ability to ~~pursue~~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, ~~strategies. Additionally, if we issue shares of common stock, or securities convertible or exchangeable for common stock,~~financial condition and operating results in the ~~market price of our existing common stock may decline. There can be no assurance~~event that we ~~will be successful in obtaining any additional capital resources in a timely manner, on favorable terms, or at all.~~

attain profitability.

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ITEM 1B—U~~NRESOLVED~~UNRESOLVED STAFF COMMENTS

~~Not applicable.~~

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

ITEM 2—P~~ROPERTIES~~

PROPERTIES

We own no real property. We lease approximately 6,000 square feet of office space at our principal executive office located at ONE Copley Parkway, Suite 490, Morrisville, North Carolina 27560. The current rent is approximately ~~$10,100~~$10,400 per ~~month for~~month.

We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the ~~facility.~~

future on commercially reasonable terms.

ITEM 3—L~~EGAL~~LEGAL PROCEEDINGS

We are subject to litigation in the normal course of business, none of which management believes will have a material adverse effect on our consolidated financial statements.

ITEM 4—M~~INE~~ MINE SAFETY DISCLOSURES

Not ~~applicable~~

P~~ART~~applicable.

EXECUTIVE OFFICERS

The following table sets forth information concerning our executive officers as of March 28, 2022:

Name	Age	Position
Christopher T. Giordano	48	President and Chief Executive Officer
Eliot M. Lurier, CPA	63	Interim Chief Financial Officer
Stuart Rich, MD	72	Chief Medical Officer

Christopher T. Giordano joined the Company as our Chief Executive Officer and a member of our Board of Directors in July 2021 and became President and Chief Executive Officer in October 2021. From March 2018 to July 2021, he served as President of IQVIA Biotech LLC and IQVIA MedTech Inc., a provider of integrated clinical and commercial solutions to smaller biotech companies, where he led an executive team that executed a clinical trial portfolio that grew from 250 to 400 active projects during his three years of leadership. Prior to that role, from August 2008 to March 2018 Mr. Giordano held roles of increasing responsibility at Quintiles Transnational Holdings Inc., a provider of pharmaceutical outsourcing services (acquired by IMS Health Holdings, Inc. in October 2016 to become IQVIA Holdings Inc.), and was most recently Global Vice President of the cardiovascular, renal, and metabolic group. From January 2001 to July 2008, Mr. Giordano served in various sales and management roles at PPD, Inc., a global clinical research organization. Mr. Giordano holds a B.A. in English from University of San Diego and a M.A. in English from the University of North Carolina at Chapel Hill.

Eliot M. Lurier joined the Company as our Interim Chief Financial Officer in October 2021. Since July 2021, Mr. Lurier has served as a consultant to several companies through Danforth Advisors, LLC, an advisory firm that provides operational and strategic support services to life science companies. Prior to joining Danforth, from September 2014 to December 2020, Mr. Lurier was Chief Financial Officer of the Joslin Diabetes Center, Inc., a preeminent diabetes research, clinical care, and education organization. Prior to that, from April 2008 to September 2014, Mr. Lurier was Chief Financial Officer of Interleukin Genetics, Inc., during which time it was a public company. From April 2005 to April 2008, Mr. Lurier was Vice President, Finance and Administration and Chief Financial Officer of NUCRYST Pharmaceuticals, where he assisted in its initial public offering and where he was responsible for the company’s SEC reporting and the implementation of Sarbanes-Oxley requirements. From April 2004 to March 2005, Mr. Lurier served as Chief Financial Officer and Chief Operating Officer for Bridge Pharmaceuticals, Inc., where he established policies for managing business operations. From 1983 to 2004, Mr. Lurier held a number of senior-level financial positions, including Chief Financial Officer of Admetric Biochem, Inc., and Chief Financial Officer, Treasurer and Vice President of Finance of Ascent Pediatrics, Inc. From 1981 to 1983, Mr. Lurier was an auditor at Coopers and Lybrand in Boston, Massachusetts. Mr. Lurier holds a B.S. in Accounting from Syracuse University and is a Certified Public Accountant in Massachusetts.

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Stuart Rich has served as our Chief Medical Officer since January 2021 and a director since February 2021. Dr. Rich joined the Company from PHPM, where he was a co-founder and held the positions of Chief Executive Officer and Director from October 2018 until PHPM’s merger with the Company in January 2021. Since July 2015, Dr. Rich has served as Professor of Medicine at Northwestern University Feinberg School of Medicine and as Director of the Pulmonary Vascular Disease Program at the Bluhm Cardiovascular Institute, a U.K. based charity, and since January 2011, he has also served as Director of the Cardiovascular Medical and Research Foundation, a U.S. based charity. Prior to Northwestern University, Dr. Rich was Professor of Medicine at the Section of Cardiology of the University of Chicago Pritzker School of Medicine from September 2004 to July 2015. Dr. Rich also served as the Chief Medical Officer (part-time) of United Therapeutics from October 2003 until December 2004. He was Professor of Medicine at the Rush Heart Institute of the Rush University School of Medicine from July 1996 to September 2004 and Professor of Medicine and Chief of the Section of Cardiology at the University of Illinois College of Medicine in Chicago from July 1980 to July 1996. Dr. Rich received his B.S. in Biology at the University of Illinois and his M.D. at Loyola University Stritch School of Medicine, and he completed his residency in medicine at the Washington University of St. Louis and his fellowship in cardiology at the University of Chicago.

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PART II

I~~TEM~~

ITEM 5—M~~ARKET~~MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Number of Stockholders

Our common stock is listed on the Nasdaq Capital Market under the symbol ~~“TENX.”~~

As“TENX”.

Based upon information furnished by our transfer agent, as of March ~~25, 2021,~~28, 2022, there were approximately ~~1,337~~1,338 holders of record of our common stock. ~~In addition, we believe that a significant number of beneficial owners~~

Dividend Policy

We have never declared dividends on our equity securities, and currently do not plan to declare dividends on shares of our common stock ~~hold their shares~~ in ~~nominee or in “street name” accounts through brokers, and any such beneficial owners are not included in this number of holders of record.~~

~~Dividend Policy~~

~~Since our inception, we have not paid dividends on our common stock.~~the foreseeable future. We ~~intend~~expect to retain our future earnings, if any, ~~earnings~~ for use in the operation and expansion of our ~~business activities, so it is not expected that~~business. Subject to the foregoing, the payment of cash dividends in the future, if any, ~~dividends on our common stock~~ will be ~~declared~~at the discretion of our Board of Directors and ~~paid in the foreseeable future.~~

will depend upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant by our Board.

Repurchases of Common Stock

None.

Unregistered Sales of Equity Securities

During the year ended December 31, ~~2020,~~2021, we did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.

ITEM 6—S~~ELECTED FINANCIAL DATA~~

~~Not applicable.~~

RESERVED

ITEM 7—M~~ANAGEMENT’S~~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 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.

~~Results of operations- Comparison~~

Overview

Tenax Therapeutics was originally formed as a New Jersey corporation in 1967 under the name Rudmer, David & Associates, Inc., and subsequently changed its name to Synthetic Blood International, Inc. Effective June 30, 2008, we changed the domiciliary state of the ~~years ended December 31, 2020~~corporation to Delaware and ~~2019~~

~~Overview~~

~~Strategy~~

~~Our principal business objective is~~changed the Company name to ~~identify,~~Oxygen Biotherapeutics, Inc. On September 19, 2014, we changed the Company name to Tenax Therapeutics, Inc.

On November 13, 2013, we acquired a license granting Life Newco, our wholly-owned subsidiary, an exclusive, sublicensable right to develop and commercialize ~~novel therapeutic~~pharmaceutical products containing levosimendan, 2.5 mg/ml concentrate for ~~disease indications that represent significant areas of clinical need~~solution for infusion / 5ml vial in the United States and ~~commercial opportunity. The key elements of our business strategy are outlined below.~~

~~Efficiently conduct clinical development to establish clinical proof of concept with our current product candidates.~~ ~~Levosimendan and imatinib both represent novel therapeutic modalities for the treatment of pulmonary hypertension and other~~ ~~cardiovascular and pulmonary diseases of high unmet medical need.~~ We are conducting clinical development with the intent to establish proof of concept in several important disease areas where these therapeutics would be expected to have benefit. Our focus is on conducting well-designed studies to establish a robust foundation for subsequent development, partnership and expansion into complementary areas.

~~Efficiently explore new high potential therapeutic applications, leveraging third-party research collaborations and our results from related areas~~. Levosimendan has shown promise in multiple disease areas. We are committed to exploring potential clinical indications where our therapies may achieve best-in-class profile, and where we can address significant unmet medical needs. In order to achieve this goal, we have established collaborative research relationships with investigators from research and clinical institutions and our strategic partners. These collaborative relationships have enabled us to cost effectively explore where our product candidates may have therapeutic relevance, and how it may be utilized to advance treatment over current clinical care. Additionally, we believe we will be able to leverage clinical safety data and preclinical results from some programs to support accelerated clinical development efforts in other areas, saving substantial development time and resources compared to traditional drug development.

~~Continue to expand our intellectual property portfolio~~. Our intellectual property is important to our business and we take significant steps to protect its value. We have ongoing research and development efforts, both through internal activities and through collaborative research activities with others, which aim to develop new intellectual property and enable us to file patent applications that cover new applications of our existing technologies or product candidates.

~~Enter into licensing or product co-development arrangements.~~ In addition to our internal development efforts, an important part of our product development strategy is to work with collaborators and partners to accelerate product development, reduce our development costs, and broaden our commercialization capabilities. We believe this strategy will help us to develop a portfolio of high-quality product development opportunities, enhance our clinical development and commercialization capabilities, and increase our ability to generate value from our proprietary technologies.

Additionally, our Board of Directors continues to review strategic alternatives focused on maximizing stockholder value. This process may not result in any transaction and we do not intend to disclose additional details unless and until we determine further disclosure is appropriate or required.

~~Opportunities and Trends~~

On June 2, 2020, we announced preliminary, top-line data from our Phase 2 HELP Study. The primary efficacy analysis, PCWP during exercise did not demonstrate a statistically significant reduction from baseline. Levosimendan did demonstrate a statistically significant reduction in PCWP compared to baseline (p=<0.0017) and placebo (p=<0.0475) when the measurements at rest, with legs up and on exercise were combined. Levosimendan also demonstrated a statistically significant improvement in 6-minute walk distance as compared to placebo (p=0.0329). These findings from the HELP Study represent important discoveries related to the use of levosimendan in PH-HFpEF patients since this is the first study to evaluate levosimendan in PH-HFpEF patients and this is the first study ever conducted of any therapy in PH-HFpEF patients to show such positive improvements in hemodynamics and 6-minute walk distance.

Canada. On October 9, 2020 and January 25, 2022, we entered into ~~an amendment~~amendments to the ~~License with Orion~~license to include two ~~new~~ product ~~formulations~~dose forms containing levosimendan, in a capsule and solid ~~oral~~ dosage form, and a subcutaneously administered ~~dosage form~~product containing levosimendan, ~~to the scope of the License,~~ subject to specified limitations. We plan to study the utility of the levosimendan oral capsule dosage form in patients who have participated in the open-label extension of the HELP Study and who continue to receive weekly infusions of ~~intravenous~~ levosimendan. These patients are now eligible to participate in the amendment to the HELP Study that will transition them from the intravenous to an oral formulation. The investigators at the centers that participated in the HELP Study have been invited to participate and enroll their patients into this study. The results of this study will inform Tenax Therapeutics about the design of the Phase 3 that has been proposed.

In October 2020, we met with the FDA for an End-of-Phase 2 Meeting to discuss the Phase 2 clinical data and further development of levosimendan in PH-HFpEF patients. The FDA agreed that one or two Phase 3 clinical studies (depending on the size) with a primary endpoint of change in 6-minute walk distance over 12 weeks or a single Phase 3 trial with clinical worsening (e.g., death, hospitalization for heart failure, or decline in exercise capacity) over 24 weeks would be sufficient to demonstrate the effectiveness of levosimendan in PH-HFpEF. The FDA also agreed to a plan to replace weekly intravenous levosimendan dosing with daily oral levosimendan doses in a Phase 3 clinical study. The FDA expressed concern about a safety database as potentially necessary and indicated that the need for a further safety database could be dependent on the final design of the Phase 3 study. This will be addressed when the final Phase 3 protocol is submitted which will better characterize the trial design and primary endpoints.

On January 15, 2021, ~~through our wholly owned subsidiary, Life Newco II,~~ we acquired 100% of the equity of ~~PHPM.~~ ~~In accordance with the terms of the merger agreement between Life Newco II and PHPM~~PHPrecisionMed Inc., ~~Life Newco II merged with and into~~a Delaware corporation, or PHPM, with PHPM surviving as our ~~wholly owned~~wholly-owned subsidiary. As a result of the merger, we plan to develop and commercialize pharmaceutical products containing imatinib for the treatment of pulmonary arterial ~~hypertension.~~

~~On May 30, 2019, PHPM met~~hypertension, or PAH.

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Strategy

Our principal business objective is to identify, develop, and commercialize late-stage pharmaceutical therapeutic products for serious cardiovascular and pulmonary diseases with ~~the FDA to discuss a proposal for a Phase 3 trial~~high unmet medical need. The key elements of imatinib for PAH. At that meeting PHPM received agreement for a single Phase 3 trial using change in 6-minute walk distance as the primary endpoint (p<0.05). PHPM also received agreement for submission under the 505(b)(2) regulatory pathway, and thereafter received orphan designation. In August of 2019, PHPM was given preliminary advice on its plans to submit an application for Breakthrough Therapy Designation. In July 2020, PHPM received agreement from the FDA for the development of a modified release formulation that would require only a small comparative PK/bioavailability study in 12 volunteers receiving a single dose of the modified release formulation to be compared to a single dose of the existing immediate release formulation. A Phase 3 study is planned with the modified release formulation of imatinib.

~~The continued spread of COVID-19 globally could adversely affect~~ our clinical trial operations in the United States and elsewhere, including our ability to recruit and retain patients, principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography. Further, some patients may be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services, or if the patients become infected with COVID-19 themselves, which would delay our ability to initiate and/or complete planned clinical and preclinical studies in the future.

business strategy are outlined below.

	·	Efficiently conduct clinical development to establish clinical proof of principle in new indications, refine formulation, and commence Phase 3 testing of our current product candidates.

		Levosimendan and imatinib have been approved and prescribed globally for more than 20 years, but we believe their mechanisms of action have not been fully exploited, despite promising evidence they may significantly improve the lives of patients with pulmonary hypertension. We are conducting clinical development with the intent to establish proof of beneficial activity in cardiopulmonary diseases in which these therapeutics would be expected to have benefit for patients with diseases for which either no pharmaceutical therapies are approved at all, or in the case of PAH, where numerous expensive therapies generally offer a modest reduction of symptoms. Our focus is primarily on designing and executing formulation improvements, protecting these innovations with patents and other forms of exclusivity, and employing innovative clinical trial science to establish a robust foundation for subsequent development, product approval, and commercialization.

	·	Efficiently explore new high-potential therapeutic applications, in particular where expedited regulatory pathways are available, leveraging third-party research collaborations and our results from related areas.

		Levosimendan has shown promise in multiple disease areas in its two decades of use following its approval. In order to achieve our objectives of developing these medicines for new groups of patients, we have established collaborative research relationships with investigators from leading research and clinical institutions, and our strategic partners. Additionally, we believe we will be able to leverage clinical safety data and preclinical results from some programs to support accelerated clinical development efforts in other areas, saving substantial development time and resources compared to traditional drug development.

	·	Continue to expand our intellectual property portfolio.

		Our intellectual property, and the confidentiality of all our company information, is important to our business and we take significant steps to protect its value. We have ongoing research and development efforts, both through internal activities and through collaborative research activities with others, which aim to develop new intellectual property and enable us to file patent applications that cover new applications of our existing technologies, alone or in combination with existing therapies, as well as other product candidates.

	·	Enter into licensing or product co-development arrangements.

		In addition to our internal development efforts, an important part of our product development strategy is to work with collaborators and partners to accelerate product development, maintain our low development and business operations costs, and broaden our commercialization capabilities globally.

As we focus on the development of our existing product candidates, we also continue to position ourselves to execute upon licensing and other partnering opportunities. To do so, we will need to continue to maintain our strategic direction, manage and deploy our available cash efficiently and strengthen our collaborative research development and partner relationships.

~~During 2021,~~

Historically, we have financed our operations principally through equity and debt offerings, including private placements and loans from our stockholders. Based on our current operating plan, there is substantial doubt about our ability to continue as going concern. Our ability to continue as a going concern depends on our ability to raise additional capital, through the sale of equity or debt securities and through collaboration and licensing agreements, to support our future operations. If we are ~~focused on~~unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs.

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COVID-19

The continued spread of COVID-19, including variant strains, globally, may affect our operations, including the ~~following initiatives:~~

~~Working~~potential interruption of our clinical trial activities and our supply chain. The continued spread of COVID-19 may result in a period of continued or recurring business disruption in these and other areas impacting our business, including the establishment of contractual relationships with ~~collaborators and partners to accelerate product development, reduce~~investigators enrolling subjects in our ~~development costs, and broaden our developmental capabilities; and~~

~~Identifying strategic alternatives, including, but not limited~~clinical trials, the continuity of care provided by these institutions to the patients we seek to enroll and their ability to support industry-funded research as a means of caring for their patients, supply of these sites with study materials, and the enrolment of subjects and their adherence with study requirements. In addition, there could be a potential ~~acquisition~~effect of ~~additional products~~COVID-19 to the business at FDA or other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates.

Financial Overview

General and Administrative Expenses

General and administrative expenses were $7.6 million for the year ended December 31, 2021, compared to $5.3 million for the same period in 2020. General and administrative expenses consist primarily of compensation for executive, finance, legal and administrative personnel, including 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 ~~services,~~ and consulting ~~fees.~~services. General and administrative expenses and percentage changes for the years ended December 31, ~~2020~~2021 and ~~2019,~~2020, respectively, are as follows:

For the year ended December 31,

Increase/
(Decrease)

% Increase/
(Decrease)

2020

2019

Personnel costs
$3,478,186
$2,782,798
$695,388
  25%
Legal and professional fees
  1,043,139
  1,545,890
  (502,751)
  (33)%
Other costs
  630,959
  602,611
  28,348
  5%
Facilities
  154,922
  152,812
  2,110
  1%

~~Personnel costs:~~

	For the year ended December 31,				Increase/ (Decrease)		% Increase/ (Decrease)
	2021		2020
Personnel costs	$	4,952,334	$	3,478,186	$	1,474,148		42	%
Legal and professional fees		1,770,483		1,043,139		727,344		70	%
Other costs		698,473		630,959		67,514		11	%
Facilities		159,557		154,922		4,635		3	%

Personnel costs increased approximately ~~$695,000~~$1.5 million for the year ended December 31, 2020 compared to the prior year. This increase was due primarily to an increase of approximately $86,000 for the recognized expense for vested employee stock options, an increase of approximately $548,000 in bonuses paid and an overall increase of approximately $51,000 in salaries paid as2021, compared to the same period in the prior year.

The increase was primarily due to approximately $1.2 million in severance costs associated with the departure from the Company of the former CEO and other employees, as well as approximately $266,000 in noncash compensation expense resulting from the modification of the former CEO’s outstanding stock options and the grant of an additional stock option on his separation date.

Legal and professional ~~fees:~~

~~Legal and professional~~fees increased approximately $727,000 for the year ended December 31, 2021, compared to the same period in the prior year. Professional fees consist of the costs incurred for ~~legal fees,~~ 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 ~~decreased~~increased approximately ~~$503,000~~$566,000 for the year ended December 31, ~~2020~~2021, as compared to the same period in the prior year. ~~This decrease~~The increase was ~~due~~ primarily to reimbursement of direct costs and legal fees incurred for arbitration proceedings related to our license agreement for levosimendan, and a decrease in costs incurred for investor relations services in the current period.

~~Legal fees decreased approximately $369,000 in the current year. This decrease was~~ due ~~primarily~~ to the reimbursement of approximately $358,000 in ~~costs incurred for arbitration in the current period, as well as a decrease of approximately $170,000 in~~legal fees ~~incurred for arbitration proceedings related to our license agreement for levosimendan and a decrease of approximately $34,000 in costs~~ associated with ~~our intellectual property portfolio, partially offset by an increase of approximately $192,000 in legal fees, primarily due to our acquisition of PHPM as compared to the prior year.~~

Investor relations costs decreased approximately $111,000 in the current period. This decrease was primarily due to fees paid to a third-party investor relations firm for direct outreach and communicationsarbitration proceedings in the prior year, as well as an increase in fees paid associated with the PHPM acquisition and costs associated with the CEO transition that were not incurred during the same period in the ~~current~~prior year.

Professional fees increased approximately $161,000 for the year ~~as well as~~ended December 31, 2021, compared to the same period in the prior year. The increase was primarily attributable to increased accounting, director, consulting and capital market fees offset by a decrease in ~~fees paid~~investor relations costs.

Other costs increased approximately $68,000 for ~~conferences and presentations in~~ the ~~current~~ year asended December 31, 2021, compared to the same period in the prior year.

~~Other costs:~~

Other costs include ~~costs~~expenses incurred for franchise and other taxes, travel, supplies, insurance, depreciation and other miscellaneous charges. ~~Other costs increased approximately $28,000 for the year~~ ~~ended December 31, 2020~~ ~~compared to the prior year. This~~The increase was ~~due~~ primarily attributable to ~~an increase of approximately $171,000~~increased costs for ~~the cost of annual~~ insurance ~~premiums, partially~~ offset by ~~a reduction of approximately $65,000~~decreases in ~~travel~~franchise and other taxes.

Facilities costs ~~incurred and approximately $67,000 in taxes paid in the current year as compared to the same period in the prior year.~~

~~Facilities:~~

~~Facilities expenses~~ include costs paid for rent and utilities at our corporate headquarters in North Carolina. Facilities costs remained relatively ~~consistent~~unchanged for the years ended December 31, ~~2020~~2021 and ~~2019.~~

2020.

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Research and Development Expenses

Research and development expenses were $25.1 million for the year ended December 31, 2021 as compared to $4.6 million for the same period in the prior year. Research and development expenses include, but are not limited to, (i) expenses incurred under agreements with CROs and investigative sites, which conduct our clinical trials and a substantial portion of our pre-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, ~~2020~~2021 and ~~2019,~~2020, respectively, are as follows:

For the year ended December 31,

Increase/
(Decrease)

% Increase/
(Decrease)

2020

2019

Clinical and preclinical development
$4,281,884
$3,217,596
$1,064,288
  33%
Personnel costs
  250,228
  215,907
  34,321
  16%
Other costs
  2,025
  21,050
  (19,025)
  (90)%
Consulting
  26,587
  16,600
  9,987
  60%

~~Clinical and preclinical development:~~

	For the year ended December 31,				Increase/ (Decrease)			% Increase/ (Decrease)
	2021		2020
Clinical and preclinical development	$	2,653,571	$	4,281,884	$	(1,628,313	)		(38	)%
Personnel costs		689,183		250,228		438,955			175	%
Other costs		21,804,640		28,612		21,776,028			76108	%

Clinical and preclinical development costs ~~include, primarily,~~decreased approximately $1.6 million for the year ended December 31, 2021 as compared to the same period in the prior year. Clinical and preclinical development costs consist of expenses associated with our Phase 2 HELP Study for levosimendan, which was ~~initiated~~completed during fiscal year ~~2018~~2020, costs associated with our intravenous to oral levosimendan transition study and development costs associated with the ~~trial was completed~~formulation for imatinib. The decrease is primarily attributable to a decrease of approximately $2.0 million in ~~the current year. The increase~~expenditures for CRO costs, a reduction of approximately $1.1 million in enrolled patient and direct site costs and a decrease of approximately $86,000 in fees paid for clinical research associates and ~~preclinical development~~other direct costs ~~for~~to manage the ~~year ended December 31, 2020~~Phase 2 HELP Study in the current period as compared to the same period in the prior ~~year was primarily due to~~year. These cost reductions were partially offset by an increase of approximately $1.5 million in expenditures for CRO costs, partially offset by a reduction of approximately $210,000 in costs for clinical research associates to manage the Phase 2 HELP Study, as well as a decrease of approximately $216,000 in the direct costs associated with ~~clinical sites, clinical drug delivery and enrolled patient costs.~~

~~Personnel costs:~~

formulation development of imatinib in the current period that were not incurred in the same period in the prior year.

Personnel costs increased approximately ~~$34,000~~$439,000 for the year ended December 31, ~~2020 primarily due to an increase in salaries and bonuses paid in the current year~~2021, as compared to the same period in the prior ~~year.~~

~~Other costs:~~

~~Other costs decreased approximately $19,000 for~~year, primarily attributable to the ~~year~~ ~~ended December 31, 2020 due primarily to reductions in costs incurred for travel~~addition of our Chief Medical Officer in the current ~~year as compared to the prior year.~~

~~Consulting fees:~~

~~Consulting fees~~period.

Other costs increased approximately ~~$10,000~~$21.8 million for the year ended December 31, ~~2020 due primarily to fees paid to an external consultant to assist in review and analysis of our Phase 2 clinical data in the current year~~2021, as compared to the same period in the prior year,.

primarily attributable to the recognition of in-process research and development acquired as part of the merger with PHPM in the current period. There were no such expenses incurred in the same period in the prior year.

Other ~~income, net~~

Income and Expense

Other income and expense include non-operating income and expense items not otherwise recorded in our consolidated statement of comprehensive ~~loss~~.loss. These items include, but are not limited to, changes in the fair value of financial assets and derivative liabilities, interest income earned and fixed asset disposals. Other income ~~for the~~ ~~years ended December 31, 2020~~ ~~and 2019, respectively, is as follows:~~

For the year ended December 31,

(Increase)/
Decrease

2020

2019

Other income, net
$(18,166)
$(160,901)
$142,735

~~Other income decreased~~increased approximately ~~$143,000~~$237,000 for the year ended December 31, ~~2020~~2021, compared to the same period in the prior year. This ~~decrease~~increase is due primarily to ~~a decrease~~the forgiveness of our PPP Loan in the ~~interest earned on our investment in marketable securities.~~

~~During the year ended December 31, 2020, we recorded interest income~~current period.

Liquidity, Capital Resources and Plan of approximately $24,000 from our investments in marketable securities. This income is derived from approximately $31,000 in bond interest paid and approximately $7,000 in fair-value adjustments for the year, which compares to approximately $144,000 in bond interest paid, net of charges for amortization of premiums paid and fair-value adjustments during the prior year.

~~Liquidity, capital resources and plan of operation~~

Operation

We have incurred losses since our inception and, as of December 31, ~~2020,~~2021, we had an accumulated deficit of approximately ~~$246~~$278 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 imatinib for pulmonary hypertension 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.

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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; however, we will need substantial additional capital in the future in order to complete the development and potential commercialization of levosimendan and 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 ~~$6,795,506~~$5,689,000 and ~~$6,180,829~~$6,795,506 and working capital of ~~$4,676,543~~$4,125,022 and ~~$3,648,434~~$4,676,543 as of December 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Our practice is to invest excess cash, where available, in short-term money market investment instruments and high quality corporate and government bonds.

Clinical and Preclinical Product Development

We are currently developing a new formulation for imatinib and conducting a clinical trial to transition from an intravenous to oral formulation of levosimendan in North America for the treatment of pulmonary hypertension. Our ability to continue to pursue development of our products beyond the ~~third~~second quarter of calendar year ~~2021~~2022 will depend on obtaining license income 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.

The continued spread of COVID-19, including variant strains, globally could adversely affect our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography. Further, some patients may be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services, or if the patients become infected with COVID-19 themselves, which would delay our ability to complete our clinical trials or release clinical trial results. See “Item 1A – Risk Factors” above for additional discussion.

Financings

On July 6, 2021, we sold 4,773,269 units in a private placement at a purchase price of $2.095 per unit for net proceeds of approximately $10 million. Each unit consisted of one unregistered pre-funded warrant to purchase one share of our common stock and one unregistered warrant to purchase one share of common stock.

On July 6, 2020, ~~entered into a definitive agreement with a single healthcare-focused institutional investor, or the Investor, for the issuance and sale of~~we sold 2,523,611 shares of our common stock at a purchase price of $1.0278 per share and pre-funded warrants to purchase up to 652,313 shares of common stock, at a purchase price of $1.0277 per pre-funded warrant, ~~(which represents the per share offering price for the common stock less $0.0001, the exercise price of each pre-funded warrant),~~ in a registered direct ~~offering priced at-the-market under Nasdaq rules.~~offering. Additionally, in a concurrent private placement, ~~we agreed to issue to the Investor unregistered~~sold pre-funded warrants to purchase up to 4,607,692 shares of common stock, at the same purchase price as the registered pre-funded warrants, as well as unregistered warrants to purchase up to an aggregate of 7,783,616 shares of common stock. The unregistered warrants have an exercise price of $0.903 per share, were immediately exercisable upon issuance, and expire five and one-half years from the date of issuance. The aggregate gross proceeds to us of both offerings were approximately $8.0 million. As part of the offerings and subject to Nasdaq rules, the Investor will have the right to designate two directors to our Board of Directors. The offerings closed on July 8, 2020.

~~We agreed to pay H.C. Wainwright & Co., LLC, or the Placement Agent, a cash fee equal to 7.5% of the gross proceeds of the July 2020 offering, totaling approximately $600,000.~~ We also ~~agreed~~issued to ~~pay~~ the ~~Placement Agent $75,000 for non-accountable expenses, a management fee equal to 1.0% of the gross proceeds and up to $12,900 for clearing fees. In addition, we issued designees of the Placement Agent~~placement agent five-year warrants to purchase 583,771 shares of common stock (representing 7.5% of the aggregate number of shares of common stock (or common stock equivalents) sold in the July 2020 offering). The Placement Agent warrants have substantially the same terms as the unregistered warrants, except that the Placement Agent warrants havewith an exercise price ~~equal to $1.2848, or 125%~~ of ~~the offering price per share of common stock and will be exercisable for five years from the effective date of the July 2020 offering.~~

$1.2848. The shares of common stock and pre-funded warrants offered in the registered direct offering (including the shares of common stock underlying the pre-funded warrants) were offered and sold pursuant to a “shelf” registration statement on Form S-3 which was declared effective by the SEC on May 23, 2018. The unregistered pre-funded warrants and unregistered warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and, along with the shares of common stock underlying the pre-funded warrants and the warrants, have not been registered under the Securities Act, or applicable state securities laws. Theaggregate net proceeds ~~from the July 2020 offering,~~for offerings were approximately $6.5 million after deducting placement agent ~~fees~~discounts and ~~other direct~~commissions and offering ~~expenses, were approximately $6.5 million.~~expenses. We are using the net proceeds to further our clinical trials of levosimendan, for research and development and general corporate purposes, including working capital and potential acquisitions.

On March 11, 2020, we ~~entered into a definitive agreement with the Investor for the issuance and sale of~~sold 750,000 shares of our common stock at a purchase price of $1.1651 per share and pre-funded warrants to purchase up to 1,610,313 shares of common stock, at a purchase price of $1.1650 per pre-funded warrant, ~~(which represents the per share offering price for the common stock less $0.0001, the exercise price of each pre-funded warrant), for gross proceeds of approximately $2.75 million,~~ in a registered direct ~~offering priced at-the-market under Nasdaq rules.~~offering. Additionally, in a concurrent private placement, we ~~also agreed to issue to the Investor~~sold unregistered warrants to purchase up to 2,360,313 shares of common stock. The unregistered warrants have an exercise price of $1.04 per share and exercise period commencing immediately upon the issuance date and a term of five and one-half years. ~~The offering closed on March 13, 2020.~~

~~We agreed to pay the Placement Agent a cash fee equal to 7.5% of the gross proceeds of the March 2020 offering, totaling approximately $206,250.~~ We also ~~agreed~~issued to ~~pay~~ the ~~Placement Agent $75,000 for non-accountable expenses, a management fee equal to 1.0% of the gross proceeds and up to $12,900 for clearing fees. In addition, we issued designees of the Placement Agent~~placement agent five-year warrants to purchase 177,023 shares of common stock (representing 7.5% of the aggregate number of shares of common stock (or common stock equivalents) sold in the March 2020 offering). The Placement Agent warrants have substantially the same terms as the unregistered warrants, except that the Placement Agent warrants havewith an exercise price ~~equal to $1.4564, or 125%~~ of ~~the offering price per share of common stock and will be exercisable for five years from the effective date of the March 2020 offering.~~

The shares of common stock and pre-funded warrants offered in the registered direct offering (including the shares of common stock underlying the pre-funded warrants) were offered and sold pursuant to a “shelf” registration statement on Form S-3, which was declared effective by the SEC on May 23, 2018. The unregistered warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws.$1.4564. The net proceeds from the March 2020 offering, after deducting placement agent fees and other direct offering expenses, were approximately $2.125 million. ~~We intend to use the net proceeds to further our clinical trials of levosimendan, for research and development and general corporate purposes, including working capital and potential acquisitions.~~

We have an effective shelf registration statement on Form S-3 on file with the SEC that allows us to periodically offer and sell, individually or in any combination, shares of common stock, shares of preferred stock, debt securities, warrants to purchase shares of common stock or preferred stock or debt securities, and units consisting of any combination of the foregoing types of securities, up to a total of $75.0 million (of which approximately $69.0 million remains available), but not to exceed one-third of our public float in any 12-month period. As of March 25, 2021, our public float (which is the aggregate market value of our outstanding common stock held by non-affiliates) is approximately $23.9 million. Our ability to issue securities under the shelf registration statement is also subject to market conditions.

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Paycheck Protection Program Loan

On April 30, 2020, we received ~~the PPP Loan~~a loan in the principal amount of ~~$244,657. The~~$244,657 pursuant to the Paycheck Protection Program (the “PPP Loan”) under the Coronavirus Aid, Relief, and Economic Security Act, as administered by the U.S. Small Business Administration (“SBA”).

On May 28, 2021, we received notice from the SBA that the SBA had remitted $244,657 in principal and $2,576 in interest to the lender in full forgiveness of our PPP Loan ~~has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred for sixteen months. Beginning September 30, 2021, we are required~~pursuant to ~~make monthly payments of principal and interest of approximately $31,100~~our application to the ~~Lender. We did not provide any collateral or guarantees~~SBA for ~~the PPP Loan, nor did we pay any facility charge to obtain~~forgiveness of the PPP Loan. The ~~note governing~~total amount was recorded as other income in our consolidated statement of comprehensive loss for the PPP Loan provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations, and material adverse effects. We may prepay the principal of the PPP Loan at any time, subject to certain notice requirements.

Under the terms of the CARES Act, Paycheck Protection Program loan recipients can apply for and be granted forgiveness for all or a portion of a loan granted under the program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. We are using the proceeds from the PPP Loan to fund payroll costs in accordance with the relevant terms and conditions of the CARES Act. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained.

~~As of~~year ended December 31, ~~2020, the current and long-term portions of the PPP Loan were $120,491 and $124,166, respectively.~~

2021.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated:

For the year ended December 31,

2020

2019

Net cash used in operating activities
$(9,272,856)
$(7,556,177)
Net cash provided by (used in) investing activities
  20,109
  (1,651)
Net cash provided by financing activities
  10,596,995
  96,500

	For the year ended December 31,
	2021			2020
Net cash used in operating activities	$	(10,856,203	)	$	(9,272,856	)
Net cash provided by investing activities		452,609			20,109
Net cash provided by financing activities		9,737,275			10,596,995

Net cash used in operating activities. Net cash used in operating activities was approximately $10.9 million for the year ended December 31, 2021 compared to approximately $9.3 million for the year ended December 31, ~~2020 compared to net cash used in operating activities of approximately $7.6 million for the year ended December 31, 2019.~~2020. The increase in cash used for operating activities was primarily due ~~primarily~~ to an increase in our annual insurance premiums, employee severance and accrued ~~costs related to the Phase 2 clinical trial for levosimendan~~bonuses paid in the current ~~period.~~

period as compared to the prior year.

Net cash provided by ~~(used in)~~ investing activities. Net cash provided by investing activities was approximately ~~$20,000~~$453,000 for the year ended December 31, ~~2020~~2021, compared to approximately ~~$2,000 used~~$20,000 in the year ended December 31, ~~2019.~~2020. The increase in cash provided by investing activities was primarily due to ~~a decrease in~~ the ~~purchase~~sale of marketable securities in the current period.

Net cash provided by financing activities.

Net cash provided by financing activities was approximately ~~$10.6~~$9.7 million, for the year ended December 31, ~~2020 compared~~2021, primarily attributable to ~~approximately $97,000 for~~net proceeds from the ~~year ended December 31, 2019. The increase~~sale of stock units in our July 2021 private placement of $9.2 million and the exercise of stock warrants of $0.5 million.

Net cash provided by financing activities ~~was due~~in the prior year totaled $10.6 million, primarily attributable to aggregate net proceeds ~~of approximately $6.5 million~~ from the ~~July 2020 offering, net proceeds of approximately $2.1 million from the March 2020 offering, the issuance of 877,203 shares~~sale of common stock, ~~upon~~warrants and pre-funded warrants in our July 2020 registered direct offering and concurrent private placement of $6.5 million, aggregate net proceeds from the sale of common stock and pre-funded warrants in our March 2020 registered direct offering and concurrent private placement of $2.1 million, $0.2 million in proceeds from the PPP Loan under the Cares Act and $1.7 million of proceeds from the exercise of ~~approximately $1.7 million of outstanding warrants and the receipt of approximately $245,000 under the PPP Loan in the current period.~~

stock warrants.

Operating Capital and Capital Expenditure Requirements

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

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	·	the initiation, 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 the global coronavirus ~~pandemic~~; pandemic;
-
	·	delays that may be caused by changing regulatory requirements;
-
	·	the number of product candidates that 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, ~~2020,~~2021, we believe we have sufficient capital on hand to continue to fund operations through the ~~third~~second quarter of calendar year ~~2021.~~

2022.

We will need substantial additional capital beyond the ~~third~~second quarter of calendar year ~~2021~~2022 and in the future in order to complete the regulatory approval and commercialization of imatinib and levosimendan ~~and~~as well as to fund the development and commercialization of other future product candidates. Until we can generate a sufficient amount of product revenue, if ever, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Such funding, if needed, may not be available on favorable terms, if at all. In the event we are unable to obtain additional capital, we may delay or reduce the scope of our current research and development programs and other expenses. As a result of our historical operating losses and expected future negative cash flows from operations, we have concluded that there is substantial doubt about our ability to continue as a going concern. Similarly, the report of our independent registered public accounting firm on our December 31, ~~2020~~2021 consolidated financial statements ~~includes~~include an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock and make it more difficult to obtain financing.

If adequate funds are not available, we may also be required to eliminate one or more of our clinical trials, delaying approval of levosimendan or our commercialization efforts. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or our product candidates or grant licenses on terms that may not be favorable to us. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. We may also consider strategic alternatives, including a sale of our company, merger, other business combination or recapitalization.

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

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.

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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 ~~service providers~~testing of active pharmaceutical ingredients and drug materials for use in ~~connection with the production~~preclinical studies and ~~testing of active pharmaceutical ingredients and drug materials for use in preclinical studies and~~ clinical trials.

Stock-Based Compensation—We account for stock-based awards to employees in accordance with Accounting Standards Codification, or 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 our 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.

We account for equity instruments issued to non-employees in accordance with ASC 505-50, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic adjustment as the underlying equity instruments vest.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board, or FASB, issued an accounting standard intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740, Income Taxes, and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 and early adoption is permitted. We ~~are currently evaluating~~adopted this standard ~~but we do not believe the~~on January 1, 2021. Our adoption of the new guidance ~~will~~did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued an accounting standard intended to improve financial reporting regarding leasing transactions. The standard requires us to recognize on our balance sheet the assets and liabilities for the rights and obligations created by all leased assets. The standard also requires us to provide enhanced disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from all leases, operating and capital, with lease terms greater than 12 months. The standard was effective for financial statements beginning after December 15, 2018, and interim periods within those annual periods. Early adoption was permitted.

We adopted this standard on January 1, 2019, using the required modified-retrospective approach as of the effective date. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We made an accounting policy election to account for leases with an initial term of 12 months or less similar to previous guidance for operating leases, under which we recognize those lease payments in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term. Results for the year ended December 31, 2019 continue to be reported in accordance with historical accounting under previous lease guidance, the ASC Topic 840, Leases.

In June 2016, the FASB issued an accounting standard that amends how credit losses are measured and reported for certain financial instruments that are not accounted for at fair value through net income. This standard requires that credit losses be presented as an allowance rather than as a write-down for available-for-sale debt securities and will be effective for interim and annual reporting periods beginning January 1, 2023, with early adoption permitted. A modified retrospective approach is to be used for certain parts of this guidance, while other parts of the guidance are to be applied using a prospective approach. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements and related disclosures.

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ITEM 7A—Q~~UANTITATIVE~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Not applicable.~~

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

ITEM 8—F~~INANCIAL~~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

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, 2021, 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.

During the most recently completed fiscal quarter, management reviewed all work generated in support of the financial statements and corresponding footnotes in order to determine areas which may be susceptible to human error. The review focused on limiting manual inputs into work papers wherever possible and tying inputs to external source documents. In addition, management also enhanced its work paper review to compare figures to prior year amounts or source documents and increased the number of calculations in the work papers that are reviewed and re-performed.

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:

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	·	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, 2021. In making its assessment, management used the criteria established by the Committee of Sponsoring Organizations of 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, 2021.

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

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 2022 Annual Meeting of Stockholders currently scheduled to be held on June 9, 2022, 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 2022 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 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.

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 concerning compliance with Section 16(a) of the Exchange Act is 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.

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, 2021.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a))
Plan category
Equity compensation plans approved by security holders:
2016 Stock Incentive Plan, as amended		663,250	$	1.90		819,750
Amended and Restated 1999 Amended Stock Plan, as amended		36,317	$	42.26		-

Equity compensation plans not approved by security holders:
Plan for Employee Inducement Stock Option Grants		600,000	$	1.89		-
Total		1,299,567	$	3.02		819,750

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

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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:

1.	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.

2.	Financial Statement Schedules:

	None.

3.	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

2.1	Agreement and Plan of Merger between Synthetic Blood International, Inc. and Oxygen Biotherapeutics, Inc. dated April 28, 2008.	8-K	002-31909	2.01	June 30, 2008

2.2	Asset Purchase Agreement by and between Oxygen Biotherapeutics, Inc., Life Newco, Inc., Phyxius Pharma, Inc., and the stockholders of Phyxius Pharma, Inc. dated October 21, 2013.	8-K	001-34600	2.1	October 25, 2013

2.3	Agreement and Plan of Merger among PHPrecisionMed Inc., Tenax Therapeutics, Inc., Life Newco II, Inc., and Dr. Stuart Rich dated January 15, 2021.	8-K	001-34600	2.1	January 19, 2021

3.1.1	Certificate of Incorporation of Oxygen Biotherapeutics, Inc., dated April 17, 2008.	8-K	002-31909	3.01	June 30, 2008

3.1.2	Certificate of Amendment of the Certificate of Incorporation, effective November 9, 2009.	8-K	002-31909	3.1	November 13, 2009

3.1.3	Certificate of Amendment of the Certificate of Incorporation, effective May 10, 2013.	8-K	001-34600	3.1	May 15, 2013

3.1.4	Certificate of Amendment of the Certificate of Incorporation, effective September 19, 2014.	10-Q	001-34600	3.4	December 15, 2014

3.1.5	Certificate of Amendment of the Certificate of Incorporation, effective February 23, 2018.	8-K	001-34600	3.1	February 23, 2018

3.2	Certificate of Designation of Series A Convertible Preferred, dated December 10, 2018.	8-K	001-34600	4.1	December 11, 2018

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3.3	Certificate of Designation of Series B Convertible Preferred Stock, dated January 15, 2021.	8-K	001-34600	4.1	January 19, 2021

3.4	Third Amended and Restated Bylaws.	10-Q	001-34600	3.1	September 9, 2015

4.1	Specimen Stock Certificate.	10-K	001-34600	4.1	July 23, 2010

4.2	Representative’s Warrant to Purchase Shares of Common Stock, dated December 11, 2018.	8-K	001-34600	4.2	December 11, 2018

4.3	Form of Warrant to Purchase Shares of Common Stock, dated December 11, 2018.	8-K	001-34600	4.3	December 11, 2018

4.4	Warrant Agency Agreement, dated December 11, 2018	8-K	001-34600	4.4	December 11, 2018

4.5	Form of Pre-Funded Warrant, dated March 13, 2020.	8-K	001-34600	4.1	March 13, 2020

4.6	Form of Unregistered Warrant, dated March 13, 2020.	8-K	001-34600	4.2	March 13, 2020

4.7	Form of Placement Agent Warrant, dated March 13, 2020.	8-K	001-34600	4.3	March 13, 2020

4.8	Form of Pre-Funded Warrant, dated July 6, 2020.	8-K	001-34600	4.1	July 8, 2020

4.9	Form of Unregistered Warrant, dated July 6, 2020.	8-K	001-34600	4.2	July 8, 2020

4.10	Form of Placement Agent Warrant, dated July 6, 2020.	8-K	001-34600	4.3	July 8, 2020

4.11	Form of Unregistered Pre-Funded Warrant, dated July 6, 2021.	8-K	001-34600	4.1	July 8, 2021

4.12	Form of Unregistered Warrant, dated July 6, 2021.	8-K	001-34600	4.2	July 8, 2021

4.13	Form of HCW Warrant, dated July 6, 2021.	8-K	001-34600	4.3	July 8, 2021

4.14	Description of Common Stock.	-	-	-	Filed herewith

10.1.1+	1999 Amended Stock Plan, as amended and restated June 17, 2008.	10-K	002-31909	10.15	August 13, 2008

10.1.2+	Amendment No. 1 to Oxygen Biotherapeutics, Inc. 1999 Amended Stock Plan.	10-K	001-34600	10.19	July 29, 2014

10.1.3+	Amendment No. 2 to Oxygen Biotherapeutics, Inc. 1999 Amended Stock Plan.	10-K	001-34600	10.20	July 29, 2014

10.1.4+	Form of Option issued to Executive Officers and Directors.	10-K	002-31909	10.5	August 13, 2004

10.1.5+	Form of Option issued to Employees.	10-K	002-31909	10.6	August 13, 2004

10.1.6+	Form of Option Agreement with Form of Notice of Grant.	10-K	001-34600	10.9	March 16, 2017

10.2.1	Lease Agreement for North Carolina Corporate Office.	10-Q	001-34600	10.6	March 21, 2011

10.2.2	First Amendment to Lease Agreement for North Carolina Corporate Office.	10-K	001-34600	10.74	March 14, 2016

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10.3+	Form of Indemnification Agreement.	10-K	001-34600	10.36	July 15, 2011

10.4.1*	License Agreement dated September 20, 2013 by and between Phyxius Pharma, Inc. and Orion Corporation.	10-Q	001-34600	10.3	March 17, 2014

10.4.2*	Amendment to License Agreement, dated as of October 9, 2020, by and between Tenax Therapeutics, Inc. and Orion Corporation.	8-K	001-34600	10.1	October 15, 2020

10.4.3*	Amendment to the License Agreement of September 20, 2013 by and between Tenax Therapeutics, Inc. and Orion Corporation, dated as of January 25, 2022.	8-K	001-34600	10.1	January 28, 2022

10.5.1+	Second Amended and Restated Employment Agreement with Michael Jebsen dated November 13, 2013.	8-K	001-34600	10.2	November 19, 2013

10.5.2+	First Amendment to Second Amended and Restated Employment Agreement with Michael Jebsen dated June 18, 2015.	8-K	001-34600	10.2	June 19, 2015

10.6+	Description of Non-Employee Director Compensation, effective June 15, 2015.	10-Q	001-34600	10.1	September 9, 2015

10.7.1+	2016 Stock Incentive Plan.	10-Q	001-34600	10.1	August 9, 2016

10.7.2+	Amendment No. 1 to 2016 Stock Incentive Plan.	10-Q	001-34600	10.1	August 14, 2019

10.7.3+	Amendment No. 2 to 2016 Stock Incentive Plan.	10-Q	001-34600	10.1	August 16, 2021

10.7.4+	Form of Option issued to Non-Employee Directors under 2016 Stock Incentive Plan.	10-Q	001-34600	10.2	August 14, 2018

10.7.5+	Form of Option issued to Employees and Contractors under 2016 Stock Incentive Plan.	10-Q	001-34600	10.3	August 14, 2018

10.7.6+	Form of Incentive Stock Option Agreement under 2016 Stock Incentive Plan.	10-Q	001-34600	10.4	August 14, 2018

10.8+	Employment Agreement with Anthony DiTonno dated June 1, 2018.	8-K	001-34600	10.1	June 5, 2018

10.9	Form of Securities Purchase Agreement, dated as of March 11, 2020, by and between Tenax Therapeutics, Inc. and the investor identified on the signature page thereto.	8-K	001-34600	10.1	March 13, 2020

10.10	Note, dated April 30, 2020, between Tenax Therapeutics, Inc. and First Horizon Bank.	10-Q	001-34600	10.1	May 15, 2020

10.11	Form of Securities Purchase Agreement for Class C Units and Class D Units, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the Investor.	8-K	001-34600	10.1	July 8, 2020

10.12	Form of Securities Purchase Agreement for Class E Units and Class F Units, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the Investor.	8-K	001-34600	10.2	July 8, 2020

10.13	Form of Registration Rights Agreement, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the Investor.	8-K	001-34600	10.3	July 8, 2020

10.14+	Executive Employment Agreement with Dr. Stuart Rich dated January 15, 2021.	8-K	001-34600	10.1	January 19, 2021

10.15	Securities Purchase Agreement for Unregistered Pre-Funded Warrant, dated as of July 6, 2021 by and between Tenax Therapeutics, Inc. and the Investor.	8-K	001-34600	10.1	July 8, 2021

10.16	Registration Rights Agreement, dated July 6, 2021, by and between Tenax Therapeutics, Inc. and the Investor.	8-K	001-34600	10.2	July 8, 2021

10.17+	Separation and General Release Agreement dated July 6, 2021, by and between Tenax Therapeutics, Inc. and Anthony A. DiTonno.	8-K	001-34600	10.3	July 8, 2021

10.18+	Executive Employment Agreement dated July 6, 2021, by and between Tenax Therapeutics, Inc. and Christopher T. Giordano.	8-K	001-34600	10.4	July 8, 2021

10.19+	Plan for Employee Inducement Stock Options adopted July 6, 2021 with Form of Stock Option Agreement.	8-K	001-34600	10.5	July 8, 2021

10.20 +*	Consulting Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Danforth Advisors, LLC.	-	-	-	Filed herewith

10.21+	Separation and Release Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Michael B. Jebsen.	-	-	-	Filed herewith

10.22+	Consulting Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Michael B. Jebsen.	-	-	-	Filed herewith

21.1	List of Subsidiaries of Registrant.	-	-	-	Filed herewith

23.1	Consent of Independent Registered Public Accounting Firm.	-	-	-	Filed herewith

31.1	Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	-	-	-	Filed herewith

31.2	Certification of Interim Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	-	-	-	Filed herewith

32.1	Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	-	-	-	Furnished herewith

32.2	Certification of the Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	-	-	-	Furnished herewith

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

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

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	-	-	-	Filed herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	-	-	-	Filed herewith

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

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	-	-	-	Filed herewith

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	-	-	-	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.

	TENAX THERAPEUTICS, INC.

Date: March 29, 2022	By:	/s/ Eliot M. Lurier
		Eliot M. Lurier
		Interim Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial and Accounting Officer)

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

/s/ Christopher T. Giordano	President and Chief Executive Officer and Director	March 29, 2022
Christopher T. Giordano	(Principal Executive Officer)

/s/ Eliot M. Lurier	Interim Chief Financial Officer	March 29, 2022
Eliot M. Lurier	(Principal Financial Officer and Principal Accounting Officer)

/s/ Gerald Proehl	Chairman of the Board and Director	March 29, 2022
Gerald Proehl

/s/ June Almenoff, MD	Director	March 29, 2022
June Almenoff, MD

/s/ Steven Boyd	Director	March 29, 2022
Steven Boyd

/s/ Michael Davidson, MD	Director	March 29, 2022
Michael Davidson, MD

/s/ Declan Doogan, MD	Director	March 29, 2022
Declan Doogan, MD

/s/ Robyn M. Hunter	Director	March 29, 2022
Robyn M. Hunter

/s/ Keith Maher, MD	Director	March 29, 2022
Keith Maher, MD

/s/ Stuart Rich, MD	Director	March 29, 2022
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	36 F-3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS	37 F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	38 F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS	39 F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	40 F-7

F-1

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TENAX THERAPEUTICS, INC.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Tenax Therapeutics, Inc.

Raleigh, North Carolina

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Tenax Therapeutics, Inc. and ~~Subsidiary~~Subsidiaries (the “Company”) as of December 31, ~~2020~~2021 and ~~2019,~~2020, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows ~~for~~ each of the years in the two-year period ended December 31, ~~2020,~~2021, 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, ~~2020~~2021 and ~~2019,~~2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, ~~2020,~~2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note A and Note B to the consolidated financial statements, the Company has suffered recurring losses from operations and negative cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are described in Note A and Note B to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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)~~(“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 audit 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 Transactions Involving Equity Instruments~~

As disclosed in Note E to the consolidated financial statements, the Company participated in two significant capital raise transactions during the year which involved the issuance of shares of the Company’s common stock, registered pre-funded warrants, unregistered pre-funded warrants, unregistered common stock warrants, and placement agent warrants to purchase shares of the Company’s common stock. The accounting for the transactions were complex as they required valuation of the freestanding warrants, which involved estimation of the fair value, and evaluation of the appropriate classification of both the pre-funded warrants and common stock warrants in the financial statements.

~~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, 2020.~~

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

We evaluated the Company’s selection of the valuation methodology and significant assumption used by the Company, and evaluated the completeness and accuracy of the underlying data supporting the significant assumptions. Specifically, when assessing the key assumptions, we evaluated the appropriateness of the Company’s estimates of its credit risk, volatility, dividend yield, and the market risk free rate.

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

	*Asset Acquisition*
Description of Matter	As disclosed in Note E to the consolidated financial statements, the Company completed the acquisition PHPrecisionMed, Inc. (“PHPM”) in an all-stock transaction whereby PHPM merged into a wholly-owned subsidiary of the Company. The transaction involved a purchase of common stock, conversion of preferred stock to common stock, and a fair value calculation of the consideration. The accounting for the transaction was complex as it required judgement to determine whether the transaction constituted an asset acquisition and whether to capitalize or expense the acquired assets.

How We Addressed the Matter in Our Audit	Our audit procedures included the following:
	·	We obtained an understanding of the internal controls and processes in place over management’s process that related to the recording of the asset acquisition.
	·	We obtained and read the underlying agreements.
	·	We verified proper approval by the Board of Directors.
	·	We tested management’s application of the relevant accounting guidance.
	·	We evaluated the completeness and accuracy of the underlying data supporting the total consideration given in the acquisition.
	·	We vouched inputs to agreements and recalculated where necessary to determine reasonableness of the purchase price allocation used by management.

		*Capital Raise Transaction Involving Equity Instruments*
Description of Matter		As disclosed in Note F 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, registered pre-funded warrants, unregistered pre-funded warrants, unregistered common stock warrants, and placement agent 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 both the pre-funded warrants and common stock warrants in the consolidated financial statements.

How We Addressed the Matter in Our Audit	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, 2021.
	·	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.
	·	Specifically, when assessing the key assumptions, we evaluated the appropriateness of the Company’s estimates of its credit risk, volatility, dividend yield, and the market risk free rate.
	·	We tested management’s application of the relevant accounting guidance.

/s/ Cherry Bekaert LLP

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

Raleigh, North Carolina

March 29, 2022


~~We have served as the Company’s auditor since 2009.~~F-2

~~Raleigh, North Carolina~~Table of Contents
~~March 31, 2021~~

TENAX THERAPEUTICS, INC.

CONSOLIDATED B~~ALANCE~~BALANCE SHEETS

December 31, 2020

December 31, 2019

ASSETS

Current assets

Cash and cash equivalents
$6,250,241
$4,905,993
Marketable securities
  462,687
  493,884
Prepaid expenses
  82,578
  780,952
Total current assets
  6,795,506
  6,180,829
Right of use asset
  58,778
  169,448
Property and equipment, net
  5,972
  6,559
Other assets
  8,435
  8,435
Total assets
$6,868,691
$6,365,271



LIABILITIES AND STOCKHOLDERS’ EQUITY


Current liabilities


Accounts payable
$757,856
$1,661,054
Accrued liabilities
  1,240,616
  871,341
Note payable
  120,491
  -
Total current liabilities
  2,118,963
  2,532,395
Long term liabilities


Lease liability
  -
  60,379
Note payable
  124,166
  -
Total long term liabilities
  124,166
  60,379
Total liabilities
  2,243,129
  2,592,774






Commitments and contingencies; see Note F


Stockholders' equity


Preferred stock, undesignated, authorized 4,818,654 shares; See Note E


  Series A Preferred stock, par value $.0001, issued 5,181,346 shares; outstanding 210 and 38,606, respectively
  -
  4
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 12,619,369 and 6,741,860, respectively
  1,262
  674
Additional paid-in capital
  250,644,197
  239,939,797
Accumulated other comprehensive (loss) gain
  (70)
  458
Accumulated deficit
  (246,019,827)
  (236,168,436)
Total stockholders’ equity
  4,625,562
  3,772,497
Total liabilities and stockholders' equity
$6,868,691
$6,365,271

	December 31, 2021			December 31, 2020

ASSETS
Current assets
Cash and cash equivalents	$	5,583,922		$	6,250,241
Prepaid expenses		105,078			82,578
Marketable securities		0			462,687
Total current assets		5,689,000			6,795,506
Right of use asset		287,692			58,778
Property and equipment, net		7,108			5,972
Other assets		8,435			8,435
Total assets	$	5,992,235		$	6,868,691

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	859,638		$	757,856
Accrued liabilities		704,340			1,240,616
Note payable		0			120,491
Total current liabilities		1,563,978			2,118,963
Long term liabilities
Lease liability		183,589			0
Note payable		0			124,166
Total long term liabilities		183,589			124,166
Total liabilities		1,747,567			2,243,129

Commitments and contingencies; see Note G
Stockholders' equity
Preferred stock, undesignated, authorized 4,818,654 shares; See Note F
Series A Preferred stock, par value $.0001, issued 5,181,346 shares; outstanding 210, respectively		0			0
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 25,206,914 and 12,619,369, respectively		2,521			1,262
Additional paid-in capital		282,736,332			250,644,197
Accumulated other comprehensive loss		0			(70	)
Accumulated deficit		(278,494,185	)		(246,019,827	)
Total stockholders’ equity		4,244,668			4,625,562
Total liabilities and stockholders' equity	$	5,992,235		$	6,868,691

The accompanying notes are an integral part of these Consolidated Financial Statements

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Table of Contents

TENAX THERAPEUTICS, INC.

CONSOLIDATED S~~TATEMENTS~~STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Year ended December 31,

2020

2019

Operating expenses

General and administrative
$5,307,206
$5,084,111
Research and development
  4,560,724
  3,471,153
Total operating expenses
  9,867,930
  8,555,264



Net operating loss
  9,867,930
  8,555,264



Interest expense
  1,627
  -
Other income, net
  (18,166)
  (160,901)
Net loss
$9,851,391
$8,394,363



Unrealized loss on marketable securities
  528
  58
Total comprehensive loss
$9,851,919
$8,394,421



Net loss per share, basic and diluted
$(1.33)
$(1.35)
Weighted average number of common shares outstanding, basic and diluted
  7,416,215
  6,195,444

	Year ended December 31,
	2021			2020

Operating expenses
General and administrative	$	7,580,847		$	5,307,206
Research and development		25,147,394			4,560,724
Total operating expenses		32,728,241			9,867,930

Net operating loss		32,728,241			9,867,930

Interest expense		949			1,627
Other income, net		(254,832	)		(18,166	)
Net loss	$	32,474,358		$	9,851,391

Unrealized (gain)/loss on marketable securities		(70	)		528
Total comprehensive loss	$	32,474,288		$	9,851,919

Net loss per share, basic and diluted	$	(1.58	)	$	(0.95	)
Weighted average number of common shares outstanding, basic and diluted		20,577,246			10,365,826

The accompanying notes are an integral part of these Consolidated Financial Statements

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Table of Contents

TENAX THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ E~~QUITY~~

Preferred Stock

Common Stock

Number of Shares

Amount

Number of Shares

Amount

Additional paid-in capital

Accumulated other comprehensive gain (loss)

Accumulated deficit

Total stockholders' equity

Balance at December 31, 2018
  2,854,593
$285
  3,792,249
$379
$239,572,094
$516
$(227,801,743)
$11,771,531
Compensation on options and restricted stock issued


  12,195
  1
  171,215


  171,216
Common stock issued for services rendered


  71,429
  7
  99,993


  100,000
Common stock issued for convertible preferred stock
  (2,815,987)
  (281)
  2,815,987
  282



  1
Exercise of warrants


  50,000
  5
  96,495


  96,500
Adoption of ASC Topic 842: Leases






  27,670
  27,670
Unrealized loss on marketable securities





  (58)

  (58)
Net loss






  (8,394,363)
  (8,394,363)
Balance at December 31, 2019
  38,606
$4
  6,741,860
$674
$239,939,797
$458
$(236,168,436)
$3,772,497









Common stock and pre-funded warrants sold, net of offering costs


  3,273,611
  327
  8,658,850


  8,659,177
Common stock issued for services rendered


  77,987
  8
  99,992


  100,000
Common stock issued for convertible preferred stock
  (38,396)
  (4)
  38,396
  4



  -
Exercise of pre-funded warrants


  1,610,313
  161



  161
Exercise of warrants


  877,202
  88
  1,692,912


  1,693,000
Compensation on options issued




  252,646


  252,646
Unrealized loss on marketable securities





  (528)

  (528)
Net loss






  (9,851,391)
  (9,851,391)
Balance at December 31, 2020
  210
$-
  12,619,369
$1,262
$250,644,197
$(70)
$(246,019,827)
$4,625,562

EQUITY

	Preferred Stock						Common Stock							Accumulated other						Total
	Number of Shares			Amount			Number of Shares		Amount		Additional paid-in capital			comprehensive gain (loss)			Accumulated deficit			stockholders' equity

Balance at December 31, 2019		38,606		$	4			6,741,860	$	674	$	239,939,797		$	458		$	(236,168,436	)	$	3,772,497

Common stock and pre-funded warrants sold, net of offering costs								3,273,611		327		8,658,850									8,659,177
Common stock issued for services rendered								77,987		8		99,992									100,000
Common stock issued for convertible preferred stock		(38,396	)		(4	)		38,396		4											0
Exercise of pre-funded warrants								1,610,313		161											161
Exercise of warrants								877,202		88		1,692,912									1,693,000
Compensation on options issued												252,646									252,646
Unrealized loss on marketable securities															(528	)					(528	)
Net loss																		(9,851,391	)		(9,851,391	)
Balance at December 31, 2020		210		$	0			12,619,369	$	1,262	$	250,644,197		$	(70	)	$	(246,019,827	)	$	4,625,562

Common stock and preferred stock issued for asset acquisition		10,232			1			1,892,905		189		21,582,141									21,582,331
Common stock issued for convertible preferred stock		(10,232	)		(1	)		10,232,000		1,023		(1,022	)								0
Pre-funded warrants sold, net of offering costs												9,192,624									9,192,624
Compensation on options issued												773,787									773,787
Exercise of warrants								457,038		46		544,605									544,651
Exercise of stock options								5,602		1											1
Unrealized loss on marketable securities															70						70
Net loss																		(32,474,358	)		(32,474,358	)
Balance at December 31, 2021		210		$	0			25,206,914	$	2,521	$	282,736,332		$	0		$	(278,494,185	)	$	4,244,668

The accompanying notes are an integral part of these Consolidated Financial Statements

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Table of Contents

TENAX THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF C~~ASH~~CASH FLOWS

Year ended December 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss
$(9,851,391)
$(8,394,363)
Adjustments to reconcile net loss to net cash used in operating activities


Depreciation and amortization
  4,077
  5,017
Interest on debt instrument
  1,627
  -
Amortization of right of use asset
  110,671
  102,262
Loss on disposal of property and equipment
  -
  522
Issuance and vesting of compensatory stock options and warrants
  252,646
  171,216
Issuance of common stock for services rendered
  100,000
  100,000
Amortization of premium on marketable securities
  7,069
  (1,230)
Changes in operating assets and liabilities


Accounts receivable, prepaid expenses and other assets
  698,374
  (322,666)
Accounts payable and accrued liabilities
  (535,550)
  883,042
Long term portion of lease liability
  (60,379)
  (99,977)
Net cash used in operating activities
  (9,272,856)
  (7,556,177)



CASH FLOWS FROM INVESTING ACTIVITIES


Purchase of marketable securities
  (596,524)
  (618,100)
Sale of marketable securities
  620,123
  620,023
Purchase of property and equipment
  (3,490)
  (3,574)
Net cash provided by (used in) investing activities
  20,109
  (1,651)



CASH FLOWS FROM FINANCING ACTIVITIES


Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs
  8,659,177
  -
Proceeds from the exercise of warrants
  1,693,161
  96,500
Proceeds from the issuance of notes payable
  244,657
  -
Net cash provided by financing activities
  10,596,995
  96,500



Net change in cash and cash equivalents
  1,344,248
  (7,461,328)
Cash and cash equivalents, beginning of period
  4,905,993
  12,367,321
Cash and cash equivalents, end of period
$6,250,241
$4,905,993

	Year ended December 31,
	2021			2020


CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(32,474,358	)	$	(9,851,391	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		4,116			4,077
Interest on debt instrument		949			1,627
Amortization of right of use asset		104,866			110,671
Gain on debt settlement and extinguishment		(247,233	)		0
Issuance and vesting of compensatory stock options and warrants		773,787			252,646	��
Issuance of common stock and preferred stock for asset acquisition		21,582,331			0
Issuance of common stock for services rendered		0			100,000
Amortization of premium on marketable securities		9,427			7,069
Changes in operating assets and liabilities
Accounts receivable, prepaid expenses and other assets		(22,500	)		698,374
Accounts payable and accrued liabilities		(544,589	)		(535,550	)
Long term portion of lease liability		(42,999	)		(60,379	)
Net cash used in operating activities		(10,856,203	)		(9,272,856	)

CASH FLOWS FROM INVESTING ACTIVITIES
Sale of marketable securities		803,401			620,123
Purchase of marketable securities		(345,540	)		(596,524	)
Purchase of property and equipment		(5,252	)		(3,490	)
Net cash provided by investing activities		452,609			20,109

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs		9,192,624			8,659,177
Proceeds from the exercise of warrants		544,651			1,693,161
Proceeds from the issuance of notes payable		0			244,657
Net cash provided by financing activities		9,737,275			10,596,995

Net change in cash and cash equivalents		(666,319	)		1,344,248
Cash and cash equivalents, beginning of period		6,250,241			4,905,993
Cash and cash equivalents, end of period	$	5,583,922		$	6,250,241

Non-cash investing activity
Addition to right of use asset obtained from new operating lease liability	$	333,779		$	0

The accompanying notes are an integral part of these Consolidated Financial Statements

F-6

Table of Contents

TENAX THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A—DESCRIPTION OF BUSINESS

~~Description of Business—~~

Tenax Therapeutics, Inc. (the “Company”) was originally formed as a New Jersey corporation in 1967 under the name Rudmer, David & Associates, Inc., and subsequently changed its name to Synthetic Blood International, Inc. On June 17, 2008, the stockholders of Synthetic Blood International approved the Agreement and Plan of Merger dated April 28, 2008, ~~(the “Plan of Merger”),~~ between Synthetic Blood International and Oxygen Biotherapeutics, Inc., a Delaware corporation. Synthetic Blood International formed Oxygen Biotherapeutics ~~was formed~~ on April 17, 2008 ~~by Synthetic Blood International~~ to participate in the merger for the purpose of changing the state of domicile of Synthetic Blood International from New Jersey to Delaware. Certificates of Merger were filed with the states of New Jersey and Delaware and the merger was effective June 30, 2008. Under the Plan of Merger, Oxygen Biotherapeutics was the surviving corporation and each share of Synthetic Blood International common stock outstanding on June 30, 2008 was converted tointo one share of Oxygen Biotherapeutics common stock. On September 19, 2014, the Company changed its name to Tenax Therapeutics, Inc.

On ~~October 18,~~November 13, 2013, the Company, ~~created a wholly owned~~through its wholly-owned subsidiary, Life Newco, Inc., a Delaware corporation, ~~(“Life Newco”), to acquire~~acquired certain assets of Phyxius Pharma, Inc., a Delaware corporation (“Phyxius”), pursuant to an Asset Purchase Agreement dated October 21, 2013 (the “Asset Purchase Agreement”), by and among the Company, Life Newco, Phyxius and the stockholders of ~~Phyxius (the “Phyxius Stockholders”). On November 13, 2013,~~Phyxius. Among these assets was a license with Orion Corporation, a global healthcare company incorporated under the ~~terms and subject to~~laws of Finland (“Orion”) for the ~~conditions of the Asset Purchase Agreement, Life Newco acquired certain assets, including a license granting Life Newco an~~ exclusive, ~~sublicensable~~sublicenseable 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.

On October 9, 2020 and January 25, 2022, the Company ~~entered into an Amendment (the “Amendment”) to~~amended the ~~License between~~license (as amended, the ~~Company and Orion Corporation, a global healthcare company incorporated under the laws of Finland (“Orion”~~“License”), to include two new oral ~~products~~product dose forms containing levosimendan, in capsule and solid dosage form, and a subcutaneously administered product containing levosimendan, subject to certain limitations. Pursuant to the ~~scope of the~~ License, subject to specified limitations. The Amendment also amends the tiered royalty payments based on net sales of the Product in the Territory (each as defined in the License, as amended by the Amendment) made by the Company and ~~its sublicensees. Pursuant~~Orion will agree to ~~the Amendment, the~~a new trademark when commercializing levosimendan in either of these forms. The term of the License has been extended 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, ~~2028,~~2030, however, either party will have the right to terminate the License with immediate effect. The Company intends to conduct an upcoming Phase 3 study in pulmonary hypertension patients utilizing one of these oral formulations.

See “Note 8 - Commitments and Contingencies” below for a further discussion of the License.

On January 15, 2021, the Company, Life Newco II, Inc., a Delaware corporation and a wholly-owned, ~~direct~~ subsidiary of the Company (“Life Newco II”), PHPrecisionMed Inc., a Delaware corporation (“~~PHPM,”~~PHPM”) and Dr. Stuart Rich, solely in his capacity as holders’ representative ~~(in such capacity,~~( the “Representative”), entered into an Agreement and Plan of Merger ~~dated January 15, 2021~~ (the “Merger Agreement”), pursuant to which ~~subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement,~~ the Company ~~would acquire 100%~~acquired all of the equity of ~~PHPM.~~PHPM, a company developing pharmaceutical products containing imatinib for the treatment of PAH (“PAH”) in the United States and the rest of the world. Under the terms of the Merger Agreement, Life Newco II ~~would merge~~merged with and into PHPM, with PHPM surviving as a ~~wholly owned~~wholly-owned subsidiary of the Company (the “Merger”). ~~On January 15, 2021, the Company completed the acquisition contemplated by the Merger Agreement (the “Acquisition”). As~~See “Note 7 - Merger” below for a ~~result~~further discussion of the ~~Acquisition the Company intends to develop pharmaceutical products containing imatinib for the treatment of pulmonary arterial hypertension in the United States and the rest of the world.~~

Merger.

Going Concern

Management believes the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of ~~$246,019,827~~$278,494,185 and ~~$236,168,436~~$246,019,827 on December 31, ~~2020~~2021 and ~~2019,~~2020, respectively, and used cash in operations of ~~$9,272,856~~$10,856,203 and ~~$7,556,177~~$9,272,856 during the years ended December 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The Company requires substantial additional funds to complete clinical trials and pursue regulatory approvals. Management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying December 31, ~~2020~~2021 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

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Table of Contents

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with 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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and transactions of Tenax Therapeutics, Inc., Life Newco, Inc. and ~~Life Newco,~~PHPrecisionMed Inc. All material intercompany transactions and balances have been eliminated in ~~consolidation~~.

consolidation.

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.

Cash Concentration Risk

The Federal Deposit Insurance Corporation (the “FDIC”) insurance limits are $250,000 per depositor per insured bank. The Company had cash balances of ~~$5,870,477~~$5,127,956 and ~~$4,533,976~~$5,870,477 uninsured by the FDIC as of December 31, 2021 and 2020, ~~and 2019,~~ respectively.

Liquidity and Capital Resources

The Company has financed its operations since September 1990 through the issuance of debt and equity securities and loans from stockholders. The Company had total current assets of ~~$6,795,506~~$5,689,000 and ~~$6,180,829~~$6,795,506 and working capital of ~~$4,676,543~~$4,125,022 and ~~$3,648,434~~$4,676,543 as of December 31, 2021 and 2020, ~~and 2019,~~ respectively.

~~Cash~~

The Company’s cash resources were approximately $5.6 million as of December 31, 2021, compared to cash resources, including the fair value of the Company’s available for sale marketable securities as of ~~December 31, 2020 were~~ approximately $6.7 ~~million, compared to approximately $5.4~~ million as of December 31, ~~2019.~~

2020.

The Company expects to continue to incur expenses related to development of imatinib for PAH and levosimendan for pulmonary hypertension and other potential indications, as well as identifying and developing other potential product candidates. Based on its resources on December 31, ~~2020,~~2021, the Company believes that it has sufficient capital to fund its planned operations through the ~~third~~second quarter of calendar year ~~2021.~~2022. However, the Company will need substantial additional financing in order to fund its operations beyond such period and thereafter until it can achieve profitability, if ever. The Company depends on its ability to raise additional funds through various potential sources, such as equity and debt financing, or to license its product candidates to another pharmaceutical company. The Company will continue to fund operations from cash on hand and through sources of capital similar to those previously described. The Company cannot provide assurance that it will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs.

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 covenants in the related transaction documentation 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.

F-8

Table of Contents

The continued spread of COVID-19 globally could adversely affect the Company’s clinical trial operations, including its ability to recruit and retain patients, principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography. Further, some patients may be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services, or if the patients become infected with COVID-19 themselves, which would delay the Company’s ability to initiate and/or complete planned clinical and preclinical studies in the future.

Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance.

Deferred financing costs

Deferred financing costs represent legal, due diligence and other direct costs incurred to raise capital or obtain debt. Direct costs include only “out-of-pocket” or incremental costs directly related to the effort, such as a finder’s fee and accounting and legal fees. These costs will be capitalized if the efforts are successful or expensed when unsuccessful. Indirect costs are expensed as incurred. Deferred financing costs related to debt are amortized over the life of the debt. Deferred financing costs related to issuing equity are charged to Additional Paid-in Capital.

Derivative financial instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments and other convertible equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”) to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results.

Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815.

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 conduct and manage preclinical and clinical trials on its 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.

Property and Equipment, Net

Property and equipment are stated at cost, subject to adjustments for impairment, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method ~~over the following~~with estimated useful ~~lives:~~

~~Laboratory equipment~~	~~3 – 5 years~~
~~Office equipment~~	~~5 years~~
~~Office furniture and fixtures~~	~~7 years~~
~~Computer equipment and software~~	~~3 years~~
~~Leasehold improvements~~	~~Shorter of useful life or remaining lease term~~

lives of three to seven years.

Maintenance and repairs are charged to expense as incurred, and improvements to leased facilities and equipment are capitalized.

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Table of Contents

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 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, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic adjustment as the underlying equity instruments vest.

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, restricted stock grants, 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,

2020

2019

Warrants to purchase common stock
  21,859,084
  10,519,945
Options to purchase common stock
  451,148
  244,206
Convertible preferred shares outstanding
  210
  38,606

	Year ended December 31,
	2021		2020
Warrants to purchase common stock		20,928,767		16,599,079
Pre-funded warrants to purchase common stock		10,033,274		5,260,005
Options to purchase common stock		1,299,567		451,148
Convertible preferred shares outstanding		210		210

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Table of Contents

Operating Leases

The Company determines if an arrangement includes a lease at inception. Operating leases are included in operating lease right-of-use assets, other current liabilities, and long-term lease liabilities in the Company’s consolidated balance sheet as of December 31, ~~2020.~~2021. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the net present value of lease payments, the Company uses the incremental borrowing rate based on the information available at the lease commencement date. The operating lease right-of-use assets also include any lease payments made and exclude lease incentives. The Company’s leases may include options to extend or terminate the lease which are included in the lease term when it is reasonably certain that the Company will exercise any such option. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has elected to account for leases with an initial term of 12 months or less similar to previous guidance for operating leases, under which the Company will recognize those lease payments in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term.

Prior period amounts continue to be reported in accordance with the Company’s historic accounting under previous lease guidance, see “Recent Accounting Pronouncements” below, for more information about the impact of the adoption of the new lease standard.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued an accounting ~~standard~~standards update (“ASU”), ASU-2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740, Income Taxes and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 and early adoption is permitted. The Company ~~is currently evaluating~~adopted this standard ~~but it does not believe the~~on January 1, 2021. The Company’s adoption of the new guidance ~~will~~did not have a material impact on its consolidated financial statements.

In June 2016, the FASB issued an accounting standard, ASU-2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that amends how credit losses are measured and reported for certain financial instruments that are not accounted for at fair value through net income. This standard requires that credit losses be presented as an allowance rather than as a write-down for available-for-sale debt securities and will be effective for interim and annual reporting periods beginning January 1, 2023, with early adoption permitted. A modified retrospective approach is to be used for certain parts of this guidance, while other parts of the guidance are to be applied using a prospective approach. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued an accounting standard intended to improve financial reporting regarding leasing transactions. The standard requires the Company to recognize on its balance sheet the assets and liabilities for the rights and obligations created by all leased assets. The standard also requires it to provide enhanced disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from all leases, operating and capital, with lease terms greater than 12 months. The standard was effective for financial statements beginning after December 15, 2018, and interim periods within those annual periods. Early adoption was permitted.

The Company adopted this standard on January 1, 2019, using the required modified-retrospective approach as of the effective date. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows it to carryforward the historical lease classification. The Company made an accounting policy election to account for leases with an initial term of 12 months or less similar to previous guidance for operating leases, under which the Company recognizes those lease payments in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term. Results for the year ended December 31, 2019 continue to be reported in accordance with historical accounting under previous lease guidance, ASC Topic 840, Leases.

The Company recorded a net reduction of $27,670 to opening accumulated deficit as of January 1, 2019, due to the cumulative impact of adopting the new leasing standard, with the impact relating to a change in the classification of the Company’s office space. The adoption of the lease standard did not have a material impact on the Company’s condensed consolidated balance sheets. The table below summarizes the impact of adopting the new standard on its condensed consolidated balance sheet as of January 1, 2019.

As Previously Reported

New Lease Standard Adjustment

As Adjusted

Operating lease right-of-use asset
$-
$271,710
$271,710
Operating lease liabilites
$-
$271,710
$271,710
Deferred lease liabilities
$27,670
$(27,670)
$-

Fair Value

The Company determines the fair value of its financial assets and liabilities in accordance with the ASC 820, Fair Value Measurements. The Company’s balance sheet includes the following financial instruments: cash and cash equivalents, investments in marketable securities and ~~warrant liabilities.~~short-term notes payable. The Company considers the carrying amount of its cash and cash equivalents and short-term notes payable 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.”~~date”. The fair value measurement hierarchy consists of three levels:

Level one	Quoted market prices in active markets for identical assets or liabilities;

Level two	Inputs other than level one inputs that are either directly or indirectly observable; and

Level three	Unobservable inputs developed using estimates and assumptions; which are developed by the reporting entity and reflect those assumptions that a market participant would use.

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.

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Investments in Marketable Securities

The Company classifies all of its investments as available-for-sale. Unrealized gains and losses on investments are recognized in comprehensive income/(loss), unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. Realized gains and losses are reflected in other income ~~(expense)~~ in the ~~Consolidated Statements~~consolidated statements of ~~Operations and Comprehensive Loss~~comprehensive loss and are determined using the specific identification method with transactions recorded on a settlement date basis.

~~The Company recognized a gain of $28 and $66 for the years ended December 31, 2020 and 2019, respectively.~~

Investments with original maturities at date of purchase beyond three months and which mature at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from the balance sheet date are classified as long-term. OnAs of December 31, ~~2020,~~2021, the Company ~~believes that the costs of its~~held no investments ~~are recoverable~~ in ~~all material respects.~~

The following tables summarize the fair value of the Company’s investments by type. The estimated fair value of the Company’s fixed income investments is classified as Level 2 in the fair value hierarchy as defined in GAAP. These fair values are obtained from independent pricing services which utilize Level 2 inputs:

December 31, 2020

Amortized Cost

Accrued Interest

Gross Unrealized Gains

Gross Unrealized losses

Estimated Fair Value

Corporate debt securities
$459,210
$3,551
$128
$(202)
$462,687
Total investments
$459,210
$3,551
$128
$(202)
$462,687

~~The following table summarizes the scheduled maturity for the Company’s investments on December 31, 2020 and 2019, respectively:~~

December 31, 2020

December 31, 2019

Maturing in one year or less
$462,687
$493,884
Maturing after one year through three years
-
-
Total investments
$462,687
$493,884

marketable securities.

The following tables summarize information regarding assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2020~~2021 and December 31, ~~2019:~~

Fair Value Measurements at Reporting Date Using

Balance as of December 31, 2020

Quoted prices in Active Markets for Identical Securities (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Current Assets

Cash and cash equivalents
$6,250,241
$6,250,241
$-
$-
Marketable securities
$462,687
$-
$462,687
$-

Fair Value Measurements at Reporting Date Using

Balance as of December 31, 2019

Quoted prices in Active Markets for Identical Securities (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Current Assets

Cash and cash equivalents
$4,905,993
$4,905,993
$-
$-
Marketable securities
$493,884
$-
$493,884
$-

2020:

			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2021		Quoted prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Cash and cash equivalents	$	5,583,922	$	5,583,922	$	0	$	0


			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2020		Quoted prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Cash and cash equivalents	$	6,250,241	$	6,250,241	$	0	$	0
Marketable securities	$	462,687	$	0	$	462,687	$	0

There were no significant transfers between levels ~~during~~in the year ended December 31, ~~2020.~~

2021.

NOTE C—BALANCE SHEET COMPONENTS

Property and equipment, net

Property and equipment primarily consist of ~~the following:~~

December 31, 2020

December 31, 2019

Office furniture and fixtures
$43,033
$130,192
Computer equipment and software
  23,307
  80,669

  66,340
  210,861
Less: Accumulated depreciation
  (60,368)
  (204,302)

$5,972
$6,559

office furniture and fixtures.

Depreciation and amortization expense were ~~$4,077~~$4,116 and ~~$5,017~~$4,077 for the years ended December 31, 2021 and 2020, ~~and 2019,~~ respectively.

Accrued liabilities

Accrued liabilities consist of the following:

December 31, 2020

December 31, 2019

Operating costs
$319,608
$426,115
Lease liability
  60,379
  111,353
Employee related
  860,629
  333,873

$1,240,616
$871,341

	December 31, 2021		December 31, 2020
Employee related	$	597,148	$	860,629
Lease liability		107,192		60,379
Operating costs		0		319,608
	$	704,340	$	1,240,616

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Table of Contents

NOTE D—NOTE PAYABLE

Payroll Protection Program Loan

On April 30, 2020, the Company received a loan pursuant to the Paycheck Protection Program (the “PPP Loan”) under the Coronavirus Aid, Relief, and Economic Security Act, ~~(the “CARES Act”),~~ as administered by the U.S. Small Business ~~Administration.~~Administration (“SBA”). The PPP Loan in the principal amount of $244,657 was disbursed by First Horizon Bank (the “Lender”) pursuant to a promissory note issued by the Company ~~(the “Note”)~~.

~~The PPP Loan has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred for sixteen months. Beginning September 30,~~

On May 28, 2021, the Company ~~is required to make monthly payments of~~received notice from the SBA that the SBA had remitted $244,657 in principal and $2,576 in interest ~~of approximately $31,100~~ to the ~~Lender. The Company did not provide any collateral or guarantees for~~Lender in full forgiveness of the Company’s PPP Loan ~~nor did~~pursuant to the ~~Company pay any facility charge~~Company’s application to ~~obtain~~the SBA for forgiveness of the PPP Loan. The ~~Note provides for customary events~~total amount was recorded as other income in our consolidated statement of ~~default, including, among others, those relating~~comprehensive loss.

NOTE E—MERGER

On January 15, 2021, the Company, Life Newco II, PHPM, and Dr. Rich, as Representative, entered into the Merger Agreement, pursuant to ~~failure to make payment, bankruptcy, breaches of representations, and material adverse effects. The~~which, the Company ~~may prepay the principal~~acquired all of the ~~PPP Loan at any time, subject to certain notice requirements.~~

equity of PHPM. Under the terms of the ~~CARES Act, Paycheck Protection Program loan recipients can apply~~Merger Agreement, Life Newco II merged with and into PHPM, with PHPM surviving as a wholly-owned subsidiary of the Company.

As consideration for the Merger, the stockholders of PHPM received (i) 1,892,905 shares of Company common stock, and (ii) 10,232 shares of the Company’s Series B convertible preferred stock (“Series B Stock”), which were convertible into up to an aggregate of 10,232,000 shares of common stock (collectively, the “Merger Consideration”). To satisfy the Company’s post-closing rights to closing adjustments and indemnification by PHPM and the former stockholders of PHPM pursuant to the Merger Agreement, 1,212,492 shares of common stock issuable upon conversion of the Series B Stock, which represented approximately 10% of the Merger Consideration, are subject to holdback restrictions for 24 months following closing of the transaction (the “Holdback Shares”).

Pursuant to the Merger Agreement, the Company’s Board of Directors, at its annual meeting of stockholders held on June 10, 2021, recommended to the Company’s stockholders, and the stockholders approved, the conversion of the Series B Stock pursuant to the Certificate of Designation. As a result, each share of Series B Stock automatically converted into (i) 881.5 shares of common stock, and (ii) the right to receive up to 118.5 Holdback Shares, to be ~~granted forgiveness~~delivered 24 months after the date of issuance of the Series B Stock, subject to reduction for ~~all or~~indemnification claims.

Pursuant to the terms of the Merger Agreement, on February 25, 2021, the Board appointed three directors designated by the PHPM representative to serve on the Board, Dr. Rich, the co-founder and Chief Executive Officer and a ~~portion~~stockholder of PHPM, and Drs. Michael Davidson and Declan Doogan. In connection with the closing of the Merger, Dr. Rich also was appointed Chief Medical Officer of the Company.

The Company evaluated this acquisition in accordance with ASC 805, Business Combinations, to determine whether the assets and operations of PHPM met the definition of a ~~loan granted under~~business. Included in the ~~program. Such forgiveness will~~in-process research and development project is the historical know-how, formula protocols, designs, and procedures expected to be ~~determined, subject~~needed to ~~limitations, based on~~complete the ~~use~~related phase of ~~loan proceeds~~testing. The Company concluded that the in-process research and development project is an identifiable intangible asset that would be accounted for ~~payment~~as a single asset in a business combination. The Company also qualitatively concluded that there is no fair value associated with the clinical research organization contract and the clinical manufacturing organization contract because the services are being provided at market rates and could be provided by multiple vendors in the marketplace. Therefore, all of ~~payroll costs~~the consideration in the transaction was allocated to the in-process research and ~~any payments~~development project. As such, the Company concluded that substantially all of ~~mortgage interest, rent,~~the fair value of the gross assets acquired was concentrated in the single in-process research and ~~utilities.~~ development asset and the set was not a business.

The Company is ~~using~~planning to use the ~~proceeds from~~acquired asset to further its clinical development in an upcoming phase 3 clinical trial for the ~~PPP Loan to fund payroll costs~~treatment of patients with PAH. Although the acquired asset may have utility in other patient populations, future development decisions for the acquired asset will be contingent upon the results of the contemplated phase 3 program for PAH. As such, the acquired asset does not have an alternative future use at the acquisition date. In accordance with ASC 730, Research and Development, the ~~relevant terms~~Company concluded the entire Purchase Price for the asset acquisition was an expense on the acquisition date.

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The consideration transferred, assets acquired and ~~conditions of the CARES Act. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained.~~

~~As of December 31, 2020, the current and long-term portions of the PPP Loan~~liabilities assumed were ~~$120,491 and $124,166, respectively.~~

recognized as follows:

Fair value of shares of Common Stock issued	$	3,369,371
Fair Value of Series B Convertible Preferred Stock issued at closing		18,212,960
Total fair value of consideration transferred	$	21,582,331

Tangible assets acquired	$	0
Accounts payable assumed		(150,000	)
Total identifiable net assets		(150,000	)
IPR&D expense recognized		21,732,331
Total fair value of consideration	$	21,582,331

NOTE E—F—STOCKHOLDERS’ EQUITY

~~Preferred Stock~~

Under the Company’s Certificate of Incorporation, 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.

Series B Stock

As further discussed in “Note E—Merger” above, on January 15, 2021 the Company issued 10,232 shares of its Series B Stock, which were convertible into an aggregate of 10,232,000 shares of common stock, to the stockholders of PHPM as partial consideration for the Merger with PHPM pursuant to the Merger Agreement.

The rights, preferences and privileges of the Series B Stock are set forth in the Certificate of Designation. Following receipt of the approval of the stockholders of the Company on June 10, 2021 for the Conversion, each share of Series B Stock automatically converted into (i) 881.5 shares of common stock and (ii) the right to receive up to 118.5 Holdback Shares, to be delivered 24 months after the date of issuance of the Series B Stock, subject to reduction for indemnification claims.

As of December 31, 2021, there were no shares of Series B Stock outstanding.

Series A Stock

On December 11, 2018, the Company closed its underwritten offering of 5,181,346 units for net proceeds of approximately ~~$9 million.~~$9.0 million (the “2018 Offering”). Each unit ~~consists~~consisted of ~~(a)~~(i) one share of the Company’s Series A convertible preferred stock, par value $0.0001 per share (the “Series A Stock”), ~~(b)~~(ii) a two-year warrant to purchase one share of common stock at an exercise price of $1.93, ~~(the “Series 1 Warrants”),~~ and ~~(c)~~(iii) a five-year warrant to purchase one share of common stock at an exercise price of ~~$1.93 (the “Series 2 Warrants”).~~$1.93. In accordance with ASC 480, Distinguishing Liabilities from Equity, the estimated fair value of $1,800,016 for the beneficial conversion feature was recognized as a deemed dividend on the Series A Stock during the year ended December 31, ~~2019~~.

2020.

The table below sets forth a summary of the designation, powers, preferences and rights of the Series A Stock.

Conversion

Subject to the ownership limitations described below, the Series A Stock is convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion ratio determined by dividing the stated value of the Series A Stock by a conversion price of $1.93 per share. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

The Company will not ~~effect~~affect any conversion of the Series A Stock,, nor shall a holder convert its shares of Series A Stock,, to the extent that such conversion would cause the holder to have acquired, through conversion of the Series A Stock or otherwise, beneficial ownership of a number of shares of common stock in excess of 4.99% (or, at the election of the holder prior to the issuance of any shares of Series A Stock, 9.99%) of the common stock outstanding after giving effect to such exercise.

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Dividends

In the event the Company pays dividends on its shares of common stock, the holders of the Series A Stock will be entitled to receive dividends on shares of Series A Stock equal, on an as-if-converted basis, to and in the same form as paid on the common stock. No other dividends will be paid on the shares of Series A Stock.

Liquidation

Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount equal to the amount that a holder of common stock would receive if the Series A Stock were fully converted to common stock, which amounts will be paid pari passu with all holders of common stock.

Voting rights

Shares of Series A Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the then outstanding Series A Stock will be required to amend the terms of the Series A Stock or to take other action that adversely affects the rights of the holders of Series A ~~Stock~~.

Stock.

~~During the years ended December 31, 2020 and 2019, 38,396 and 2,815,987 shares of~~ ~~Series A Stock~~ ~~were converted into 38,396 and 2,815,987 shares of common stock, respectively.~~

As of December 31, ~~2020,~~2021, there were 210 shares of Series A Stock outstanding.

Common Stock

and Pre-Funded Warrants

The Company’s Certificate of Incorporation authorizes it to issue 400,000,000 shares of $0.0001 par value common stock. As of December 31, ~~2020,~~2021, and December 31, ~~2019,~~2020, there were ~~12,619,369~~25,206,914 and ~~6,741,860~~12,619,369 shares of common stock issued and outstanding, respectively.

As of December 31, 2021, there were 10,033,274 pre-funded warrants outstanding.

July 2021 Private Placement (the “July 2021 Offering”)

On ~~March 13, 2020,~~July 6, 2021, the Company ~~completed~~entered into a ~~registered direct offering to a single healthcare-focused~~securities purchase agreement with an institutional investor ~~(the “Investor”) for~~pursuant to which the ~~issuance~~Company agreed to sell and ~~sale of 750,000 shares of its common stock~~issue to the investor 4,773,269 Units in a private placement at a purchase price of ~~$1.1651~~$2.095 per unit. Each Unit consisted of (i) one unregistered pre-funded warrant to purchase one share of common stock and (ii) one unregistered warrant to purchase one share of common stock (together with the pre-funded warrants, ~~to purchase up to 1,610,313~~the “2021 Warrants”). In the aggregate, 9,546,538 shares of ~~its~~the Company’s common stock ~~at a purchase price of $1.1650 per pre-funded warrant (which represents~~are underlying the per share offering price for the common stock less $0.0001, the exercise price of each pre-funded warrant), for gross proceeds of approximately $2.75 million, priced at-the-market under Nasdaq rules. Additionally, in a concurrent private placement, the Company issued to the Investor unregistered warrants to purchase up to 2,360,313 shares of its common stock. The unregistered warrants have an exercise price of $1.04 per share and exercise period commencing immediately upon the issuance date and a term of five and one-half years.2021 Warrants. The net proceeds from the ~~offerings,~~private placement, after deducting placement agent fees and other direct offering expenses, were approximately ~~$2.125~~$9.2 million. The fair value allocated to the ~~common stock,~~ pre-funded warrants and warrants was ~~$0.5 million, $1.1~~$5.5 million and ~~$1.1~~$4.5 million, respectively.

Also, on July 6, 2021 and in connection with the July 2021 Offering, the Company entered into a registration rights agreement (the “July 2021 Registration Rights Agreement”) with the investor, pursuant to which the Company agreed to register for resale the shares of common stock issuable upon exercise of the 2021 Warrants within 120 days following the effective date of the July 2021 Registration Rights Agreement. Pursuant to the July 2021 Registration Rights Agreement, on August 20, 2021, the Company filed a resale registration statement on Form S-3, which went effective on September 1, 2021.

July 2020 Registered Direct Offering and Private Placement (the “July 2020 Offering”)

On July 8,6, 2020, the Company completed a registered direct offering with ~~the Investor~~an investor for the issuance and sale of 2,523,611 shares of its common stock at a purchase price of $1.0278 per share and pre-funded warrants to purchase up to 652,313 shares of its common stock, at a purchase price of $1.0277 per pre-funded warrant (which represents the per share offering price for the common stock less $0.0001, the exercise price of each pre-funded warrant). The Company issued in a concurrent private placement unregistered pre-funded warrants to purchase up to 4,607,692 shares of common stock at the same purchase price as the registered pre-funded warrants, and unregistered common stock warrants to purchase up to 7,783,616 shares of common stock for aggregate gross proceeds of approximately $8.0 million, priced at-the-market under Nasdaq rules. The unregistered warrants have an exercise price of $0.903 per share and exercise period commencing immediately upon the issuance date and a term of five and one-half years. The net proceeds from the offerings, after deducting placement agent fees and other direct offering expenses were approximately $6.5 million. The fair value allocated to the common stock, pre-funded warrants and warrants was $1.5 million, $3.0 million and $3.5 million, respectively.

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Also, on July 6, 2020 and in connection with the concurrent private placement, the Company entered into a registration rights agreement (the “July 2020 Registration Rights Agreement”) with the investor, pursuant to which the Company agreed to register for resale the shares of common stock issuable upon exercise of the unregistered pre-funded warrants and the unregistered warrants within 120 days following the date of the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, on August 20, 2020, the Company filed a resale registration statement on Form S-3, which went effective on September 30, 2020.

March 2020 Registered Direct Offering and Private Placement (the “March 2020 Offering”)

On March 13, 2020, the Company completed a registered direct offering to an investor for the issuance and sale of 750,000 shares of its common stock at a purchase price of $1.1651 per share and pre-funded warrants to purchase up to 1,610,313 shares of its common stock, at a purchase price of $1.1650 per pre-funded warrant (which represents the per share offering price for the common stock less $0.0001, the exercise price of each pre-funded warrant), for gross proceeds of approximately $2.75 million, priced at-the-market under Nasdaq rules. Additionally, in a concurrent private placement, the Company issued to the investor unregistered warrants to purchase up to 2,360,313 shares of its common stock. The unregistered warrants have an exercise price of $1.04 per share and exercise period commencing immediately upon the issuance date and a term of five and one-half years. The net proceeds from the offerings, after deducting placement agent fees and other direct offering expenses were approximately $2.1 million. The fair value allocated to the common stock, pre-funded warrants and warrants was $0.5 million, $1.1 million and $1.1 million, respectively.

Warrants

During the year ended December 31, ~~2020,~~2021, the Company received approximately $545,000 and issued ~~1,610,313~~282,202 shares of common stock upon the exercise of ~~pre-funded warrants.~~ previously outstanding warrants issued in connection with the Company’s December 2018 Offering.

During the year ended December 31, 2021, the Company issued 519,374 shares of common stock upon the cashless exercise of previously outstanding placement agent warrants issued in connection with the Company’s July 2020 and March 2020 Offerings.

As of December 31, ~~2020, there were 5,260,005 pre-funded~~2021, the Company has 20,928,767 warrants outstanding.

~~Warrants~~

~~March~~ The following table summarizes the Company’s warrant activity for the year ended December 31, 2020 and 2021:

	Warrants			Weighted Average Exercise Price
Outstanding at December 31, 2019		10,519,945		$	1.94
Issued		11,310,480			0.98
Exercised		(877,202	)		1.93
Expired		(4,354,144	)		1.93
Outstanding at December 31, 2020		16,599,079		$	1.29
Issued		5,131,264			2.00
Exercised		(801,576	)		1.54
Outstanding at December 31, 2021		20,928,767		$	1.45

July 2021 Warrants

As described above, as a part of the ~~March 2020 registered direct offering,~~July 2021 Offering, the Company issued unregistered warrants to purchase ~~2,360,313~~4,773,269 shares of its common stock at an exercise price of ~~$1.04~~$1.97 per share and contractual term of five and one-half ~~years~~.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 and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws.~~thereunder. In accordance with ASC 480, these warrants are classified as equity and their relative fair value of approximately ~~$1.1~~$4.5 million was recognized as additional paid in ~~capital~~.capital. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~As of December 31, 2020, there were 2,360,313 March 2020 Warrants outstanding.~~

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Table of Contents

July 2020 Warrants

As described above, as a part of the July 2020 offering, the Company issued unregistered warrants to purchase 7,783,616 shares of its common stock at an exercise price of $0.903 per share and contractual term of five and one-half ~~years~~.years. The unregistered warrants were offered in a private placement under Section 4(a)(2) of the Securities Act, and Regulation D promulgated ~~thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws.~~thereunder. In accordance with ASC ~~480,~~815, Derivatives and Hedging, these warrants are classified as equity and their relative fair value of approximately $3.5 million was recognized as additional paid in ~~capital~~.capital. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~As of December 31, 2020, there were 7,783,616 July~~

March 2020 Warrants ~~outstanding.~~

~~Series 1 Warrants~~

As described above, as part of the ~~offering of Series A Stock,~~March 2020 Offering, the Company issued ~~5,181,346 Series 1 Warrants~~unregistered warrants to purchase 2,360,313 shares of its common stock at an exercise price of ~~$1.93~~$1.04 per share and contractual term of ~~two years~~.five and one-half years. The unregistered warrants were offered in a private placement under Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder. In accordance with ASC ~~480,~~815, Derivatives and Hedging, these warrants are classified as equity and their relative ~~fair-value~~fair value of ~~$2,621,809~~approximately $1.1 million was recognized as ~~a deemed dividend on the Series A Stock during the year ended December 31, 2019~~.additional paid in capital. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~During~~

Warrants Issued for Services

In connection with the ~~year ended December 31, 2019, the Company received $96,500 and issued 50,000 shares upon the exercise of outstanding Series 1 Warrants.~~

~~During the year ended December 31, 2020, the Company received $1,500,000 and issued 777,202 shares upon the exercise of outstanding Series 1 Warrants.~~

~~As of December 31, 2020, all of the remaining 4,354,144 Series 1 Warrants expired unexercised~~.

~~Series 2 Warrants~~

~~As part of the offering of Series A Stock,~~July 2021 Offering described above, the Company issued ~~5,181,346 Series 2 Warrants~~designees of the placement agent warrants to purchase 357,995 shares of common stock at an exercise price of ~~$1.93 per share~~$2.46 and a contractual term of five ~~years~~.years. In accordance with ASC ~~480,~~815, Derivatives and Hedging, these warrants are classified as equity and ~~their relative fair-value~~its estimated fair value of ~~$2,908,778~~$558,472 was recognized as ~~a deemed dividend on the Series A Stock during the year ended December 31, 2019~~.additional paid in capital. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the ~~warrants,~~warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~During~~

In connection with the ~~year ended December 31,~~July 2020 Offering described above, the Company ~~received $193,000~~issued designees of the placement agent warrants to purchase 583,771 shares of common stock at an exercise price of $1.2848 and a contractual term of five years. In accordance with ASC 815, these warrants are classified as equity and its estimated fair value of $399,445 was recognized as additional paid in capital. Additionally, the Company issued ~~100,000~~to its previous underwriter a warrant to purchase 311,345 shares ~~upon~~of common stock at an exercise price of $1.2848 per share and contractual term of five years. In accordance with ASC 815, this warrant is classified as equity and its estimated fair value of $213,038 was recognized as additional paid in capital. The estimated fair value is determined using the ~~exercise~~Black-Scholes Option Pricing Model which is based on the value of ~~outstanding Series 2 Warrants.~~

Asthe underlying common stock at the valuation measurement date, the remaining contractual term of ~~December 31, 2020, 5,081,346 Series 2 Warrants remain outstanding.~~

~~Warrants Issued for Services~~

the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

In connection with the March 2020 ~~offering~~Offering described above, the Company issued designees of the placement agent warrants to purchase 177,023 shares of common stock at an exercise price of $1.4564 and a contractual term of five years. In accordance with ASC 815, these warrants are classified as equity and its estimated fair value of $66,201 was recognized as additional paid in ~~capital~~.capital. Additionally, the Company issued to its previous underwriter a warrant to purchase 94,413 shares of common stock at an exercise price of $1.4564 per share and contractual term of five ~~years~~.years. In accordance with ASC 815, this warrant is classified as equity and its estimated fair value of $35,308 was recognized as additional paid in capital. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~In connection with the July 2020 offering described above, the Company issued~~ designees of the placement agent warrants to purchase 583,771 shares of common stock at an exercise price of $1.2848 and a contractual term of five years. In accordance with ASC 815, these warrants are classified as equity and its estimated fair value of $399,445 was recognized as additional paid in capital~~. Additionally, the Company issued to its previous underwriter a warrant to purchase 311,345 shares of common stock at an exercise price of $1.2848 per share and contractual term of five years. In accordance with ASC 815, this warrant is classified as equity and its estimated fair value of $213,038 was recognized as additional paid in capital.~~ ~~The estimated fair value is determined using the~~ ~~Black-Scholes Option Pricing Model~~ which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~Series D Warrant~~

On August 22, 2013, the Company closed its private placement of an aggregate of $4.6 million shares of the Company’s Series D Stock to OXBT Fund. In connection with the purchase of shares of Series D Stock, OXBT Fund received the Series D Warrant to purchase 117,949 shares of common stock at an exercise price equal to $52.00 and contractual term of six years. In accordance with ASC 815, these warrants are classified as equity and their relative fair-value of $1,531,167 was recognized as a deemed dividend on the Series D Stock during the prior fiscal year ended April 30, 2014~~. The estimated fair value is determined using the~~ ~~Black-Scholes Option Pricing Model~~ which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~The~~ ~~Series D~~ ~~Warrant was exercisable beginning on the date of issuance and expired on August 22, 2019. The exercise price and the number of shares issuable upon exercise of~~ ~~Series D~~ Warrant was subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock, and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. In addition, if stockholder approval for the transaction was obtained, the ~~Series D~~ Warrant would be subject to anti-dilution provisions until such time that for 25 trading days during any 30 consecutive trading day period, the volume weighted average price of the Company’s common stock exceeded $130.00 and the daily dollar trading volume exceeds $350,000 per trading day.

~~The~~ ~~Series D~~ Warrant was issued and sold without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, OXBT Fund could exercise the Series D Warrant and sell the ~~Series D~~ Stock and underlying shares only pursuant to an effective registration statement under the Securities Act covering the resale of those securities, an exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities Act.

~~During the year ended December 31, 2019, all of the 107,488 previously outstanding Series D Warrants expired unexercised.~~

~~Series C Warrants~~

~~On July 23, 2013, as part of the offering of Series C Stock, the Company issued 137,668 Series C Warrants at an exercise price of $52.00 per share and contractual term of six years~~. In accordance with ASC 815, these warrants are classified as equity and their relative fair-value of $1,867,991 was recognized as a deemed dividend on the Series C Stock during the prior fiscal year ended April 30, 2014~~. The estimated fair value is determined using the~~ ~~Black-Scholes Option Pricing Model~~ which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock.

~~During the year ended December 31, 2019, all of the 12,035 previously outstanding Series C Warrants expired unexercised.~~

~~The following table summarizes the Company’s warrant activity for the years ended December 31, 2020 and December 31, 2019:~~

Warrants

Weighted Average Exercise Price

Outstanding at December 31, 2018
  10,690,718
$2.45
Exercised
  (50,000)
  1.93
Expired
  (120,773)
  47.30
Outstanding at December 31, 2019
  10,519,945
$1.94
Issued
  11,310,480
  0.98
Exercised
  (877,202)
  1.93
Expired
  (4,354,144)
  1.93
Outstanding at December 31, 2020
  16,599,079
$1.29

Stock Options

The following table summarizes all options outstanding as of December 31, ~~2020:~~

Options Outstanding at December 31, 2020

Options Exercisable and Vested at December 31, 2020

Exercise Price

Number of Options

Weighted Average Remaining Contractual Life (Years)

Number of Options

Weighted Average Exercise Price

$0.66 to $6.23
  396,500
  8.2
  30,500
$5.75
$10.60 to $41.40
  32,500
  6.1
  32,500
$29.26
$54.40 to $96.40
  20,751
  4.5
  20,751
$70.13
$113.00 to $1,188.00
  1,397
  3.0
  1,397
$178.14

  451,148
  7.9
  85,148
$33.24

2021:

		Options Outstanding at December 31, 2021				Options Exercisable and Vested at December 31, 2021
Exercise Price		Number of Options		Weighted Average Remaining Contractual Life (Years)		Number of Options		Weighted Average Exercise Price
$	0.66 to $1.85		539,500		8.1		237,171	$	1.43
$	1.97 to $11.20		135,750		4.7		37,000	$	7.60
$	41.40 to $63.20		19,500		4.7		19,500	$	46.54
$	68.40 to $748.00		4,817		2.4		4,817	$	103.99
			699,567		7.3		298,488	$	6.80

The following table summarizes options outstanding that have vested and are expected to vest based on options outstanding as of December 31, ~~2020:~~

Number of Option Shares

Weighted Average Exercise Price

Aggregate Intrinsic Value (1)

Weighted Average Remaining Contractual Life (Years)

Vested
  85,148
$33.24
$350
  6.1
Vested and expected to vest
  410,888
$8.09
$207,747
  7.8

2021:

	Number of Option Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value ⁽¹⁾		Weighted Average Remaining Contractual Life (Years)
Vested		296,488	$	6.80	$	190		7.4
Vested and expected to vest		655,451	$	4.13	$	190		7.3

⁽¹⁾	Amount represents the difference between the exercise price and ~~$1.86,~~$1.04, the closing price of Tenax Therapeutics’ stock on December 31, ~~2020,~~2021, as reported on the Nasdaq Capital Market, for all in-the-money options outstanding.

2016 Stock Incentive Plan

In June 2016, the Company adopted the 2016 Stock Incentive Plan (the “2016 Plan”). Under the 2016 Plan, with the approval of the Board’s Compensation Committee, ~~of the Board of Directors,~~ 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. On June 16, 2016, the Company’s stockholders approved the 2016 Plan and authorized for issuance under the 2016 Plan a total of 150,000 shares of common stock. On June 13, 2019, the Company’s stockholders approved an amendment to the 2016 Plan which increased the number of shares of common stock authorized for issuance under the 2016 Plan to a total of 750,000 shares, up from 150,000 previously authorized.

On June 10, 2021, the Company’s stockholders approved an amendment to the 2016 Plan which increased the number of shares of common stock authorized for issuance under the 2016 Plan to a total of 1.5 million shares, up from 750,000 previously authorized.

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The following table summarizes the shares available for grant under the Plan for the years ended December 31, ~~2020~~2021 and ~~2019:~~

2020:

		Shares Available for Grant
~~Balances, at December 31, 2018~~	~~100,000~~
~~Additional shares reserved~~	~~600,000~~
~~Options granted~~	~~(2,500~~)
Balances, at December 31, 2019			697,500
Options granted			(341,000	)
Balances, at December 31, 2020			356,500
Additional shares reserved			750,000
Options granted			(378,750	)
Options cancelled/forfeited			92,000
Balances, at December 31, 2021			819,750

2016 Plan Stock Options

Stock options granted under the 2016 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 2016 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 three to four years.

The following table summarizes the outstanding stock options under the 2016 Plan for the years ended December 31, ~~2020~~2021 and ~~2019:~~

Outstanding Options

Number of Shares

Weighted Average Exercise Price

Aggregate Intrinsic Value

Balances at December 31, 2018
  50,000
$6.10

Options granted
  2,500
$1.72

Balances at December 31, 2019
  52,500
$5.89

Options granted
  341,000
$1.18

Balances at December 31, 2020
  393,500
$1.81
$233,380 (1)

2020:

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value
Balances at December 31, 2019		52,500		$	5.89
Options granted		341,000		$	1.18
Balances at December 31, 2020		393,500		$	1.81
Options granted		378,750		$	1.88
Options exercised		(17,000	)	$	1.18
Options cancelled/forfeited		(92,000	)	$	1.59
Balances at December 31, 2021		663,250		$	1.90	$	190	⁽¹⁾

⁽¹⁾	Amount represents the difference between the exercise price and ~~$1.86,~~$1.04, the closing price of Tenax Therapeutics’ stock on December 31, ~~2020,~~2021, as reported on the Nasdaq Capital Market, for all in-the-money options outstanding.

The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value.

The Company used the following assumptions to estimate the fair value of options granted under the 2016 Plan for the years ended December 31, ~~2020~~2021 and ~~2019:~~

For the year ended December 31,

2020

2019

Risk-free interest rate (weighted average)
  1.02%
  2.39%
Expected volatility (weighted average)
  97.63%
  106.74%
Expected term (in years)
  7
  7
Expected dividend yield
  0.00%
  0.00%

2020:

	For the year ended December 31,
	2021			2020
Risk-free interest rate (weighted average)		0.72	%		1.02	%
Expected volatility (weighted average)		101.60	%		97.63	%
Expected term (in years)		6.7			7
Expected dividend yield		0.00	%		0.00	%

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Risk-Free Interest Rate	The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options.

Expected Volatility	The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options.

Expected Term	The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the Company’s historical experience with its stock option grants.

Expected Dividend Yield	The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not anticipate paying any dividends in the near future.
~~Forfeitures~~
Forfeitures	As stock-based compensation expense recognized in the statement of operations for the years ended December 31, ~~2020~~2021 and ~~2019~~2020 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience.

The weighted-average grant-date fair value of options granted during the years ended December 31, 2021 and 2020 was $1.53 and ~~2019 was~~ $0.95, ~~and $1.47,~~ respectively.

The Company recorded compensation expense for these stock options grants of ~~$218,148~~$391,801 and ~~$92,919~~$218,148 for the years ended December 31, 2021 and 2020, ~~and 2019,~~ respectively.

As of December 31, ~~2020,~~2021, there were unrecognized compensation costs of approximately ~~$152,000~~$167,000 related to non-vested stock option awards under the 2016 Plan that will be recognized on a straight-line basis over the weighted average remaining vesting period of ~~1.13~~0.82 years.

1999 ~~Amended~~ Stock Plan

In October 2000, the Company adopted the 1999 Stock Plan, as amended and restated on June 17, 2008 (the “1999 Plan”). Under the 1999 Plan, with the approval of the Compensation Committee of the Board of Directors, the Company could grant stock options, restricted stock, stock appreciation rights and new shares of common stock upon exercise of stock options. On March 13, 2014, the Company’s stockholders approved an amendment to the 1999 Plan which increased the number of shares of common stock authorized for issuance under the 1999 Plan to a total of 200,000 shares, up from 15,000 previously authorized. On September 15, 2015, the Company’s stockholders approved an additional amendment to the 1999 Plan which increased the number of shares of common stock authorized for issuance under the 1999 Plan to a total of 250,000 shares, up from 200,000 previously authorized. The 1999 Plan expired on June 17, 2018 and no new grants may be made under that plan after that date. However, unexpired awards granted under the 1999 Plan remain outstanding and subject to the terms of the 1999 Plan.

1999 Plan Stock Options

Stock options granted under the 1999 Plan may be ISOs or NSOs. ISOs could be granted only to employees. NSOs could be granted to employees, consultants and directors. Stock options under the 1999 Plan could be granted with a term of up to ten years and at prices no less than fair market value for ISOs and no less than 85% of the fair market value for NSOs. Stock options granted generally vest over one to three years.

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The following table summarizes the outstanding stock options under the 1999 Plan for the years ended December 31, ~~2020~~2021 and ~~2019:~~

Outstanding Options

Number of Shares

Weighted Average Exercise Price

Aggregate Intrinsic Value

Balances at December 31, 2018
  191,735
$93.72

Options cancelled
  (29)
$2,203.00

Balances at December 31, 2019
  191,706
$93.40

Options cancelled
  (134,058)
$113.64

Balances at December 31, 2020
  57,648
$46.34
$- (1)

2020:

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value
Balances at December 31, 2019		191,706		$	93.40
Options cancelled		(134,058	)	$	113.64
Balances at December 31, 2020		57,648		$	46.34
Options cancelled		(21,331	)	$	53.28
Balances at December 31, 2021		36,317		$	42.26	$	0	⁽¹⁾

⁽¹⁾	Amount represents the difference between the exercise price and ~~$1.86,~~$1.04, the closing price of Tenax Therapeutics’ stock on December 31, ~~2020,~~2021, as reported on the Nasdaq Capital Market, for all in-the-money options outstanding.

~~The Company used the following assumptions to estimate the fair value of options granted under the 1999 Plan for the year ended December 31, 2019:~~

~~Risk-Free Interest Rate~~	~~The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options.~~
~~Expected Volatility~~	The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options.
~~Expected Term~~	The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the historical experience that the Company has had with its stock option grants.
~~Expected Dividend Yield~~	~~The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and do not anticipate paying any dividends in the near future.~~
~~Forfeitures~~	As stock-based compensation expense recognized in the statement of operations for the years ended December 31, 2020 and 2019 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience.

The Company recorded compensation expense for these stock options grants of ~~$34,498~~$1,290 and ~~$78,297~~$34,498 for the years ended December 31, 2021 and 2020, ~~and 2019,~~ respectively.

As of December 31, 2020, there were unrecognized compensation costs of approximately $1,500 related to non-vested stock option awards that will be recognized on a straight-line basis over the weighted average remaining vesting period of 0.25 years.

~~Restricted Stock Grants~~

~~The following table summarizes the outstanding restricted stock under the 1999 Plan for the year ended December 31, 2019~~:

Outstanding Restricted Stock Grants

Number of Shares

Weighted Average Grant Date Fair Value

Balances, at December 31, 2018
  19,914
$6.29
Restricted stock vested
  (12,195)
$6.28
Restricted stock cancelled
  (7,719)
$6.27
Balances at December 31, 2019
  -
$-

~~The Company recorded no compensation expense for these restricted stock grants for the year ended December 31, 2020 and 2019.~~

~~As of December 31, 2020,~~2021, there were no unrecognized compensation costs related to non-vested stock option awards under the ~~non-vested restricted~~1999 Plan.

In connection with the retirement of the Company’s former Chief Executive Officer (“CEO”), effective July 13, 2021 (the “Modification Date”), the Company modified the terms of the former CEO’s outstanding stock ~~grants.~~

awards to: (1) accelerate the 152,500 unvested shares underlying his outstanding stock awards immediately as of the Modification Date and (2) extend the period during which his outstanding stock awards for an aggregate of 218,706 shares may be exercised through the earlier of the stock award’s original termination date or the five-year anniversary of the Modification Date.

The Company determined that the extension of the period during which the vested shares may be exercised was a Type 1 modification pursuant to ASC 718, Compensation-Stock Compensation. However, acceleration of vesting and extension of the exercise period for the remaining Stock Awards was a Type 3 modification pursuant to ASC 718 because absent the modification terms, those Stock Awards would have been forfeited as of the former CEO’s retirement date.

On the Modification Date, the Company recognized approximately $187,000 of compensation expense, which is included in General and administrative expense for the year ended December 31, 2021, with respect to these modifications.

Inducement Stock Options

The Company granted two employment inducement stock option awards, one for 100,000 shares of common stock and the other for 250,000 shares of common stock, to its new CEO on July 6, 2021.

The employment inducement stock option for 100,000 shares of common stock 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: 50% upon initiation of a Phase 3 trial for levosimendan by June 30, 2022; and 50% upon initiation of a Phase 3 trial for imatinib by June 30, 2022. The options have a 10-year term and an exercise price of $1.97 per share, the July 6, 2021 closing price of our common stock. As of December 31, 2021, none of the vesting milestones have been achieved. The estimated fair value of this inducement stock option award was $178,291 using a 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 1.37%, dividend yield of 0%, volatility factor for our common stock of 103.50% and an expected life of 10 years.

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The employment inducement stock option award for 250,000 shares of common stock also 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% on the one-year anniversary of the CEO’s employment start date and an additional 25% on each of the following three anniversaries of the CEO’s employment start date, subject to continued employment. The options have a 10-year term and an exercise price of $1.97 per share, the July 6, 2021 closing price of our common stock.

The estimated fair value of this inducement stock option award was $403,180 using a 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 granted an employment inducement stock option award for 250,000 shares of common stock to our 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 options have a 10-year term and an exercise price of $1.78 per share, the January 15, 2021 closing price of our common stock. As of December 31, 2021, none of the vesting milestones have been achieved. The estimated fair value of the inducement stock option award granted was $402,789 using a 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 1.11%, dividend yield of 0%, volatility factor for our common stock of 103.94% and an expected life of 10 years.

Inducement stock option compensation expense totaled $194,143 for the year ended December 31, 2021. As of December 31, 2021, there was $778,658 of remaining unrecognized compensation expense related to these inducement stock options.

NOTE F—G—COMMITMENTS AND CONTINGENCIES

Operating Leases

As described above in “NOTE ~~B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES”~~B”, the Company adopted ASC 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840.

In January 2011, the Company entered into ~~the Lease~~a lease with Concourse Associates, LLC for ~~office facilities located at the premises~~its headquarters in Morrisville, North Carolina (the “Lease”). The Lease was amended in August 2015 to extend the term for the 5,954 square foot rental. The current term began on March 1, 2016 and ~~continues~~continued for 64 months to ~~September~~June 30, 2021. Rent payments began on July 1, 2016, following the conclusion of a four-month rent abatement period. The Company has two five-year options to extend the Lease and a one-time option to terminate the Lease 36thirty-six months after the commencement of the initial term if no additional space ~~(“Expansion Space”)~~ became ~~available; none of these optional periods have been considered in the determination of the right-of-use asset or the lease liability for the Lease as~~available. On April 2, 2021, the Company ~~did not consider it reasonably certain that it would exercise any such options. The Lease further provides that the Company is obligated to pay~~negotiated a 3-year extension to the ~~landlord certain variable costs, including taxes~~existing lease term, commencing July 1, 2021 (the “Commencement Date”). Beginning on the Commencement Date, the annual base rent was increased to $125,034 and ~~operating expenses. The Company also has a right of first offer to~~will increase 2.5% annually for lease the Expansion Space, of no less than 1,000 square feet, as that additional space becomes available adjacent to the premises over the remainder of the initial term of the Lease, at the same rate per square foot as the current premises, with an extension of the term of 60 additional months starting at the commencement date of acquiring the Expansion Space.

years 2 and 3.

The Company performed an evaluation of its other contracts with customers and suppliers in accordance with ASC 842, Leases, and determined that, except for the Lease described above, none of the Company’s contracts contain a lease.

The balance sheet classification of our lease liabilities was as follows:

December 31, 2020

December 31, 2019

Current portion included in accrued liabilities
$60,379
$111,353
Long term lease liability
  -
  60,379

$60,379
$171,732

	December 31, 2021		December 31, 2020
Current portion included in accrued liabilities	$	107,192	$	60,379
Long term lease liability		183,589		0
	$	290,781	$	60,379

F-21

Table of Contents

As of December 31, ~~2020,~~2021, the maturities of our operating lease liabilities were as follows:

Year ending December 31,

2021
  61,803


Total lease payments
$61,803
Less: Imputed interest
  (1,424)
Operating lease liability
$60,379

Year ending December 31,
2022	$	126,612
2023		129,797
2024		65,702

Total lease payments	$	322,111
Less: Imputed interest		(31,330	)
Operating lease liability	$	290,781

Simdax license agreement

On November 13, 2013, the Company acquired, through its ~~wholly owned~~wholly-owned subsidiary, Life Newco, that certain License Agreement, ~~(the “License”),~~ dated September 20, 2013, as amended on October 9, 2020 and January 25, 2022, by and between Phyxius and Orion (as amended, the “License”), and that certain Side Letter, dated October 15, 2013 by and between Phyxius and Orion. The License grants the Company an exclusive, ~~sublicensable~~sublicenseable right to develop and commercialize pharmaceutical products containing levosimendan ~~(the “Product”)~~ in the United States and Canada (the “Territory”) ~~from Orion.~~and, pursuant to the October 9, 2020 amendment, also includes two product dose forms containing levosimendan, in capsule and solid dosage form, and a subcutaneously administered product containing levosimendan, subject to specified limitations in the License (together, the “Product”). Pursuant to the License, the Company ~~must use Orion’s “Simdax®”~~and Orion will agree to a new trademark ~~to commercialize the Product.~~ when commercializing levosimendan in either of these forms.

The License also grants to 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 ~~i.e.~~(i.e., line extension ~~products.~~ products).

Orion’s ongoing role under the License includes sublicense approval, serving as the sole source of manufacture, holding a first right to enforce intellectual property rights in the Territory, and certain regulatory participation rights. Orion must notify the Company before the end of 2024 if it chooses not to exercise its right to supply oral formulations of levosimendan to the Company for commercialization in the Territory. Additionally, the Company must grant back to Orion a broad non-exclusive license to any patents or clinical trial data related to the Product developed by the Company under the License. The License has a fifteen-year term, provided, however, that the License will continue after the end of the 15-year term in each country in the Territory until the expiration of Orion’s patent rights in the Product in such country.

On October 9, 2020, the Company entered into the Amendment to include two new oral products containing levosimendan, in capsule and solid dosage form, and a subcutaneously administered product containing levosimendan to the scope of the License, subject to specified limitations. The Amendment also amends the tiered royalty payments based on net sales of the Product in the Territory (each as defined in the License, as amended by the Amendment) made by the Company and its sublicensees. Pursuant to the Amendment, the term of the License ~~has been extended~~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, ~~2028,~~2030, however, either party will have the right to terminate the License with immediate effect.

Pursuant to the terms of the License, on November 13, 2013, the Company paid to Orion a non-refundable up-front payment in the amount of $1.0 million. The License also includes the following development milestones for which the Company ~~shall~~must make non-refundable payments to Orion no later than 28 days after the occurrence of the applicable milestone event: ~~(i)~~(1) $2.0 million upon the grant of ~~FDA~~United States Food and Drug Administration approval, including all registrations, licenses, authorizations and necessary approvals, to develop and/or commercialize the Product in the United States; and ~~(ii)~~(2) $1.0 million upon the grant of regulatory approval for the Product in Canada. Once commercialized, the Company is obligated to make certain non-refundable commercialization milestone payments to Orion, aggregating to up to $13.0 million, contingent upon achievement of certain cumulative net sales amounts in the Territory. The Company also must ~~also~~ pay Orion tiered royalties based on net sales of the Product in the Territory made by the Company and its sublicensees. After the end of the License term, ~~of the License,~~ the Company must pay Orion a royalty based on net sales of the Product in the Territory for as long as the Company sells the Product in the ~~Territory~~.

Territory.

As of December 31, ~~2020,~~2021, the Company has not met any of the developmental milestones under the License and, accordingly, has not recorded any liability for the contingent payments due to Orion.

~~On July 3, 2019, Orion filed a request for arbitration against the Company under the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce seeking~~ a declaration regarding the correct interpretation of the line extension provisions of the License and whether or not such provisions apply to the oral form of levosimendan recently developed by Orion. Additionally, Orion requested the Company reimburse Orion for all legal fees associated with the arbitration. The Company submitted its response to the request for arbitration on July 31, 2019 and rejected Orion’s position that the oral formation was not a line extension product under the License and requested Orion reimburse the Company for all legal fees associated with the arbitration. The hearing on this matter was held before the arbitral tribunal on April 7 and April 8, 2020. The Final Award was issued May 21, 2020 and held in favor of the Company. The tribunal determined that oral levosimendan was a line extension product under the License and ordered Orion to reimburse the Company approximately $358,000 for its direct arbitration costs, including legal fees incurred.

F-22

Table of Contents

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 G—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 18eighteen 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. ~~The~~A third-party trustee manages the 401(k) ~~Plan is managed by a third-party trustee.~~

Plan.

For the years ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company recorded ~~$69,793~~$73,855 and ~~$68,587~~$69,793 for matching contributions expense, respectively.

NOTE H—INCOME TAXES

The Company has not recorded any income tax expense (benefit) for the period ended December 31, ~~2020~~2021 due to its history of net operating losses.

The reconciliation of income tax expense (benefit) at the statutory federal income tax rate of 21% for the periods ended December 31, ~~2020~~2021 and December 31, ~~2019~~2020 is as follows:

December 31,

2020

2019

U.S. federal tax benefit at statutory rate
$(2,068,792)
$(1,762,816)
State income tax benefit, net of federal benefit
  (194,565)
  (165,789)
Stock compensation
  57,611
  37,761
Other nondeductible, including goodwill impairment
  576
  1,373
Change in state tax rate
  -
  27,945
Federal and state net operating loss adjustments
  1,605,223
  234,659
Other, including effect of tax rate brackets
  (56,640)
  (17,043)
Change in valuation allowance
  656,587
  1,643,910

$-
$-

	December 31,
	2021			2020
U.S. federal tax benefit at statutory rate	$	(6,819,615	)	$	(2,068,792	)
State income tax benefit, net of federal benefit		(641,368	)		(194,565	)
Stock compensation		171,269			57,611
Other nondeductible, including IPR&D expense		5,032,981			576
Change in state tax rate		1,768,013			0
Federal and state net operating loss adjustments		745,439			1,605,223
Other, including effect of tax rate brackets		(73	)		(56,640	)
Change in realizability of IPR&D		229,750			0
Change in valuation allowance		(486,396	)		656,587
	$	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:

December 31,

Deferred Tax Assets

2020

2019

Net operating loss carryforwards
$35,540,911
$34,933,500
Accruals and other
  545,225
  498,572
Capital loss carryforwards
  11,003
  16,908
Valuation allowance
  (36,096,792)
  (35,440,205)
Net deferred tax assets
  347
  8,775
Deferred Tax Liabilities


Other liabilities
  (347)
  (8,775)
Net Deferred Tax Liabilities
$-
$-

	December 31,
Deferred Tax Assets	2021			2020
Net operating loss carryforwards	$	35,291,097		$	35,540,911
Accruals and other		308,296			545,225
Capital loss carryforwards		11,003			11,003
Valuation allowance		(35,610,396	)		(36,096,792	)
Net deferred tax assets		0			347
Deferred Tax Liabilities
Other liabilities		0			(347	)
Net Deferred Tax Liabilities	$	0		$	0

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~~decrease in the valuation allowance during ~~2020~~2021 was approximately ~~$0.7~~$0.49 million.

As of December 31, ~~2020,~~2021, the Company had Federal and State net operating loss carryforwards of approximately ~~$153.0~~$159.3 million and ~~$109.3~~$119.0 million available to offset future federal and state taxable income, respectively. Federal net operating losses of ~~$128.7~~$125.2 million begin to expire in ~~2021,~~2022, while the remaining ~~$24.3~~$34.2 million carryforward indefinitely. State net operating losses begin to expire in 2024.

F-23

Table of Contents

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.

The Company has U.S. federal net operating loss carryforwards, or NOLs, which expire in various years if not utilized. In addition, it has federal research and development credit carryforwards. The federal research and development credit carryforwards 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. The Company has not performed a formal study to determine whether any of its NOLs are subject to these limitations. The Company has 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 it has in the past experienced additional ownership changes, or if it experiences one or more ownership changes as a result of future transactions in its stock, then the Company may be further limited in its ability to use its NOLs and other tax assets to reduce taxes owed on the net taxable income that it earns in the event that The Company attains profitability. Any such limitations on the ability to use its NOLs and other tax assets could adversely impact its business, financial condition, and operating results in the event that the Company attain profitability.

Management has evaluated all other tax positions that could have a significant effect on the financial statements and determined the Company had no uncertain income tax positions onat December 31, ~~2020.~~

2021.

The Company files U.S. and state income tax returns with varying statutes of limitations. The tax years 2002 and forward remain open to examination due to the carryover of unused net operating losses or tax ~~credit.~~

credits.

NOTE I—SUBSEQUENT EVENTS

On January ~~15, 2021,~~4, 2022, the Company ~~Life Newco II, PHPM, and Dr. Stuart Rich, solely in his capacity~~was issued US Pat. No. 11,213,524, entitled PHARMACEUTICAL COMPOSITIONS FOR SUBCUTANEOUS ADMINISTRATION OF LEVOSIMENDAN, which is directed towards the use of levosimendan via subcutaneous administration for treating a subject having a health condition of any kind, such as ~~holders’ representative (in such capacity, the “Representative”), entered into the Merger Agreement, pursuant to which, subject to the satisfaction~~heart failure, pulmonary hypertension including PH-HFpEF, chronic kidney disease, stroke, or waiver of the conditions set forth in the Merger Agreement, the Company would acquire 100% of the equity of PHPM. Under the terms of the Merger Agreement, Life Newco II would merge with and into PHPM, with PHPM surviving as a wholly owned subsidiary of the Company. On January 15, 2021, the Company completed the Acquisition.

As consideration for the Merger, the stockholders of PHPM received (i) 1,892,905 shares of the Company’s common stock (“Common Stock”), and (ii) 10,232 shares of the Company’s Series B convertible preferred stock, which are convertible into up to an aggregate of 10,232,000 shares of Common Stock (“Preferred Stock”) (collectively, the “Merger Consideration”).other health conditions. The issuance of 1,212,492 shares of Common Stock issuable upon conversion of the Preferred Stock, representing approximately 10% of the Merger Consideration, will be delayed as security for closing adjustments and post-closing indemnification obligations of PHPM and the stockholders of PHPM. Each share of Preferred Stock will automatically convert into (i) 881.5 shares of Common Stock following receipt of the approval of the stockholders of the Company for the Conversion (as defined herein), and (ii) 118.5 shares of Common Stock 24 months after the date of issuance of the Preferred Stock, subject to reduction for indemnification claims. The number of shares of Common Stock into which the Preferred Stock converts is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The Preferred Stock does not carry dividends or a liquidation preference. The Preferred Stock carries voting rights aggregating 4.99% of the Company’s Common Stock voting power immediately prior to the closing of the Merger. The rights, preferences and privileges of the Preferred Stock are set forth in the Certificate of Designation of Series B Convertible Preferred Stock that the Company filed with the Secretary of State of the State of Delaware on January 15, 2021 (the “Certificate of Designation”).

Pursuant to the Merger Agreement, the Company must, no later than July 31, 2021, take all action necessary to call, convene and hold a meeting of the Company’s stockholders to vote upon the conversion of the Preferred Stock pursuant to the Certificate of Designation (the “Conversion”). If stockholder approval is not obtained at such meeting, the Company must call a meeting every 90 days thereafter to seek stockholder approval for the Conversion until the earlier of the date stockholder approval for the Conversion is obtained or the Preferred Stock is no longer outstanding.

The terms of the Merger Agreement also require the board of directors of the Company (the “Board”) to, subject to the Board’s fiduciary duties under applicable law, (i) recommend to the Company’s stockholders that they approve the Conversion at any meeting of the Company’s stockholders called for the approval of the Conversion, and (ii) use reasonable best efforts to solicit from the Company’s stockholders, the affirmative vote of the holders of shares representing a majority of the shares of the Company’s capital stock voting in person or by proxy at any such meeting. A vote on the Conversionpatent is expected to ~~take place at the Company’s next annual meeting~~expire no earlier than 2039, exclusive of ~~stockholders. In addition, (i) at~~any possible extensions. The Company also has a PCT international application pending, with a U.S. counterpart already under examination, that describes and claims methods of treating the Company’s first ~~regularly scheduled Board meeting following the closing~~intended clinical indication, PH-HFpEF, by providing levosimendan by any route of the Merger, the Board must appoint one director designated by the Representative to serve on the Board, and (ii) as promptly as practicable after the Company has obtained stockholder approval for the Conversion, the Board must appoint two additional directors designated by the Representative to serve on the Board. Dr. Stuart Rich, the co-founder and Chief Executive Officer, and a stockholder of PHPM, and Dr. Michael Davidson and Dr. Declan Doogan, the two other designees of the Representative, were appointed to the Board on February 25, 2021. In connection with the closing of the Merger, Dr. Stuart Rich was also appointed Chief Medical Officer of the Company.

~~ITEM 9—~~C~~HANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~

~~None.~~

~~ITEM 9A—~~C~~ONTROLS AND PROCEDURES~~

~~Disclosure Controls and Procedures~~

Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the SEC, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2020, our disclosure controls and procedures were effective at the reasonable assurance level.

~~Changes in Internal Controls over Financial Reporting~~

From time to time, we may review and make changes to our internal control over financial reporting that are intended to enhance the effectiveness of our internal control over financial reporting and which do not have a material effect on our overall internal control over financial reporting. During the three months ended December 31, 2020, we made no changes to our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that we believe materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~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 Chief Executive Officer and 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:

administration.

-	~~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.~~

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making its assessment, management used the criteria established by the Committee of Sponsoring Organizations of 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, 2020.~~

~~ITEM 9B—~~O~~THER INFORMATION~~

~~There is no information to report under this item for the quarter ended December 31, 2020.~~

P~~ART III~~

~~ITEM 10—~~ D~~IRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE~~

The information required by this item is incorporated by reference to our Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 days after the end of fiscal 2020.

~~ITEM 11—~~E~~XECUTIVE COMPENSATION~~

~~ITEM 12—~~S~~ECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~

~~ITEM 13—~~C~~ERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE~~

~~ITEM 14—~~P~~RINCIPAL ACCOUNTANT FEES AND SERVICES~~

P~~ART IV~~

~~ITEM 15—~~E~~XHIBITS AND FINANCIAL STATEMENT SCHEDULES~~

~~(A)(1) The Consolidated Financial Statements and information listed below are included in this report in Part II, Item 8.~~

-	~~Report of Independent Registered Public Accounting Firm.~~
-	~~Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019.~~
-	~~Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2020 and 2019.~~
-	~~Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020 and 2019.~~
-	~~Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019.~~
-	~~Notes to the Consolidated Financial Statements.~~

~~(A)(2) No schedules have been included because they are not applicable, or the required information is shown in our Consolidated Financial Statements or our notes thereto.~~

~~(A)(3) The following exhibits have been or are being filed herewith and are numbered in accordance with Item 601 of Regulation S-K:~~

~~Exhibit No.~~		~~Exhibits Required by Item 601 of Regulation S-K~~
~~2.1~~		Agreement and Plan of Merger between Synthetic Blood International, Inc. and Oxygen Biotherapeutics, Inc. dated April 28, 2008 (incorporated herein by reference to Exhibit 2.01 to our current report on Form 8-K filed with the SEC on June 30, 2008)

~~2.2~~		Asset Purchase Agreement by and between Oxygen Biotherapeutics, Inc., Life Newco, Inc., Phyxius Pharma, Inc., and the stockholders of Phyxius Pharma, Inc. dated October 21, 2013 (incorporated herein by reference to Exhibit 2.1 to our current report on Form 8-K filed with the SEC on October 25, 2013) F-24

~~2.3~~		Agreement and Plan of Merger among PHPrecisionMed Inc., Tenax Therapeutics, Inc., Life Newco II, Inc., and Dr. Stuart Rich dated January 15, 2021 (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K filed with the SEC on January 19, 2021)

~~3.1~~		~~Certificate of Incorporation (incorporated herein by reference to Exhibit 3.01 to our current report on Form 8-K filed with the SEC on June 30, 2008)~~

~~3.2~~		~~Certificate of Amendment of the Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our current report on Form 8-K filed with the SEC on November 13, 2009)~~

~~3.3~~		~~Certificate of Amendment of the Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our~~ ~~current report on Form 8-K filed with the SEC on May 15, 2013~~)

~~3.4~~		~~Certificate of Amendment of the Certificate of Incorporation (incorporated herein by reference to Exhibit 3.4 to our quarterly report on Form 10-Q filed with the SEC on December 15, 2014)~~

~~3.5~~		~~Certificate of Amendment of the Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our current report on Form 8-K filed with the SEC on February 23, 2018)~~

~~3.6~~		~~Certificate of Designation of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 4.1 to our current report on Form 8-K filed with the SEC on December 11, 2018)~~

~~3.7~~		~~Certificate of Designation of Series B Convertible Preferred Stock (incorporated herein by reference to Exhibit 4.1 to our current report on Form 8-K filed with the SEC on January 19, 2021)~~

~~3.8~~		~~Third Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to our quarterly report on Form 10-Q filed with the SEC on September 9, 2015)~~

~~4.1~~		~~Specimen Stock Certificate (incorporated herein by reference to Exhibit 4.1 to our annual report on Form 10-K filed with the SEC on July 23, 2010)~~

~~4.2~~		Description of Common Stock*

~~10.1~~		Agreement with Leland C. Clark, Jr., Ph.D. dated November 20, 1992 with amendments, Assignment of Intellectual Property/ Employment (incorporated herein by reference to Exhibit 10.1 to our annual report on Form 10-K filed with the SEC on August 13, 2004)

~~10.2~~		Agreement between the Registrant and Keith R. Watson, Ph.D. Assignment of Invention (incorporated herein by reference to Exhibit 10.2 to our annual report on Form 10-K filed with the SEC on August 13, 2004)

~~10.3~~		Children’s Hospital Research Foundation License Agreement dated February 28, 2001 (incorporated herein by reference to Exhibit 10.3 to our annual report on Form 10-K filed with the SEC on August 13, 2004)

~~10.4~~		~~1999 Amended Stock Plan (as amended and restated in 2008) (incorporated herein by reference to Exhibit 10.15 to our annual report on Form 10-K with the SEC on August 13, 2008) +~~

~~10.5~~		~~Amendment No. 1 to Oxygen Biotherapeutics, Inc. 1999 Amended Stock Plan (incorporated herein by reference to Exhibit 10.19 to our annual report on Form 10-K filed with the SEC on July 29, 2014) +~~

~~10.6~~		~~Amendment No. 2 to Oxygen Biotherapeutics, Inc. 1999 Amended Stock Plan (incorporated herein by reference to Exhibit 10.20 to our annual report on Form 10-K filed with the SEC on July 29, 2014) +~~

~~10.7~~		~~Form of Option issued to Executive Officers and Directors (incorporated herein by reference to Exhibit 10.5 to our annual report on Form 10-K filed with the SEC on August 13, 2004) +~~

~~10.8~~		~~Form of Option issued to Employees (incorporated herein by reference to Exhibit 10.6 to our annual report on Form 10-K filed with the SEC on August 13, 2004) +~~

~~10.9~~		~~Form of Option Agreement with Form of Notice of Grant (incorporated herein by reference to Exhibit 10.9 to our annual report on Form 10-K filed with the SEC on March 16, 2017) +~~

~~10.10~~		~~2016 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to our quarterly report on Form 10-Q filed with the SEC on August 9, 2016) +~~

~~10.1~~1		~~Amendment No. 1 to 2016 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to our quarterly report on Form 10-Q filed with the SEC on August 14, 2019) +~~

~~10.12~~		Form of Option issued to Non-Employee Directors under 2016 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 to our quarterly report on Form 10-Q filed with the SEC on August 14, 2018) +

~~10.13~~		Form of Option issued to Employees and Contractors under 2016 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.3 to our quarterly report on Form 10-Q filed with the SEC on August 14, 2018) +

~~10.14~~		~~Form of Incentive Stock Option Agreement under 2016 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.4 to our quarterly report on Form 10-Q filed with the SEC on August 14, 2018) +~~

~~10.15~~		Second Amended and Restated Employment Agreement with Michael Jebsen dated November 13, 2013 (incorporated herein by reference to Exhibit 10.2 to our current report on Form 8-K filed with the SEC on November 19, 2013) +

~~10.16~~		First Amendment to Second Amended and Restated Employment Agreement with Michael Jebsen dated June 18, 2015 (incorporated herein by reference to Exhibit 10.2 to our current report on Form 8-K filed with the SEC on June 19, 2015) +

~~10.17~~		~~Employment Agreement with Anthony DiTonno dated June 1, 2018 (incorporated herein by reference to Exhibit 10.36 to our annual report on Form 10-K filed with the SEC on July 15, 2011) +~~

~~10.18~~		~~Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.36 to our annual report on Form 10-K filed with the SEC on July 15, 2011) +~~

~~10.19~~		Description of Non-Employee Director Compensation, effective June 15, 2015 (incorporated herein by reference to Exhibit 10.1 to our quarterly report on Form 10-Q filed with the SEC on September 9, 2015) +

~~10.20~~		~~Lease Agreement for North Carolina corporate office (incorporated herein by reference to Exhibit 10.6 to our quarterly report on Form 10-Q filed with the SEC on March 21, 2011)~~

~~10.21~~		~~First Amendment to Lease Agreement for North Carolina corporate office (incorporated herein by reference to Exhibit 10.74 to our transition report on Form 10-KT filed with the SEC on March 14, 2016)~~

~~10.22~~		~~Task Order between the Company and NextPharma, dated November 15, 2011 (incorporated herein by reference to Exhibit 10.2 to our current report on Form 8-K filed with the SEC on November 16, 2011)~~

~~10.23~~		~~Fluoromed Supply Agreement (incorporated herein by reference to Exhibit 10.62 to our annual report on Form 10-K filed with the SEC on July 25, 2012)~~

~~10.24~~		License and Supply Agreement dated February 5, 2013, between Oxygen Biotherapeutics, Inc. and Valor SA (incorporated herein by reference to Exhibit 10.60 to our annual report on Form 10-K filed with the SEC on July 29, 2014)

~~10.25~~		License Agreement dated September 20, 2013 by and between Phyxius Pharma, Inc. and Orion Corporation (incorporated herein by reference to Exhibit 10.3 to our quarterly report on Form 10-Q filed with the SEC on March 17, 2014)**

~~10.26~~		Amendment to License Agreement, dated as of October 9, 2020, by and between Tenax Therapeutics, Inc. and Orion Corporation (incorporated herein by reference to Exhibit 10.1 to our current report on Form 8-K filed with the SEC on October 15, 2020)**

~~10.27~~		Sales Agreement dated as of February 23, 2015, between Tenax Therapeutics, Inc. and Cowen and Company, LLC (incorporated herein by reference to Exhibit 10.72 to our annual report on Form 10-K filed with the SEC on July 14, 2015)

~~10.28~~		~~Representative’s Warrant to Purchase Shares of Common Stock (incorporated herein by reference to Exhibit 4.2 to our current report on Form 8-K filed with the SEC on December 11, 2018)~~

~~10.29~~		~~Form of Warrant to Purchase Shares of Common Stock (incorporated herein by reference to Exhibit 4.3 to our current report on Form 8-K filed with the SEC on December 11, 2018)~~

~~10.30~~		~~Warrant Agency Agreement (incorporated herein by reference to Exhibit 4.4 to our current report on Form 8-K filed with the SEC on December 11, 2018)~~

~~10.31~~		Form of Securities Purchase Agreement, dated as of March 11, 2020, by and between Tenax Therapeutics, Inc. and the investor identified on the signature page thereto (incorporated herein by reference to Exhibit 10.1 to our current report on Form 8-K filed with the SEC on March 13, 2020)

~~10.32~~		~~Form of Pre-Funded Warrant (incorporated herein by reference to Exhibit 4.1 to our current report on Form 8-K filed with the SEC on March 13, 2020)~~

~~10.33~~		~~Form of Unregistered Warrant (incorporated herein by reference to Exhibit 4.2 to our current report on Form 8-K filed with the SEC on March 13, 2020)~~

~~10.34~~		~~Form of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.3 to our current report on Form 8-K filed with the SEC on March 13, 2020)~~

~~10.35~~		Note, dated April 30, 2020, between Tenax Therapeutics, Inc. and First Horizon Bank (incorporated herein by reference to Exhibit 10.1 to our quarterly report on Form 10-Q filed with the SEC on May 15, 2020)

~~10.36~~		~~Form of Pre-Funded Warrant (incorporated herein by reference to Exhibit 4.1 to our current report on Form 8-K filed with the SEC on July 8, 2020)~~

~~10.37~~		~~Form of Unregistered Warrant (incorporated herein by reference to Exhibit 4.2 to our current report on Form 8-K filed with the SEC on July 8, 2020)~~

~~10.38~~		~~Form of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.3 to our current report on Form 8-K filed with the SEC on July 8, 2020)~~

~~10.39~~		Form of Securities Purchase Agreement for Class C Units and Class D Units, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the investor identified on the signature page thereto (incorporated herein by reference to Exhibit 10.1 to our current report on Form 8-K filed with the SEC on July 8, 2020)

~~10.40~~		Form of Securities Purchase Agreement for Class E Units and Class F Units, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the investor identified on the signature page thereto (incorporated herein by reference to Exhibit 10.2 to our current report on Form 8-K filed with the SEC on July 8, 2020)

~~10.41~~		Form of Registration Rights Agreement, dated as of July 6, 2020, by and between Tenax Therapeutics, Inc. and the investor identified on the signature page thereto (incorporated herein by reference to Exhibit 10.3 to our current report on Form 8-K filed with the SEC on July 8, 2020)

~~21.1~~		~~Subsidiaries of Tenax Therapeutics, Inc. (incorporated herein by reference to Exhibit 21.1 to our annual report on Form 10-K filed with the SEC on July 14, 2015)~~

~~23.1~~		Consent of Independent Registered Public Accounting Firm*

~~24.1~~		Power of Attorney (contained on signature page)*

~~31.1~~		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

~~31.2~~		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

~~32.1~~		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350*

~~32.2~~		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350*

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

*	~~Filed herewith.~~
**	~~Asterisks located within the exhibit denote information which has been redacted pursuant to a request for confidential treatment filed with the SEC or~~ ~~pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and would likely cause competitive harm to the Company if publicly disclosed~~.
+	~~Management contract or compensatory plan or arrangement.~~

~~ITEM 16—FORM 10-K SUMMARY~~

~~None.~~

S~~IGNATURES~~

~~Date: March 31, 2021~~	~~TENAX THERAPEUTICS, INC.~~

	~~By:~~	~~/s/ Michael B. Jebsen~~
		~~Michael B. Jebsen~~
		~~Michael B. Jebsen~~ ~~President and Chief Financial Officer~~ ~~(On behalf of the Registrant and as Principal~~ ~~Financial Officer)~~

P~~OWER OF ATTORNEY~~

KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Michael B. Jebsen his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

~~Name~~	~~Title~~	~~Date~~

~~/s/ Anthony DiTonno~~ ~~Anthony DiTonno~~	~~Chief Executive Officer and Director~~ ~~(Principal Executive Officer)~~	~~March 31, 2021~~

~~/s/ Michael B. Jebsen~~ ~~Michael B. Jebsen~~	~~Chief Financial Officer~~ ~~(Principal Financial Officer and Principal Accounting Officer)~~	~~March 31, 2021~~

~~/s/ Stuart Rich~~ ~~Stuart Rich, MD~~	~~Chief Medical Officer and Director~~	~~March 31, 2021~~
~~/s/ Ronald R. Blanck~~ ~~Ronald R. Blanck, DO~~	~~Director~~	~~March 31, 2021~~

~~/s/ Gregory Pepin~~ ~~Gregory Pepin~~	~~Director~~	~~March 31, 2021~~

~~/s/ James Mitchum~~ ~~James Mitchum~~	~~Director~~	~~March 31, 2021~~

~~/s/ Chris A. Rallis~~ ~~Chris A. Rallis~~	~~Director~~	~~March 31, 2021~~

~~/s/ Gerald Proehl~~ ~~Gerald Proehl~~	~~Director~~	~~March 31, 2021~~



~~/s/ June Almenoff~~ ~~June Almenoff, MD~~	~~Director~~	~~March 31, 2021~~

~~/s/ Declan Doogan~~ ~~Declan Doogan, MD~~	~~Director~~	~~March 31, 2021~~

~~/s/ Michael Davidson~~ ~~Michael Davidson, MD~~	~~Director~~	~~March 31, 2021~~

~~/s/ Steven Boyd~~ ~~Steven Boyd~~	~~Director~~	~~March 31, 2021~~

~~/s/ Keith Maher~~ ~~Keith Maher, MD~~	~~Director~~	~~March 31, 2021~~

Delaware		26-2593535
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share	TENX	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

~~Delaware~~	~~26-2593535~~ TENAX THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)

PART I			1

	ITEM 1—BUSINESS	1	4

	ITEM 1A—RISK FACTORS	8	13

	ITEM 1B—UNRESOLVED STAFF COMMENTS	24	32

	ITEM 2—PROPERTIES	24	32

	ITEM 3—LEGAL PROCEEDINGS	24	32

	ITEM 4—MINE SAFETY DISCLOSURES	24	32

PART II	24		34

	ITEM 5—MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	24	34

	ITEM 6—~~SELECTED FINANCIAL DATA~~RESERVED	24	34

	ITEM 7—~~MANAGEMENTS~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24	34

	ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	34	42

	ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	34	42

	ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	58	42

	ITEM 9A—CONTROLS AND PROCEDURES	58	42

	ITEM 9B—OTHER INFORMATION	59	43

	ITEM 9C— DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.		43

PART III	59		45

	ITEM 10—DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		45

	ITEM 11—EXECUTIVE COMPENSATION		44

	ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		44

	ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		45

	ITEM 14—PRINCIPAL ACCOUNTANT FEES AND SERVICES		45

PART IV	61		46

	ITEM 15—EXHIBIT AND FINANCIAL STATEMENT SCHEDULES		46

	ITEM 16—FORM 10-K SUMMARY		50

	·	Our independent registered public accounting firm auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
	·	We have incurred losses since our inception, expect to continue to incur losses in the foreseeable future, and may never become profitable.
	·	We will require substantial additional financing to further develop our product candidates.
	·	We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

	·	We are limited in the number of products we can simultaneously pursue and therefore our survival depends on our success with a small number of product opportunities.
	·	A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, or outbreak of a similar disrupting illness, may materially and adversely affect our business and our financial results.
	·	If we fail to attract and retain senior management and key scientific personnel, we may be unable to successfully develop and commercialize our product candidates.

	·	We currently have no approved drug products for sale, and we cannot guarantee that we will ever have marketable drug products.
	·	We are required to conduct additional clinical trials in the future, which are expensive and time consuming, and the outcome of the trials is uncertain.
	·	The market may not accept our products.
	·	Interim and preliminary results from our clinical trials may change and could result in material changes in the final data.
	·	Any collaboration we enter with third parties to develop and commercialize any future product candidates may be on terms unfavorable to us.
	·	Delays in the enrollment and completion of clinical testing could result in increased costs to us and delay or limit our ability to obtain regulatory approval for our product candidates.

	·	Intense competition might render our product candidates noncompetitive or obsolete.
	·	Our activities are and will continue to be subject to extensive government regulation and we will not be able to sell our products without regulatory approval.
	·	We may not receive all of the anticipated market exclusivity benefits of imatinib’s orphan drug designation.
	·	After our products are commercialized, we expect to spend considerable time and money complying with federal and state laws and regulations governing their sale, and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties.
	·	We are subject to uncertainty relating to healthcare reform measures and reimbursement policies that, if not favorable to our products, could hinder or prevent our products’ commercial success, if any of our product candidates are approved.
	·	Governments outside the United States tend to impose strict price controls and reimbursement approval policies, which may adversely affect our prospects for generating revenue outside the United States.
	·	Product liability lawsuits against us could cause us to incur substantial liabilities, limit sales of our existing products and limit commercialization of any products that we may develop.
	·	Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security

	·	We currently rely significantly on third parties to conduct our nonclinical testing and clinical studies and other aspects of our development programs.
	·	We depend on third parties to formulate and manufacture our products.
	·	We currently have no marketing capabilities and no sales organization.

	·	Our success will depend in part on obtaining and maintaining effective patent and other intellectual property protection for our product candidates and proprietary technology.
	·	We rely on confidentiality agreements that, if breached, may be difficult to enforce and could have a material adverse effect on our business and competitive position.
	·	We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights and we may be unable to protect our rights.
	·	Under current law, we may not be able to enforce all employees’ covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.
	·	We may infringe or be alleged to infringe intellectual property rights of third parties.

	·	Future sales and issuances of shares of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
	·	Our share price has been volatile, and may continue to be volatile, which may subject us to securities class action litigation in the future.
	·	Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock.
	·	We have a significant security holder, which could exert substantial influence over our business.
	·	Anti-takeover provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult, which could discourage takeover attempts and lead to management entrenchment, and the market price of our common stock may be lower as a result.
	·	Our bylaws contain an exclusive forum provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.
	·	We have not paid cash dividends in the past and do not expect to pay dividends in the future.
	·	Our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be subject to certain limitations.

	·	Opening of potassium channels in the vasculature smooth muscle, resulting in a vasodilatory effect on all vascular beds.
	·	Increased cardiac contractility by calcium sensitization of troponin C, resulting in a positive inotropic effect which is not associated with substantial increases in oxygen demand.
	·	Opening of mitochondrial potassium channels in cardiomyocytes, resulting in a cardioprotective effect.

	·	the scope, rate of progress and cost of our clinical trials and other research and development activities;
	·	the number of investigator sites and patients who participate, the rate of enrollment and the potential impact the COVID-19 pandemic could have on the expected timelines for each of our clinical programs;
	·	the costs and timing of regulatory approval;
	·	the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
	·	the effect of competing technological and market developments;
	·	the terms and timing of any collaboration, licensing or other arrangements that we may establish;
	·	the cost and timing of completion of clinical and commercial-scale manufacturing activities; and
	·	the costs of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval.

	·	our ability to obtain additional funding to develop our product candidates, and any further product candidate which we may develop or in-license in the future;
	·	delays in the commencement, enrollment and completion of clinical testing, as well as the analysis and reporting of results from such clinical testing;
	·	the need to obtain regulatory approval of our product candidates;
	·	potential risks related to any collaborations we may enter into for our product candidates;
	·	the success of clinical trials of our product candidates;
	·	any delays in regulatory review and approval of product candidates in development;
	·	our ability to establish an effective sales and marketing infrastructure;
	·	competition from existing products or new products that may emerge;
	·	the ability to receive regulatory approval or commercialize our products;
	·	potential side effects of our product candidates that could delay or prevent commercialization;
	·	potential product liability claims and adverse events;
	·	potential liabilities associated with hazardous materials;
	·	our ability to maintain adequate insurance policies;
	·	our dependency on third-party manufacturers and clinical research organizations, or CROs;
	·	our ability to establish or maintain collaborations, licensing or other arrangements;
	·	our ability, our partners’ abilities, and third parties’ abilities to protect and assert intellectual property rights;
	·	costs related to and outcomes of potential litigation;
	·	compliance with obligations under intellectual property licenses with third parties;
	·	our ability to adequately support future growth;
	·	our ability to attract and retain key personnel, including advisors and members of our Board of Directors; and
	·	volatility and uncertainty in the global economy and financial markets in light of the evolving COVID-19 pandemic and geopolitical uncertainties, including tensions in Ukraine.

	·	the efficacy, safety and potential advantages of our product candidates;
	·	our ability to offer our products for sale at competitive prices;
	·	the convenience and ease of administration compared to alternative treatments, if any;
	·	product labeling or product insert requirements of the FDA or foreign regulatory authorities, including any limitations or warnings contained in a product’s approved labeling, including any black box warning;
	·	the willingness of the target patient population to try new treatments and of physicians to prescribe these treatments;
	·	our ability to hire and retain a sales force in the United States;
	·	the strength of manufacturing, marketing and distribution support;
	·	the availability of third-party coverage and adequate reimbursement for of levosimendan, imatinib and any other product candidates, once approved;
	·	the prevalence and severity of any side effects; and
	·	any restrictions on the use of our products together with other medications.

	·	we may not be able to control the amount and timing of resources that our partners may devote to the development or commercialization of our product candidates or to their marketing and distribution;
	·	partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
	·	disputes may arise between us and our partners that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management’s attention and resources;
	·	partners may experience financial difficulties;
	·	partners may not properly maintain or defend our intellectual property rights, or may use our proprietary information, in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or proprietary information or expose us to potential litigation;
	·	business combinations or significant changes in a partner’s business strategy may adversely affect a partner’s willingness or ability to meet its obligations under any arrangement;
	·	a partner could independently move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors; and
	·	the collaborations with our partners may be terminated or allowed to expire, which would delay the development and may increase the cost of developing our product candidates.

	·	the evolving COVID-19 pandemic, which might cause site closures because of infected staff or cause patients to avoid or be unable to travel to healthcare facilities and physicians’ offices unless due to a health emergency;
	·	reaching agreements on acceptable terms with prospective trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among trial sites;
	·	obtaining institutional review board, or IRB, approval to conduct a clinical trial at numerous prospective sites;
	·	recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including meeting the enrollment criteria for our study and competition from other clinical trial programs for the same indication as our product candidates;
	·	maintaining and supplying clinical trial material on a timely basis; and
	·	collecting, analyzing and reporting final data from the clinical trials.

	·	failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
	·	inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
	·	unforeseen safety issues or any determination that a trial presents unacceptable health risks; and
	·	lack of adequate funding to continue the clinical trial, including unforeseen costs due to enrollment delays, requirements to conduct additional trials and studies, and increased expenses associated with the services of our CROs and other third parties.

	·	the data obtained from laboratory testing and clinical trials are susceptible to varying interpretations, which could delay, limit or prevent FDA and other regulatory approvals;
	·	adverse events could cause the FDA and other regulatory authorities to halt trials;
	·	at any time, the FDA and other regulatory agencies could change policies and regulations that could result in delay and perhaps rejection of our products;
	·	if a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions; and
	·	even after extensive testing and clinical trials, and receiving agreements and reassurances from FDA, EMA, and others, as to their future position on a dataset or result to be generated from a trial the design of which they have weighed in on, there is no assurance that regulatory approval will ever be obtained for any of our products.

	·	the federal anti-kickback statute is a criminal statute that makes it a felony for individuals or entities knowingly and willfully to offer or pay, or to solicit or receive, direct or indirect remuneration, in order to induce the purchase, order, lease, or recommending of items or services, or the referral of patients for services, that are reimbursed under a federal health care program, including Medicare and Medicaid;
	·	the federal False Claims Act imposes liability on any person who knowingly submits, or causes another person or entity to submit, a false claim for payment of government funds, with penalties that include three times the government’s damages plus civil penalties for each false claim; in addition, the False Claims Act permits a person with knowledge of fraud, referred to as a qui tam plaintiff, to file a lawsuit on behalf of the government against the person or business that committed the fraud, and, if the action is successful, the qui tam plaintiff is rewarded with a percentage of the recovery;
	·	the Health Insurance Portability and Accountability Act imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
	·	the Social Security Act contains numerous provisions allowing the imposition of a civil monetary penalty, a monetary assessment, exclusion from the Medicare and Medicaid programs, or some combination of these penalties; and
	·	many states have analogous state laws and regulations, such as state anti-kickback and false claims laws, which, in some cases, impose more strict requirements than the federal laws and may require pharmaceutical companies to comply with certain price reporting and other compliance requirements.

	·	decreased demand for our products and any product candidates that we may develop;
	·	injury to our reputation;
	·	withdrawal of clinical trial participants;
	·	costs to defend the related litigation;
	·	substantial monetary awards to trial participants or patients;
	·	loss of revenue; and
	·	the inability to commercialize any products that we may develop.

	For the year ended December 31,		Increase/ (Decrease)	% Increase/ (Decrease)
	2020	2019
Personnel costs	$3,478,186	$2,782,798	$695,388	25%
Legal and professional fees	1,043,139	1,545,890	(502,751)	(33)%
Other costs	630,959	602,611	28,348	5%
Facilities	154,922	152,812	2,110	1%

	For the year ended December 31,		(Increase)/ Decrease
	2020	2019
Other income, net	$(18,166)	$(160,901)	$142,735

	December 31, 2020	December 31, 2019

ASSETS
Current assets
Cash and cash equivalents	$6,250,241	$4,905,993
Marketable securities	462,687	493,884
Prepaid expenses	82,578	780,952
Total current assets	6,795,506	6,180,829
Right of use asset	58,778	169,448
Property and equipment, net	5,972	6,559
Other assets	8,435	8,435
Total assets	$6,868,691	$6,365,271

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$757,856	$1,661,054
Accrued liabilities	1,240,616	871,341
Note payable	120,491	-
Total current liabilities	2,118,963	2,532,395
Long term liabilities
Lease liability	-	60,379
Note payable	124,166	-
Total long term liabilities	124,166	60,379
Total liabilities	2,243,129	2,592,774


Commitments and contingencies; see Note F
Stockholders' equity
Preferred stock, undesignated, authorized 4,818,654 shares; See Note E
Series A Preferred stock, par value $.0001, issued 5,181,346 shares; outstanding 210 and 38,606, respectively	-	4
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 12,619,369 and 6,741,860, respectively	1,262	674
Additional paid-in capital	250,644,197	239,939,797
Accumulated other comprehensive (loss) gain	(70)	458
Accumulated deficit	(246,019,827)	(236,168,436)
Total stockholders’ equity	4,625,562	3,772,497
Total liabilities and stockholders' equity	$6,868,691	$6,365,271

	Preferred Stock		Common Stock
	Number of Shares	Amount	Number of Shares	Amount	Additional paid-in capital	Accumulated other comprehensive gain (loss)	Accumulated deficit	Total stockholders' equity

Balance at December 31, 2018	2,854,593	$285	3,792,249	$379	$239,572,094	$516	$(227,801,743)	$11,771,531
Compensation on options and restricted stock issued			12,195	1	171,215			171,216
Common stock issued for services rendered			71,429	7	99,993			100,000
Common stock issued for convertible preferred stock	(2,815,987)	(281)	2,815,987	282				1
Exercise of warrants			50,000	5	96,495			96,500
Adoption of ASC Topic 842: Leases							27,670	27,670
Unrealized loss on marketable securities						(58)		(58)
Net loss							(8,394,363)	(8,394,363)
Balance at December 31, 2019	38,606	$4	6,741,860	$674	$239,939,797	$458	$(236,168,436)	$3,772,497

Common stock and pre-funded warrants sold, net of offering costs			3,273,611	327	8,658,850			8,659,177
Common stock issued for services rendered			77,987	8	99,992			100,000
Common stock issued for convertible preferred stock	(38,396)	(4)	38,396	4				-
Exercise of pre-funded warrants			1,610,313	161				161
Exercise of warrants			877,202	88	1,692,912			1,693,000
Compensation on options issued					252,646			252,646
Unrealized loss on marketable securities						(528)		(528)
Net loss							(9,851,391)	(9,851,391)
Balance at December 31, 2020	210	$-	12,619,369	$1,262	$250,644,197	$(70)	$(246,019,827)	$4,625,562

	As Previously Reported	New Lease Standard Adjustment	As Adjusted
Operating lease right-of-use asset	$-	$271,710	$271,710
Operating lease liabilites	$-	$271,710	$271,710
Deferred lease liabilities	$27,670	$(27,670)	$-

	December 31, 2020
	Amortized Cost	Accrued Interest	Gross Unrealized Gains	Gross Unrealized losses	Estimated Fair Value
Corporate debt securities	$459,210	$3,551	$128	$(202)	$462,687
Total investments	$459,210	$3,551	$128	$(202)	$462,687

	December 31, 2020	December 31, 2019
Maturing in one year or less	$462,687	$493,884
Maturing after one year through three years	-	-
Total investments	$462,687	$493,884

		Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2020	Quoted prices in Active Markets for Identical Securities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Current Assets
Cash and cash equivalents	$6,250,241	$6,250,241	$-	$-
Marketable securities	$462,687	$-	$462,687	$-

		Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2019	Quoted prices in Active Markets for Identical Securities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Current Assets
Cash and cash equivalents	$4,905,993	$4,905,993	$-	$-
Marketable securities	$493,884	$-	$493,884	$-

	December 31, 2020	December 31, 2019
Office furniture and fixtures	$43,033	$130,192
Computer equipment and software	23,307	80,669
	66,340	210,861
Less: Accumulated depreciation	(60,368)	(204,302)
	$5,972	$6,559

	Warrants	Weighted Average Exercise Price
Outstanding at December 31, 2018	10,690,718	$2.45
Exercised	(50,000)	1.93
Expired	(120,773)	47.30
Outstanding at December 31, 2019	10,519,945	$1.94
Issued	11,310,480	0.98
Exercised	(877,202)	1.93
Expired	(4,354,144)	1.93
Outstanding at December 31, 2020	16,599,079	$1.29