Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~May 12, ~~2021,~~2022 the registrant had outstanding 25,206,914 shares of Common Stock.

								March 31, 2022			December 31, 2021
		September 30, 2021			December 31, 2020
		(Unaudited)						(Unaudited)
ASSETS	ASSETS
Current assets
Cash and cash equivalents		$	8,354,075		$	6,250,241		$	2,868,684		$	5,583,922
Marketable securities			0			462,687
Prepaid expenses			229,152			82,578			586,987			105,078
Total current assets			8,583,227			6,795,506			3,455,671			5,689,000
Right of use asset			313,443			58,778			261,435			287,692
Property and equipment, net			6,489			5,972			12,078			7,108
Other assets			8,435			8,435			8,435			8,435
Total assets		$	8,911,594		$	6,868,691		$	3,737,619		$	5,992,235

LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	776,247		$	757,856		$	1,287,126		$	859,638
Accrued liabilities			685,114			1,240,616			460,506			704,340
Note payable			0			120,491			228,762			0
Total current liabilities			1,461,361			2,118,963			1,976,394			1,563,978
Long term liabilities
Lease liability			211,590			0			155,024			183,589
Note payable			0			124,166
Total long term liabilities			211,590			124,166			155,024			183,589
Total liabilities			1,672,951			2,243,129			2,131,418			1,747,567


Commitments and contingencies; see Note 8
Stockholders' equity
Preferred stock, undesignated, authorized 9,999,790 shares; See Note 9
Series A Preferred stock, par value $.0001, issued 5,181,346 shares; outstanding 210, respectively			0			0
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 25,201,312 and 12,619,369 respectively			2,520			1,262
Preferred stock, undesignated, authorized 4,818,654 shares; See Note 9
Series A Preferred stock, par value $0.0001, issued 5,181,346 shares; outstanding 210 as of March 31, 2022 and December 31, 2021 respectively									0			0
Common stock, par value $0.0001 per share; authorized 400,000,000 shares; issued and outstanding 25,206,914 as of March 31, 2022 and December 31, 2021 respectively									2,521			2,521
Additional paid-in capital			282,519,752			250,644,197			282,819,401			282,736,332
Accumulated other comprehensive gain (loss)			2			(70	)
Accumulated deficit			(275,283,631	)		(246,019,827	)		(281,215,721	)		(278,494,185	)
Total stockholders equity			7,238,643			4,625,562
Total stockholders’ equity									1,606,201			4,244,668
Total liabilities and stockholders' equity		$	8,911,594		$	6,868,691		$	3,737,619		$	5,992,235

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

	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2021			2020			2021			2020			2022			2021
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Operating expenses
General and administrative	$	2,639,920		$	1,172,725		$	5,284,658		$	3,364,890		$	1,540,744		$	1,373,460
Research and development		1,162,370			1,052,398			24,231,794			3,669,761			1,177,895			22,376,202
Total operating expenses		3,802,290			2,225,123			29,516,452			7,034,651			2,718,639			23,749,662

Net operating loss		3,802,290			2,225,123			29,516,452			7,034,651			2,718,639			23,749,662

Interest expense		0			610			949			1,016			2,587			613
Other income, net		(3,642	)		(5,298	)		(253,597	)		(14,038	)
Other expense (income), net														310			(2,135	)
Net loss	$	3,798,648		$	2,220,435		$	29,263,804		$	7,021,629		$	2,721,536		$	23,748,140

Unrealized (gain) loss on marketable securities		(276	)		1,171			(72	)		(445	)
Unrealized loss on marketable securities														0			332
Total comprehensive loss	$	3,798,372		$	2,221,606		$	29,263,732		$	7,021,184		$	2,721,536		$	23,748,472

Net loss per share, basic and diluted	$	(0.15	)	$	(0.18	)	$	(1.54	)	$	(0.73	)	$	(0.11	)	$	(1.64	)
Weighted average number of common shares outstanding, basic and diluted		25,201,312			12,427,355			19,017,311			9,590,741			25,206,914			14,515,088

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

	Preferred Stock						Common Stock				Additional			Accumulated other						Total													Accumulated
	Number of Shares			Amount			Number of Shares		Amount		paid-in capital			comprehensive gain (loss)			Accumulated deficit			stockholders' equity			Preferred Stock				Common Stock				Additional		other						Total
																							Number of Shares		Amount		Number of Shares		Amount		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								750,000		75		2,129,930									2,130,005
Compensation on options issued										0		72,376									72,376
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									0
Exercise of pre-funded warrants								400,000		40		0									40
Unrealized loss on marketable securities															(1,622	)					(1,622	)
Net loss																		(2,654,644	)		(2,654,644	)
Balance at March 31, 2020		210		$	0			8,008,243	$	801	$	242,242,095		$	(1,164	)	$	(238,823,080	)	$	3,418,652
Compensation on options issued										0		63,166									63,166
Exercise of pre-funded warrants								1,210,313		121		0									121
Exercise of warrants								877,202		88		1,690,455									1,690,543
Unrealized gain on marketable securities															3,238						3,238
Net loss																		(2,146,550	)		(2,146,550	)
Balance at June 30, 2020		210		$	0			10,095,758	$	1,010	$	243,995,716		$	2,074		$	(240,969,630	)	$	3,029,170
Common stock and pre-funded warrants sold, net of offering costs								2,523,611		252		6,532,727									6,532,979
Compensation on options issued												63,161									63,161
Unrealized loss on marketable securities															(1,171	)					(1,171	)
Net loss																		(2,220,435	)		(2,220,435	)
Balance at September 30, 2020		210		$	0			12,619,369	$	1,262	$	250,591,604		$	903		$	(243,190,065	)	$	7,403,704

Balance at December 31, 2020		210		$	0			12,619,369	$	1,262	$	250,644,197		$	(70	)	$	(246,019,827	)	$	4,625,562			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			10,232		1		1,892,905		189		21,582,141								21,582,331
Compensation on options issued												91,609									91,609											91,609								91,609
Exercise of warrants								457,038		46		544,605									544,651							457,038		46		544,605								544,651
Unrealized loss on marketable securities															(332	)					(332	)												(332	)					(332	)
Net loss																		(23,748,140	)		(23,748,140	)															(23,748,140	)		(23,748,140	)
Balance at March 31, 2021		10,442		$	1			14,969,312	$	1,497	$	272,862,552		$	402	)	$	(269,767,967	)	$	3,095,681			10,442	$	1		14,969,312	$	1,497	$	272,862,552	$	(402	)	$	(269,767,967	)	$	3,095,681
Common stock issued for convertible preferred stock		(10,232	)		(1	)		10,232,000		1,023		(1,022	)								0

Balance at December 31, 2021																								210	$	0		25,206,914	$	2,521	$	282,736,332	$	0		$	(278,494,185	)	$	4,244,668
Compensation on options issued												92,339									92,339											83,069								83,069
Unrealized gain on marketable securities															128						128
Net loss																		(1,717,016	)		(1,717,016	)															(2,721,536	)		(2,721,536	)
Balance at June 30, 2021		210		$	0			25,201,312	$	2,520	$	272,953,869		$	(274	)	$	(271,484,983	)	$	1,471,132
Pre-funded warrants sold, net of offering costs												9,192,624									9,192,624
Compensation on options issued												373,259									373,259
Unrealized gain on marketable securities															276						276
Net loss																		(3,798,648	)		(3,798,648	)
Balance at September 30, 2021		210		$	0			25,201,312	$	2,520	$	282,519,752		$	2		$	(275,283,631	)	$	7,238,643
Balance at March 31, 2022																								210	$	0		25,206,914	$	2,521	$	282,819,401	$	0		$	(281,215,721	)	$	1,606,201

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

	Nine Months ended September 30,						Three months ended March 31,
	2021			2020			2022			2021
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(29,263,804	)	$	(7,021,629	)	$	(2,721,536	)	$	(23,748,140	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		3,037			3,098			1,353			1,135
Interest on debt instrument		949			1,016			2,587			613
Amortization of right of use asset		79,115			82,163			26,257			29,088
Gain on debt settlement and extinguishment		(247,233	)		0
Issuance and vesting of compensatory stock options and warrants								83,069			91,609
Issuance of common stock and preferred stock for asset acquisition		21,582,331			0			0			21,582,331
Issuance and vesting of compensatory stock options and warrants		557,207			198,703
Issuance of common stock for services rendered		0			75,000
Amortization of premium on marketable securities		9,427			5,078			0			4,442
Changes in operating assets and liabilities
Accounts receivable, prepaid expenses and other assets		(146,574	)		616,676			(484,496	)		(403,357	)
Accounts payable and accrued liabilities		(644,311	)		(1,185,136	)		183,654			(778,862	)
Long term portion of lease liability		(17,892	)		(60,379	)		(28,565	)		0
Net cash used in operating activities		(8,087,748	)		(7,285,410	)		(2,937,677	)		(3,221,141	)

CASH FLOWS FROM INVESTING ACTIVITIES
Sale of marketable securities								0			190,184
Purchase of marketable securities		(345,540	)		(458,438	)		0			(227,148	)
Sale of marketable securities		803,401			475,041
Purchase of property and equipment		(3,554	)		0			(6,323	)		0
Net cash provided by investing activities		454,307			16,603			(6,323	)		(36,964	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs		9,192,624			8,662,985
Proceeds from the exercise of warrants		544,651			1,690,704			0			544,651
Proceeds from the issuance of notes payable		0			244,657
Proceeds from the issuance of note payable								364,546			0
Payments on short-term note								(135,784	)		0
Net cash provided by financing activities		9,737,275			10,598,346			228,762			544,651

Net change in cash and cash equivalents		2,103,834			3,329,539			(2,715,238	)		(2,713,454	)
Cash and cash equivalents, beginning of period		6,250,241			4,905,993			5,583,922			6,250,241
Cash and cash equivalents, end of period	$	8,354,075		$	8,235,532		$	2,868,684		$	3,536,787

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 Condensed Consolidated Financial Statements.

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, between Synthetic Blood International and Oxygen Biotherapeutics, Inc., a Delaware corporation. Synthetic Blood International formed Oxygen Biotherapeutics on April 17, 2008 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 into 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 acquired, through its ~~wholly owned~~wholly-owned subsidiary, Life Newco, Inc., a Delaware corporation ~~acquired~~(“Life Newco”), 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. Among these assets was a license ~~with~~between Phyxius and Orion Corporation, a global healthcare company incorporated under the laws of Finland (“Orion”), dated September 20, 2013, and that certain Side Letter, dated October 15, 2013, for the exclusive, ~~sublicenseable~~sublicensable right to develop and commercialize pharmaceutical products containing levosimendan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial in the United States and ~~Canada.~~Canada (the “Territory”). On October 9, 2020 and January 25, 2022, the Company ~~entered into an Amendment (the “Amendment”) to~~amended the license (as amended, the “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. The Amendment also amends the tiered royalty payments based on net sales of the Product~~levosimendan, subject to specified limitations in the ~~Territory (each as defined below) made by~~License (together, the “Product”). Pursuant to the License, 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~~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. 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,~~wholly-owned subsidiary of the Company (“Life Newco II”), PHPrecisionMed Inc., a Delaware corporation (“PHPM”) and Dr. Stuart Rich, solely in his capacity as holders’ representative ( the “Representative”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which the Company acquired all of the equity of PHPM, a company developing pharmaceutical products containing imatinib for the treatment of pulmonary arterial hypertension (“PAH”) in the United States and the rest of the world. Under the terms of the Merger Agreement, Life Newco II merged with and into PHPM, with PHPM surviving as a ~~wholly owned~~wholly-owned subsidiary of the Company (the “Merger”). See “Note 7 –- Merger” below for a further discussion of the Merger.

The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of these financial statements. The condensed consolidated balance sheet on December 31, 2020 has been derived from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the period ended December 31, 2020, as amended. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) rules and regulations. Operating results for the three and nine-month period ended September 30, 2021 are not necessarily indicative of results for the full year or any other future periods. As such, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as amended.

Management believes the accompanying condensed consolidated financial statements have been prepared in conformity with ~~GAAP,~~generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of ~~$275~~$281 million on ~~September 30, 2021~~March 31, 2022 and ~~$246~~$278 million on December 31, ~~2020~~2021 and used cash in operations of ~~$8.1~~$2.9 million and ~~$7.3~~$3.2 million during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, respectively. The Company requires substantial additional funds to complete clinical trials and ~~2020, respectively.~~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 ~~September 30, 2021~~March 31, 2022 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 for at least one year from the date that these financial statements are issued.~~concern. The condensed consolidated 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.

The accompanying unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the unaudited condensed consolidated financial statements have read or have access to the audited financial statements for the preceding fiscal year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 29, 2022, from which the Company derived the balance sheet data at December 31, 2021

~~In preparing~~The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires management ~~is required~~ to make certain estimates and assumptions that affect the reported amounts of assets and liabilities ~~the~~and disclosure of contingent assets and liabilities at the ~~dates~~date of the unaudited condensed consolidated financial statements and ~~the~~ reported amounts of ~~revenue and~~ expenses during the reporting ~~periods.~~period. Actual results could differ from ~~these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.~~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.

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

The Company considers all highly liquid instruments with a maturity date of three months or less, when acquired, to be cash equivalents.

On ~~September 30, 2021,~~March 31, 2022, the Company had cash and cash equivalents of approximately ~~$8.4~~$2.9 million. The Company used ~~$8.1~~$2.9 million of cash for operating activities during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and had stockholders’ equity of ~~$7.2~~$1.6 million, versus ~~$4.6~~$4.2 million on December 31, ~~2020.~~

As further discussed in “Note 9—Stockholders’ Equity” below, on July 6, 2021, the Company sold 4,773,269 units (“Units”) in a private placement at a purchase price of $2.095 per Unit. Each Unit consists of one unregistered pre-funded warrant to purchase one share of Company common stock, par value $0.0001 per share (“Common Stock”) and one unregistered warrant to purchase one share of Common Stock for gross proceeds of approximately $10.0 million. The Company requires substantial additional funds to complete its planned clinical trials and to 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.2021.

The Company expects to continue to incur expenses related to development of imatinib for PAH, levosimendan for pulmonary hypertension, and ~~any~~other potential indications, as well as identifying and developing other potential product candidates. Based on its resources on ~~September 30, 2021,~~March 31, 2022, the Company believes that it has sufficient capital to fund its planned operations through the second quarter of calendar year 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 licensing ~~arrangements.~~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 ~~assure~~provide assurance that it will be able to secure such additional financing on reasonable terms, 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~~common stock or other securities convertible or exchangeable for shares of ~~Common Stock,~~common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to restrictive ~~covenants.~~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.

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

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 ~~of these investigators and site staff~~patients may be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services, or if ~~they~~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.

~~The full extent to which~~Any or all of the ~~evolving COVID-19 pandemic and the various responses to it might impact~~foregoing may have a material adverse effect on the Company’s business ~~operations~~ and financial results continue to remain uncertain and will depend on numerous evolving factors that are not subject to accurate prediction and that are beyond the Company’s control. We will continue to evaluate the nature and extent of these potential impacts to our business and condensed consolidated financial statements.performance.

Basic ~~net~~ 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 ~~net~~ 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.~~common stock. Such amounts include shares potentially issuable under outstanding options, ~~convertible preferred shares~~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.

	Nine months ended September 30,				Three months ended March 31,
	2021		2020		2022		2021

Warrants to purchase common stock		20,928,767		20,953,223		20,928,767		15,797,503
Pre-funded warrants to purchase common stock		10,033,274		5,260,005		10,033,274		5,260,005
Options to purchase common stock		1,330,366		451,186		1,299,567		751,137
Convertible preferred shares outstanding		210		210		210		10,442

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 condensed consolidated balance ~~sheets.~~sheet as of March 31, 2022. 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.

In ~~December 2019,~~August 2020, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. Early adoption will be permitted. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In December 2019, FASB issued 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~~with early adoption is permitted. The Company adopted this standard on January 1, 2021. The Company’s adoption of ~~this standard~~the new guidance did not have a material impact on its condensed consolidated financial ~~statements.~~statements

In June 2016, the FASB issued an accounting standard, ASU-2016-13, Financial ~~Instruments—Credit~~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 condensed consolidated financial statements and related disclosures.

The Company determines the fair value of its financial assets and liabilities in accordance with the Accounting Standards Codification (“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:

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 condensed consolidated financial statements.

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 in the condensed consolidated statements of comprehensive loss and are determined using the specific identification method with transactions recorded on a settlement date basis. 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. As of ~~September 30, 2021,~~March 31, 2022, the Company held no investments in marketable securities.

~~The following tables summarize information regarding assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020:~~

~~There were no significant transfers between levels in the nine months ended September 30, 2021.~~

Property and equipment primarily consist of ~~the following as of September 30, 2021~~office furniture and ~~December 31, 2020:~~fixtures.

Depreciation expense was ~~approximately $1,000~~$1,400 and $1,100 for ~~each of~~ the ~~three-month periods~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020.~~

~~Depreciation expense was approximately $3,000 for each of the nine-month periods ended September 30, 2021 and 2020.~~respectively.

Accrued liabilities consist of the ~~following as of September 30, 2021 and December 31, 2020:~~following:

	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Employee related	$	462,444	$	860,629
Operating costs		118,372		319,608	$	261,384	$	0
Lease liability		104,298		60,379		110,144		107,192
Employee related						88,978		597,148
	$	685,114	$	1,240,616	$	460,506	$	704,340

The Company entered into a Premium Finance Agreement with Premium Funding Associates, Inc. in connection with certain of the Company’s insurance policies and, pursuant thereto, issued a note payable to Premium Funding, Inc. for $364,546 (the “Note”). The Note has an eight-month term, bears interest at a rate of 3.24% per annum, and is secured by the policies. Under the terms of the Note, the Company is required to make monthly installments of principal and interest totaling $46,124 through August 31, 2022. The Company recorded interest expense of $2,587 for the three months ended March 31, 2022. The balance on the Note as of March 31, 2022 was $228,762.

In January 2011, the Company entered into a lease with Concourse Associates, LLC for 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 continued for 64 months to 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 thirty-six months after the commencement of the initial term if no additional space became available. On April 2, 2021, the Company negotiated a 3-year extension to the 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 will increase 2.5% annually for lease 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.

	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Current portion included in accrued liabilities	$	104,298	$	60,379	$	110,144	$	107,192
Long term lease liability		211,590		0		155,024		183,589
	$	315,888	$	60,379	$	265,168	$	290,781

As of ~~September 30, 2021,~~March 31, 2022, the maturities of our operating lease liabilities were as follows:

Year ending December 31,
2021	$	31,259
2022		126,612		$	95,353
2023		129,797			129,797
2024		65,702			65,702

Total lease payments	$	353,370		$	290,852
Less: Imputed interest		(37,482	)		(25,684	)
Operating lease liability	$	315,888		$	265,168

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used the incremental borrowing rate based on the information available at its Lease’s Commencement Date. As of ~~September 30, 2021,~~March 31, 2022, the remaining Lease term is ~~thirty-three~~twenty-seven months and the discount rate used to determine the operating lease liability was 8.0%. For the ~~nine~~three months ending ~~September 30, 2021,~~March 31, 2022, the Company paid ~~$100,058~~$32,809 in total lease expenses, including ~~$6,997~~$1,551 for common area maintenance charges.

On January 15, 2021, the Company, Life Newco II, PHPM, and Dr. Rich, as Representative, entered into the Merger Agreement, pursuant to which, the Company acquired all of the equity of PHPM. Under the terms of the Merger Agreement, Life Newco II merged with and into PHPM, with PHPM surviving as a ~~wholly owned~~wholly-owned subsidiary of the Company.

As consideration for the Merger, the stockholders of PHPM received (i) 1,892,905 shares of ~~Common Stock,~~Company common stock, and (ii) 10,232 shares of the Company’s Series B convertible preferred stock (“~~Preferred Stock” or “Series~~Series B Stock”), which were convertible into up to an aggregate of 10,232,000 shares of ~~Common Stock (“Preferred Stock”)~~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~~common stock issuable upon conversion of the ~~Preferred~~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, ~~(the “Board”),~~ at its ~~Annual Meeting~~annual meeting of ~~Shareholders~~stockholders held on June 10, 2021, recommended to the Company’s ~~shareholders,~~stockholders, and the ~~shareholders~~stockholders approved, the conversion of the ~~Preferred~~Series B Stock pursuant to the Certificate of Designation. As a result, each share of ~~Preferred~~Series B Stock automatically converted into (i) 881.5 shares of ~~Common Stock,~~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 ~~Preferred~~Series B Stock, subject to reduction for indemnification claims.

Pursuant to the terms of the Merger Agreement, on February 25, 2021, the Board appointed three directors designated by the ~~Representative~~PHPM representative to serve on the Board, Dr. Rich, the co-founder and Chief Executive Officer and a 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 business. Included in the in-process research and development project is the historical know-how, formula protocols, designs, and procedures expected to be needed to complete the related phase of testing. The Company concluded that the in-process research and development project is an identifiable intangible asset that would be accounted for 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 the consideration in the transaction was allocated to the in-process research and development project. As such, the Company concluded that substantially all of the fair value of the gross assets acquired was concentrated in the single in-process research and development asset and the set was not a business.

The Company is planning to use the acquired asset to further its clinical development in an upcoming ~~phase~~Phase 3 clinical trial for the 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~~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 Company concluded the entire Purchase Price for the asset acquisition was an expense on the acquisition date.

The consideration transferred, assets acquired and liabilities assumed were recognized as follows:

On November 13, 2013, the Company acquired, through its ~~wholly owned~~wholly-owned subsidiary, Life Newco, that certain License, ~~Agreement,~~ dated September 20, 2013, as amended on October 9, 2020 and January 25, 2022, by and between Phyxius and Orion, ~~(the “License”),~~ and that certain Side Letter, dated October 15, 2013 by and between Phyxius and Orion. The License grants the Company an exclusive, ~~sublicenseable~~sublicensable right to develop and commercialize pharmaceutical products containing levosimendan in the ~~United States and Canada (the “Territory”)~~Territory and, pursuant to the October 9, 2020 ~~amendment,~~and January 25, 2022 amendments, also includes two ~~oral products~~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”).~~License. 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 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., line extension 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 term of the License extends until 10 years after the launch of the Product in the Territory, provided that the License will continue after the end of the term in each country in the Territory until the expiration of Orion’s patent rights in the Product in such country. In the event that no regulatory approval for the Product has been granted in the United States on or before September 20, ~~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 must make non-refundable payments to Orion no later than 28 days after the occurrence of the applicable milestone event: (1) $2.0 million upon the grant of 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 (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 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, 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.

As of ~~September 30, 2021,~~March 31, 2022, 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.

Under the Company’s Certificate of Incorporation, the Board 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.

As further discussed in “Note 7—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,~~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~~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 ~~Preferred~~Series B Stock, subject to reduction for indemnification claims.

As of ~~September 30, 2021,~~March 31, 2022, there were no shares of Series B Stock outstanding.

On December 11, 2018, the Company closed its underwritten offering of 5,181,346 units for net proceeds of approximately $9.0 million (the “2018 Offering”). Each unit consisted of (i) one share of the Company’s Series A convertible preferred stock, par value $0.0001 per share (the “Series A Stock”), (ii) a two-year warrant to purchase one share of ~~Common Stock~~common stock at an exercise price of $1.93, and (iii) a five-year warrant to purchase one share of ~~Common Stock~~common stock at an exercise price of $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, 2020.

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

As of ~~September 30, 2021,~~March 31, 2022, there were 210 shares of Series A Stock outstanding.

The Company’s Certificate of Incorporation authorizes it to issue 400,000,000 shares of $0.0001 par value ~~Common Stock.~~common stock. As of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, there were ~~25,201,312 and 12,619,369~~25,206,914 shares of ~~Common Stock~~common stock issued and ~~outstanding, respectively.~~outstanding. As of ~~September 30, 2021,~~March 31, 2022, there were 10,033,274 pre-funded warrants outstanding.

On July 6, 2021, the Company entered into a securities purchase agreement with an institutional investor ~~(“Investor”)~~ pursuant to which the Company agreed to sell and issue to the ~~Investor~~investor 4,773,269 Units in a private placement at a purchase price of $2.095 per unit. Each Unit consisted of (i) one unregistered pre-funded warrant to purchase one share of ~~Common Stock~~common stock and (ii) one unregistered warrant to purchase one share of ~~Common Stock~~common stock (together with the pre-funded warrants, the “2021 Warrants”). In the aggregate, 9,546,538 shares of the Company’s ~~Common Stock~~common stock are underlying the 2021 Warrants. The net proceeds from the private placement, after deducting placement agent fees and other direct offering expenses, were approximately $9.2 million. The fair value allocated to the pre-funded warrants and warrants was $5.5 million and $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,~~investor, pursuant to which the Company agreed to register for resale the shares of ~~Common Stock~~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 6, 2020, the Company completed a registered direct offering with an ~~Investor~~investor for the issuance and sale of 2,523,611 shares of its ~~Common Stock~~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,~~common stock, at a purchase price of $1.0277 per pre-funded warrant (which represents the per share offering price for the ~~Common Stock~~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~~common stock at the same purchase price as the registered pre-funded warrants, and unregistered ~~Common Stock~~common stock warrants to purchase up to 7,783,616 shares of ~~Common Stock~~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,~~common stock, pre-funded warrants and warrants was $1.5 million, $3.0 million and $3.5 million, respectively.

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,~~investor, pursuant to which the Company agreed to register for resale the shares of ~~Common Stock~~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 towith an ~~Investor~~investor for the issuance and sale of 750,000 shares of its ~~Common Stock~~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,~~common stock, at a purchase price of $1.1650 per pre-funded warrant (which represents the per share offering price for the ~~Common Stock~~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~~investor unregistered warrants to purchase up to ~~2,360,313shares~~2,360,313 shares of its ~~Common Stock.~~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,~~common stock, pre-funded warrants and warrants was $0.5 million, $1.1 million and $1.1 million, respectively.

During the nine months ended September 30, 2021, the Company received approximately $545,000 and issued 282,202 shares of Common Stock upon the exercise of previously outstanding warrants issued in connection with the Company’s December 2018 Offering.

During the nine months ended September 30, 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 ~~September 30, 2021,~~March 31, 2022, the Company has 20,928,767 warrants outstanding. ~~The following table summarizes the Company’s~~There was no warrant activity for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022.

As described above, as a part of the July 2021 Offering, the Company issued unregistered warrants to purchase 4,773,269 shares of its ~~Common Stock~~common stock at an exercise price of $1.97 per share and contractual term of five and one-half years. The unregistered warrants were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D promulgated thereunder. In accordance with ASC 480, these warrants are classified as equity and their relative fair value of approximately $4.5 million 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~~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.~~common stock.

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~~common stock at an exercise price of $0.903 per share and contractual term of 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 of approximately $3.5 million 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~~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.~~common stock.

As described above, as part of the March 2020 Offering, the Company issued unregistered warrants to purchase 2,360,313 shares of its ~~Common Stock~~common stock at an exercise price of $1.04 per share and contractual term of 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, these warrants are classified as equity and their relative fair value of approximately $1.1 million 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~~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.~~common stock.

In connection with the July 2021 Offering described above, the Company issued designees of the placement agent warrants to purchase 357,995 shares of ~~Common Stock~~common stock at an exercise price of $2.46 and a contractual term of five years. In accordance with ASC 815, ~~Derivatives and Hedging,~~ these warrants are classified as equity and its estimated fair value of $558,472 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~~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.~~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~~common stock at an exercise price of ~~$1.2848and~~$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~~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~~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.~~common stock.

In connection with the March 2020 Offering described above, the Company issued designees of the placement agent warrants to purchase 177,023 shares of ~~Common Stock~~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. Additionally, the Company issued to its previous underwriter a warrant to purchase 94,413 shares of ~~Common Stock~~common stock at an exercise price of $1.4564 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 $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~~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.~~common stock.

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, 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.~~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~~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~~common stock authorized for issuance under the 2016 Plan to a total of 1.5 million shares, up from 750,000 previously authorized.

~~The following table summarizes~~As of March 31, 2022, the Company has 819,750 shares available for ~~grant~~ under the 2016 ~~Plan~~Plan. There was no stock activity for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022.

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~~As of March 31, 2022, the ~~outstanding stock~~Company has 663,250 options ~~under the 2016 Plan~~outstanding. There was no option activity for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022.

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 recorded compensation expense for ~~these~~ stock option grants of ~~$139,983~~$36,346 and ~~$52,659~~$90,319 for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, and $322,641 and $165,492 for the nine months ended September 30, 2021 and 2020,~~ respectively.

As of ~~September 30, 2021,~~March 31, 2022, there were unrecognized compensation costs of approximately ~~$244,865~~$126,000 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 ~~1.07~~1.02 years.

~~The Company used the following assumptions to estimate the fair value of options granted under the 2016 Plan for the nine months ended September 30, 2021:~~

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 ~~Board’s~~ Compensation Committee of the Board of Directors, the Company could grant stock options, restricted stock, stock appreciation rights and new shares of ~~Common Stock~~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~~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~~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.

Stock options granted under the 1999 Plan may be ~~either~~ ISOs or NSOs. ISOs ~~can~~could be granted only to employees. NSOs ~~can~~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 ~~under the 1999 Plan~~ generally vest over one to ~~six~~three years.

~~The following table summarizes~~As of March 31, 2022, the ~~outstanding stock~~Company has 36,317 options ~~under the 1999 Plan~~outstanding. There was no option activity for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022.

The Company recorded compensation expense for ~~these~~ stock option grants of $0 and ~~$10,502~~$1,290 for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, and $1,290 and $33,211 for the nine months ended September 30, 2021 and 2020,~~ respectively.

As of ~~September 30,~~March 31, 2021, there were no unrecognized compensation costs related to non-vested stock option awards under the 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 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 three and nine months ended September 30, 2021, with respect to these modifications.

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

The employment inducement stock option for 100,000 shares of ~~Common Stock~~common stock was awarded in accordance with the employment inducement award exemption provided by ~~NASDAQ Rule~~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.~~common stock. As of ~~September 30, 2021,~~March 31, 2022, 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~~common stock of 103.50% and an expected life of 10 years.

The employment inducement stock option award for 250,000 shares of ~~Common Stock~~common stock also was awarded in accordance with the employment inducement award exemption provided by ~~NASDAQ Rule~~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.~~

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~~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~~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 Rule~~Nasdaq listing rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity ~~plan.The~~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.~~common stock. As of ~~September 30, 2021,~~March 31, 2022, none of the remaining 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~~common stock of 103.94% and an expected life of 10 years.

Inducement stock option compensation expense totaled ~~$46,723for~~$46,723 for the three ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 2022. As of ~~September 30, 2021,~~March 31, 2022, there was ~~$937,537~~approximately $726,000 of remaining unrecognized compensation expense related to these inducement stock options.

On October 8, 2021, the Company and Michael B. Jebsen, the Company’s President and Chief Financial Officer, agreed that Mr. Jebsen would separate from the Company effective October 29, 2021 (the “Separation Date”).

In connection with Mr. Jebsen’s separation from the Company, the Company and Mr. Jebsen entered into a separation and release agreement dated October 14, 2021 (the “Jebsen Separation Agreement”). Subject to Mr. Jebsen’s execution of a general release of claims, Mr. Jebsen will receive severance in an amount equal to one year of his current base annual salary and a pro-rated amount of his target annual bonus that would have been received had 100% of his annual goals been achieved, aggregating to approximately $513,000 (less applicable taxes and withholdings)and payable in a lump sum on the 30th day following the Separation Date. The Company also will reimburse COBRA premiums for coverage of Mr. Jebsen and his eligible dependents for up to 12 months if Mr. Jebsen timely and properly elects continuation coverage.

The Company and Mr. Jebsen also entered into a consulting agreement dated October 14, 2021 (the “Jebsen Consulting Agreement”) pursuant to which, for a period of six months following the Separation Date (the “Transition Period”), Mr. Jebsen will remain at the Company in an advisory role. The Transition Period can be terminated upon 30 days’ notice by either party or immediately by the Company for cause (as defined in the Jebsen Consulting Agreement). During the Transition Period, the Company will pay Mr. Jebsen for his advisory services at a rate of $275 per hour.None.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with the audited condensed consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, ~~2020, as amended.~~2021. All references in this Quarterly Report to “Tenax Therapeutics,” “we,” “our” and “us” means Tenax Therapeutics, Inc. The description or discussion in this Quarterly Report on Form 10-Q of any contract or agreement is a summary only and is qualified in all respects by reference to the full text of the applicable contract or agreement.

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

~~Strategy~~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 corporation to Delaware and changed the Company name to Oxygen Biotherapeutics, Inc. On September 19, 2014, we changed the Company name to Tenax Therapeutics, Inc.

~~We are a specialty pharmaceutical company focused on identifying, developing and commercializing products that address cardiovascular and pulmonary diseases of high unmet medical need.~~ On November 13, 2013, ~~through our wholly owned subsidiary, Life Newco, Inc., or Life Newco,~~ we acquired a license granting Life Newco, our wholly-owned subsidiary, an exclusive, sublicensable right to develop and commercialize pharmaceutical products containing levosimendan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial in the United States and Canada. On October 9, 2020 and January 25, 2022, we entered into ~~an amendment~~amendments to the 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, ~~to the scope of the license,~~ subject to specified limitations.

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

~~Levosimendan was discovered and developed by Orion Corporation, a Finnish company, or Orion. Levosimendan~~Our principal business objective is a ~~calcium sensitizer/K-ATP activator~~ developed for intravenous use in hospitalized patients with acutely decompensated heart failure. It is currently approved in over sixty countries for this indication and not available in the United States or Canada. It is estimated that to ~~date over 1.5 million patients have been treated worldwide with levosimendan~~.

~~Levosimendan is a novel, first in class~~ ~~calcium sensitizer/K-ATP activator~~~~. The therapeutic effects of levosimendan are mediated through:~~

This triple mechanism of action helps to preserve heart function during cardiac surgery. Several studies have demonstrated that levosimendan protects the heart and improves tissue perfusion while minimizing tissue damage during cardiac surgery.

~~In 2013, we acquired certain assets of Phyxius Pharma, Inc., or Phyxius, including its North American rights to~~identify, develop, and commercialize ~~levosimendan~~late-stage pharmaceutical therapeutic products for any indication in the United States and Canada. In the countries where levosimendan is marketed, levosimendan is indicated for the short-term treatment of acutely decompensated severe chronic heart failure in situations where conventional therapy is not sufficient, and in cases where inotropic support is considered appropriate. In acute decompensated heart failure patients, levosimendan has been shown to significantly improve patients’ symptoms as well as acute hemodynamic measurements such as increased cardiac output, reduced preload and reduced afterload.

The European Society of Cardiology, or the ESC, recommends levosimendan as a preferable agent over dobutamine to reverse the effect of beta blockade if it is thought to be contributing to hypotension. The ESC guidelines also state that levosimendan is not appropriate for patients with systolic blood pressure less than 85mmHg or in patients in cardiogenic shock unless it is used in combination with other inotropes or vasopressors. Other unique properties of levosimendan include sustained efficacy through the formation of a long-acting metabolite, lack of impairment of diastolic function, and evidence of better compatibility with beta blockers than dobutamine.

We recently completed a Phase 2 clinical trial of levosimendan in North America for the treatment of patients with pulmonary hypertension associated with heart failure with preserved ejection fraction, or PH-HFpEF. PH-HFpEF is defined hemodynamically by a mean pulmonary artery pressure, or mPAP, ≥25 mmHg, and a pulmonary capillary wedge pressure, or PCWP, >15 mmHg. Pulmonary hypertension in these patients is believed to arise from a passive backward transmission of elevated filling pressures from left-sided heart failure. These mechanical components of pulmonary venous congestion may trigger pulmonary vasoconstriction, decreased nitric oxide availability, increased endothelin expression, desensitization to natriuretic peptide induced vasodilation, and vascular remodeling. Over time, these changes often lead to advanced pulmonary arterial and venous disease, increased right ventricle afterload, and right ventricle failure.

PH-HFpEF is a common form of pulmonary hypertension with an estimated U.S. prevalence exceeding 1.5 million patients. Currently, no pharmacologic therapies are approved for treatment of PH-HFpEF. Despite the fact that many therapies have been studied in PH-HFpEF patients, including therapies approved to treat pulmonary arterial hypertension patients, no therapies have been shown to be effective in treating PH-HFpEF patients.

Published pre-clinical and clinical studies indicate that levosimendan may provide important benefits to patients with pulmonary hypertension. Data from these published trials indicate that levosimendan may reduce pulmonary vascular resistance and improve importantserious cardiovascular ~~hemodynamics such as reduced pulmonary capillary wedge pressure~~ and pulmonary ~~artery pressure in patients~~diseases with pulmonary hypertension. In addition, several published studies provide evidence that levosimendan may improve right ventricular dysfunction which is a common comorbidity in patients with pulmonary hypertension. While none of these studies have focused specifically on PH-HFpEF patients, the general hemodynamic improvements in these published studies of various types of pulmonary hypertension provide a basis to believe that levosimendan may be beneficial in PH-HFpEF patients.

~~In March 2018, we met with the United States Food and Drug Administration, or FDA, to discuss development of levosimendan in PH-HFpEF patients.~~high unmet medical need. The FDA agreed with our planned Phase 2 design, patient entry criteria, and endpoints. It was agreed the study could be conducted under the existing investigational new drug application with no additional nonclinical studies required to support full development. The FDA recognized there were no approved drug therapies to treat PH-HFpEF patients and acknowledged this provided an opportunity for a limited Phase 3 clinical program. This topic was discussed further at the End-of-Phase 2 Meeting following completion of the Phase 2 study in PH-HFpEF patients, which is known as the HELP Study – H~~emodynamic~~ E~~valuation of~~ L~~evosimendan in~~ P~~H-HFpEF.~~

~~We initiated the first~~key elements of our expected 10 to 12 HELP Study clinical sites in November 2018 and the first of thirty-seven patients were enrolled in the HELP Study in March 2019. Enrollment in the HELP Study was completed in March 2020. The primary endpoint of the HELP Study was based on the change in PCWP during exercise versus baseline compared to placebo. The HELP Study utilized a double-blind randomized design following five weekly outpatient infusions of levosimendan.

On June 2, 2020, we announced preliminary, top-line data from the study. The primary efficacy analysis, pulmonary capillary wedge pressure (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.

Hemodynamic measurements were made at rest (supine), after leg raise on a supine bicycle (a test of rapid increase in ventricular filling) and during exercise (25 watts for 3 minutes or until the patient tired). In the initial open-label phase, 84% of the patients had a significant reduction in right atrial pressure, or RAP, pulmonary artery pressure, or PAP and PCWP at rest and during exercise. In the randomized double-blinded 6-week trial, levosimendan demonstrated 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. While there was no significant change in PCWP during exercise, patients receiving levosimendan had reductions from baseline at Week 6 in PCWP, PAP, and RAP that were significant when patients were “at rest” and/or with their “legs raised” (p<0.05).

The clinical efficacy was confirmed by a statistically significant improvement in 6-minute walk distance of 29 meters (p=0.0329). The 6-minute walk distance was a secondary endpoint in the trial and is a validated and accepted endpoint used in many pulmonary hypertension registration trials. Levosimendan was given in once-weekly home infusions for six weeks.

The incidence of adverse events or serious adverse events between the control and treated groups were similar. In addition, there were no arrhythmias observed, atrial or ventricular, when comparing baseline electrocardiographic monitoring with 72-hour monitoring after five weeks of treatment.

The detailed results from the Phase 2 HELP Study of levosimendan in PH-HFpEF were presented at the Heart Failure Society of America Virtual Annual Scientific Meeting on October 3, 2020 and at the American Heart Association Scientific Sessions 2020 on November 13, 2020. Additionally, in May 2021, the manuscript was published in the peer-reviewed journal JACC: Heart Failure.

On October 9, 2020, we entered into an amendment to the License between the Company and Orion to include two new product formulations containing levosimendan, in a capsule solid oral dosage form, and a subcutaneously administered dosage form containing levosimendan, to the scope of the License, subject to specified limitations.

We have studied 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. The patients were successfully transitioned from the intravenous to an oral formulation. The investigators at the centers that participated in the HELP Study were the ones who participated and enrolled their patients into this study. The data from that open-label extension will inform as to the oral dosage of levosimendan for the Phase 3 trial.

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. We expect that this will be addressed when the final Phase 3 protocol is submitted which will better characterize the trial design and primary endpoints.

The HELP Study design was novel in several respects. To date, no other multi-center study has evaluated levosimendan in heart failure patients with preserved ejection fraction, or HFpEF, patients or PH-HFpEF patients. Instead, all previous levosimendan heart failure studies have enrolled heart failure patients with reduced ejection fraction, or HFrEF, which specifically excluded HFpEF patients. Also, the HELP Study utilized a unique 24-hour weekly infusion regimen of 0.075- 0.1µm/kg/min. Finally, the HELP Study employed a unique home-based intravenous infusion administration via an ambulatory infusion pump. This home-based weekly intravenous administration is unlike all other chronic dosing studies of levosimendan that have typically employed a shorter duration and less frequent infusion regimen administered in a hospital setting. Despite the unique patient population, weekly dosing, and home-based administration, there have been no reported serious adverse events.

We believe that the combination of the HELP Study patient population, weekly 24-hour dosing, home-based site of administration, and findings of efficacy and safety in PH-HFpEF patients represent significant discoveries and intellectual property. These discoveries, among others from the HELP Study, form the basis for a U.S. patent application that we have filed.

Imatinib (also known as “Gleevec”) is a tyrosine kinase inhibitor, which revolutionized the treatment of chronic myeloid leukemia, or CML, in 2001. The first clinical trial of imatinib took place in 1998 and the drug received FDA approval in May 2001. Encouraged by the success of imatinib in treating CML patients, scientists explored its effect in other cancers, and it was found to produce a similar positive effect in other cancers where tyrosine kinases were overexpressed.

~~Tyrosine kinases~~business strategy are important mediators of the signaling cascade, determining key roles in diverse biological processes like growth, differentiation, metabolism, and apoptosis in response to external and internal stimuli. Deregulation of protein kinase activity has been shown to play a central role in the pathogenesis of human cancers. Imatinib, a 2-phenyl amino pyrimidine derivative, is a tyrosine kinase inhibitor with activity against ABL, BCR-ABL, PDGFRA, and c-KIT. Imatinib works by binding close to the ATP binding site therefore inhibiting the enzyme activity of the protein. Imatinib also inhibits the ABL protein of noncancer cells. Imatinib is well absorbed after oral administration with a bioavailability exceeding 90%. It is extensively metabolized, principally by cytochrome P450 (CYP)3A4 and CYP3A5 and can competitively inhibit the metabolism of drugs that are CYP3A4 or CYP3A5 substrates. Imatinib is generally well tolerated in cancer patients. Common side effects include fluid retention, headache, diarrhea, loss of appetite, weakness, nausea and vomiting, abdominal distention, edema, rash, dizziness, and muscle cramps. Serious side effects may include myelosuppression, heart failure, and liver function abnormalities. Novartis manufactures Gleevec.

~~Previous~~ ~~Imatinib Development for Pulmonary Arterial Hypertension Patients~~

In PAH, a rare disease, subjects who remain symptomatic despite available therapies have a high morbidity and mortality. Though several therapies are now available, there is no cure for the disease, and there is no data supporting that the existing therapies, all of which are pulmonary vasodilators, halt progression or induce regression of the disease. Imatinib is a tyrosine kinase inhibitor that has been shown in animal models of pulmonary hypertension to induce disease reversal by an effect on platelet derived growth factor, or PDGF, which appears to be causal in the disease. After that discovery was made, several case reports and small case series of patients with advanced PAH failing combination pulmonary vasodilator therapy were published showing a dramatic effect of imatinib on stabilizing and improving these patients. This led Novartis to develop imatinib as a treatment of PAH.

Novartis sponsored a Phase 2 proof-of-concept trial to evaluate the safety, tolerability, and efficacy of imatinib as an adjunct to PAH specific therapy in patients with PAH. This was a 24-week randomized, double-blind, placebo-controlled study of PAH subjects who remained symptomatic on one or more PAH therapies in WHO Functional Class (FC) II-IV. The Phase 2 trial of imatinib in PAH caused significant hemodynamic improvement in some patients but failed to meet the primary endpoint of an increase in 6-minute walk distance (22 meters, p=NS). Novartis then sponsored a Phase 3 trial (IMPRES) which met its primary endpoint of significant increase in 6-minute walk (32 meters, p=0.002), an effect maintained in the extension study in patients remaining on imatinib. However, the data were confounded by a high rate of dropouts in the patients randomized to imatinib attributed largely to gastric intolerance during the first eight weeks. The sponsor proposed consideration of a surrogate endpoint under the subpart H provision as a basis for approval but was denied. Consequently, Novartis chose to withdraw the Investigational New Drug application as the drug went off patent.

~~Current~~ ~~Imatinib Development for Pulmonary Arterial Hypertension Patients~~

On May 30, 2019, PHPM met with the FDA to discuss a proposal for a Phase 3 trial of imatinib for PAH. At that meeting, PHPM received agreement from the FDA 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 imatinib 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 twelve volunteers receiving a single dose of the modified release formulation to be compared to a single dose of the existing immediate release formulation. The Company is planning a Phase 3 study with the modified release formulation of imatinib.

~~The following summarizes certain key financial measures for the three months ended September 30, 2021:~~outlined below.

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.

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.

~~For~~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 ~~remainder~~sale of ~~2021,~~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.

On January 4, 2022, the ~~following initiatives:~~Company 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 heart failure, pulmonary hypertension including PH-HFpEF, chronic kidney disease, stroke, or other health conditions. The patent is expected to expire no earlier than 2039, exclusive of 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 intended clinical indication, PH-HFpEF, by providing levosimendan by any route of administration.

The continued spread of COVID-19, including variant strains, globally, may affect our operations, including the 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 investigators enrolling subjects in our 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 enrollment of subjects and their adherence with study requirements. In addition, there could be a potential effect of 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.

~~Results of Operations- Comparison of the Three Months Ended September 30, 2021 and 2020~~

General and administrative expenses were $1.5 million for the three months ended March 31, 2022, compared to $1.4 million for the same period in 2021. 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 three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively, are as follows:

Personnel costs ~~increased~~decreased approximately ~~$1.2 million in~~$213,000 for the ~~current period,~~three months ended March 31, 2022, compared to the same period in the prior ~~year,~~year. The decrease was primarily due to ~~approximately $930,000~~headcount reductions in ~~severance costs associated with~~ the ~~retirement of our former CEO and other employees,~~current period as ~~well as approximately $266,000~~compared to the same period in ~~noncash compensation expense resulting from~~ the ~~modification of the former CEO’s outstanding options and the grant of an additional option on his separation date.~~

Legal and professional fees increased approximately $339,000 for the three months ended March 31, 2022, 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 (the “Board”).~~ Directors.

Legal ~~and professional~~ fees increased approximately ~~$235,000~~$237,000 for the three months ended ~~September 30, 2021~~March 31, 2022, as compared to the same period in the prior year. ~~This~~The increase was primarily due to ~~an increase of approximately $208,000 in~~the legal fees associated with outsourcing the ~~filing of registration statements,~~in-house legal function and ~~the CEO transition in the current period. Additionally, Board fees increased to approximately $14,000 in the current period due primarily to fees paid to new directors~~IP costs that were not incurred during the same period in the prior year.

~~Other costs:~~Professional fees increased approximately $102,000 for the three months ended March 31, 2022, compared to the same period in the prior year. The increase was primarily attributable to increased investor relations, director, consulting and capital market fees offset by a decrease in accounting costs.

Other costs increased approximately $43,000 for the three months ended March 31, 2022, compared to the same period in the prior year. Other costs include ~~costs~~expenses incurred for franchise and other taxes, travel, supplies, insurance, depreciation and other miscellaneous charges. ~~Other~~The increase was primarily attributable to increased costs ~~increased approximately $15,000 in the current period primarily due to an increase of approximately $25,000 in~~for insurance, ~~premiums paid, partially~~dues and administrative expenses offset by ~~a decrease of approximately $12,000~~decreases in franchise ~~taxes paid in the current period as compared to the same period of the prior year.~~

Facilities ~~expenses~~costs include costs paid for rent and utilities at our corporate headquarters in ~~Morrisville,~~ North Carolina. Facilities costs remained relatively ~~consistent~~unchanged for the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

Research and development expenses were $1.2 million for the three months ended March 31, 2022 as compared to $22.4 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 ~~clinical~~contract research organizations ~~or CROs,~~ and investigative sites, which conduct our clinical trials and a substantial portion of our pre-clinical studies; (ii) the cost of ~~manufacturing and~~ 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, ~~laboratory~~ and other supplies. All research and development expenses are expensed as incurred. Research and development expenses and percentage changes for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively, are as follows:

Clinical and preclinical development costs ~~include~~increased approximately $497,000 for the three months ended March 31, 2022 as compared to the same period in the prior year. Clinical and preclinical development costs consist of expenses associated with our ongoing Phase 2 HELP Open Label Extension Study for levosimendan, costs associated with our imatinib Phase ~~2 HELP~~1 Pharmacokinetics Study, ~~for levosimendan, which was completed during fiscal year 2020, the costs associated with our IV to oral levosimendan transition study~~imatinib Phase 3 IMPROVE Study, and development costs associated with the formulation for imatinib. The increase ~~of approximately $25,000 in clinical and preclinical development costs for the three months ended September 30, 2021 compared~~is primarily attributable to ~~the same period in the prior year was primarily due to an increase of approximately $630,000 in~~ costs associated with formulation development, ofPhase 1 and Phase 3 costs associated with imatinib in the current period that were not incurred in the same period in the prior ~~year, partially offset by a decrease of~~year.

Personnel costs increased approximately ~~$605,000 in expenditures~~$43,000 for ~~CRO costs and other direct costs associated with~~ the ~~Phase 2 and IV to oral transition studies in the current period~~three months ended March 31, 2022, as compared to the same period in the prior ~~year.~~

~~Personnel costs increased approximately $80,000 for the three months ended September 30, 2021~~year, primarily ~~due~~attributable to the addition of our Chief Medical ~~Officer~~Officer.

Other costs decreased approximately $21.7 million for the three months ended March 31, 2022, 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 prior period. There were no such expenses incurred in the same period in the current year.

Other ~~costs remained relatively consistent~~income and expense include non-operating income and expense items not otherwise recorded in our consolidated statement of comprehensive 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 expense increased approximately $1,642 for the three months ended ~~September 30, 2021~~March 31, 2022, compared to the same period in the prior year. This increase is due primarily to interest expense in the current period.

We have incurred losses since our inception and, as of March 31, 2022, we had an accumulated deficit of approximately $281 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.

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.

~~Results of Operations- Comparison of the Nine Months Ended September 30, 2021 and 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, other professional services, and consulting fees. General and administrative expenses and percentage changes for the nine months ended September 30, 2021 and 2020, respectively, are as follows:

Personnel costs increased approximately $1.3 million for the nine months ended September 30, 2021 compared to the same period in the prior year. This increase was primarily due to approximately $930,000 in severance costs associated with the retirement 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 options and the grant of an additional option on his separation date in the current period.

Legal and 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 our Board members. Legal and professional fees increased approximately $636,000 for the nine months ended September 30, 2021 compared to the same period in the prior year.

Other costs include costs incurred for franchise and other taxes, travel, supplies, insurance, depreciation and other miscellaneous charges. Other costs decreased approximately $4,000 in the current period due primarily to a decrease in franchise taxes paid, partially offset by an increase of approximately $76,000 in insurance premiums paid in the current period as compared to the same period of the prior year.

Facilities expenses include costs paid for rent and utilities at our corporate headquarters in North Carolina. Facilities costs remained relatively consistent for the nine months ended September 30, 2021 and 2020.

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 manufacturing and 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, laboratory and other supplies. All research and development expenses are expensed as incurred. Research and development expenses and percentage changes for the nine months ended September 30, 2021 and 2020, respectively, are as follows:

Clinical and preclinical development costs include costs associated with our Phase 2 HELP Study for levosimendan, which was completed during fiscal year 2020, costs associated with our IV to oral levosimendan transition study and development costs associated with the formulation for imatinib. The decrease of approximately $1.4 million in clinical and preclinical development costs for the nine months ended September 30, 2021 compared to the same period in the prior year was primarily due to a decrease of approximately $1.5 million in expenditures for CRO costs, a reduction of approximately $748,000 in enrolled patient and direct site costs and a decrease of approximately $122,000 in fees paid for clinical research associates and other direct costs to manage the Phase 2 HELP Study in the current period as compared to the same period in the prior year. These cost reductions were partially offset by an increase of approximately $891,000 in costs associated with formulation development of imatinib in the current period that were not incurred in the same period in the prior year.

~~Personnel costs increased approximately $250,000 for the nine months ended September 30, 2021 due primarily to the addition of our Chief Medical Officer in the current year.~~

Other costs increased approximately $21.7 million for the nine months ended September 30, 2021 primarily due to the recognition of in-process research and development acquired as part of the merger with PHPM in the current period that was not incurred in the same period in the prior year.

Other income and expense include non-operating income and expense items not otherwise recorded in our condensed consolidated statement of comprehensive 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 nine months ended September 30, 2021 and 2020, respectively, are as follows:

Other income increased approximately $240,000 for the nine months ended September 30, 2021 compared to the same period in the prior year. This increase is due primarily to the forgiveness of our PPP Loan in the current period.

We have incurred losses since our inception, and as of September 30, 2021 we had an accumulated deficit of approximately $275 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 increased expenses related to our development and potential commercialization of levosimendan for pulmonary hypertension and imatinib for PAH, 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.

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 ~~$8,583,227~~$3,455,671 and ~~$6,795,506~~$5,689,000 and working capital of ~~$7,121,866~~$1,479,277 and ~~$4,676,543~~$4,125,022 as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. ~~Based on our working capital~~Our practice is to invest excess cash, where available, in short-term money market investment instruments and ~~the value of our investments in marketable securities on September 30, 2021, we believe we have sufficient capital to fund our operations only through the second quarter of calendar year 2022.~~high quality corporate and government bonds.

The following table shows a summary of our cash flows for the ~~nine months ended September 30, 2021 and 2020:~~periods indicated:

	Nine months ended September 30,						Three months ended March 31,
	2021			2020			2022			2021
Net cash used in operating activities	$	(8,087,748	)	$	(7,285,410	)	$	(2,937,677	)	$	(3,221,141	)
Net cash provided by investing activities		454,307			16,603
Net cash used in investing activities								(6,323	)		(36,964	)
Net cash provided by financing activities		9,737,275			10,598,346			228,762			544,651

Net cash used in operating activities was approximately ~~$8.1~~$2.9 million for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 compared to ~~net cash used in operating activities of~~ approximately ~~$7.3~~$3.2 million for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The ~~increase~~decrease in cash used for operating activities was primarily due to ~~an increase in our annual insurance premiums, employee severance~~prepaid expense and ~~accrued bonuses paid~~accounts payable activity in the current period as compared to the prior year.

Net cash ~~provided by~~used in investing activities was approximately ~~$454,000~~$6,000 for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022, compared to approximately ~~$16,000 provided by investing activities for~~$37,000 in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The ~~increase~~decrease in cash provided by investing activities was primarily due to the ~~sale~~purchase of marketable securities in the prior period where no such purchases were made in the current period.

Net cash provided by financing activities was approximately $229,000 for the ~~nine~~three months ended ~~September 30, 2021 totaled $9.7 million, which was attributable~~March 31, 2022, compared to ~~net proceeds from~~approximately $545,000 in the ~~sale of units~~three months ended March 31, 2021. The decrease 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 ~~for~~was primarily due to the nine months ended September 30, 2020 totaled $10.6 million, which was attributable to aggregate net proceeds from the sale of common stock, 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 a loan in connection with the Paycheck Protection Program under the Cares Act and $1.7 million of proceeds from the exercise of ~~stock warrants.~~warrants in the prior period.

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

~~The circumstances above raise substantial doubt about~~Based on our ~~ability~~working capital on March 31, 2022, we believe we have sufficient capital on hand to continue as a going concern for at least one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. In fact, we believe that our existing cash and cash equivalents, along with our investment in marketable securities, will be sufficient to fund ~~our projected operating requirements only~~operations through the second quarter of calendar year 2022. ~~Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Further, we~~

We will need substantial additional capital beyond the second quarter of calendar year 2022 and in the future in order to complete the ~~development~~regulatory approval and commercialization of ~~levosimendan and~~ imatinib and levosimendan 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 ~~reasonable~~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, 2021 consolidated financial statements 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.~~capital at that time. We may also consider strategic alternatives, including a sale of our company, merger, other business combination or recapitalization.

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates under different assumptions or conditions. For information regarding our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, ~~2020, as amended~~2021 and Note 2 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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.

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

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 Quarterly Report on Form 10-Q, 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 ~~September 30, 2021,~~March 31, 2022, the end of the period covered by this Quarterly Report on Form 10-Q, 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.

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.

There are no material pending legal proceedings to which we are a party or to which any of our property is subject.

The risks we face have not materially changed from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020, as amended.~~2021.

The following exhibits are being filed or furnished as part of this Quarterly Report on Form 10-Q and are numbered in accordance with Item 601 of Regulation S-K:

#Portions of this ~~exhibit~~Exhibit have been ~~redacted in compliance with Regulation S-K~~omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of this Exhibit to the Securities and Exchange Commission upon request.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		26-2593535
(State of incorporation)		(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

			PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements		3
	Condensed Consolidated Balance Sheets as of ~~September 30, 2021~~March 31, 2022 (Unaudited) and December 31, ~~2020~~2021		3
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~		4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~		5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~three Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~		6
	Notes to Condensed Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2119
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		3024
Item 4.	Controls and Procedures		3024

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		3226
Item 1A.	Risk Factors		3226
Item 6.	Exhibits		3226

SIGNATURES		33	27

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2021		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	$	8,354,075	$	8,354,075	$	0	$	0
Marketable securities	$	0	$	0	$	0	$	0

	September 30, 2021			December 31, 2020
Office furniture and fixtures	$	43,033		$	43,033
Computer equipment and software		21,259			23,307
		64,292			66,340
Less: Accumulated depreciation		(57,803	)		(60,368	)
	$	6,489		$	5,972

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

			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	$	0	$	0
Marketable securities	$	462,687	$	0	$	462,687	$	0

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

	Warrants			Weighted Average Exercise Price
Outstanding at December 31, 2020		16,599,079		$	1.29
Issued		5,131,264			2.00
Exercised		(801,576	)		1.54
Outstanding at September 30, 2021		20,928,767		$	1.45

	~~Shares~~ ~~Available for~~ ~~Grant~~
~~Balances, at December 31, 2020~~		~~356,500~~
~~Additional shares reserved~~		~~750,000~~
~~Options granted~~		~~(378,750~~	)
~~Options cancelled/forfeited~~		~~91,000~~
~~Balances, at September 30, 2021~~		~~818,750~~

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances at December 31, 2020		393,500		$	1.81
Options granted		378,750		$	1.88
Options cancelled/forfeited		(91,000	)	$	1.59
Balances at September 30, 2021		681,250		$	1.88

	For the nine months ended September 30,
	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	%

	-	~~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 potassium channels in the vasculature smooth muscle, resulting in a vasodilatory effect on all vascular beds; and~~
	-	~~Opening of mitochondrial potassium channels in cardiomyocytes, resulting in a cardioprotective effect.~~

	·	~~Cash~~Efficiently conduct clinical development to establish clinical proof of principle in new indications, refine formulation, and ~~cash equivalents were $8.4 million~~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 ~~September 30, 2021;~~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 ~~net loss from operations was $3.9 million for~~intellectual property, and the ~~third quarter~~confidentiality of ~~fiscal 2021 compared~~all our company information, is important to ~~$2.2 million for the three months ended September 30, 2020;~~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.

	·	~~Net cash used in operating activities was $3.0 million and $2.4 million for the three months ended September 30, 2021 and 2020, respectively.~~


24

~~Table~~		In addition to our internal development efforts, an important part of ~~Contents~~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.


-	~~Working with collaborators and partners to accelerate product development, reduce our development costs, and broaden our developmental capabilities; and~~21

-	~~Identifying strategic alternatives, including, but not limited to, the potential acquisition of additional products or product candidates.~~Table Of Contents

	Three months ended September 30,				Increase/ (Decrease)		% Increase/ (Decrease)
	2021		2020
Personnel costs	$	1,898,685	$	682,907	$	1,215,778		178	%
Legal and professional fees		527,603		292,625		234,978		80	%
Other costs		174,229		159,327		14,902		9	%
Facilities		39,403		37,866		1,537		4	%

	-	Legal fees increased approximately $519,000 in the current period. This increase was primarily due to the reimbursement of approximately $358,000 in legal fees associated with arbitration 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 prior year.

	-	~~Accounting fees increased approximately $39,000 in the current period primarily due to fees associated with the PHPM transaction that were not incurred during the same period in the prior year.~~

	-	Board fees increased approximately $65,000 in the current period primarily due to fees paid to new directors that were not incurred during the same period in the prior year and an increase in the vested value of outstanding stock options as compared to the same period in the prior year.

	-	Capital market fees increased by approximately $25,000 in the current period. This increase was primarily due to an increase in proxy related costs incurred in the current period as compared to the same period in the prior year.

	-	Investor relations costs decreased approximately $30,000 in the current period. This decrease was primarily due to fees paid to third-party investor relations firms for direct outreach and communications in the prior year that were not incurred in the current period.

	Nine months ended September 30,						(Increase)/ Decrease			% Increase/ (Decrease)
	2021			2020
Other income, net	$	(253,597	)	$	(14,038	)	$	(239,559	)	1707	%

-	·	the initiation, progress, timing and completion of clinical trials for our product ~~candidate~~candidates and potential product candidates;
-
	·	the outcome, timing and cost of regulatory approvals and the regulatory approval process;
-	~~the impacts of COVID-19, including~~
	·	delays that may be caused by ~~COVID-19;~~the global coronavirus 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.

Exhibit Number		Description

~~4.1~~10.1#		~~Form~~Amendment to the License Agreement of ~~Unregistered Pre-Funded Warrant (July 2021) (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).~~

~~4.2~~		~~Form of Unregistered Warrant (July 2021) (incorporated herein by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).~~

~~4.3~~		~~Form of HCW Warrant (July 2021) (incorporated herein by reference to Exhibit 4.3 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).~~

~~10.1~~		~~Securities Purchase Agreement for Unregistered Pre-Funded Warrant dated as of July 6, 2021,~~September 20, 2013 by and between Tenax Therapeutics, Inc. and ~~the Investor~~Orion Corporation, dated as of January 25, 2022. (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on ~~July 8, 2021)~~January 28, 2022).

~~10.2~~		Registration Rights Agreement dated July 6, 2021, by and between Tenax Therapeutics, Inc. and the Investor (incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).

~~10.3+~~		Separation and General Release Agreement dated July 6, 2021, by and between Tenax Therapeutics, Inc. and Anthony A. DiTonno (incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).

~~10.4+~~		Executive Employment Agreement dated July 6, 2021, by and between Tenax Therapeutics, Inc. and Christopher T. Giordano (incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).

~~10.5+~~		Plan for Employee Inducement Stock Options adopted July 6, 2021 with Form of Stock Option Agreement (incorporated herein by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on July 8, 2021).

~~10.6*+#~~		~~Consulting Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Danforth Advisors, LLC.~~

~~10.7*+~~		~~Separation and Release Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Michael B. Jebsen.~~

~~10.8*+~~		~~Consulting Agreement dated October 14, 2021, by and between Tenax Therapeutics, Inc. and Michael B. Jebsen.~~

31.1*		Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

31.2*		Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

32.1		Certification of 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.

32.2		Certification of 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.

101*		Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

Date: May 16, 2022
	TENAX THERAPEUTICS, INC.

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