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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
or
FOR THE TRANSITION PERIOD FROM _________ to __________
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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| (Address of principal executive offices) (Zip Code) | (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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.
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
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 in Rule 12b-2 of the Exchange Act) Yes ☐ No
As of August 13, 2026, the registrant had a total of
INDEX
| Page | ||
| PART I. FINANCIAL INFORMATION | 1 | |
| Item 1. | Condensed Financial Statements (unaudited) | 1 |
| Condensed Balance Sheets | 1 | |
| Condensed Statements of Operations and Comprehensive Loss | 2 | |
| Condensed Statements of Stockholders’ (Deficit) Equity | 3 | |
| Condensed Statements of Cash Flows | 5 | |
| Notes to Condensed Financial Statements | 6 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 24 |
| Item 4. | Controls and Procedures | 24 |
| PART II. OTHER INFORMATION | 25 | |
| Item 1. | Legal Proceedings | 25 |
| Item 1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 25 |
| Item 4. | Mine Safety Disclosures | 25 |
| Item 5. | Other Information | 25 |
| Item 6. | Exhibits | 26 |
| SIGNATURES | 29 | |
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “intend,” “seek,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “might,” “forecast,” “continue,” or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:
| ● | Our ability to effectively operate our business; |
| ● | Our ability to manage our research, development, expansion, growth and operating expenses; |
| ● | Our ability to evaluate and measure our business, prospects and performance metrics; |
| ● | Our ability and our national distributor’s ability to compete, directly and indirectly, and succeed in the highly competitive medical devices industry; |
| ● | Our ability to respond and adapt to changes in technology and customer behavior; |
| ● | Our ability to raise the needed capital to fund our operations; |
| ● | Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand; and |
| ● | Other factors (including the risks contained in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 27, 2026) relating to our industry, our operations, and results of operations. |
Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.
ii
PART I – FINANCIAL INFORMATION
ITEM 1. Condensed Financial Statements (Unaudited)
Tenon Medical, Inc.
Condensed Balance Sheets (Unaudited)
(In thousands, except share data)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net (Note 3) | ||||||||
| Deposits | ||||||||
| Operating lease right-of-use asset (Note 6) | ||||||||
| Intangible assets, net (Note 4) | ||||||||
| Goodwill | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| Liabilities and Stockholders’ (DEFICIT) EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses (Note 5) | ||||||||
| Current portion of accrued commissions | ||||||||
| Current portion of operating lease liability (Note 6) | ||||||||
| Current portion of contingent consideration (Note 10) | ||||||||
| Convertible notes (Note 7) | ||||||||
| Derivative liability (Note 8) | ||||||||
| Total current liabilities | ||||||||
| Accrued commissions, net of current portion | ||||||||
| Operating lease liability, net of current portion (Note 6) | ||||||||
| Contingent consideration, net of current portion (Note 10) | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 10) | ||||||||
| Stockholders’ (deficit) equity: | ||||||||
| Series A convertible preferred stock, $ | ||||||||
| Series B convertible preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ (deficit) equity | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
1
Tenon Medical, Inc.
Condensed Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Gain on investments | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||
| Total Other (Expense) Income, net | ( | ) | ( | ) | ||||||||||||
| Net Loss and Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Share of Common Stock | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-Average Shares of Common Stock Outstanding | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
2
Tenon Medical, Inc.
Condensed Statements of Stockholders’ (Deficit) Equity (Unaudited)
(In thousands, except share data)
Three months ended June 30, 2026 and 2025:
| Series A Convertible Preferred Stock |
Series B Convertible Preferred Stock |
Common Stock | Additional Paid-In |
Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||
| Release of restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of common stock to SiVantage upon completion of milestone | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||
| Release of restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Deferred deal costs | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
3
Six months ended June 30, 2026 and 2025:
| Series A Convertible Preferred Stock |
Series B Convertible Preferred Stock |
Common Stock | Additional Paid-In |
Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||
| Release of restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of common stock to SiVantage upon completion of milestone | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||
| Issuance of common stock, pre-funded warrants and warrants under inducement agreement, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of common stock, pre-funded warrants, and warrants, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||
| Release of restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Deferred financing costs | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
4
Tenon Medical, Inc.
Condensed Statements of Cash Flows (Unaudited)
(In thousands)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Amortization of operating right-of-use asset | ||||||||
| Provision for credit losses on accounts receivable | ||||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ||||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Gross proceeds from issuance of convertible notes | ||||||||
| Gross proceeds from issuance of common stock, pre-funded warrants and warrants | ||||||||
| Gross proceeds from issuance of common stock, pre-funded warrants and warrants under inducement agreement | ||||||||
| Offering costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | ( | ) | ||||||
| Cash and Cash Equivalents at Beginning of Period | ||||||||
| Cash and Cash Equivalents at End of Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Remeasurement of right-of-use asset and lease liability | $ | $ | ||||||
| Initial fair value of derivative liability recorded as a debt discount | $ | $ | ||||||
| Warrant modification costs | $ | $ | ||||||
| Reclassification of deferred offering costs to additional paid-in capital | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
5
Tenon Medical Inc.
Notes to Condensed Financial Statements (unaudited) (in thousands, except share and per-share data)
1. Organization and Business
Nature of operations
Tenon Medical, Inc. (the “Company”) was incorporated in the State of Delaware on
In August 2025, the Company acquired substantially all of the assets of SiVantage, Inc. and SIMPL Medical, LLC, including the SImmetry+ SI Joint Fusion System (“The SImmetry+ System”) that treats disorders of the SI Joint through a minimally invasive lateral access solution that incorporates well-established orthopedic fusion principles-including joint decortication, bone graft placement, and rigid fixation-with the goal of achieving a true biological fusion across the SI Joint.
2. Summary of Significant Accounting Principles
Basis of presentation
The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). As permitted under these rules and regulations, the Company has condensed or omitted certain financial information and footnote disclosures normally included in its annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed balance sheet as of December 31, 2025 has been derived from the Company’s audited financial statements, which are included in its Annual Report on Form 10-K filed with the SEC on March 27, 2026 (the “Annual Report”).
These condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in management’s opinion, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of its financial information. The interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s audited financial statements as of and for the years ended December 31, 2025 and 2024 included in its Annual Report.
The Company’s significant accounting policies are disclosed in the Annual Report. There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2026 with the exception of the policy for accounting for derivatives which is included below.
Going concern uncertainty and liquidity requirements
The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. There is substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these financial statements are issued.
Since inception, the Company has incurred losses and negative cash flows from operations. Management expects to incur additional operating losses and negative cash flows from operations in the foreseeable future as the Company continues its product development programs and the commercialization of The Catamaran System and The SImmetry+ System. Based on the Company’s expected level of revenues and expenditures, the Company believes that its existing cash and cash equivalents as of June 30, 2026 and net proceeds of $
6
On July 1, 2026, the Company consummated a public offering of an aggregate of (i)
Reverse Stock Split
On August 10, 2026, the Company effected a 1-for-35 reverse stock split (the “Reverse Stock Split”) by filing an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State. The Reverse Stock Split combined every 35 shares of our common stock issued and outstanding immediately prior to effecting the Reverse Stock Split into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split.
All historical share and per share amounts reflected throughout this document have been adjusted to reflect the Reverse Stock Split. The authorized number of shares and the par value per share of the Company’s common stock, Series A preferred stock and Series B preferred stock were not affected by the Reverse Stock Split.
Notices from Nasdaq
On February 25, 2026, the Company received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) stating that for the 30 consecutive business day period between January 9, 2026 and February 24, 2026, the common stock of the Company had not maintained a minimum closing bid price of $
If the Company does not regain compliance with the Bid Price Rule by August 24, 2026, the Company may be eligible for an additional 180-day period to regain compliance. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Bid Price Rule, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
If the Company cannot regain compliance during the Compliance Period or any subsequently granted compliance period, the common stock of the Company will be subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq hearings panel.
The notice from Nasdaq has no immediate effect on the listing of the Company’s common stock and its common stock will continue to be listed on The Nasdaq Capital Market under the symbol “TNON.” As noted above, on August 10, 2026, the Company effected the Reverse Stock Split, which management believes will allow the Company to regain compliance with the Bid Price Rule.
On May 21, 2026, the Company received a written notice from Nasdaq, notifying the Company that it was no longer in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $
Under Nasdaq rules, the Company had 45 calendar days, or until July 6, 2026, to submit a plan to regain compliance. If the Company’s plan to regain compliance is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the Notice for the Company to regain compliance.
7
As a result of the public offering described in Note 11, the Company believes it satisfies the minimum stockholders’ equity requirement as of July 10, 2026 and filed a Current Report on Form 8-K disclosing that belief. On July 17, 2026, the Company received a notice from Nasdaq that, based on the July 10, 2026 8-K, we had regained compliance with the stockholders’ equity rule. However, if we fail to evidence compliance upon filing our Quarterly Report on Form 10-Q for the period ending September 30, 2026, we may be subject to delisting and any such delisting would be subject to appeal.
Use of estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates made by management include, but are not limited to, collectability of accounts receivable, impairment of long-lived assets, accrued liabilities, accrued commissions, contingent consideration, derivative liability valuation, incremental borrowing rate, obsolescence of inventory and stock-based compensation.
Derivative Liabilities
The Company accounts for certain features embedded in its financial instruments as derivative liabilities in accordance with ASC 815. The Company evaluates all financial instruments, including convertible debt and equity-linked instruments, to determine whether such instruments or embedded features meet the definition of a derivative and require bifurcation under ASC 815.
Derivative liabilities are initially recorded at fair value at the date of issuance, with a corresponding adjustment to the carrying amount of the host instrument, if applicable. For derivative liabilities related to debt, the initial fair value of the derivative is recognized as a debt discount and amortized to interest expense over the term of the related instrument using the effective interest method.
Subsequent to initial recognition, derivative liabilities are remeasured at fair value at each reporting date in accordance with ASC 820. Changes in the fair value of derivative liabilities are recognized in the condensed statements of operations within other income (expense).
The fair value of derivative liabilities is determined using valuation techniques that include significant unobservable inputs, including expected stock price volatility, expected term, and risk-free interest rates. Accordingly, derivative liabilities are generally classified within Level 3 of the fair value hierarchy. The Company utilizes valuation models, including Monte Carlo simulation models, when appropriate, to estimate the fair value of derivative liabilities. These models incorporate assumptions regarding the probability and timing of conversion or settlement, as well as other relevant contractual features.
Derivative liabilities are classified as current or non-current based on the expected timing of settlement in accordance with applicable balance sheet classification guidance. In most cases, derivative liabilities are classified as current due to the potential for settlement within twelve months. Upon settlement or conversion of the underlying instrument, the related derivative liability is derecognized, and any remaining carrying value is reclassified to equity or recognized in earnings, as appropriate.
Net loss per share
Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all potential common stock equivalents (restricted stock units, stock options, warrants, convertible preferred stock and convertible notes) are converted or exercised pursuant to the if-converted method or the treasury stock method. The calculation of diluted net loss per share excludes potential common stock equivalents if the effect is anti-dilutive. The Company’s weighted average common shares outstanding for basic and diluted are the same because the effect of the potential common stock equivalents is anti-dilutive.
8
The Company had the following dilutive common stock equivalents as of June 30, 2026 and 2025, which were excluded from the calculation because their effect was anti-dilutive:
|
June 30, 2026 |
June 30, 2025 | |||||||
| Outstanding restricted stock units | ||||||||
| Outstanding stock options | ||||||||
| Outstanding warrants | ||||||||
| Common shares convertible from preferred stock | ||||||||
| Common shares convertible from convertible notes | ||||||||
| Total | ||||||||
Adoption of New Accounting Pronouncement
In July 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses on current accounts receivable and contract assets. The practical expedient allows companies to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. For public companies, this guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this guidance as of January 1, 2026. The adoption of this guidance had no material impact on the Company’s condensed financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. We are currently evaluating the impact of adopting this new accounting guidance.
3. Property and Equipment, net
Property and equipment, net, consisted of the following:
|
June 30, 2026 |
December 31, 2025 | |||||||
| Instrument tray sets | $ | $ | ||||||
| Construction in progress | ||||||||
| Lab equipment | ||||||||
| IT equipment | ||||||||
| Leasehold improvements | ||||||||
| Office furniture | ||||||||
| Property and equipment, gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Construction in progress is made up of reusable components that will become reusable instrument tray sets. Depreciation expense was approximately $
9
4. Intangible Assets, net
The Company’s intangible assets, net relate to developed technology, trademarks/trade names and customer relationships acquired in connection with the acquisition of substantially all of the assets of SiVantage, Inc. (“SI”) and SIMPL Medical, LLC (the “SI Acquisition”) as described in the Company’s Annual Report. Intangible assets were valued based on their estimated fair value on the date of acquisition and are being amortized on a straight-line basis over estimated useful lives of
Intangible assets as of June 30, 2026 consist of the following:
| Gross Value | Accumulated Amortization | Net Value | ||||||||||
| Developed technology | $ | $ | ( | ) | $ | |||||||
| Trademarks/trade names | ( | ) | ||||||||||
| Customer relationships | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
Intangible assets as of December 31, 2025 consist of the following:
| Gross Value | Accumulated Amortization | Net Value | ||||||||||
| Developed technology | $ | $ | ( | ) | $ | |||||||
| Trademarks/trade names | ( | ) | ||||||||||
| Customer relationships | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
Amortization expense for three months ended June 30, 2026 and 2025 was $
As of June 30, 2026, future amortization of amortizable intangible assets is as follows:
| 2026 (remaining 6 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| $ |
5. Accrued Expenses
Accrued expenses consisted of the following:
|
June 30, 2026 |
December 31, 2025 | |||||||
| Accrued compensation | $ | $ | ||||||
| Accrued professional services fees | ||||||||
| Other accrued expenses | ||||||||
| Total accrued expenses | $ | $ | ||||||
10
6. Leases
In June 2021, the Company entered into a facility lease agreement for its company headquarters in Los Gatos, California, which was to expire in June 2026. In February 2026, the Company entered into a lease extension for the same facility. This non-cancellable operating lease expires in
Supplemental balance sheet information related to leases was as follows:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liability, current | $ | $ | | |||||
| Operating lease liability, noncurrent | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Future maturities of operating lease liabilities as of June 30, 2026 were as follows:
| 2026 (remaining 6 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of operating lease liabilities | $ |
Other information:
| Cash paid for operating leases for the six months ended June 30, 2026 | $ | |||
| Cash paid for operating leases for the six months ended June 30, 2025 | $ | |||
| Remaining lease term - operating leases (in years) | ||||
| Average discount rate - operating leases | % |
7. Debt
Convertible Promissory Notes
On March 11, 2026, the Company entered into securities purchase agreements with certain accredited investors, pursuant to which the Company agreed to issue and sell in a private placement an aggregate principal amount of $
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The Convertible Promissory Notes have a maturity date of
Following the six month anniversary of the issuance date, the Convertible Promissory Notes will be convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price per share equal to the greater of
If the maturity date of the Convertible Promissory Notes is extended, the outstanding principal amount will be increased by
For the three and six months ended June 30, 2026, the Company recorded interest expense, which included the amortization of the discount, the initial value of the derivative liability and transaction costs of $
8. Derivative Liability
The Company evaluated the conversion feature of the Convertible Promissory Notes under applicable accounting guidance and concluded that the feature is not indexed to the Company’s own stock and does not meet the criteria for equity classification. Accordingly, the conversion feature is accounted for as an embedded derivative liability.
The fair value of the derivative liability at issuance date was $
Due to the use of significant unobservable inputs, the derivative liability is classified as a Level 3 fair value measurement. The derivative was initially recorded at fair value, with a corresponding discount recorded to the carrying value of the Convertible Promissory Notes. The debt discount is being amortized to interest expense over the term of the Convertible Promissory Notes using the effective interest method.
Subsequent to initial recognition, the derivative liability is remeasured at fair value at each reporting date in accordance with ASC 820, with changes in fair value recognized in earnings within other income (expense) in the condensed statements of operations and comprehensive loss. For the three and six months ended June 30, 2026, the gain on the change in fair value of the derivative liability was $
The following is a reconciliation of the changes in the fair value of the derivative liability for the six months ended June 30, 2026:
| Balance at January 1, 2026 | $ | |||
| Initial recognition of derivative liability | ||||
| Change in fair value | ( | ) | ||
| Balance at June 30, 2026 | $ |
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9. Stockholders’ Equity
The Company’s current Amended and Restated Certificate of Incorporation dated February 18, 2014 authorizes the issuance of
At-the-Market Offering Program
On May 4, 2023, the Company entered into an Equity Distribution Agreement to establish an at-the-market offering program, under which the Company may sell from time to time, at its option, shares of its common stock having an aggregate gross sales price of $
2025 Warrant Inducement
On March 11, 2025, the Company entered into a warrant exercise inducement offer letter agreement (the “Inducement Letter”) with the holder of the Series A New Warrants and Series B New Warrants (the “Existing Warrants”), pursuant to which, the holder agreed to exercise the Existing Warrants at a reduced exercise price of $
The Company filed a registration statement on Form S-1 on April 4, 2025 providing for the resale of the shares of common stock issuable upon the exercise of the New Warrants.
2025 Securities Purchase Agreements
On March 25, 2025, the Company entered into a securities purchase agreement for the issuance of
Also on March 25, 2025, the Company entered into a securities purchase agreement for the issuance of
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Equity Awards
In 2012, the Board of Directors of the Company (the “Board”) approved the Tenon Medical, Inc. 2012 Equity Incentive Plan (the “2012 Plan”), which provided for the issuance of common stock options, appreciation rights, and other awards to employees, directors, and consultants. On January 10, 2022 and February 2, 2022, the Board and stockholders, respectively, of the Company approved the Tenon Medical, Inc. 2022 Equity Incentive Plan (the “2022 Plan”), which was effective on April 25, 2022. The 2022 Plan provided for the issuance of common stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. Upon the effective date of the 2022 Plan, the Board terminated the 2012 Plan such that no new equity awards will be issued by the 2012 Plan.
A summary of the Company’s stock option and restricted stock unit activity under its plans is as follows:
|
Number of Shares Subject to Outstanding Stock Options | Weighted Average Exercise Price per Share |
Number of Outstanding Restricted Stock Units |
Weighted Average Grant Date Fair Value per Unit | |||||||||||||
| Outstanding at December 31, 2025 | | $ | $ | |||||||||||||
| Granted | $ | |||||||||||||||
| Released | ( | ) | $ | |||||||||||||
| Cancelled/Forfeited | ( | ) | $ | ( | ) | $ | ||||||||||
| Outstanding at June 30, 2026 | $ | $ | ||||||||||||||
The following table sets forth stock-based compensation expense recognized for the three and six months ended June 30, 2026 and 2025:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
At June 30, 2026, there were
Warrants
IPO Warrants
In April 2022, in association with the Company’s initial public offering, the Company granted to The Benchmark Company, LLC and Valuable Capital Limited warrants to purchase a total of
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Registered Offering Warrants
In June 2023, in connection with a registered offering of stock, the Company issued warrants to purchase a total of
Convertible Note Warrants
In November 2023, in connection with the issuance of the Convertible Notes, the Company issued warrants to purchase a total of
Series A Preferred Stock Warrants
On February 20, 2024, in connection with the issuance of Series A Preferred Stock, the Company issued the Series A Warrants to purchase a total of
Series B Preferred Stock Warrants
On September 5, 2024, in connection with the issuance of Series B Preferred Stock, the Company issued the Series B Warrants to purchase a total of
Series C Warrants
On March 11, 2025, in connection with 2025 Warrant Inducement, the Company issued new unregistered five-year warrants (the “Series C-1 Warrants”) to purchase up to an aggregate of
The fair value of the Series C-1 Warrants on the grant date was $
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Series D Warrants
On March 25, 2025, in connection with a securities purchase agreement, the Company issued warrants to purchase up to
Series E Warrants
Also on March 25, 2025, in connection with a securities purchase agreement, the Company issued warrants to purchase up to
PIPE Warrants
On November 11, 2025, in connection with entering into securities purchase agreements with certain accredited investors in an at-the-market private investment in public equity financing, the Company issued warrants to purchase
10. Commitments and Contingencies
Sales Representative Agreement
In April 2020, the Company entered into an Exclusive Sales Representative Agreement, under which the counterparty to the agreement (the “Representative”) received exclusive rights to market, promote, and distribute The Catamaran System in the United States and Puerto Rico. The agreement is for an initial period of
The Restated Sales Agreement restructured the calculation of the bonus paid to the Representative upon an acquisition, removed the bonus payable upon an IPO, and allows the Company to terminate the Restated Sales Agreement as long as the bonus paid to the Representative is at least $
On October 6, 2022, the Company entered into the Terminating Amended and Restated Exclusive Sales Representative Agreement (the “Termination Agreement”) with the Representative, which terminated the Restated Sales Agreement. In accordance with the Termination Agreement, (i) the Company paid the Representative $
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A reconciliation of the liability under clause (b) and clause (c) for the six months ended June 30, 2026 is as follows:
| Balance at January 1, 2026 | $ | |||
| Amounts paid during 2026 | ( | ) | ||
| Accretion | ||||
| Balance at June 30, 2026 | $ |
Per the terms of the Termination Agreement, the Company ultimately expects to expense $
Contingent Consideration
Contingent consideration relates to royalties and future warrant exercises in conjunction with the SI Acquisition and was calculated using the present value of expected payments based on current revenue, projections of future sales, and other estimates using a discount rate of
A reconciliation of the contingent consideration for the six months ended June 30, 2026 is as follows:
| Balance at January 1, 2026 | $ | |||
| Amounts earned | ( | ) | ||
| Accretion | ||||
| Balance at June 30, 2026 | $ |
Credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.
The Company maintains cash balances at financial institutions located in California. Accounts at the U.S. financial institutions are secured by the Federal Deposit Insurance Corporation. At times, balances may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash and cash equivalents.
The Company grants unsecured credit to its customers based on an evaluation of the customer’s financial condition and a cash deposit is generally not required. Management believes its credit policies do not result in significant adverse risk and historically has not experienced significant credit-related losses.
11. Subsequent Event
2026 Offering
On July 1, 2026, the Company consummated a best efforts public offering (the “2026 Offering”) of an aggregate of (i)
Each Offering Warrant is immediately exercisable for one share of common stock at an exercise price of $
In connection with the 2026 Offering, the Company paid WallachBeth Capital, LLC, a placement agent in the 2026 Offering, a cash fee equal to
The proceeds from the 2026 Offering, net of placement agent fees and offering expenses were $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 27, 2026. In addition to historical financial information, this discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. You should not place undue reliance on these forward-looking statements, which involve risks and uncertainties. As a result of many factors, including but not limited to those set forth under “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 27, 2026, our actual results may differ materially from those anticipated in these forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”
Overview
Tenon Medical, Inc. was incorporated in the State of Delaware on June 19, 2012 and was headquartered in San Ramon, California until June 2021 when it relocated to Los Gatos, California. We are a medical device company dedicated to transforming care for patients with certain sacro-pelvic disorders. We currently offer two systems to treat a diseased SI Joint. We developed The Catamaran®™ SI Joint Fusion System (“The Catamaran System”) that offers a novel, less invasive approach to the SI Joint using a single, robust, titanium implant for treatment of the most common types of SI Joint disorders that cause lower back pain. We received U.S. Food and Drug Administration (“FDA”) clearance in 2018 for The Catamaran System and are currently focused on the U.S. market.
In August 2025, we acquired substantially all of the assets of SiVantage, Inc. and SIMPL Medical, LLC, including the SImmetry+® SI Joint Fusion System (“The SImmetry+ System”) that treats disorders of the SI Joint through a minimally invasive lateral access solution that incorporates well-established orthopedic fusion principles-including joint decortication, bone graft placement, and rigid fixation-with the goal of achieving a true biological fusion across the SI Joint.
In February 2026, we announced an expansion of our U.S. intellectual property portfolio following receipt of Notices of Allowance from the United States Patent and Trademark Office (USPTO) for multiple patent applications expected to issue in 2026. These newly allowed claims will further strengthen our growing patent portfolio and build upon the 10 patents issued in 2025, including 5 issued by the USPTO and 5 issued internationally.
We have incurred net losses since our inception in 2012. As of June 30, 2026, we had an accumulated deficit of approximately $88.8 million. To date, we have financed our operations primarily through public equity offerings, private placements of equity securities, certain debt-related financing arrangements, and sales of our product. We have devoted substantially all of our resources to research and development, regulatory matters and sales and marketing of our product.
Recent Developments
Bylaws Amendment
On June 10, 2026, the Board of Directors approved and adopted Amendment No. 1 (the “Amendment”) to our Bylaws, effective as of that date. The Amendment amended and restated Sections 1.5 and 1.8 of Article I of the Bylaws to change the quorum requirements for meetings of stockholders from a majority to not less than 33 1/3% of the votes entitled to be cast at the meeting, in accordance with Nasdaq Listing Rule 5620, and to provide that holders of a majority of the votes present at a meeting (rather than a majority of all outstanding shares) may determine that voting at meetings of stockholders be conducted by written ballot.
Notices from Nasdaq and Reverse Stock Split
As previously disclosed, on February 25, 2026, we received a letter (the “Notification Letter”) from the Nasdaq Listing Qualifications Staff of Nasdaq stating that for the 30 consecutive business day period between January 9, 2026 and February 24, 2026, our common stock had not maintained a minimum closing bid price of $1.00 per share which is required for continued listing on Nasdaq. We were provided an initial period of 180 calendar days, or until August 24, 2026 (the “Compliance Period”), to regain compliance with the Bid Price Rule. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the Compliance Period. On August 10, 2026 we effected a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-35. On August 12, 2026, the closing bid price of our common stock was $5.64. We expect to regain compliance with the Bid Price Rule on or about August 21, 2026. If we do not regain compliance during the Compliance Period, our common stock will be subject to delisting. At that time, we may appeal the delisting determination to a Nasdaq hearings panel.
In addition, on May 21, 2026, we received a written notice from Nasdaq, notifying us that we are no longer in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000 (“Stockholders’ Equity Rule”). Subsequently, we were informed by Nasdaq that we comply with the Stockholders’ Equity Rule, however if we fail to evidence compliance in our Quarterly Report on Form 10-Q for the period ended September 30, 2026, we may be we may be subject to delisting.
The notices from Nasdaq have no immediate effect on the listing of our common stock, which will continue to be listed on Nasdaq under the symbol “TNON.” There is no assurance that we will regain compliance with the Bid Price Rule, the Stockholders’ Equity Rule, or maintain compliance with any of the other Nasdaq continued listing requirements.
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2026 Offering
On July 1, 2026, we consummated a best efforts public offering (the “2026 Offering”) of an aggregate of (i) 157,895 shares of common stock and pre-funded warrants to purchase up to 157,895 shares of common stock and (ii) common stock purchase warrants (the “Offering Warrants”) to purchase up to 378,948 shares of common stock. Each share of common stock issued (or pre-funded warrant in lieu thereof) and accompanying Offering Warrants were sold at a combined public offering price of $13.30 per share (inclusive of the pre-funded warrant exercise price of $0.035). Per the terms of the 2026 Offering, the number of shares issuable under the Offering Warrants increased to 473,685 on August 10, 2026, due to the Reverse Stock Split.
Each Offering Warrant is immediately exercisable for one share of common stock at an exercise price of $13.30 per share and will expire on the fifth anniversary of the initial exercise date. The number of shares of common stock underlying the Offering Warrants equals 150%of the number of shares of common stock purchased by each purchaser. Each pre-funded warrant is immediately exercisable for one share of common stock at an exercise price of $0.035 per share (or on a cashless basis) and will remain exercisable until the pre-funded warrants are exercised in full.
In connection with the 2026 Offering, we paid WallachBeth Capital, LLC, a placement agent in the 2026 Offering, a cash fee equal to 6.5% of the gross proceeds of the 2026 Offering and a non-accountable expense allowance equal to 1% of gross proceeds, reimbursed certain of the placement agent’s expenses, and issued the placement agent warrants to purchase shares of common stock equal to 3% of the aggregate number of shares sold in the 2026 Offering, at an exercise price equal to 120% of the public offering price per share.
The proceeds from the 2026 Offering, net of placement agent fees and offering expenses were $3,620. We intend to use the net proceeds for partial repayment of outstanding convertible notes, expansion of the commercial footprint of our product portfolio including training clinicians on current procedures, hiring additional direct sales reps, expansion of our external distribution network, continuing clinical research studies to support reimbursement and coverage efforts, funding research and development including upcoming future launches, and increases to inventory and instrumentation capacities, as well as other marketing activities, working capital and general corporate purposes.
Components of Results of Operations
Revenue
We derive substantially all our revenue from sales of The Catamaran System and The SImmetry+ System to a limited number of clinicians. Revenue from sales of The Catamaran System and The SImmetry+ System fluctuates based on volume of cases (procedures performed), discounts, rebates, and the number of implants used for a particular patient. Similar to other orthopedic companies, our revenue can also fluctuate from quarter to quarter due to a variety of factors, including reimbursement, changes in independent sales representatives and physician activities.
Cost of Goods Sold, Gross Profit, and Gross Margin
We utilize contract manufacturers for production of The Catamaran System and The SImmetry+ System implants and tray sets. Cost of goods sold consists primarily of costs of the components of The Catamaran System and The SImmetry+ System implants and instruments, overhead related to operations personnel and facility costs, depreciation of tray sets, quality inspection, packaging, scrap and inventory obsolescence, as well as distribution-related expenses such as logistics and shipping costs. We anticipate that certain of our cost of goods sold will increase in absolute dollars as case levels increase.
Our gross margins have been and will continue to be affected by a variety of factors, including the cost to have our products manufactured for us, pricing pressure from increasing competition, and the factors described above impacting our revenue.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of consulting expenses, salaries, sales commissions and other cash and stock-based compensation related expenses. We expect operating expenses to increase in absolute dollars as we continue to invest and grow our business.
Sales and Marketing Expenses
Sales and marketing expenses primarily consist of salaries, commissions, stock-based compensation expense and travel and entertainment expenses of our sales and market personnel along with commissions paid to our independent distributors. We expect our sales and marketing expenses to increase in absolute dollars with the increased sales of The Catamaran System and The SImmetry+ System resulting in higher commissions and salaries, increased clinician and sales representative training, and the cost to complete our clinical study to gain wider clinician adoption of The Catamaran System. Our sales and marketing expenses may fluctuate from period to period due to the timing of sales and marketing activities related to the commercial activity of our product.
Research and Development Expenses
Our research and development expenses primarily consist of engineering, product development, regulatory expenses, and consulting services, outside prototyping services, outside research activities, materials, and other costs associated with the development and refinement of our product. Research and development expenses also include related personnel and consultants’ compensation and stock-based compensation expense. We expense research and development costs as they are incurred. We expect research and development expense to increase in absolute dollars as we improve The Catamaran System and The SImmetry+ System, develop new products, add research and development personnel, and undergo clinical activities that may be required for regulatory clearances of future products.
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General and Administrative Expenses
General and administrative expenses primarily consist of salaries, consultants’ compensation, stock-based compensation expense, and other costs for finance, accounting, legal, compliance, and administrative matters. We expect our general and administrative expenses to increase in absolute dollars as we add personnel and information technology infrastructure to support the growth of our business. We also expect to incur additional general and administrative expenses as a result of operating as a public company, including but not limited to: expenses related to compliance with the rules and regulations of the SEC and those of The Nasdaq Stock Market LLC on which our securities are traded; additional insurance expenses; investor relations activities; and other administrative and professional services. While we expect the general and administrative expenses to increase in absolute dollars, we anticipate that it will decrease as a percentage of revenue over time.
Gain on Investments, Interest Expense and Other Income (Expense), Net
Gain on investments consists of interest income and realized gains and losses from the sale of our investments in money market and corporate debt securities. Interest expense is related to borrowings, when applicable. Other income and expenses have not been significant to date and, since March 2026, include changes in the fair value of derivative liabilities.
Results of Operations
The following table sets forth our results of operations for the periods presented (in thousands):
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Statements of Operations Data: | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 1,279 | $ | 564 | $ | 2,658 | $ | 1,290 | ||||||||
| Cost of sales | 465 | 319 | 899 | 722 | ||||||||||||
| Gross profit | 814 | 245 | 1,759 | 568 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 768 | 503 | 1,430 | 1,194 | ||||||||||||
| Sales and marketing | 1,869 | 1,119 | 3,727 | 2,766 | ||||||||||||
| General and administrative | 1,531 | 1,480 | 3,236 | 3,142 | ||||||||||||
| Total operating expenses | 4,168 | 3,102 | 8,393 | 7,102 | ||||||||||||
| Loss from operations | (3,354 | ) | (2,857 | ) | (6,634 | ) | (6,534 | ) | ||||||||
| Other income (expense), net: | ||||||||||||||||
| Gain on investments | 24 | 88 | 49 | 149 | ||||||||||||
| Interest expense | (852 | ) | — | (1,028 | ) | — | ||||||||||
| Other income | 132 | — | 87 | — | ||||||||||||
| Net loss | $ | (4,050 | ) | $ | (2,769 | ) | $ | (7,526 | ) | $ | (6,385 | ) | ||||
The following table sets forth our results of operations as a percentage of revenue:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Statements of Operations Data: | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
| Cost of sales | 36 | 57 | 34 | 56 | ||||||||||||
| Gross profit | 64 | 43 | 66 | 44 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 60 | 89 | 54 | 93 | ||||||||||||
| Sales and marketing | 146 | 198 | 140 | 214 | ||||||||||||
| General and administrative | 120 | 262 | 122 | 244 | ||||||||||||
| Total operating expenses | 326 | 550 | 316 | 551 | ||||||||||||
| Loss from operations | (262 | ) | (507 | ) | (250 | ) | (507 | ) | ||||||||
| Other income (expense), net: | ||||||||||||||||
| Gain on investments | 2 | 16 | 2 | 12 | ||||||||||||
| Interest expense | (67 | ) | — | (39 | ) | — | ||||||||||
| Other income | 10 | — | 3 | — | ||||||||||||
| Net loss | (317 | )% | (491 | )% | (283 | )% | (495 | )% | ||||||||
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Comparison of the Three and Six Months Ended June 30, 2026 and 2025 (in thousands, except percentages)
Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin
| Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Revenue | $ | 1,279 | $ | 564 | $ | 715 | 127 | % | ||||||||
| Cost of sales | 465 | 319 | 146 | 46 | % | |||||||||||
| Gross profit | $ | 814 | $ | 245 | $ | 569 | 232 | % | ||||||||
| Gross profit percentage | 64 | % | 43 | % | ||||||||||||
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Revenue | $ | 2,658 | $ | 1,290 | $ | 1,368 | 106 | % | ||||||||
| Cost of sales | 899 | 722 | 177 | 25 | % | |||||||||||
| Gross profit | $ | 1,759 | $ | 568 | $ | 1,191 | 210 | % | ||||||||
| Gross profit percentage | 66 | % | 44 | % | ||||||||||||
Revenue. The increase in revenue for both the three and six months ended June 30, 2026 as compared to 2025 was primarily due to a significant increase in the number of surgical procedures, including the addition of revenue related to The SImmetry+ System.
Cost of Sales, Gross Profit, and Gross Margin. The change in cost of sales for the three and six months ended June 30, 2026 as compared to 2025 was due to the absorption of production overhead costs into our standard cost and operating leverage created due to lower relative fixed costs and increased revenue volume.
Operating Expenses
|
Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Research and development | $ | 768 | $ | 503 | $ | 265 | 53 | % | ||||||||
| Sales and marketing | 1,869 | 1,119 | 750 | 67 | % | |||||||||||
| General and administrative | 1,531 | 1,480 | 51 | 3 | % | |||||||||||
| Total operating expenses | $ | 4,168 | $ | 3,102 | $ | 1,066 | 34 | % | ||||||||
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Research and development | $ | 1,430 | $ | 1,194 | $ | 236 | 20 | % | ||||||||
| Sales and marketing | 3,727 | 2,766 | 961 | 35 | % | |||||||||||
| General and administrative | 3,236 | 3,142 | 94 | 3 | % | |||||||||||
| Total operating expenses | $ | 8,393 | $ | 7,102 | $ | 1,291 | 18 | % | ||||||||
Research and Development Expenses. Research and development expenses for the three months ended June 30, 2026 increased as compared to 2025 primarily due to increased professional fees ($273) and payroll and employee expenses ($74), partially offset by decreased stock-based compensation ($107). Research and development expenses for the six months ended June 30, 2026 increased as compared to 2025 primarily due to increased professional fees ($501) and payroll and employee expenses ($32), partially offset by decreased stock-based compensation ($360).
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Sales and Marketing Expenses. Sales and marketing expenses for the three months ended June 30, 2026 increased as compared to the same period in 2025 primarily due to increased commission expenses ($369), payroll and employee expenses ($309) and stock-based compensation ($8), partially offset by decreased consulting and professional fees ($2). Sales and marketing expenses for the six months ended June 30, 2026 increased as compared to the same period in 2025 primarily due to increased commission expense ($417) and payroll and employee expenses ($408), partially offset by decreased consulting and professional fees ($72) and stock-based compensation ($16).
General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2026 increased as compared to the same period in 2025 primarily due to increased stock-based compensation ($92) and payroll and employee expenses ($66), partially offset by decreased professional service fees ($111). General and administrative expenses for the six months ended June 30, 2026 increased as compared to the same period in 2025 primarily due to increased payroll and employee expenses ($255) and insurance costs ($25), partially offset by decreased stock-based compensation ($170) and professional service fees ($23).
Gain on Investments, Interest Expense and Other Income
Gain on investments for the three and six months ended June 30, 2026 decreased as compared to 2025 due to interest on lower average cash and cash equivalent balances. Interest expense for the three and six months ended June 30, 2026 related to interest on our convertible notes. Other income for the three and six months ended June 30, 2026 related to gains on the change in fair value of our derivative liability.
Liquidity and Capital Resources
As of June 30, 2026, we had cash and cash equivalents of $1.7 million. Since inception, we have financed our operations through private placements of preferred stock, debt financing arrangements, our initial public offering, additional stock offerings and the sale of our products. As of June 30, 2026, we had an accumulated deficit of $88.8 million, and we expect to incur additional losses in the future. We have not achieved positive cash flow from operations to date.
Based upon our current operating plan, our existing cash and cash equivalents will not be sufficient to fund our operating expenses and working capital requirements through at least the next 12 months from the date these financial statements were filed. We plan to raise the necessary additional capital through one or a combination of public or private equity offerings, debt financings, and collaborations. We continue to face challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to (a) the uncertainty of future revenues; (b) changes we may make to the business that affect ongoing operating expenses; (c) changes we may make in our business strategy; (d) regulatory developments affecting our existing products; (e) changes we may make in our research and development spending plans; and (f) other items affecting our forecasted level of expenditures and use of cash resources.
On July 1, 2026, we consummated a public offering of an aggregate of (i) 157,895 shares of common stock and pre-funded warrants to purchase up to 157,895 shares of common stock, and (ii) common stock purchase warrants to purchase up to 473,685 shares of common stock. Each share of common stock, pre-funded warrant and accompanying common stock purchase warrants was sold at a combined public offering price of $13.30 per share, for proceeds, net of placement fees and offering expenses, of approximately $3,620.
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As we attempt to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our sales and marketing efforts, research and development activities, or other operations. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, and collaborations. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we are unable to raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs. Doing so will likely harm our ability to execute our business plans. Due to the uncertainty in our ability to raise capital, management believes that there is substantial doubt in our ability to continue as a going concern.
Cash Flows (in thousands, except percentages)
The following table sets forth the primary sources and uses of cash for each of the periods presented below:
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Net cash (used in) provided by: | ||||||||||||||||
| Operating activities | $ | (5,718 | ) | $ | (4,697 | ) | $ | (1,021 | ) | 22 | % | |||||
| Investing activities | (228 | ) | (192 | ) | (36 | ) | 19 | |||||||||
| Financing activities | 3,867 | 6,200 | (2,333 | ) | (38 | ) | ||||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (2,079 | ) | $ | 1,311 | $ | (3,390 | ) | (259 | )% | ||||||
The increase in net cash used in operating activities for the six months ended June 30, 2026 as compared to 2025 was primarily attributable to our increased net loss adjusted for increased non-cash expenses ($460) in addition to decreased accounts payable ($742) and increased accounts receivable ($348), partially offset by decreases in inventory ($598).
Cash used in investing activities for the six months ended June 30, 2026 and 2025 consisted of purchases of property and equipment ($228 and $192, respectively).
Cash provided by financing activities for the six months ended June 30, 2026 consisted of the net proceeds from the issuance of convertible notes ($3,867). Cash provided by financing activities for the six months ended June 30, 2025 consisted primarily of gross proceeds from the issuance of common stock from our securities purchase agreements ($4,010) and gross proceeds from the exercise of warrants under the inducement agreement ($3,057), net of total offering costs ($867).
Critical Accounting Policies, Significant Judgments, and Use of Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. 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 reported results of operations during the reporting periods. Our estimates are based on our 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 values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions. For the six months ended June 30, 2026, there were no significant changes to our existing critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K with the exception of our policy for derivative liabilities which is included in Note 2 to our condensed financial statements.
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Off-Balance Sheet Arrangements
As of June 30, 2026, and December 31, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
Not required under Regulation S-K for “smaller reporting companies.”
ITEM 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms promulgated by the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations to the effectiveness of any system of disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that all control issues and instances of fraud, if any, with a company have been prevented or detected on a timely basis. Even disclosure controls and procedures determined to be effective can only provide reasonable assurance that their objectives are achieved.
As of June 30, 2026, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and President and Chief Financial Officer concluded that our disclosure controls and procedures are not effective at the reasonable assurance level.
Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties. Therefore, it is difficult to effectively segregate accounting duties which comprises a material weakness in internal controls. This lack of segregation of duties leads management to conclude that the Company’s disclosure controls and procedures are not effective to give reasonable assurance that the information required to be disclosed in reports that the Company files under the Exchange Act is recorded, processed, summarized and reported as and when required.
To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over our Exchange Act reporting disclosures.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. In any event, there have been no material changes in our risk factors as previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 27, 2026.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(A) Unregistered Sales of Equity Securities
Except for the issuances of unregistered securities described in the Current Reports on Form 8-K filed by the Company with the SEC during the quarter ended June 30, 2026, the Company did not issue any equity securities which were not registered under the Securities Act.
(B) Use of Proceeds
Not applicable.
(C) Issuer Purchases of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
EXHIBIT INDEX
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| # | Denotes management compensation plan, agreement or arrangement |
| * | Filed herewith |
| ** | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
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SIGNATURES
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.
| TENON MEDICAL, INC. | |
| Dated: August 13, 2026 | /s/ Steven M. Foster |
| Steven M. Foster | |
| Chief Executive Officer and President, Director (Principal Executive Officer) | |
| Dated: August 13, 2026 | /s/ Kevin Williamson |
| Kevin Williamson | |
| Chief Financial Officer (Principal Financial and Accounting Officer) |
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Exhibit 10.22
COMMERCIAL AGREEMENT OF LEASE
THIS LEASE, made on April 7, 2026 by and between, 4406 W Linebaugh Ave LLC, hereafter called Lessor and Tenon Medical Inc hereafter called Lessee.
ARTICLE 1 - GRANT AND TERM
| 1.01 | LEASED PREMISES: |
In consideration of the rents, covenants and agreements herein set forth, Lessor hereby leases to Lessee and Lessee hereby rents from Lessor those certain premises; hereafter called demised premises, addressed as: 4406 W Linebaugh Ave. Suite 110 Tampa, FL 33624 2976 SqFt (MOL)
| 1.02 | ENTIRE PREMISES: |
The building or buildings and common areas of the center are hereinafter called the entire premises.
| 1.03 | USE OF COMMON AREAS: |
In addition to the demised premises Lessee shall have hereinafter defined Common Areas subject to this lease and to reasonable rules and regulations for use thereof as prescribed from time to time by Lessor.
| 1.04 | QUIET ENJOYMENT: |
Lessee shall have the right to quiet enjoyment of the demised premises, subject to the terms, conditions, and covenants of this lease.
| 1.05 | COMMENCEMENT: |
The Lease terms and Lessee’s obligation to pay rent shall commence on the 8th day of April, 2026 (“Commencement Date”). Lessee agrees to pay $118,764.33 upon signing this Lease to cover the rent per Article 2 and security deposit per 4.01.
| Base Rent | Additional Rent | Total | ||||||||
| Annual Rent | $ | 52,080.00 | Per Article 2.02 | $ | 52,080.00 | |||||
| Pro-Rated Rent | $ | 3,327.33 | $ | 3,327.33 | ||||||
| CAM Charges | $ | 2,058.00 | April CAM Fees / CAM Fees will be due monthly | $ | 2,058.00 | |||||
| Security Deposit | $ | 6,615.00 | Per Article 3.01 | $ | 6,615.00 | |||||
| Prepaid 2nd Year’s Rent | $ | 54,684.00 | Tenant to prepay rent in lieu of guarantee | $ | 54,684.00 | |||||
| $ | 0.00 | |||||||||
| TOTAL: | $ | 118,764.33 | ||||||||
Initial /s/ KW Initial /s/ JS
| 1.06 | TERM: |
The term shall be for a period of 2 year(s) 0 month(s), 23 day(s), as hereinafter defined, plus the part of a month, if any, from the date of commencement of the term to the first day of the first full calendar month of the term. The dates will be from April 7, 2026 thru April 30, 2028 (See additional Terms Sections)
| 1.07 | Notwithstanding any provision herein to the contrary, rent under this Lease shall be paid annually in advance. In the event the Premises or the building in which the Premises is located is sold for the purpose of redevelopment during the term of this Lease, Lessor shall have the right to terminate this Lease upon providing not less than three (3) months’ prior written notice to Lessee. Upon such termination, Lessor shall refund to Lessee the prorated portion of any prepaid annual rent attributable to the period following the effective date of termination. |
ARTICLE 2 - RENT
| 2.01 | BASE RENT: |
Lessee agrees to pay to Lessor as base rent for the demised premises the sum of $52,080.00 for the first year, plus all applicable sales tax at mandated state rates, Lessee agrees to pay pro-rational share of property taxes, Insurance and maintenance on a monthly basis. Base rent shall be due and payable on the first day of each lease term without any demand or setoff or deduction whatsoever (except as herein provided), monthly CAM shall be due and payable on the first day of each calendar month without any demand at the office of the Lessor designated for notices. If the term shall commence upon a day other than the first day of a calendar month, then the rent is payable in advance for such fraction of a month until the beginning of the first full year of the term, prorated on a daily basis.
| 2.02 | ADDITIONAL RENT: |
| ☐ | If real estate ad valorem taxes increase at the rate of more than 3% per year from Base Year .Lessor may pass through to Lessee as additional rent the pro rate share of the increase in excess of 3% per year. All other expenses are included in Base Rent. |
| ☒ | Additional Rent NNN Common Area Expenses pass through: Lessee hereby acknowledges that this is a NNN lease, all property tax, Insurance expense, common area expenses including capital expense items such as HVAC, exterior & Interior paint, electrical, parking lot, signage and all other items related to the full operation and maintenance for the property are at the lessee’s expense. The lessee shall be billed 1/12th of said expenses on a pro-rata basis during the term of the lease. The tenant agrees to make up any short fall due to increased property taxes and insurance cost no later than 10 days after receipt has been submitted by the lessor. Adjustments to these expenses shall be based on the actual expense billed by the lessor to the lessee on an annual basis billed monthly. |
| 2.03 | PAST - DUE RENT: |
If the Lessee fails to pay within five (5) days after the same is due and payable any rent, additional rent, or any other amounts or charges provided for in this Lease, there shall become due and payable a late fee on the sixth day of the month equal to 5% of the total rent due, and 1% per day, for each day thereafter that the rent, additional rent, or any other amounts or charges are not paid. The Lessor may demand in any notice served on the Lessee that payment be made by cashier’s check. The Lessor reserves the right to refuse late payments of rent, additional rent, or any other amount or charges, offered after the expiration of the Lessor’s notice and demand. The late charges are imposed to reimburse the Lessor for additional costs in handling delinquent payments. Lessee will also be required to pay a $50.00 fee on any check written to Lessor by Lessee which is returned non-sufficient funds or similar wording.
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| 2.04 | INCREASES IN BASE RENT AS FOLLOWS: |
| Base Rent | Sales Tax Rate* |
Sales Tax Amount |
Total | |||||||||||||
| Year 1 | $ | 52,080.00 | $ | 0.00 | $ | 52,080.00 | ||||||||||
| Year 2 | $ | 54,684.00 | $ | 0.00 | $ | 54,684.00 | ||||||||||
| Year 3: | $ | 0.00 | $ | 0.00 | ||||||||||||
| Year 4: | $ | 0.00 | $ | 0.00 | ||||||||||||
| Year 5: | $ | 0.00 | $ | 0.00 | ||||||||||||
| * | sales tax is based off current rate and subject to change per state guidelines |
| ** | ADDITIONAL RENTS TO BE CALACUATED ON AN ANNUAL BASIS |
| 2.05 | COVENANT TO PAY RENT: |
The covenants of Lessee to pay the Base Rent and the Additional Rent are each independent of any other covenant, condition, provision or agreement contained in this Lease. All rents are payable to:
| 4406 W Linebaugh Ave LLC | ||
| C/O | Radiant Asset Management of Florida LLC | |
| 10801 Starkey Rd. 104-104, Seminole, FL 33777 | ||
| Phone: | 727-625-6004 |
ARTICLE 3 - SECURITY AND DAMAGE DEPOSIT
| 3.01 | Lessee, contemporaneously with the execution of this Lease, has deposited with Lessor the sum of $6,615.00, receipt of which is acknowledged hereby by Lessor, which deposit is to be held by Lessor, without liability for interest, as a security and damage deposit for the faithful performance by Lessee during the term hereof or any extension hereof. Prior to the time when Lessee shall be entitled to the return of this security deposit, Lessor may co-mingle such deposit with Lessor’s own funds and to use such security deposit for such purpose as Lessor may determine. In the event of the failure of Lessee to keep and perform any of the terms, covenants and conditions of this Lease to be kept and performed by Lessee during the term hereof or any extension hereof, the Lessor, either with or without terminating this Lease, may (but shall not be required to) apply such portion of said deposit as may be necessary to compensate or repay Lessor for all losses or damages sustained or to be sustained by Lessor due to such breach on the part of Lessee, including, but not limited to overdue and unpaid rent, any other sum payable by Lessee to Lessor pursuant to the provisions of this Lease, damages or deficiencies in the reletting of demised premises, and reasonable attorney’s fees incurred by Lessor. Should the entire deposit or any portion thereof, be appropriated and applied by Lessor, in accordance with the provisions of this paragraph, Lessee upon written demand by Lessor, shall remit forthwith to Lessor a sufficient amount of cash to restore said security deposit to the original sum deposited, and Lessee’s failure to do so within five (5) days after receipt of such demand shall constitute a breach of this Lease. Said security deposit shall be returned to Lessee, less any depletion thereof as the result of the provisions of this paragraph, at the end of the term of this Lease. Lessee shall have no right to anticipate return of said deposit by withholding any amount required to be paid pursuant to the provision of this Lease or otherwise. |
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In the event Lessor shall sell the Premises or shall otherwise convey or dispose of its interest in this Lease, Lessor may assign said security deposit or any balance thereof to Lessor’s assignee, whereupon Lessor shall be released from all liability for the return or repayment of such security deposit and Lessee shall look solely to the said assignee for the return and repayment of said security deposit. Said security deposit shall not be assigned or encumbered by Lessee without the written consent of Lessor, and any assignment of encumbrance without such consent shall not bind Lessor
ARTICLE 4 - CONDUCT OF BUSINESS BY LESSEE
| 4.01 | USE OF PREMISES: |
The demised premises shall be used by Lessee solely for the purpose of conducting therein:
Sales Training Facility
| 4.02 | GOVERNMENTAL REGULATION: |
Lessee, at its expense, shall comply with all federal, state, and local laws, ordinances, orders, rules, regulations, all agreements and covenants of public pertaining to any of the entire premises.
| 4.03 | WASTE OR NUISANCE: |
Lessee shall not commit or suffer to be committed any waste upon the demised premises or the entire premises or any nuisance or other act or thing, which may disturb the quiet enjoyment of any other tenant of the building.
ARTICLE 5 - CONTROL AND USE OF COMMON AREAS
| 5.01 | DESCRIPTION OF COMMON AREA: |
Common Areas are all those areas and facilities including, but not limited to parking area, driveways, sidewalks, walkways, landscaped areas, utility and drainage systems, utility rooms, hallways and improvements provided by the Lessor for the general use, in common, of tenants, their officers, agents, employees, customers, or persons having business with Lessee.
| 5.02 | CONTROL OF COMMON AREAS BY LESSOR: |
Common Areas are subject to the exclusive control and management of Lessor, who shall have the right from time to time to establish, modify, and enforce reasonable rules and regulations with respect to their use. The Lessor shall have the right to change the size and uses of Common Areas as the Lessor desires, provided said change does not adversely affect the Lessee’s business operation.
ARTICLE 6 - UTILITIES
| 6.01 | Lessee shall pay its pro-rata share of all utilities used at the demised premises. Specifically, if the demised premises shall be separately metered for electricity and water use and the utility company shall bill Lessee directly. Lessor makes no representation as to the adequacy of the utilities available to the demised premises. Lessor shall not be liable for interruption in service resulting from any act or omission of the Lessor or any other cause whatsoever, except where caused by the negligence of the Lessor. |
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| 6.02 | The Lessee will pay for water consumption and sewer charges. Lessee Agrees that if Lessor converts the property to individually metered units for water & sewer that the lessee agrees to pay for the consumption of water & sewer for the unit and billed by the lessor, public utility or governing entity to the lessor. |
| 6.03 | Lessor will pay for dumpsters provided for normal use of Lessee. All other costs due to excessive or abnormal use of dumpsters shall be paid by Lessee. |
ARTICLE 7 - MAINTENANCE OF LEASED PREMISES
| 7.01 | CARE AND REPAIR OF DEMISED PREMISES: |
| a. | Lessee shall, at all times throughout the term of this Lease, including renewals, and extensions, and at its sole expense, keep and maintain the demised premises in a clean, safe, sanitary, and first class condition and in compliance with all applicable laws, codes, ordinances, rules and regulations. Lessee’s obligation hereunder shall include but not be limited to the maintenance, repair and replacement, if necessary, of heating, air conditioning fixtures, equipment, and systems. Lessee shall within five (5) days of occupancy, contract with a licensed HVAC Maintenance Company to maintain the system in proper working order. The Lessee agrees to supply a copy of the Maintenance Agreement to the Lessor and shall at all times during the term of this Lease keep in full force a HVAC maintenance agreement. Provided, however, at Lessor’s option, Lessor may obtain the HVAC maintenance agreement for the benefit of Lessee, and Lessee hereby agrees to pay to Lessor’s contractor or to Lessor, the total annual cost of such services as soon as such is determined and billed to Lessee. Nothing herein is intended to release Lessee from and Lessee agrees to be responsible for the maintenance and repair or replacement of the HVAC system. Lessee has ten (10) days from the commencement of this Lease to notify Lessor of any defects in the HVAC system. If Lessee does not notify Lessor within ten (10) days Lessee is deemed to have accepted premises in As Is condition. In addition, Lessee shall maintain, repair and replace, if necessary, all lighting and plumbing fixtures and equipment, fixtures, motors and machinery, all interior walls, partitions, doors and windows, including regular painting thereof, all exterior entrances, windows, doors and the replacement of all broken glass. When used in this provision, the term “repairs” shall include replacements or renewals when necessary, and all such repairs made by the Lessee shall be equal in quality and class to the original work. The Lessee shall keep and maintain all portions of the demised premises and sidewalk and areas adjoining the same in a clean and orderly condition, free of accumulation of dirt and rubbish. |
| b. | If Lessee fails, refuses or neglects to maintain or repair the demised premises as required in this Lease, after notice shall have been given Lessee, in accordance with Article 17.02 of this Lease, Lessor may make such repairs without liability to Lessor for any loss or damage that may accrue to Lessee’s merchandise, fixtures or other property or to Lessee’s business by reason thereof, and upon completion thereof, Lessee shall pay Lessor all costs plus 15% for overhead incurred by Lessor in making such repair upon presentation to Lessee. Lessor shall repair, at its expense, the structural portions of the Building, provided however where structural repairs are required to be made by reason of the acts of Lessee, the costs thereof shall be borne by Lessee and payable by Lessee to Lessor upon demand. |
| c. | The Lessor shall be responsible for all outside maintenance of the demised premises, including grounds and parking areas. All such maintenance which is the responsibility of the Lessor shall be provided as reasonably necessary to the comfortable use and occupancy of demised premises during business hours, except Saturdays, Sundays and holidays, upon the condition that the Lessor shall not be liable for damages for failure to do so due to causes beyond its control. |
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| 7.02 | SIGNS (See Exhibit C) |
Signs must meet municipality and building codes requirements.
ARTICLE 8 - FIXTURES, ALTERATIONS, REPLACEMENTS
Except as hereinafter provided, Lessee shall not make any alteration, additions, or improvements in or to the demised premises or add, disturb or in any way change any plumbing or wiring therein without the prior written consent of the Lessor. In the event alterations are required by any governmental agency by reason of the use and occupancy of the demised premises by Lessee, Lessee shall make such alterations at its own cost and expense after first obtaining Lessor’s approval of plans and specifications therefore and furnishing such indemnification as Lessor may reasonably require against liens, costs, damages and expenses arising out of such alterations. Alterations or additions by Lessee must be built in compliance with all laws, ordinances and governmental regulations affecting the demised premises and Lessee shall warrant to Lessor that all such alterations, additions, or improvements shall be in strict compliance with all relevant laws, ordinances, governmental regulations, and insurance requirements. Construction of such alterations or additions shall commence only upon Lessee obtaining and exhibiting to Lessor the requisite approvals, licenses and permits and indemnification against liens. All alterations, installations, physical additions or improvements to the demised premises made by Lessee shall be equal in quality or better than original installation and shall at once become the property of Lessor and shall be surrendered to Lessor upon the termination of this Lease; provided, however, this clause shall not apply to movable equipment or furniture owned by Lessee which may be removed by Lessee at the end of the term of this Lease if Lessee is not then in default.
ARTICLE 9 - POSSESSION AND LIENS
| 9.01 | POSSESSION: |
Except as hereinafter provided, Lessor shall deliver possession of the demised premises to Lessee in the condition required by this Lease on or before the Commencement Date. The rentals herein reserved shall commence on the date when the improvements are substantially completed or possession of the demised premises is delivered by Lessor to Lessee, whichever comes first. Any occupancy by Lessee prior to the beginning of the term shall in all respects be the same as that of a Lessee under this Lease. Lessor shall have no responsibility or liability for loss or damage to fixtures, facilities or equipment installed or left on the demised premises.
| 9.02 | MECHANIC’S LIEN |
Lessee shall not permit any mechanics’ or other liens to be filed against the Premises or any fixture or improvements therein. If any lien is filed, Lessee shall have it discharged of record within ten (10) days after notice of filing. If Lessee fails to discharge the lien, Lessor may, at its option, do so by paying the full amount thereof, or otherwise, without any investigation or contest of validity, and Lessee shall pay to Lessor upon demand, as additional rent, the amount paid by Lessor, including Lessor’s costs, expenses and attorney’s fees. The interest of Lessor shall not be subject to liens for improvements made by Lessee. Lessee shall notify every contractor making improvements of this provision.
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ARTICLE 10 - INSURANCE AND INDEMNITY
| 10.01 | LIABILITY INSURANCE: |
Lessee shall keep in force at its own expense throughout the term of this Lease , public liability insurance with respect to the demised premises and business operated by Lessee in such companies and in such form as are acceptable to Lessor, with minimum limits with respect to bodily injury of $1,000,000 aggregate, and with respect to property damage, $300,000. Lessee shall have all such public liability policies endorsed to show the Lessor as an additional insured with respect to occurrences upon the demised premises. The Lessee’s insurance policy will further provide for at least thirty (30) days notice to Lessor before substantial reduction of policy limits, cancellation, or any other policy changes adverse to the Lessor’s interests. Lessee shall furnish Lessor with a copy of the policy or policies of such insurance or certificates thereof, within ten (10) days of the date of the Lease.
If Lessee shall not comply with the provision of this Section Lessor may have required coverage issued and in such event, Lessee agrees to pay the premium for such insurance promptly upon Lessor’s demand as additional rent. Nothing herein contained shall require the Lessor to be liable for any loss occasioned by fire or other casualty to personal property or fixtures of the Lessee, its agents, employees, assignees, sublessees, bailors, invitees, or any other person, firm, or corporation upon any part of the demised premises.
ARTICLE 11 - CONSENT REQUIRED
| 11.01 | Lessee shall not assign this Lease in whole or in part, nor sublet all or any part of the demised premises, nor permit others to use the demised premises, without the prior written consent of Lessor, said consent not to be unreasonably withheld. Consent by Lessor to any assignment of subletting shall not constitute a waiver of subletting. Notwithstanding any assignment or sublease, Lessee and guarantors of this Lease, if any, shall remain fully liable on this lease and shall not be released from performing any of the terms, covenants, and conditions of this Lease unless released in writing by the Lessor. A transfer, conveyance, or assignment of more than fifty-one percent (51%), of Lessee’s stock, if Lessee is a corporation, shall be deemed an assignment for the purposes of this section. |
ARTICLE 12 - DEFAULT OF LESSEE
| 12.01 | If Lessee shall default in the payment of the rent reserved herein, or in the payment of any item of additional rent or other monies due hereunder or any part of same, then this Lease and the term hereof shall, at the option and election of the Lessor, wholly cease and terminate upon three (3) days written notice. |
| 12.02 | If Lessee shall violate or default any of the other covenants, agreements, stipulations, or conditions herein, and such violation or default shall continue for a period of ten (10) days after written notice of such violation or default shall have been given by Lessor to Lessee, then it shall be optional for Lessor to declare this Lease forfeited and the said term ended. |
| 12.03 | If Lessor shall declare this Lease forfeited and terminated as provided for in the preceding paragraphs, the Lessor may at Lessor’s option, terminate and end this Lease and re-enter upon the property, whereupon the term thereby granted, and at the Lessor’s option, all right, title and interest in or under it shall end and Lessee becomes a tenant at sufferance or else said Lessor may at Lessor’s option, elect to declare the entire rent for the balance of the term or any part thereof, due and payable forthwith, and may proceed to collect the same either by distress or otherwise, and thereupon said term shall terminate at the option of the Lessor, the said Lessor may take possession of the premises and rent the same for the account of the Lessee, the exercise of any of which options herein contained shall not be deemed the exclusive Lessor’s remedy. The expression entire rent for the balance of the term as used herein, shall mean all of the rent for prescribed to be paid by the Lessee unto the Lessor for the full term of this Lease, less however, any payments that have been made on account of and pursuant to the terms of said Lease. |
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| 12.04 | Neither this Lease, nor any interest therein, nor any estate thereby created shall pass to any trustee or receiver of assignee for the benefit of creditors or otherwise by operation of law. In the event the estate created hereby shall be taken in execution or by other process of law or if Lessee shall be adjudicated insolvent or bankrupt pursuant to provisions of any state or federal insolvency or bankruptcy act or if a receiver or trustee of the property of Lessee shall be appointed by reason of Lessee’s insolvency or inability to pay its debts or if any assignment shall be made of Lessee’s property for the benefit of creditors or if any reorganization preceding under the federal laws be instituted by or filed against Lessee, then and in any of such events, Lessor may, at its option, terminate this Lease and all rights of Lessee herein by giving to Lessee notice in writing of the election of Lessor so to terminate. Lessee shall not cause or give cause for the institution of legal proceedings seeking to have Lessee adjudicated bankrupt, reorganized, or rearranged under the bankruptcy laws of the United States, and shall not cause or give cause for the appointment of a trustee or a receiver for Lessee’s assets and shall not make an assignment for the benefit of creditors or become or be adjudicated insolvent. The allowance of any petition or the appointment of a trustee or receiver is vacated within thirty (30) days after such allowance or appointment. |
| 12.05 | Lessee hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Lessee being evicted or dispossessed for any cause or in the event of Lessor obtaining possession of the leased premises by reason of the violation by Lessee of any of the covenants or conditions of this Lease or otherwise. |
| 12.06 | ATTORNEY’S FEES: |
The prevailing party shall be entitled to recover all reasonable attorney’s fees incurred by him in and about the enforcement or defense of this Lease and the parties’ Lessor/Lessee relationship.
ARTICLE 13 - ACCESS BY LESSOR
| 13.01 | Lessor or Lessor’s agent shall have the right to enter the leased premises at all times, upon reasonable notice of not less than twenty-four (24) hours, excluding emergency situation, to examine the same and to show them to prospective purchasers or Lessees of the building. During the three (3) months prior to the expiration of the term of this Lease, or any renewal term, Lessor may exhibit the premises to prospective Lessees or purchasers and place upon the premises the usual notices “TO LET or “FOR SALE”, or similar wording, which notices Lessee shall permit to remain thereon without molestation. If Lessee shall not be personally present to open and permit entry into said premises at any time, when for any reason an entry therein shall be necessary in an emergency, Lessor or Lessor’s agents may enter the same by forcibly entering the same without rendering Lessor or such agent liable therefore and without in any manner affecting the obligations and covenants of this Lease. Nothing herein contained, however, shall be deemed or construed to impose upon Lessor any obligation, responsibility, or liability whatsoever, for the care, maintenance, or repair of the building, or any part thereof, except as otherwise herein specifically provided. |
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ARTICLE 14 - LESSEE’S PROPERTY
| 14.01 | TAXES ON LESSEE’S LEASEHOLD: |
Lessee shall be responsible for and shall pay before delinquency, all municipal, county, state, and federal taxes assessed during the term of this Lease against personal property of any kind owned by or placed in, upon, or about the demised premises by the Lessee.
| 14.02 | LOSS AND DAMAGE: |
Lessor shall not be liable for any damage to property of Lessee or of others located on the demised premises, nor for the loss of or damage to any property of Lessee or of others by theft or otherwise, from any act or omission of the Lessor or from any other cause. Lessor shall not be liable to Lessee and the Lessee shall hold Lessor harmless from and indemnify Lessor against any claims arising from injury to or death of persons, or damage to property, resulting from fire, explosion, falling plaster, storm gas, electricity, water, flood, air pollution, rain, or leaks from any part of the demised premises, or from the pipes, appliances, or plumbing works, or by dampness, by the acts or omissions of the Lessor or its agents, employees and contractors, or by any other cause of whatever nature.
| 14.03 | NOTICE BY LESSEE: |
Lessee shall give immediate oral and written notice to Lessor in case of fire or other casualty, or accidents in the demised premises, or in the building, or of defects therein or in any fixtures or equipment.
ARTICLE 15 - HOLDING OVER3
| 15.01 | This Lease and the tenancy hereby created shall cease and terminate at the end of the original term hereof, or any extension or renewal thereof, without the necessity of any notice from either Lessor or Lessee, to terminate the same, and Lessee hereby waives notice to vacate the demised premises and agrees that the Lessor shall be entitled to the benefit of all provisions of law respecting the summary recovery of possession of premises from a Lessee holding over to the same extent as if statutory notice had been given. |
| 15.02 | Any holding over after the expiration of the term hereof with the consent of the Lessor, shall be construed to be a tenancy from month to month at a rent thirty percent (30%) greater than the base rent and additional rent herein specified (prorated on a monthly basis), and shall otherwise be on the terms and conditions hereby specified, so far as applicable. |
ARTICLE 16 - EMINENT DOMAIN
In the event of any eminent domain or condemnation proceeding or private sale in lieu thereof in respect to the premises during the term thereof, the following provisions shall apply:
| 16.01 | If the whole of the premises shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose, then the term of this Lease shall cease and terminate as of the date possession shall be taken in such proceeding and all rentals shall be paid up to that date. |
| 16.02 | If any part constituting less than the whole of the premises shall be acquired or condemned as aforesaid, and in the event that such partial taking or condemnation shall materially affect the demised premises so as to render the demised premises unsuitable for the business of the Lessee, in the reasonable opinion of the Lessor, this Lease shall continue in full force and effect but with a proportionate abatement of the Base Rent and Additional Rent based on the portion, if any, of the demised premises taken. Lessor reserves the right, at its option, to restore the Building and the demised premises to substantially the same condition as they were prior to such condemnation. In such event, Lessor shall give written notice to Lessee, within thirty (30) days following the date possession shall be taken by the condemning authority, of Lessor’s intention to restore. Upon Lessor’s notice of election to restore, Lessor shall commence restoration and shall restore the Building and the demised premises with reasonable promptness, subject to delays beyond Lessor’s control and delays in the making of condemnation or sale proceeds adjustments by Lessor, and Lessee shall have no right to terminate this Lease except as herein provided. Upon completion of such restoration, the rent shall be adjusted based upon the portion, if any, of the demised premises restored. |
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| 16.03 | In the event of any condemnation or taking as aforesaid, whether whole or partial, Lessee shall not be entitled to any part of the award paid for such condemnation and Lessor is to receive the full amount of such award, the Lessee hereby expressly waiving any right to claim to any part thereof. |
| 16.04 | Although all damages in the event of any condemnation shall belong to the Lessor, whether such damages are awarded as compensation for diminution in value of the leasehold or to the fee of the demised premises, Lessee shall have the right to claim and recover from the condemning authority, but not from Lessor, such compensation as may be separately awarded or recoverable by Lessee in Lessee’s own right on account of any and all damage to Lessee’s business by reason of the condemnation and for or on account of any cost or loss to which Lessee might be put in removing Lessee’s merchandise, furniture, fixtures, leasehold improvements and equipment. However, Lessee shall have no claim against Lessor, make any claim with the condemning authority for the loss of its leasehold estate, any unexpired term or loss of any possible renewal or extension of said Lease or loss of any possible value of said Lease, or any unexpired term, renewal or extension. |
ARTICLE 17 - MISCELLANEOUS
| 17.01 | ENTIRE AGREEMENT |
This Lease and riders attached hereto and forming a part hereof set forth all of the covenants, promises, agreements, conditions or understandings, whether oral or written between them other than are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Lessor or Lessee unless reduced to writing and signed by them.
| 17.02 | NOTICES |
Any notice, demand, request, or other instrument which may be or is required to be given under this Lease shall be delivered either in person, via overnight delivery such as Fed-ex, Airbourne, UPS or sent by United States certified mail, postage prepaid, return receipt requested, and shall be addressed (a) if to Lessee, at the demised premises, or at such other address as the Lessee shall designate by written notice, and (b) if to Lessor, at C/O Radiant Asset Management of Florida LLC 10801 Starkey Road 104-104, Seminole FL 33777 or at such other address as Lessor may designate by written notice. The notice shall be deemed served when personally delivered or when deposited with the U.S. Postal Service.
| 17.03 | This Lease shall be construed according to the laws of the State of Florida. |
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| 17.04 | VENUE: |
Lessee and Lessor hereby agree that in the event either party files a suit to protect their rights under this Lease, that venue shall be in the Circuit Court for Hillsborough County, Florida. Lessee and Lessor waive any venue rights to institute suit in a jurisdiction other than in the Judicial Court for Hillsborough County, Florida.
| 17.05 | RADON GAS: |
Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit.
ARTICLE 18 - DESTRUCTION OF PREMISES
In the event of any damage or destruction to the Premises by fire or other cause during the term hereof, the following provisions shall apply:
| 18.01 | If the Building is damaged by fire or any other cause to such extent that the cost of restoration, as reasonably estimated by Lessor, will equal or exceed thirty percent (30%) of the replacement value of the Building (exclusive of foundations) just prior to the occurrence of the damage, then Lessor may, no later than the ninetieth (90th) day following the damage, give Lessee written notice of Lessor’s election to terminate this Lease. |
| 18.02 | If the cost of restoration as estimated by Lessor will equal or exceed fifty percent (50%) of said replacement value of the Building and if the demised premises are not suitable as a result of said damage for the purposes for which they are demised hereunder, in the reasonable opinion of Lessee, then Lessee may, no later than the ninetieth (90th) day following the damage, give Lessor a written notice of election terminate this Lease. |
| 18.03 | If the cost of restoration as estimated by Lessor shall amount to less than thirty percent (30%) of said replacement value of the Building, or if, despite the cost, Lessor does not elect to terminate this Lease, Lessor shall restore the Building and the demised premises with reasonable promptness, subject to delays beyond Lessor’s control and delays in the making of insurance adjustments by Lessor, and Lessee shall have no right to terminate this Lease except as herein provided. Lessor shall not be responsible for restoring or repairing leasehold improvement of the Lessee. |
| 18.04 | In the event of either of the elections to terminate, this Lease shall be deemed to terminate on the date of the receipt of the notice of election and all rentals shall be paid up to that date. Lessee shall have no claim against Lessor for the value of any unexpired term of this Lease. |
| 18.05 | In any case where damage to the Building shall materially affect the demised premises so as to render them unsuitable in whole or in part for the purposes for which they are demised hereunder, then, unless such destruction was wholly or partially caused by the negligence or breach of the terms of this Lease by Lessee, its employees, agents, contractors or licensees, a portion of the rent based upon the amount of the extent to which the demised premises are rendered unsuitable in Lessor’s reasonable opinion shall be abated until repaired or restored. If the destruction or damage was wholly or partially caused by negligence or breach of the terms of this Lease by Lessee as aforesaid and if Lessor shall elect to rebuild, the rent shall not abate and the Lessee shall remain liable for the same. |
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ARTICLE 19 - SUBORDINATION
| 19.01 | This Lease shall be subordinated to any mortgages that may exist or that may hereafter be placed upon the demised premises and to any and all advances made thereunder, and to the interest upon the indebtedness evidence by such mortgages, and to all renewals, replacements and extensions thereof. In the event of execution by Lessor after the date of this Lease of any such mortgage, renewal, replacement or extension, Lessee agrees to execute a subordination agreement with the holder thereof which agreement shall provide that: |
| 19.02 | Such holder shall not disturb the possession and other rights of Lessee under this Lease so long as lessee is not in default hereunder, |
| 19.03 | In the event of acquisition of title to the demised premises by such holder, such holder shall accept the terms as Lessor of the demised premises under the terms and conditions of this Lease and shall perform all obligations of Lessor hereunder, and |
| 19.04 | The Lessee shall recognize such holder as Lessor hereunder. The Lessee shall, upon receipt of a request from Lessor therefore, execute and deliver to Lessor or to any proposed purchaser of the Premises, a certificate in recordable form, certifying that this Lease is in full force and effect, and that there are no offsets against rent nor defenses to Lessee’s performance under this Lease, or setting forth any such offsets or defenses claimed by Lessee, as the case may be. |
ARTICLE 20 - ATTORNMENT
| 20.01 | In the event of a sale or assignment of Lessor’s interest in the Premises, or the Building in which the demised premises are located or in this Lease, or if the Premises come into custody or possession of a mortgagee or any other party, whether because of a mortgage or any other party, whether because of a mortgage foreclosure, or otherwise, Lessee shall attorn to such assignee or other party and recognize such party as Lessor hereunder; provided, however, Lessee’s peaceable possession will not be disturbed so long as Lessee faithfully performs its obligations under this Lease and shall not be in default hereunder. Lessee shall execute on demand, any attornment agreement required by any such party to be executed, containing such provisions and such other provisions as such party may require. |
ARTICLE 21 - NOVATION IN THE EVENT OF SALE
| 21.01 | In the event of the sale of the demised premises, Lessor shall be and hereby is relieved of all of the covenants and obligations created hereby accruing from and after the date of sale, and such sale shall result automatically in the purchaser assuming and agreeing to carry out all the covenants and obligations of Lessor herein. Notwithstanding the foregoing provisions of this Section, Lessor, in the event of a sale of the Demised premises, shall cause to be included in this agreement of sale and purchase a covenant whereby the purchaser of the demised premises assumes and agrees to carry out all of the covenants and obligations of Lessor herein. |
| 21.02 | The Lessee agrees to any time and from time to time upon not less than five (5) days prior written request by the Lessor to execute, acknowledge and deliver to the Lessor a statement in writing certifying that this Lease is unmodified and in full force and effect and if modified, stating the modifications and the dates to which the basic rent and other charges have been paid in advance, if any, it being intended that any such statement delivered pursuant to this paragraph may be relied upon by any prospective purchaser of the fee or mortgagee or assignee of any mortgage upon the fee of the demised premises. |
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ARTICLE 22 - SUCCESSORS AND ASSIGNS
The terms, covenants, and conditions hereof shall be binding upon and inure to the successors and assigns of the parties hereto.
ARTICLE 23 - HAZARDOUS MATERIALS
Lessee shall not knowingly cause or permit any Hazardous Material (as hereinafter defined) to be brought upon, kept or used in or about the Premises or the Building by Lessee, its agents, principals, employees, assigns sublessees, contractors, consultants or invitees without the prior written consent of Lessor, which consent may be withheld for any reason whatsoever or for no reason at all. If Lessee breaches the obligations stated in the preceding sentence, or if the presence of Hazardous Material on the Premises or around the Building caused or permitted by Tenant (or the aforesaid others) results in contamination of the Premises or the Building or the surrounding area(s), or if contamination of the Premises or the Building or the surrounding area(s) by Hazardous Material otherwise occurs for which Lessee is legally, actually or factually liable or responsible to Lessor (or any party claiming by, through or under Lessor) for damages, losses, costs or expenses resulting therefrom, then Lessee shall fully and completely indemnify, defend and hold harmless Lessor (or any party claiming by, through or under Lessor) from any and all claims judgments, damages, penalties, fines, costs liabilities or losses [including, without limitation; (i) diminution in the value of the premises and/or the Building and/or the land on which the Building is located and/or any adjoining area(s) which Lessor owns or in which it holds a property interest; (ii) damages for the loss or restriction on use of rentable or usable space of any amenity of the Premises, the Building or the land on which the building is located; (iii) damages arising from any adverse impact on marketing of space; and (iv) any sums paid in settlement of claims, attorneys’ fees, consultants fees and expert fees] which arise during or after the term of this Lease, as may be extended, as a consequence of such contamination. This indemnification of Lessor by Lessee includes, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil or ground water on or under the Premises or the Building. Without limiting the foregoing, if the presence of any Hazardous Material on, under or about the Premises, the Building or the surrounding area(s) caused or permitted by Lessor (or the aforesaid others) results in any contamination of the Premises, the Building or the surrounding area(s), Lessor shall immediately take all actions at its sole expense as are necessary or appropriate to return the Premises, the Building and the surrounding area(s) to the condition existing prior to the introduction of any such Hazardous Material thereto; provided that Lessor’s prior written approval of such actions by Lessee shall be first obtained. The foregoing obligations and responsibilities of Lessee shall survive the expiration or earlier termination of this Lease.
As used herein, the term “Hazardous Material” means any hazardous or toxic substance, material or waste, including, but not limited to, those substances, materials, and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CAR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CAR Part 302) and amendments thereto, or such substances, materials and wastes that are or become regulated under any applicable local, state or federal law. “Hazardous Material” includes any and all material or substances which are defined as “hazardous waste,” “extremely hazardous waste” or a “hazardous substance” pursuant to state, federal or local governmental law. “Hazardous Substance” includes but is not restricted to asbestos, polychlorobiphenyls (“PCB’s”) and petroleum.
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Lessor and its agents shall have the right, but not the duty, to inspect the Premises at any time to determine whether Lessee is complying with the terms of this Lease. If Lessee is not in compliance with this Lease, Lessor shall have the right to immediately enter upon the Premises to remedy any contamination caused by Lessee’s failure to comply, notwithstanding any other provision of this Lease. Lessor shall use its best efforts to minimize interference with Lessee’s business, but shall not be liable for any interference caused thereby.
Any non-compliance by Lessee with its duties, responsibilities and obligations under this Item 23 shall be an “automatic” (no notice of any nature from Lessor to Lessee being required) default of this Lease.
ARTICLE 24 - EXHIBITS / ADDENDUMS
Additional exhibits and / or addendums may be attached and incorporated as additional terms and conditions of this Commercial Agreement of Lease.
IN WITNESS WHEREOF, this Lease has been duly and properly executed the day and year first above written:
| Dated: 4/7/2026 | LESSOR: | 4406 W Linebaugh Ave LLC |
| /s/ Joseph Speed | ||
| By: Joseph Speed | ||
| Its: As agent for 4406 W Linebaugh Ave LLC | ||
| Dated: 4/7/2026 | LESSEE: | Tenon Medical, Inc. |
| /s/ Kevin Williamson | ||
| By: Kevin Williamson | ||
| Its: CFO |
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EXHIBIT A
RULES AND REGULATIONS
Attached to and forming part of the COMMERCIAL AGREEMENT OF LEASE
Leased to: Tenon Medical Inc ,
Dated: April 7, 2026,
Lessee agrees that it will:
| 1. | not waste any of the utilities furnished by Lessor; |
| 2. | not use the plumbing facilities for any purpose other than that for which they are constructed, and not throw any foreign substance of any kind therein; and will pay the expense of any breakage, stoppage, or damage resulting from such violation; |
| 3. | deposit trash, refuse, garbage and waste material at the location and in the container or containers specified by Lessor for such purposes; |
| 4. | not install any window blinds or shades without the written consent of Lessor; |
| 5. | not display, store or keep any merchandise, materials or refuse outside the demised premises, or in any way obstruct entries, halls, stairways, lavatories, or other common areas; |
| 6. | not solicit business in the common areas or parking areas; and not distribute any handbills or other advertising matter in the common areas or on vehicles in the parking areas; |
| 7. | use, and cause its principals, employees, agents and contractors to use, the parking areas in the manner prescribed by Lessor, including , but not limited to, appropriate use by Lessee, its principals, employees, agents and contractors of employee parking areas, if such be designated; |
| 8. | use no loud speakers, televisions, phonographs, radios, or other devices in a manner so as to be heard or seen outside of the Leased Premises without the prior written consent of the Lessor. |
| 9. | keep the exterior areas immediately adjoining the Leased Premises clean and free from dirt and rubbish by Tenant to the satisfaction of Lessor, and Lessee shall not place or permit any obstruction or merchandise in such areas. |
| 10. | No animals are allowed on the premises at any time. |
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EXHIBIT B
GUARANTY
Attached to and forming part of the COMMERCIAL AGREEMENT OF LEASE
GUARANTY OF LESSEE’S OBLIGATIONS UNDER AGREEMENT OF LEASE BETWEEN:, as LESSEE.
The undersigned, in consideration of the leasing of the demised premises described in the attached Lease to Lessee, at the request of the undersigned and on the faith of this Guaranty is hereby guaranteeing the full and timely performance of all Tenant obligations under the Lease for the first three (3) years of the five (5) year lease term, hereby absolutely, unconditionally and irrevocably guarantee(s) to Lessor the full and complete performance of all of Lessee’s covenants and obligations under said Lease and the full payment of Lessee of all rentals, additional rentals and other charges and amounts required to be paid thereunder, and the undersigned will pay all of Lessor’s expenses, including attorney’s fees, incurred in enforcing the obligations of Lessee under said Lease or incurred in enforcing this Guaranty.
The undersigned hereby waive(s) all requirements of notice of the acceptance of this Guaranty, all requirements of notice of breach or non-performance by Lessee, any necessity of proceeding first or simultaneously against Lessee, and all rights of the undersigned under the Laws of the State of Florida. The obligations hereunder of the undersigned shall remain fully binding, although Lessor may have waived one or more defaults by Lessee, extended the time of performance by Lessee, modified or amended said Lease, released, returned or misapplied other collateral given later as additional security, including other guaranties, released Lessee from the performance of its obligations under said Lease or consented to any assignment of the Lease or sublease of the demised premises. Discharge in bankruptcy of Lessee or its obligations shall not release the undersigned.
If this Guaranty is signed by more than one person, their obligation shall be joint and several, and the release of one guarantor shall not release any other guarantor. This Guaranty shall be binding upon the undersigned and respective heirs, executors, administrators, representative, successors and assignee.
| Guarantor: | Guarantor: |
| Name: | Name: |
| Address: | Address: |
| SS #: | SS #: |
| BY: | BY: |
| Witnessed: | Witnessed: |
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EXHIBIT C
SIGN CRITERIA
Attached to and forming part of the COMMERCIAL AGREEMENT OF LEASE
Leased to: Tenon Medical Inc ,
Dated: April 7, 2026,
This sign criteria has been established for the mutual benefit the Lessor, and Lessee. Conformance will be strictly enforced; any installed nonconforming or unapproved sign shall be brought into conformance at the sole expense of the Lessee. Further, the purpose of this criteria is to assure consistent design, fabrication techniques, and materials with regards to Lessee identification.
| I. | GENERAL REQUIREMENTS |
| 1. | Each Lessee (or representative) must submit two (2) sets of scale drawings of proposed signage for approval by Lessor or his appointed agent. Lessee shall be responsible for all costs, expenses, fees, and taxes relating to building, installing, and permitting their signs. |
| 2. | Necessary sign permits must be obtained by Lessee prior to installation of signs. |
| 3. | No signs, advertisements, notices, or other lettering shall be displayed, exhibited, inscribed, painted, or affixed on any part of the building, including storefront windows and Lessee doors, unless covered specifically by this criteria. |
| 4. | No notices, decals, credit card acceptance information, security system emblems, sales signs, or any other display shall be attached directly in the windows outside the building or the door of any Lessee’s leased space unless expressly approved by Lessor. |
| 5. | No freestanding signs whether temporary or permanent large, small, cardboard, plastic, metal or glass on a stand of any kind or sandwich-type board, will be allowed in front or adjacent to any Lessee space or anywhere else on the property or in the public right of way adjacent to the property, unless expressly approved by Lessor. |
| 6. | No secondary exterior signs shall be placed on building wall elevations. |
| II. | LESSEE SIGNAGE |
| 1. | Window signage is subject to Lessor or his appointed agent’s approval and must meet specifications as required by city or government authority approval. |
| 2. | Letter style and logo are optional but subject to Lessor’s approval. |
| 3. | No clips or mounting devices will be visible. No labels will be directly visible. |
| 4. | All signs must comply with all applicable building and electrical codes. |
| 5. | Each Lessee who has a non-customer door may install signage to said door. Such signage, location, and color to be coordinated and approved by Lessor. |
| 6. | No sign shall be installed or altered after installation except with the permission of the lessor and his appointed agent and the appropriate city or other governmental authority. |
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EXHIBIT D
LESSOR’S WORK
Attached to and forming part of the COMMERCIAL AGREEMENT OF LEASE
Leased to: Tenon Medical Inc ,
Dated: April 7, 2026,
Other Terms & Conditions
Tenant is to prepay full term of the lease in lieu of guarantee.
If tenant elects to extend their term for an additional two years—remaining under Panda’s sublease—Panda will continue to be responsible for commissions due and payable to John Burpee Commercial Real Estate Brokers, Inc. throughout the remaining duration of the lease.
Notwithstanding anything to the contrary contained in Paragraph 7.01 or elsewhere in this Agreement, the parties acknowledge and agree that the Premises does not contain a unit-specific HVAC system. The building is serviced by a centralized chiller system. Accordingly, any provisions relating to the care, maintenance, repair, or replacement of HVAC systems as set forth in Paragraph 7.01 shall be deemed inapplicable to the unit 110 and are hereby null and void with respect to the Tenant.
Notwithstanding any provision herein to the contrary, this Lease shall not become effective, and Lessee shall have no right of entry, access, or possession of the Premises, until all funds due and payable by Lessee to Lessor under this Lease, including but not limited to rent, security deposit, fees, and any other required payments, have been received in full and in cleared funds by Lessor. In the event such payments are not timely made, Lessor shall have no obligation to deliver possession of the Premises, and this Lease may, at Lessor’s option, be deemed null and void without further liability.
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Welcome to 4406 W. Linebaugh Ave
Professionally Managed by: Radiant Asset Management of Florida
Dear Valued Tenant,
Welcome to 4406 W. Linebaugh Ave Office Park! We’re pleased you’ve chosen this location as the home for your business, and we look forward to supporting your success here. Radiant Asset Management of Florida is committed to providing a clean, professional, and efficient working environment for all tenants. To help you settle in, please review the following important information about the property:
Management & Contact Info:
Our team is here to assist you with any questions, concerns, or maintenance needs. You can reach us by phone at 727-625-6004 or by email at CS@RamFL.info. Please don’t hesitate to get in touch, we’re here to help!
Tenant Portal:
Your online tenant portal provides easy access to work order submissions, account balances, and other essential property information. If you need help accessing or using the portal, please contact us directly.
Property Features & Guidelines:
| Ø | Bathrooms & Elevators: Are located in the common areas on each floor toward the center of the building. |
| Ø | Parking: Tenants should park in the rear lot behind the building whenever possible. This helps to keep the front parking area clear for patrons or clients of the other businesses in the building. |
| Ø | Lighting: Most lighting in the building is automated for your convenience; however, some local controls may exist within individual office suites. |
| Ø | Air Conditioning: The AC is centrally managed in most building locations. If you require adjustments or experience issues, please notify management. |
| Ø | Trash Disposal: Daily trash and small cardboard amounts may be disposed of in the rear dumpster located inside the white fence (All boxes must be broken down). Please do not dispose of trash in the common area cans located in the restrooms or at the front of the building. These are for paper or small items only. If you have a large amount of cardboard or other material to dispose of including furniture, please contact management prior to removing it from your suite for further guidance. |
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Property Features & Guidelines (cont’d):
| Ø | Items in Common Areas: No tenant items, supplies, materials or furniture may be stored or left in common areas outside of your suite without prior written approval from management. Most flammable liquids, hazardous materials, bicycles, scooters or other motorized vehicles are prohibited from being brought into the building unless specifically authorized by ADA guidelines. Please contact management if you need further clarification. |
| Ø | Security: Please secure your suite and/or vehicles in the parking lot when left unattended. Management is not responsible for lost, stolen or missing items. NOTE: Management does not provide building or parking lot security services. |
| Ø | Locks & Keys: You will be provided with keys to your suite at initial lease signing. Please report any lock or key issues including the need to change or rekey and locks to management immediately for assistance. If you require an after-hours key fob, please ensure that an access form is completed for each individual requesting a fob. |
| Ø | Leased Space Usage: Tenants may only use the areas specifically leased to them within their suite. Storage or use of closets, hallways, or package areas outside your suite is not permitted unless authorized by management in writing. |
| Ø | Utilities: For Electric Service contact: TECO (813) 223-0800 / For Internet Service contact: Spectrum (855) 646-4498. Any additional wiring or WiFi services needed in a suite are the responsibility of the tenant. All work must be performed by licensed contractors and tenants should contact management prior to performing any interior modifications for guidance or approval. |
Lease Terms:
For other details regarding rent payments, due dates, fees, or lease conditions, please refer to your signed lease agreement which will contain the timelines, terms and conditions of your tenancy.
Once again, welcome! We’re glad to have you as a part of our business community here at 4406 W. Linebaugh and wish you great success in your business endeavors. If there’s anything we can do to help, please don’t hesitate to reach out!
Sincerely,
Radiant Asset Management of Florida LLC
Office: 727-625-6004
Email: CS@RamFL.info
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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECTUIVE OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven Foster, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Tenon Medical, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 13, 2026
| /s/ Steven Foster | ||
| Name: | Steven Foster | |
| Title: | Chief Executive Officer and President | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kevin Williamson, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Tenon Medical, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions) |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 13, 2026
| /s/ Kevin Williamson | ||
| Name: | Kevin Williamson | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Steven Foster, the Chief Executive Officer of Tenon Medical, Inc. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended June 30, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 13, 2026
| /s/ Steven Foster | ||
| Name: | Steven Foster | |
| Title: | Chief Executive Officer and President | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Kevin Williamson, the Chief Financial Officer of Tenon Medical, Inc. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended June 30, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 13, 2026
| /s/ Kevin Williamson | ||
| Name: | Kevin Williamson | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |