tnon-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _________ to __________

COMMISSION FILE NUMBER 001-41364

TENON MEDICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		45-5574718
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

104 Cooper Court Los Gatos, CA 95032		(408) 649-5760
(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
Common Stock, par value $0.001 per share	TNON	The Nasdaq Stock Market LLC
Warrants	TNONW	The Nasdaq Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-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 667,047 shares of its common stock, par value $0.001 per share, issued and outstanding.

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

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.

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	$	1,677		$	3,756
Accounts receivable, net		1,947			1,698
Inventory		783			1,054
Prepaid expenses and other current assets		400			260
Total current assets		4,807			6,768
Property and equipment, net (Note 3)		771			918
Deposits		51			51
Operating lease right-of-use asset (Note 6)		1,431			131
Intangible assets, net (Note 4)		455			485
Goodwill		2,407			2,407
TOTAL ASSETS	$	9,922		$	10,760

Liabilities and Stockholders’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	628		$	845
Accrued expenses (Note 5)		1,952			1,637
Current portion of accrued commissions		674			590
Current portion of operating lease liability (Note 6)		215			141
Current portion of contingent consideration (Note 10)		29			—
Convertible notes (Note 7)		4,332			—
Derivative liability (Note 8)		475			—
Total current liabilities		8,305			3,213
Accrued commissions, net of current portion		1,250			1,514
Operating lease liability, net of current portion (Note 6)		1,131			—
Contingent consideration, net of current portion (Note 10)		979			993
Total liabilities		11,665			5,720

Commitments and contingencies (Note 10)
Stockholders’ (deficit) equity:
Series A convertible preferred stock, $0.001 par value; 4,500,000 shares authorized at June 30, 2026 and December 31, 2025; 204,159 shares issued and outstanding at June 30, 2026 and December 31, 2025		2,622			2,622
Series B convertible preferred stock, $0.001 par value; 491,222 shares authorized at June 30, 2026 and December 31, 2025; 86,454 shares issued and outstanding at June 30, 2026 and December 31, 2025		452			452
Common stock, $0.001 par value; 130,000,000 shares authorized at June 30, 2026 and December 31, 2025; 330,670 and 310,036 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		—			—
Additional paid-in capital		84,011			83,268
Accumulated deficit		(88,828	)		(81,302	)
Total stockholders’ (deficit) equity		(1,743	)		5,040
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	9,922		$	10,760

The accompanying notes are an integral part of these condensed financial statements.

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	$	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)
Gain on investments		24			88			49			149
Interest expense		(852	)		—			(1,028	)		—
Other income		132			—			87			—
Total Other (Expense) Income, net		(696	)		88			(892	)		149
Net Loss and Comprehensive Loss	$	(4,050	)	$	(2,769	)	$	(7,526	)	$	(6,385	)
Net Loss Per Share of Common Stock
Basic and diluted	$	(12.35	)	$	(12.76	)	$	(23.16	)	$	(39.91	)

Weighted-Average Shares of Common Stock Outstanding
Basic and diluted		328			217			325			160

The accompanying notes are an integral part of these condensed financial statements.

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		204,159	$	2,622		86,454	$	452		322,754	$	—	$	83,599		$	(84,778	)	$	1,895
Stock-based compensation expense		—		—		—		—		—		—		412			—			412
Release of restricted stock units		—		—		—		—		24		—		—			—			—
Issuance of common stock to SiVantage upon completion of milestone		—		—		—		—		7,892		—		—			—			—
Net loss		—		—		—		—		—		—		—			(4,050	)		(4,050	)
Balance at June 30, 2026		204,159	$	2,622		86,454	$	452		330,670	$	—	$	84,011		$	(88,828	)	$	(1,743	)

Balance at March 31, 2025		256,968	$	3,300		86,454	$	452		216,856	$	—	$	77,986		$	(72,362	)	$	9,376
Stock-based compensation expense		—		—		—		—		—		—		417			—			417
Release of restricted stock units		—		—		—		—		64		—		—			—			—
Deferred deal costs		—		—		—		—		—		—		(311	)		—			(311	)
Net loss		—		—		—		—		—		—		—			(2,769	)		(2,769	)
Balance at June 30, 2025		256,968	$	3,300		86,454	$	452		216,920	$	—	$	78,092		$	(75,131	)	$	6,713

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		204,159	$	2,622		86,454	$	452		310,036	$	—	$	83,268		$	(81,302	)	$	5,040
Stock-based compensation expense		—		—		—		—		—		—		743			—			743
Release of restricted stock units		—		—		—		—		12,742		—		—			—			—
Issuance of common stock to SiVantage upon completion of milestone		—		—		—		—		7,892		—		—			—			—
Net loss		—		—		—		—		—		—		—			(7,526	)		(7,526	)
Balance at June 30, 2026		204,159	$	2,622		86,454	$	452		330,670	$	—	$	84,011		$	(88,828	)	$	(1,743	)

Balance at December 31, 2024		256,968	$	3,300		86,454	$	452		89,680	$	—	$	70,965		$	(68,746	)	$	5,971
Stock-based compensation expense		—		—		—		—		—		—		1,289			—			1,289
Issuance of common stock, pre-funded warrants and warrants under inducement agreement, net of issuance costs		—		—		—		—		69,877		—		2,735			—			2,735
Issuance of common stock, pre-funded warrants, and warrants, net of issuance costs		—		—		—		—		57,286		—		3,524			—			3,524
Release of restricted stock units		—		—		—		—		77		—		—			—			—
Deferred financing costs		—		—		—		—		—		—		(421	)		—			(421	)
Net loss		—		—		—		—		—		—		—			(6,385	)		(6,385	)
Balance at June 30, 2025		256,968	$	3,300		86,454	$	452		216,920	$	—	$	78,092		$	(75,131	)	$	6,713

The accompanying notes are an integral part of these condensed financial statements.

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	$	(7,526	)	$	(6,385	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		743			1,289
Depreciation and amortization		148			90
Amortization of debt discount		1,028			—
Change in fair value of derivative liabilities		(88	)		—
Amortization of operating right-of-use asset		133			131
Provision for credit losses on accounts receivable		6			—
Increase (decrease) in cash resulting from changes in:
Accounts receivable		(255	)		93
Inventory		528			(70	)
Prepaid expenses and other assets		(250	)		(374	)
Accounts payable		(217	)		525
Accrued expenses		150			142
Operating lease liability		(118	)		(138	)
Net cash used in operating activities		(5,718	)		(4,697	)

Cash Flows from Investing Activities
Purchases of property and equipment		(228	)		(192	)
Cash used in investing activities		(228	)		(192	)

Cash Flows from Financing Activities
Gross proceeds from issuance of convertible notes		4,300			—
Gross proceeds from issuance of common stock, pre-funded warrants and warrants		—			4,010
Gross proceeds from issuance of common stock, pre-funded warrants and warrants under inducement agreement		—			3,057
Offering costs		(433	)		(867	)
Net cash provided by financing activities		3,867			6,200

Net (Decrease) Increase in Cash and Cash Equivalents		(2,079	)		1,311

Cash and Cash Equivalents at Beginning of Period		3,756			6,535
Cash and Cash Equivalents at End of Period	$	1,677		$	7,846

Supplemental Disclosures of Cash Flow Information
Non-cash investing and financing activities:
Remeasurement of right-of-use asset and lease liability	$	1,323		$	—
Initial fair value of derivative liability recorded as a debt discount	$	563		$
Warrant modification costs	$	—		$	1,402
Reclassification of deferred offering costs to additional paid-in capital	$	—		$	421

The accompanying notes are an integral part of these condensed financial statements.

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 June 19, 2012 and was headquartered in San Ramon, California until June 2021 when it relocated to Los Gatos, California. The Company is a medical device company dedicated to transforming care for patients with certain sacro-pelvic disorders. The Company currently offers two systems to treat a diseased sacroiliac joint (“SI Joint”). The Company has 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. The Company received U.S. Food and Drug Administration (“FDA”) clearance in 2018 for The Catamaran System and is currently focused on the U.S. market. Since the national launch of The Catamaran System in October 2022, the Company is focused on three commercial opportunities: 1) Primary SI Joint procedures, 2) Revision procedures of failed SI Joint implants and 3) SI Joint fusion adjunct to a spine fusion construct.

In August 2025, 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 $3,620 from its July 2026 public offering (Note 11) will not provide sufficient funds to enable it to meet its obligations for a period of at least twelve months from the date of the filing of these financial statements. The Company plans to raise the necessary additional capital through one or a combination of public or private equity offerings, debt financings, and collaborations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On July 1, 2026, the Company 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 to the Company, net of placement fees and offering expenses, of approximately $3,620. See Note 11 for a more detailed description of the transaction.

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 $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was 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 the Company’s common stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the Compliance Period.

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 $2.5 million. In addition, the Company did not currently meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations.

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.

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.

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		34,573		2,699
Outstanding stock options		504		391
Outstanding warrants		233,546		170,172
Common shares convertible from preferred stock		53,459		47,263
Common shares convertible from convertible notes		430,239		—
Total		752,321		220,525

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	$	858		$	829
Construction in progress		772			836
Lab equipment		79			79
IT equipment		56			56
Leasehold improvements		15			15
Office furniture		15			9
Property and equipment, gross		1,795			1,824
Less: accumulated depreciation		(1,024	)		(906	)
Property and equipment, net	$	771		$	918

Construction in progress is made up of reusable components that will become reusable instrument tray sets. Depreciation expense was approximately $45 and $48 for the three months ended June 30, 2026 and 2025, respectively, and $118 and $90 for the six months ended June 30, 2026 and 2025, respectively.

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 7-8 years for developed technology, 10 years for trademarks/trade names and 8 years for customer relationships.

Intangible assets as of June 30, 2026 consist of the following:

	Gross Value		Accumulated Amortization			Net Value
Developed technology	$	103	$	(12	)	$	91
Trademarks/trade names		196		(18	)		178
Customer relationships		210		(24	)		186
Total	$	509	$	(54	)	$	455

Intangible assets as of December 31, 2025 consist of the following:

	Gross Value		Accumulated Amortization			Net Value
Developed technology	$	103	$	(5	)	$	98
Trademarks/trade names		196		(8	)		188
Customer relationships		210		(11	)		199
Total	$	509	$	(24	)	$	485

Amortization expense for three months ended June 30, 2026 and 2025 was $15 and $0, respectively and $30 and $0 for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, future amortization of amortizable intangible assets is as follows:

2026 (remaining 6 months)	$	29
2027		59
2028		59
2029		59
2030		59
Thereafter		190
	$	455

5. Accrued Expenses

Accrued expenses consisted of the following:

	June 30, 2026		December 31, 2025
Accrued compensation	$	947	$	710
Accrued professional services fees		584		484
Other accrued expenses		421		443
Total accrued expenses	$	1,952	$	1,637

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 May 2031. In April 2026, the Company entered into a lease agreement for a sales facility in Tampa, Florida, which expires in April 2028. Operating lease expense for the facility leases was $95 and $73 for the three months ended June 30, 2026 and 2025, respectively and $171 and $146 for the six months ended June 30, 2026 and 2025, respectively.

Supplemental balance sheet information related to leases was as follows:

	June 30,		December 31,
	2026		2025
Operating lease right-of-use assets	$	1,431	$	131

Operating lease liability, current	$	215	$	141
Operating lease liability, noncurrent		1,131		—
Total operating lease liabilities	$	1,346	$	141

Future maturities of operating lease liabilities as of June 30, 2026 were as follows:

2026 (remaining 6 months)	$	157
2027		320
2028		329
2029		338
2030		348
Thereafter		147
Total lease payments		1,639
Less: imputed interest		(293	)
Present value of operating lease liabilities	$	1,346

Other information:

Cash paid for operating leases for the six months ended June 30, 2026	$	268
Cash paid for operating leases for the six months ended June 30, 2025	$	153
Remaining lease term - operating leases (in years)		4.92
Average discount rate - operating leases		8.0	%

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 $5,160 20% original issue discount senior convertible promissory notes (the “Convertible Promissory Notes”) for aggregate gross proceeds of approximately $4.3 million before deducting fees and expenses of the placement agent of $433.

The Convertible Promissory Notes have a maturity date of September 11, 2026, which, at the option of the Company, can be extended until December 11, 2026.

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 80% of the VWAP for the 3 trading days immediately prior to the date of conversion and $5.4845, subject to adjustment for stock splits and pro rata distributions as provided in the Convertible Promissory Notes.

If the maturity date of the Convertible Promissory Notes is extended, the outstanding principal amount will be increased by 5%. Any prepayment of the Convertible Promissory Notes will be prepaid at 102.5% of the principal prepayment. In addition, the Company is required to prepay the Convertible Promissory Notes from 15% of the net proceeds it may receive from future securities financing transactions less certain amount attributable to the original issue discount.

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 $852 and $1,028, respectively, related to the Convertible Promissory Notes.

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 $563 as determined using a Monte Carlo simulation model with expected terms of 0.5 and 0.75 years and expected daily volatility of 4.93% and 15,000 simulation paths. The model also incorporates assumptions regarding the optimal behavior of both the holder as it relates to the timing of conversion and the Company as it relates to the exercise of the extension option. The Company used a Monte Carlo simulation due to the presence of path-dependent features, including the use of a multi-day VWAP in determining the conversion price and the Company’s option to extend the maturity date.

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 $133 and $88, respectively.

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		563
Change in fair value		(88	)
Balance at June 30, 2026	$	475

9. Stockholders’ Equity

The Company’s current Amended and Restated Certificate of Incorporation dated February 18, 2014 authorizes the issuance of 130,000,000 shares of common stock and 20,000,000 shares of preferred stock, both with a par value of $0.001 per share. Of the preferred stock, 4,500,000 shares are designated Series A Preferred Stock and 491,222 shares are designated Series B Preferred Stock.

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 $5.5 million. The Company is required to pay the Sales Agents a commission of 3% of the gross proceeds from the sale of shares and has also agreed to provide the Sales Agents with customary indemnification rights. During the three and six months ended June 30, 2026 and 2025, no shares of the Company’s common stock were sold under the program. Per the terms of the Equity Distribution Agreement, no shares are available to be issued under the program as of June 30, 2026.

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 $43.75 per share in consideration for the Company’s agreement to issue (i) new unregistered five-year warrants (the “Series C-1 Warrants”) to purchase up to an aggregate of 69,878 shares of common stock at an exercise price of $43.75 per share and (ii) new unregistered three-year warrants (the “Series C-2 Warrants,” and together with the Series C-1 Warrants, the “New Warrants”) to purchase up to an aggregate of 34,939 shares of common stock at an exercise price of $43.75 per share (the “2025 Warrant Inducement”). The New Warrants were not exercisable without approval by the Company’s stockholders (the “Approval Date”), which was obtained on September 18, 2025. The Series C-1 Warrants are exercisable five years from the Approval Date, and the Series C-2 Warrants are exercisable three years from the Approval Date. Pursuant to the 2025 Warrant Inducement, the Company received proceeds, net of financial advisor fees and other transaction expenses, of $2,735. The incremental value of the consideration to the holders of the Existing Warrants was $5,113.

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 20,958 shares of its common stock (or common stock equivalents in lieu thereof) in a registered direct offering at a purchase price of $70.00 per share. In a concurrent private placement, the Company also agreed to issue to the same investor warrants to purchase up to 20,958 shares of its common stock at an exercise price of $70.00 per share, which will be exercisable immediately, and will expire five years following the date of issuance. Pursuant to the agreements, the Company received proceeds, net of financial advisor fees and other transaction expenses, of $1,234.

Also on March 25, 2025, the Company entered into a securities purchase agreement for the issuance of 36,329 shares of its common stock (or common stock equivalents in lieu thereof) in a registered direct offering at a purchase price of $70.00 per share. In a concurrent private placement, the Company also agreed to issue to the same investor warrants to purchase up to 36,329 shares of its common stock at an exercise price of $70.00 per share, which will be exercisable immediately, and will expire five years following the date of issuance. Pursuant to the agreements, the Company received proceeds, net of financial advisor fees and other transaction expenses, of $2,290.

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		506		$	459.20		26,212		$	44.10
Granted		—			—		21,258		$	26.95
Released		—			—		(12,742	)	$	40.95
Cancelled/Forfeited		(2	)	$	19,768.00		(155	)	$	54.95
Outstanding at June 30, 2026		504		$	390.25		34,573		$	34.65

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	$	102	$	208	$	197	$	557
Sales and marketing		36		27		48		64
General and administrative		274		182		498		668
Total stock-based compensation expense	$	412	$	417	$	743	$	1,289

At June 30, 2026, there were 1,306 shares available for issuance under the 2022 Plan.

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 35 shares of common stock. The warrants were immediately exercisable at an exercise price of $14,000.00 per share and expire on the fifth anniversary of the commencement of sales under the IPO. The fair value of the warrants on the grant date was $7,700.00 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 62.55%, dividend yield of 0%, and risk-free interest rate of 2.92%. The Company recorded the fair value of these warrants of $264 as an issuance cost to additional paid-in capital in 2022. All of the IPO warrants remain outstanding as of June 30, 2026.

Registered Offering Warrants

In June 2023, in connection with a registered offering of stock, the Company issued warrants to purchase a total of 7,143 shares of common stock (the “Registered Offering Warrants”). The Registered Offering Warrants were exercisable upon issuance and will expire five years from the date of issuance. Per the terms of the Registered Offering Warrants, the exercise price reset on July 16, 2023, to $880.88 per share. The fair value of the Registered Offering Warrants on the grant date of $3,164, or $442.40 per warrant, was calculated using a Monte-Carlo simulation to estimate the final exercise price, which is considered a Level 3 fair value measurement, using as inputs; the starting value of $840.00 per share, the Company’s VWAP on June 16; an assumed daily distribution of returns; a mean daily return of 5.18%; a short-term annual volatility of 100% and a standard deviation of 6.3%. The model used Black-Scholes to then calculate the estimated fair value of the Registered Offering Warrants, using an estimated time to maturity of 4.9 years, a risk-free interest rate of 3.99% and a long-term volatility of 60%. As of June 30, 2026, Registered Offering Warrants to purchase 5,929 shares of common stock remain outstanding.

Convertible Note Warrants

In November 2023, in connection with the issuance of the Convertible Notes, the Company issued warrants to purchase a total of 161 shares of common stock at an exercise price equal to $543.20 per share. The warrants expire five years from the issuance date. The fair value of the warrants on the grant date was $361.20 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.89%, dividend yield of 0%, and risk-free interest rate of 4.41%. The Company recorded the fair value of these warrants of approximately $58 as an issuance cost to additional paid-in capital in 2023. All of these warrants remain outstanding as of June 30, 2026.

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 1,484 shares of common stock at an exercise price equal to $149.80 per share. The Series A Warrants are immediately exercisable and expire five years from the date of issuance. The fair value of the Series A Warrants on the grant date was $170.80 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.24%, dividend yield of 0%, and risk-free interest rate of 4.3%. The Company recorded the fair value of these warrants of $254 to additional paid-in capital in 2024. All of the Series A Preferred Stock warrants remain outstanding as of June 30, 2026.

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 464 shares of common stock at an exercise price equal to $149.65 per share. The Series B Warrants are immediately exercisable and expire five years from the date of issuance. The fair value of the Series B Warrants on the grant date was $78.75 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.40%, dividend yield of 0%, and risk-free interest rate of 3.5%. The Company recorded the fair value of these warrants of $37 to additional paid-in capital in 2024. All of the Series B Preferred Stock warrants remain outstanding as of June 30, 2026.

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 69,878 shares of common stock at an exercise price of $43.75 per share and new unregistered three-year warrants (the “Series C-2 Warrants,” and together with the Series C-1 Warrants, the “Series C Warrants”) to purchase up to an aggregate of 34,939 shares of common stock at an exercise price of $43.75 per share. The Series C Warrants were exercisable upon approval by the Company’s stockholders, which was obtained on September 18, 2025 (the “Approval Date”). The Series C-1 Warrants are exercisable five years from the Approval Date, and the Series C-2 Warrants are exercisable three years from the Approval Date. Pursuant to the 2025 Warrant Inducement, the Company received proceeds, net of financial advisor fees and other transaction expenses, of $2,735.

The fair value of the Series C-1 Warrants on the grant date was $33.95 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.40%, dividend yield of 0%, and risk-free interest rate of 4.0%. The fair value of the Series C-2 Warrants on the grant date was $28.00 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 3.00 years, expected volatility of 68.40%, dividend yield of 0%, and risk-free interest rate of 4.0%. The Company recorded the fair value of these warrants to additional paid-in capital in the first quarter of 2025. The Company recorded the excess of the incremental value of the modified Series A New Warrants and Series B New Warrants and the fair value of the Series C Warrants over the cash proceeds from the exercise of the modified Series A New Warrants and Series B New Warrants as equity offering costs. All of the Series C Warrants remain outstanding as of June 30, 2026.

Series D Warrants

On March 25, 2025, in connection with a securities purchase agreement, the Company issued warrants to purchase up to 20,958 shares of its common stock at an exercise price of $70.00 per share (the “Series D Warrants”), which were exercisable upon issuance, and will expire five years following the date of issuance. The fair value of the Series D Warrants on the grant date was $95.20 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.40%, dividend yield of 0%, and risk-free interest rate of 4.1%. The Company recorded the fair value of these warrants to additional paid-in capital in the first quarter of 2025. All of the Series D Warrants remain outstanding as of June 30, 2026.

Series E Warrants

Also on March 25, 2025, in connection with a securities purchase agreement, the Company issued warrants to purchase up to 36,329 shares of its common stock at an exercise price of $70.00 per share (the “Series E Warrants”), which were exercisable upon issuance, and will expire five years following the date of issuance. The fair value of the Series E Warrants on the grant date was $95.20 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 5.00 years, expected volatility of 68.40%, dividend yield of 0%, and risk-free interest rate of 4.1%. The Company recorded the fair value of these warrants to additional paid-in capital in the first quarter of 2025. All of the Series E Warrants remain outstanding as of June 30, 2026.

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 63,369 shares of its common stock at an exercise price of $40.60 per share, with an expiration date of 3 years from the date of issuance (the “PIPE Warrants”). The fair value of the PIPE Warrants on the grant date was $15.40 per warrant, which was calculated using a Black-Scholes option valuation model with an expected term of 3.00 years, expected volatility of 48.80%, dividend yield of 0%, and risk-free interest rate of 3.6%. The Company recorded the fair value of these warrants to additional paid-in capital. All of the PIPE Warrants remain outstanding as of June 30, 2026.

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 five years, and automatically renews for an additional five years unless written notice is given by either party prior to April 27, 2023. The agreement provides for a bonus to be paid to the Representative upon an acquisition or IPO. In May 2021, the Company entered into an Amended and Restated Exclusive Sales Representative Agreement (the “Restated Sales Agreement”). In connection with the amended agreement, the Company paid $500 cash and issued 1,536 shares of common stock to the Representative, for which the Company recorded a combined total of approximately $880 as sales and marketing expense. In addition, the Representative received anti-dilution protections to maintain ownership of 3.0% of the fully diluted equity of the Company through the date of an initial public offering. In October 2021, the Company issued 127 shares of common stock with a fair value of approximately $31,235 to the Representative in accordance with the anti-dilution provision. In April 2022, the Company issued 893 shares of common stock to the Representative in accordance with the anti-dilution provision, fully satisfying the Company’s obligations.

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 $6,000.

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 $1,000 in cash; and (ii) the Company agreed to pay the Representative (a) $85 per month during the six months after the date of the Termination Agreement in return for efforts by the Representative to transition operations to the Company, (b) 20% of net sales of the product sold in the United States and Puerto Rico until December 31, 2023 and (c) after December 31, 2023, 10% of net sales until such time as the aggregate amount paid to the Representative under this clause (c) and clause (b) above equal $3,600. In the event of an acquisition of the Company, the Company will pay the Representative $3,600 less previous amounts paid pursuant to clause (b) and clause (c) above. The Company recorded a charge of $1,000 for the payment to the Representative in the fourth quarter of 2022 and expensed the $85 per month charges as incurred over the six-month period. For payments under clause (b) and clause (c) above, the Company originally estimated the fair value of the liability using Level 3 hierarchy inputs based on a Monte Carlo simulation of future revenues with a 25% quarterly estimated standard deviation of growth rates and a 10% probability of dissolution, discounted at an estimated discount rate of 15.4%. Based on the Company’s fair value analysis, a total of $2,611 was charged to sales and marketing expense in the statements of operations and comprehensive loss and recorded as accrued commissions in the balance sheets. For subsequent periods, the Company has used a discounted cash flow model with an estimated discount rate of