AURX 10-K
Nuo Therapeutics, Inc. (AURX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
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Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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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, 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.
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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. ☐
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The aggregate market value of voting common equity held by non-affiliates of the registrant, computed by reference to the closing price as reported on the OTC Markets Group for the registrant’s common stock, as of June 30, 2025, the last business day of the registrant’s second fiscal quarter of 2025 was approximately $
As of March 26, 2026, the number of shares outstanding of the registrant’s common stock was
TABLE OF CONTENTS
Special Note Regarding Forward-Looking Statements
Certain statements, other than purely historical information, in this Annual Report on Form 10-K (this "Annual Report") including the section titled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” constitute “forward-looking statements”. Forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “will be,” “will continue,” “will likely result,” “could,” “may” and words of similar import. These statements reflect the current view of future events by Nuo Therapeutics, Inc. ("Nuo", the "Company", "we", "our", "us") and are subject to certain risks and uncertainties as noted in this Annual Report and in other reports filed by the Company with the Securities and Exchange Commission (the “SEC”), including Forms 8-K and 10-Q. These risks and uncertainties include, among others, the following:
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our limited revenue base and sources of working capital; |
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our limited operating experience; |
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our ability to continue as a going concern; |
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the dilutive impact of raising additional equity or debt; |
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our ability to timely and accurately report our financial results and prevent fraud if we are unable to maintain effective disclosure and internal controls; |
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acceptance of our product by the medical community and patients; |
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our ability to obtain adequate reimbursement from third-party payors; |
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our ability to contract with healthcare providers; |
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our reliance on several single source suppliers and our ability to source raw materials at affordable costs; |
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our ability to protect our intellectual property; |
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our compliance with governmental regulations; |
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our ability to successfully sell and market the Aurix System; |
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our ability to attract and retain key personnel, including both of our executive officers; |
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our ability to perform under and realize sales and related benefits from our distribution agreement with Smith+Nephew as well as its ability to market and sell its private label Aurix product; |
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the fees, minimum purchase commitments, and expenses and costs associated with our distribution agreement with Smith+Nephew; |
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the impact of and our ability to undertake any license of our Aurix product, or receive and negotiate a business combination offer, due to the binding notification and negotiation rights we have provided to Smith+Nephew; and |
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our ability to successfully pursue strategic collaborations to help develop, support, or commercialize our current and future products. |
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements.
In addition to the risks identified under the heading “Item 1A. Risk Factors” in this Annual Report and the other filings referenced above, other sections of this report may include additional factors which could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business, or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Except as may be required by applicable law, the Company undertakes no obligation and does not intend to update, revise or otherwise publicly release any revisions to its forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events.
The Company owns or has rights to various copyrights, trademarks and trade names used in its business, including, but not limited to, Aurix®. This Annual Report also includes discussions of or references to other trademarks, service marks, and trade names of other companies, including, but not limited to, the Angel Whole Blood Separation System®. Other trademarks and trade names appearing in this Annual Report are the property of the holder of such trademarks and trade names.
Corporate Overview
Nuo Therapeutics, Inc. is a Delaware corporation organized in 1998 under the name Informatix Holdings, Inc. In 1999, Autologous Wound Therapy, Inc., an Arkansas Corporation, merged with and into Informatix Holdings, Inc. and the name of the surviving corporation was changed to Autologous Wound Therapy, Inc. In 2000, Autologous Wound Therapy, Inc. changed its name to Cytomedix, Inc. (“Cytomedix”). In 2001, Cytomedix, filed for bankruptcy, from which it emerged in 2002 under a Plan of Reorganization.
In September 2007, Cytomedix received Section 510(k) clearance from the U. S. Food and Drug Administration (“FDA”) for the AutoloGel™ System, now known as the Aurix System (“Aurix”), for processing peripheral blood into an autologous platelet rich plasma ("PRP") for wound management .
In 2010, Cytomedix acquired the Angel Whole Blood Separation System from Sorin Group USA, Inc. In 2012, Cytomedix, acquired Aldagen, Inc. (“Aldagen”), a privately held developmental cell-therapy company. Aldagen remains a non-operational, wholly owned subsidiary of the Company.
In 2014, Cytomedix changed its name to Nuo Therapeutics, Inc. In 2016, the Company filed for and emerged from bankruptcy under Chapter 11. Effective May 1, 2019, the Company furloughed its remaining employees and ceased standard operational activities as it awaited developments concerning its reconsideration request with the Centers for Medicare & Medicaid Services (“CMS”) regarding Medicare coverage for Aurix.
In April 2021, CMS issued a favorable National Coverage Determination (“NCD”) for autologous PRP products and the Company restarted business activities in October 2021. The Company's principal offices are located in Houston, Texas.
Our Business and Product
We are a commercial-stage medical device company focused on developing and marketing products for chronic wound care primarily within the U.S. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous (i.e., from self, the patient’s own) biological therapies for tissue repair and regeneration is part of a clinical strategy designed to improve long-term recovery in inherently complex chronic conditions with significant unmet medical needs.
Our only significant current commercial offering consists of a point of care technology for the separation of autologous blood to produce a platelet-based therapy for use in the chronic wound care market. This offering is known as “Aurix” or the “Aurix System”. The FDA cleared the Aurix System for marketing in 2007 as a device under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Aurix is one of three platelet derived products cleared by the FDA for chronic wound care use and can be used for most exuding wounds. The advanced wound care market, within which Aurix competes, is composed of advanced wound care dressings, wound care devices, and wound care biologics, and was estimated to be an approximately $10.8 billion global market in 2021 with the North American market estimated at approximately $4.15 billion in 2020. Estimates remain that 1-2% of the population in the developed countries will suffer from a chronic wound at least once in their lifetime. According to the National Institute of Health, treatment of diabetic foot ulcers cost an estimated $9-$13 billion annually in the U.S. alone. An aging population and the still increasing prevalence of diabetes suggests a continued increase in the patient population at risk of developing chronic, non-healing wounds.
The Aurix System produces a platelet rich plasma (“PRP”) gel at the point of care using the patient’s own platelets and plasma sourced from a small draw of peripheral blood. The Aurix PRP comprises a natural, endogenous complement of protein and non-protein signal molecules that are believed to contribute to effective healing. During treatment, the patient’s platelets are activated and release hundreds of growth factor proteins and other signaling molecules that form a biologically active hematogel. Aurix delivers concentrations of the natural complement of cytokines, growth factors and chemokines that are known to regulate angiogenesis (i.e., the development of new blood vessels), cell growth, and the formation of new tissue. Once applied to the prepared wound bed, the biologically active Aurix hematogel is thought to work by restoring the balance in the wound environment to transform a non-healing wound to a wound that heals naturally.
In 2012, a Medicare National Coverage Determination (“NCD”) from CMS reversed a twenty-year old non-coverage decision for autologous blood derived products used in wound care. This NCD allowed for Medicare coverage under the Coverage with Evidence Development (“CED”) program. CED programs have been selected for a variety of other therapies, including transcatheter aortic valve repair and cochlear implantation. Under a CED program, CMS provides reimbursement for items or services on the condition that they be furnished in approved clinical protocols or in the collection of additional clinical data. Due to CED program, a facility treating a patient with Aurix was reimbursed by Medicare when health outcomes data were collected to inform future coverage decisions. The intent of the CED program was to evaluate the outcomes of Aurix therapy for the broader Medicare population when it is used in a “real world” continuum of care.
In May 2019, we transmitted a letter memorandum to CMS’ Coverage and Analysis Group (“CAG”) in support of our completed formal request for reconsideration of the then existing national coverage determination based on the clinical data collected and published under the CED program. The completed formal public request for reconsideration was made on May 8, 2019.
In April 2021, CMS issued a final coverage decision memo indicating that Medicare would nationally cover autologous PRP for the treatment of chronic non-healing diabetic wounds for individual patients' care for a duration of 20 weeks under Section 1862(a)(1)(A) of the Social Security Act. This coverage applies when using devices whose FDA-cleared indications include the management of exuding cutaneous wounds, such as diabetic ulcers. Coverage of autologous PRP beyond 20 weeks for diabetic foot ulcers and for the treatment of all other chronic, non-diabetic, non-healing wounds is determined by local Medicare Administrative Contractors ("MACs").
Although the FDA cleared the Aurix System for marketing for wound care management in 2007 under Section 510(k) of the FDCA, economically viable reimbursement in the commercial market for the product only became viable with CMS's issuance of the NCD in 2021. For 2026, the CMS national average reimbursement rate for the Aurix System is $2,108 per treatment in place of service ("POS") 22 (hospital outpatient departments), which we believe provides appropriate payment to facilities for product usage. We submitted public comments to CMS as part of its annual rule-making procedures under the Physician Fee Schedule ("PFS") for payments to clinicians in primarily POS 11 (physician offices) in both 2023 and 2024. In November 2024, CMS issued its final PFS for calendar 2025 and established a national average payment of $890. In response to this final rule which removed the payment amount discretion from the MACs within POS 11, the Aurix System became economically viable within the physician office care setting effective January 1, 2025. For 2026, the CMS national average reimbursement rate for the Aurix System is $1,064 per treatment in POS 11 (private offices).
Our Strategy and Market
Our current commercial focus is to continue engaging and establishing relationships with providers treating chronic non-healing wounds to demonstrate the clinical benefits we believe result from the use of Aurix in the treatment of complex wounds. Increasing physician awareness of the differentiating attributes of Aurix will be key to establishing a base of product revenues upon which to grow. We anticipate developing these relationships with clinical providers and treatment facilities primarily by establishing a variety of distributor and sales agent arrangements throughout the United States and internationally. Our commercial team consists of four senior employees who are leveraging their current and historical relationships to establish additional third-party sales arrangements.
Following the restart of our business activities in October 2021, commercially available Aurix product first became available in May 2022 for demonstration and evaluation purposes. While limited initial commercial revenues were recorded during the second half of 2022, product adoption has consistently increased with product revenues of approximately $1.4 million in 2024 increasing to approximately $3.1 million in 2025, and we expect revenues will continue growing in the future.
As of December 31, 2025, we had established contractual relationships with more than 200 third-party entity and individual representatives. The number of sales agent representatives may continue to expand modestly in the months ahead, but the current focus is broadening commercial customer relationships with wound care providers operating in private office settings while continuing to engage with hospitals and hospital systems regarding expanded POS 22 usage while ensuring that the reimbursement mechanisms are appropriately administered by the local Medicare Administrative Contractors in support of the April 2021 NCD.
Distribution Agreement with Smith+Nephew
On March 31, 2025, we entered into a Distribution Agreement (the “Distribution Agreement”) with a U.S. affiliate of Smith & Nephew PLC (“Smith+Nephew”), a global medical technology company. Under the Distribution Agreement, we supply to Smith+Nephew its own private label of our Aurix product. Although Smith+Nephew will be the sole and exclusive distributor in the United States of a private label Aurix product (the “Private Label product”), we have the ability and will continue to market, distribute, and sell our own Aurix branded product.
Under the Distribution Agreement, Smith+Nephew will purchase Private Label product from us from time to time at agreed upon transfer pricing and we shall manufacture, package, and ship the Private Label product to Smith+Nephew’s customers in accordance with purchase orders and the Distribution Agreement. During the initial term of the Distribution Agreement commencing on the date of first commercial sales in October 2025, minimum annual purchase commitments will apply to Smith+Nephew of an average of approximately $500,000 per year for Smith+Nephew to maintain exclusive distribution rights.
As consideration for entering into the Distribution Agreement, Smith+Nephew paid us an upfront distribution fee of $1,500,000 for distribution rights and we are also eligible to be paid by Smith+Nephew an additional $750,000 in fees based on our establishment and maintenance of reimbursement in certain categories for the Aurix and the Private Label products. These fees will be refundable to Smith+Nephew on a pro rata basis for the unexpired initial term of the Distribution Agreement if we do not comply with certain terms and conditions.
The Distribution Agreement is for an initial term of five years and is renewable for additional two-year terms subject to earlier termination in accordance with the terms and conditions of the agreement. Although the Distribution Agreement is exclusive to Smith+Nephew in the United States, we are entitled to maintain our existing distributors and increase our sales agent network for the Aurix product. The Distribution Agreement also contains other standard and negotiated terms and conditions including non-solicitation of each party’s customers based on identified customer lists, and liability and indemnity clauses.
The Science Underlying Aurix and Platelet Rich Plasma
Normal Wound Healing
The science underlying wound healing is well-established. An immediate early event critical for wound healing is the influx of platelets to the wound site. Platelets bind to elements within damaged tissue such as collagen fragments and endogenous thrombin molecules and are activated to release a diversity of growth factors and other biomolecules from their alpha and dense granules (Reed 2000, Nieswandt, 2003). These biomolecules provide signals essential for biological responses regulating hemostasis and effective tissue regeneration.
Chronic Wounds
Dysregulation of cellular and biological responses contribute to the chronic wound phenotype. Chronic wounds have reduced levels of growth factors and concomitant decreases in cellular proliferation (Mast 1996). There is increased cellular senescence (Telgenhoff 2005), and there generally is a lack of perfusion that can inhibit the delivery of nutrients and cells required for regeneration (Guo 2010). As the body attempts to stave off infection, elevated concentrations of free radicals accumulate in the chronic wound and further damage surrounding tissue (Moseley 2004, James 2003).
Aurix Therapy
Aurix has been cleared by FDA for marketing with an indication for wound management including such chronic wounds as leg ulcers, pressure ulcers, and diabetic ulcers and other exuding wounds such as mechanically or surgically debrided wounds. The Aurix therapeutic is formed by mixing a sample of a patient’s platelets and plasma with pharmaceutical grade thrombin and ascorbic acid. The thrombin activates platelets while ascorbic acid drives the synthesis of high tensile strength collagen, clears damaging free radicals and controls gel consistency. The topical dermal application of Aurix gel bypasses the lack of local perfusion to provide immediate signals for new tissue formation and ultimately healing.
The Efficacy of Aurix Relates to Biological Activity Released by Platelets
Regenerative Capacity
More than 300 proteins are released by human platelets in response to thrombin activation (Coppinger 2004). Important examples include vascular endothelial cell growth factor (“VEGF”), platelet derived growth factor (“PDGF”), epidermal growth factor (“EGF”), fibroblast growth factor (“FGF”) and transforming growth factor-beta (“TGF-B”) (Eppley 2004, Everts 2006). These proteins are critical for organized wound healing, regulating responses such as vascularization, cell proliferation, cell differentiation, and deposition of new extracellular matrix (Goldman 2004). Platelets also release chemokines such as Interleukin-8 (“IL-8”), stromal cell derived factor-1 (“SDF-1”), and platelet factor-4 (“PF-4”) (Chatterjee 2011, Gear 2003) that control the mobilization and migration of stem cells and fibroblasts (Werner 2003 and Gillitzer 2001), which contribute to tissue regeneration.
Anti-infective Activity
The bioburden population in chronic wounds varies over time and wounds invariably retain or become re-infected with some level of bacteria that is detrimental to healing (Howell-Jones 2005). In addition to regenerative capacity, platelets release anti-microbial peptides effective against a broad range of pathogens including Methicillin Resistant Staphylococcus Aureus (“MRSA”) (Moojen 2007, Jia 2010, Tang 2002, Bielecki 2007).
Clinical Efficacy
Multiple efficacy and effectiveness studies have been published in peer reviewed journals documenting the impact of using Aurix to treat chronic wounds, available as part of the reconsideration review by CMS in establishing the NCD, including the following:
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In the published study of the clinical data collected during the CED program for diabetic foot ulcers, Aurix demonstrated a significant time to heal advantage compared to wounds treated with usual and customary care (including any available advanced therapy). A higher percentage of healing was observed across all wound severities (Wagner Grade 1-4) and in a patient population with significant comorbidities. (Gude W, Hagan D, Abood F, Clausen P: Aurix Gel is an Effective Intervention for Chronic Diabetic Foot Ulcers: A Pragmatic Randomized Controlled Trial. Advances in Skin and Wound Care, 2019; 32(9): 416-426.) |
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In a double blinded randomized controlled trial, 81% of the most common-sized diabetic foot ulcers healed with Aurix compared with 42% of control wounds. Mean time to healing was six weeks. (Driver V, Hanft J, Fylling, C et al.: A Prospective, Randomized, Controlled Trial of Autologous Platelet-Rich Plasma Gel for the Treatment of Diabetic Foot Ulcers. Ostomy Wound Management, 2006; 52(6): 68-87.) |
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In 285 chronic wounds in 200 patients, 96.5% of the wounds had a positive response within an average of 2.2 weeks with an average of 2.8 Aurix treatments (de Leon J, Driver VR, Fylling CP, Carter MJ, Anderson C, Wilson J, et al.: The Clinical Relevance of Treating Chronic Wounds with an Enhanced Near-physiological Concentration of Platelet-Rich Plasma (PRP) Gel. Advances in Skin and Wound Care, 2011; 24(8), 357-368.) |
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In a retrospective, longitudinal study of 40 Wagner grade II through IV diabetic foot ulcers, most with critical limb ischemia, wounds increased in size in the approximate 100 days prior to the initiation of comprehensive wound care treatment. Upon treatment with debridement, revascularization, antibiotics and off-loading, the wounds continued to increase in size over a subsequent 75-day period. Once they were then treated with Aurix, the wounds immediately changed healing trajectory and 83% of the wounds healed with an average of 6.1 Aurix treatments per wound (Sakata, J., Sasaki, S., Handa, K., et al. A Retrospective, Longitudinal Study to Evaluate Healing Lower Extremity Wounds in Patients with Diabetes Mellitus and Ischemia Using Standard Protocols of Care and Platelet-Rich Plasma Gel in a Japanese Wound Care Program. Ostomy Wound Management, 2012; 58(4):36-49.) |
Customer Concentration
Our revenues are derived from the sale of the Aurix product to customers consisting primarily of hospital outpatient wound care clinics and private practice physicians treating chronic wounds and sales of the Private Label products to Smith+Nephew. Total product revenues increased to approximately $3.1 million for the year ended December 31, 2025 versus approximately $1.4 million for the year ended December 31, 2024 while total 2025 revenues were approximately $3.3 million including the distribution fee revenues recognized under the Distribution Agreement.
Licenses and Intellectual Property Rights
Nuo relies on a combination of trademarks, trade secrets, copyright laws as well as confidentiality agreements, contractual provisions, and other similar measures, to establish and protect its business interests.
Government Regulation
Government authorities in the U.S., Canada, the European Union, and other countries extensively regulate pharmaceutical products, biologics, and medical devices. The Company’s products and product candidates are subject to approval or clearance by the governing bodies prior to and during the marketing and distribution of a product. Regulatory requirements apply to, but are not limited to, research and development, safety and efficacy, clinical studies, manufacturing, labeling, distribution, advertising and marketing, and the import and export of products. Before a product candidate is cleared or approved by the governing bodies for commercial marketing, rigorous preclinical and human clinical testing may be necessary to determine the safety and efficacy or effectiveness of the product. If the Company fails to comply with the applicable laws and regulations at any time during the product development process, approval, or clearance process, or during commercialization, it may become subject to administrative penalties, injunction or criminal prosecution. These sanctions may include, but are not limited to, refusal to approve or clear pending applications, withdrawals of approvals, clinical holds, warning letters, product recalls, product seizures, total or partial suspension of the Company’s operations, injunctions, fines, civil penalties and/or criminal prosecution. Any enforcement action could have a material adverse effect on the Company.
Medical Device Regulation
The Company reinitiated manufacture and available commercial distribution of the Aurix System in May 2022. As such, this and future products manufactured and/or distributed by the Company may be subject to regulations by the applicable governing bodies, including but not limited to, the FDA, Health Canada, the European Medicines Agency, the Japanese Ministry of Health & Welfare, and other regulatory agencies. Each of the foreign governing bodies noted above serves a comparable function as the FDA. As such, the Company and its products and product candidates are subject to the regulations enforced by these regulatory bodies and other entities. These regulations include, but are not limited to, product clearance, documentation requirements, good manufacturing practices, quality systems regulation, and medical device reporting. Labeling and promotional activities are also subject to regulation by the U.S. Federal Trade Commission, in certain circumstances. Current enforcement policies prohibit the marketing of cleared or approved medical devices for unapproved uses. The labeling and advertising of medical devices are reviewed by various government bodies to ensure that unapproved uses are not promoted. Before a new medical device can be introduced to the market, the manufacturer must obtain clearance or approval from the applicable regulatory agency, depending upon the device classification. In the U.S., medical devices are classified into one of three classes — Class I, II, or III. In the U.S., Class I devices are non-critical products that the FDA believes can be adequately regulated by “general controls” which include provisions relating to labeling, manufacturer registration, defect notification, records and reports, and the FDA’s Quality Systems Regulations. Most Class I devices are exempt from pre-market notification. Class II devices are products for which the general controls of Class I devices, by themselves, are not sufficient to assure safety and effectiveness and, therefore, require additional controls. Additional controls for Class II devices may include performance standards, post-market surveillance patient registries, pre-market clearance through the Section 510(k) notification system, and the adherence to FDA guidance. Standards may include both design and performance requirements. Class III devices have the most restrictive controls and require pre-market approval by the FDA. All of the governing bodies with responsibility over the Company’s products have the ability to inspect medical device manufacturers, order recalls of medical devices in some circumstances, seize non-complying medical devices, and pursue prosecution of either civil or criminal violations.
For most class II devices, Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) requires individuals or companies manufacturing medical devices intended for human use to file a notice with the FDA at least ninety days before intending to introduce the device into the market. This notice, commonly referred to as a 510(k) premarket notification, must identify the type of classified device into which the product falls, the class of that type, and a specific product already being marketed or cleared by the FDA and to which the product is “substantially equivalent.” In some instances, the 510(k) must include data from human clinical studies to establish “substantial equivalence.” The FDA must agree with the claim of “substantial equivalence” before the device can be marketed. The statutory time frame for clearance of a 510(k) is ninety days, though it often takes longer. Nuo currently only markets a product that is subject to, and has obtained, 510(k) clearance.
The Aurix System consists of the Aurix Wound Dressing Kit, Aurix Reagent Kit, and Aurix System Centrifuge II. Each component of the Aurix System is a legally marketed product that has been cleared or approved by the FDA. The Aurix System Centrifuge II, when used with the Aurix Wound Dressing Kit and Aurix Reagent Kit, are suitable for use on exuding wounds such as leg ulcers, pressure ulcers and diabetic ulcers, and for the management of mechanically or surgically debrided wounds.
As a specification developer, manufacturer, and distributor of medical devices, the Company is required to comply with other regulations and standards, such as the FDCA and implementing regulations set forth in 21 CFR et seq. and also ISO 13485. As a manufacturer and distributor of medical devices, the Company, and in some instances its subcontractors, is required to register its facilities and products manufactured annually with the appropriate governing bodies and certain state agencies. Additionally, the Company is subject to periodic inspections by the governing bodies to assess compliance with quality regulations. Facilities may also be subject to inspections by other federal, foreign, state, or local agencies. Accordingly, manufacturers such as the Company must continue to expend time, money, and effort around production and quality control to maintain compliance with quality systems and ISO 13485 and other aspects of regulatory compliance.
Fraud and Abuse Laws
The Company may also be indirectly subject to federal and state anti-kickback and physician self-referral laws. Federal physician self-referral legislation (commonly known as the Stark Law) prohibits, subject to certain exceptions, physician referrals of Medicare and Medicaid patients to an entity providing certain designated health services (“DHS”) if the physician or an immediate family member has a financial relationship with the entity. The Stark Law also prohibits the entity receiving the referral from billing any good or service furnished pursuant to an unlawful referral, and any person collecting any amounts in connection with an unlawful referral is obligated to refund such amounts. CMS has issued numerous regulations containing exceptions to the prohibitions of the Stark Law. If a physician and a DHS entity have financial relationship subject to the Stark Law, then an exception must be met or else the DHS entity cannot bill for the service. A person who engages in a scheme to circumvent the Stark Law’s referral prohibition may be fined up to $100,000 for each such arrangement or scheme. The penalties for violating the Stark Law also include civil monetary penalties of up to $15,000 per referral and possible exclusion from federal health care programs such as Medicare and Medicaid. Violations of the Stark Law have also been the basis for False Claims Act actions, discussed below. Various states have corollary laws to the Stark Law (so-called “baby Stark” laws), including laws that require physicians to disclose any financial interest they may have with a health care provider to their patients when referring patients to that provider. Both the scope and exception for such laws vary from state to state.
The Company may also be subject to federal and state anti-kickback laws. Section 1128B(b) of the Social Security Act, commonly referred to as the Anti-Kickback Law, prohibits persons from knowingly and willfully soliciting, receiving, offering or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or the furnishing, recommending, or arranging for a good or service, for which payment may be made under a federal health care program, such as Medicare and Medicaid. The Anti-Kickback Law is broad, and it prohibits many arrangements and practices that are otherwise lawful in businesses outside of the health care industry. The Office of the Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“DHHS”) has issued regulations, commonly known as “safe harbors” that set forth certain provisions which, if fully met, will assure health care providers and other parties that they will not be prosecuted under the federal Anti-Kickback Law. Although full compliance with these provisions ensures against prosecution under the Anti-Kickback Law, the failure of a transaction or arrangement to fit within a specific safe harbor does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the federal Anti-Kickback Law will be pursued. As with the Stark Law, violations of the Anti-Kickback Law can result in a False Claims Act action. Many states have adopted laws similar to the federal Anti-Kickback Law, and some of these state prohibitions apply to patients for health care services reimbursed by any source, not only federal health care programs such as Medicare and Medicaid.
In addition, there are other U.S. health care fraud laws to which the Company may be subject that prohibit knowingly and willfully executing or attempting to execute a scheme or artifice to defraud any health care benefit program, including private payers (“fraud on a health benefit plan”) and that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of or payment for health care benefits, items or services. These laws apply to any health benefit plan, not just Medicare and Medicaid.
The Company may also be subject to other U.S. laws that prohibit submitting, or causing to be submitted, claims for payment or causing such claims to be submitted that are false. Violation of these false claims’ statutes may lead to civil money penalties, criminal fines and imprisonment, and/or exclusion from participation in Medicare, Medicaid and other federally funded state health programs. These statutes include the federal False Claims Act, which prohibits the knowing filing of a false claim (or causing the submission of a false claim) or the knowing use of false statements to obtain payment from the U.S. federal government. Under provisions of the Affordable Care Act, the failure to report and refund an overpayment to the Medicare or Medicaid programs within 60 days of the identification of the overpayment may also be an obligation subjecting the defendant to a False Claims Act action. Finally, a recent U.S. Supreme Court case, Universal Health Services v. United States ex rel. Escobar, upheld the “implied false certification” theory under which a defendant submits a claim for payment that makes a specific representation about the goods or services provider, but fails to disclose the defendant’s noncompliance with a statutory, regulatory, or contractual requirement that would be material to the Government’s payment decision. When an entity is determined to have violated the False Claims Act, the entity must pay three times the actual damages sustained by the government, plus mandatory civil penalties. Suits filed under the False Claims Act can be brought by an individual on behalf of the government (a “qui tam action”). Such individuals (known as “qui tam relators”) may share in the amounts paid by the entity to the government in fines or settlement. In addition, certain states have enacted laws modeled after the False Claims Act. “Qui tam” actions have increased significantly in recent years causing greater numbers of health care companies to have to defend false claim actions, pay fines or be excluded from the Medicare, Medicaid or other federal or state health care programs as a result of an investigation arising out of such action.
Several states also have referral, fee splitting and other similar laws that may restrict the payment or receipt of remuneration in connection with the purchase or rental of medical equipment and supplies. State laws vary in scope and have been infrequently interpreted by courts and regulatory agencies but may apply to all health care products and services, regardless of whether Medicaid or Medicare funds are involved.
Employees
The Company had 10 full-time employees as of December 31, 2025 which are all compensated as salaried employees. None of the Company’s employees is covered by a collective bargaining agreement or represented by a labor union. The Company considers its employee relations to be good.
Research and Development
During the years ended December 31, 2025 and 2024, we incurred no significant costs for research and development activities.
Competition
While Aurix faces competition in the chronic wound care market from any other FDA cleared platelet derived products, we also face competition from pharmaceutical companies, biopharmaceutical companies, medical device companies, and other competitors in the areas of advanced wound care dressings, wound care devices, and wound care biologics. As described above, Smith+Nephew is the exclusive distributor of a Private Label product of Aurix. Smith+Nephew’s Private Label Product directly competes with Aurix. Leading companies in the advanced wound care market also include 3M, MoInlycke, and ConvaTec. Leading competitors in the wound care market that offer other biologic products such as tissue-based products include companies such as MiMedx, Organogenesis, Integra Life Sciences, as well as a significant number of smaller companies. While we believe that Aurix can compete favorably based on broad application across multiple wound etiologies, we expect that many physicians and allied professionals will continue to employ other treatment approaches and technologies, separately and in combination, in an attempt to treat chronic and hard-to heal wounds. The chronic wound market has many therapies that compete with Aurix that have established habitual use patterns and provider contracts to encourage standardized use. Furthermore, other companies have developed or are developing products that could be in direct future competition with our current product line. We may not be able to compete effectively against such companies. Many of these companies have substantially greater capital resources, larger marketing staff and more experience in commercializing products than we do. See “Item 1A. Risk Factors – Risks Relating to Our Business, Industry, and Regulatory Approval of Our Product - Our Product Has Existing Competition in the Marketplace.”
Suppliers and Manufacturing
Historically, we have used single suppliers for several components of the Aurix product line. We outsource the manufacturing of various product components to contract manufacturers. While most of the components of Aurix are generally readily available on the open market, the bovine thrombin reagent component used for our Aurix product is available exclusively through Pfizer, with whom we have an existing supply agreement. Pfizer may unilaterally raise the price for the reagent. Furthermore, we have historically sourced Aurix’s ascorbic acid reagent component from a single supplier but have now established dual supply of this component. While we believe our supply manufacturers demonstrate competency, reliability and stability, there is no assurance that one or more of them will not experience an interruption or inability to provide us with the products needed to satisfy customer demand. If a temporary or permanent interruption in the supply of a reagent used in Aurix were to occur, or the manufacturing costs exceed what we can reasonably afford, it could have a material adverse effect on our business.
Available Information
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. We also make available through our website at www.nuot.com our annual reports on Form 10-K, our quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have filed it electronically with, or furnished it to, the SEC. Information appearing on, and accessible through, our website is not part of this Annual Report.
An investment in the Company involves a high degree of risk. Before making an investment decision with respect to our common stock, you should consider the risks described below in addition to the cautionary statements and risks described elsewhere and the other information in this Annual Report and in our other filings with the SEC, including subsequent reports on Forms 10-Q and 8-K. The risks described below may not be the only risks the Company faces. Additional risks not yet known or currently believed to be immaterial may also impair our business. If any of these known or unknown risks or uncertainties actually occurs, our business, financial condition or results of operations could suffer and our common stock could be adversely impacted, resulting in a loss of part or all of your investment.
Risks Related to Our Financial Position
Our Revenue Base Is Limited to a Single Product Seeking Market Adoption.
Our current revenue base is limited to our Aurix product, including the Private Label product. Our revenue from Aurix and the Private Label product has been limited to date. We have a history of losses and are not currently profitable. For the year ended December 31, 2025, we incurred a net loss of approximately $2.5 million. Even if we succeed in increasing our revenue, we may incur losses and negative operating cash flows in the immediate future. We may never generate sufficient revenues to achieve and maintain profitability.
We May Need Additional Financing and our Ability to Successfully Affect Such Financing Could Be Limited.
Historically, we have financed our operations through a combination of the sale of debt, equity and equity-linked securities, licensing, royalty, and product revenues. Until we can generate a sufficient amount of revenues to finance our cash requirements, which we may never do, we need to finance future cash needs. It is uncertain whether we will be able to obtain such financing on satisfactory terms or at all.
If adequate capital cannot be obtained on a timely basis and on satisfactory terms, it would have a material adverse effect on our ability to implement our business plan, and our revenues and operations and the value of our common stock would be materially and negatively impacted, and we may be forced to curtail or cease our operations.
We Have a Limited Operating History and Limited Operating Experience.
We only began re-implementing our commercialization strategy for Aurix in the second half of 2022. Thus, we still have a limited operating history. Continued operating losses, together with the risks associated with our ability to gain new customers for Aurix, may have a material adverse effect on our liquidity. We may also be forced to respond to unforeseen difficulties, such as decreased demand for our products and services, downward pricing trends, regulatory requirements, and unanticipated market pressures.
Our Financial Position Creates Doubt as to Whether We Will Continue as a Going Concern.
For the years ended December 31, 2025 and 2024, the Company had a net loss of approximately $2.5 million and $2.3 million, respectively. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain funding from additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. It is uncertain whether we will be able to obtain such financing on satisfactory terms or at all. Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise substantial additional funds in order to continue to conduct our business. If we are unable to increase our revenues to secure sufficient capital to fund our operating activities, we may be forced to delay the completion of, or significantly reduce the scope of, our current business plan, delay the pursuit of commercial payor insurance reimbursement for our wound treatment product, and/or postpone the hiring of new personnel.
We May Issue Additional Equity or Debt Securities Which Will Likely Dilute and May Materially and Adversely Affect the Price of our Common Stock.
Additional issuance of our common stock or other equity or convertible debt securities will likely dilute the ownership interests of our stockholders. Sales of substantial amounts of shares of our common stock in the public market, or the perception that those sales may occur, could negatively affect the market price of our common stock. We have used, and will likely continue to use, our common stock or securities convertible into or exchangeable for common stock to fund working capital needs or to acquire technology, product rights or businesses, or for other purposes. If additional equity and/or equity-linked securities are issued, particularly during times when our common stock is trading at relatively low-price levels, the price of our common stock may be materially and adversely affected.
We May Not Be Able to Timely and Accurately Report our Financial Results or Prevent Fraud If We Are Unable to Maintain Effective Disclosure and Internal Controls.
Effective disclosure controls and procedures and internal control over financial reporting is necessary for us to provide reliable financial reports in a timely manner. Our management concluded there was a material weakness in our internal control over financial reporting as of the period covered by this Annual Report. Although we have taken steps to remediate such weakness, the material weakness cannot be considered remediated until the controls operate for a sufficient period of time and management concludes that our internal controls are operating effectively. While we believe that our intended remediation efforts will resolve the identified material weakness, there is no assurance that such efforts will be sufficient or that additional actions will not be necessary, which may undermine our ability to provide timely, accurate and reliable reports on our financial and operating results. Further, if we remediate our current material weakness but identify new material weaknesses in our internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the value of our common stock may be negatively affected. As a result of such failures, we could also become subject to investigations by the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our business.
Risks Related to Our Business, Industry and Regulatory Approval of Our Product
The Success of Aurix Is Dependent on Acceptance by the Medical Community.
The commercial success of our product will depend upon the medical community and patients accepting the therapies as safe and effective. It will also depend on our success introducing the Aurix product within the broad chronic wound market and encouraging provider evaluation and adoption of Aurix in the context of pre-existing wound treatment clinical practice.
Furthermore, the willingness of the medical community to accept or evaluate our products and processes may be impacted by the medical community’s acceptance of the quality of the clinical information that was collected and published as a result of the CED process. If the medical community and patients do not ultimately accept the therapies as safe and effective, or we are unable to raise awareness of our products and processes, our ability to sell our product may be materially and adversely affected, and the results of our operations may be adversely affected.
The Successful Commercialization of the Aurix System Will Depend on Obtaining Reimbursement from Third-Party Payors.
In the U.S., the market for any pharmaceutical or biologic product is affected by the availability of reimbursement from third-party payors, such as government health administration authorities, private health insurers, health maintenance organizations and pharmacy benefit management companies. If we cannot demonstrate favorable outcomes or a cost-benefit relationship, we may have difficulty obtaining adequate coverage or reimbursement for our products from these payors. Third-party payors may also deny coverage for our product if they determine that the product is experimental, unnecessary, or inappropriate. Coverage and reimbursement are often determining factors in predicting a product’s success, with some physicians and patients strongly favoring only those products for which they will be reimbursed.
The Aurix System is marketed to healthcare providers. Some of these providers, in turn, seek reimbursement from third-party payors such as Medicare, Medicaid, and other private insurers. While we have established Medicare coverage of Aurix through the NCD reconsideration, we may not be successful with our complete reimbursement strategy, including, without limitation, obtaining any additional regulatory approvals.
Should we pursue commercialization internationally, we would be subject to international regulations, where the pricing of prescription pharmaceutical products and services and the level of government reimbursement may be subject to governmental control. In some countries, pricing negotiations with governmental authorities can take six to twelve months or longer after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct one or more clinical trials that compare the cost effectiveness of our product or product candidates to other available therapies. Conducting one or more of these clinical trials would be expensive and result in delays in the commercialization of our current and future products.
Managing and reducing healthcare costs has become a major priority of federal and state governments in the U.S. As a result of healthcare reform efforts, we might become subject to future regulations or other cost-control initiatives that materially restrict the price we can receive for our current and future products. Third-party payors may also limit access and reimbursement for newly approved healthcare products generally or limit the indications for which they will reimburse providers or suppliers who use any products that we may develop. Cost control initiatives could decrease the price for any products that we may develop, which would result in lower product revenues to us.
A Disruption in Healthcare Provider Networks Could Have an Adverse Effect on Operations and Profitability.
Our operations and future profitability are dependent, in large part, upon the ability to contract with healthcare providers on favorable terms. In any particular service area, healthcare providers could refuse to contract with us or take other actions that could result in higher healthcare costs or create difficulties in meeting our regulatory requirements. In some service areas, certain healthcare providers may have a significant market presence. If healthcare providers refuse to contract with us, use their market position to negotiate unfavorable contracts or place us at a competitive disadvantage, our ability to market services or to be profitable in those service areas could be adversely affected. Provider networks could also be disrupted by the financial insolvency of a large healthcare provider group. Any disruption in provider networks could adversely impact our business, results of operations and financial condition.
Liquidity Problems or Bankruptcy of our Key Customers or Collaborators Could Have a Significant Adverse Effect on our Business, Financial Condition and Results of Operations.
Our sales to customers are typically made on credit without collateral. There is a risk that key customers will not pay, or that payment may be delayed, because of bankruptcy, contraction of credit availability to such customers, weak sales, or other factors beyond our control, which could increase our exposure to losses from bad debts. In addition, if our key customers were to cease doing business as a result of bankruptcy or significantly reduce their orders from us, it could have a significant adverse effect on our business, financial condition, and results of operations. In addition, if our collaborators face liquidity problems or file for bankruptcy, they may choose to divert resources away from their continued cooperation and engagement with us or otherwise choose or be forced to reduce operations, which could also have a significant adverse effect on our business, financial condition, and results of operation.
We May Be Unable to Attract a Strategic Partner for the Further Development of Potential Future Product Candidates.
Even if positive clinical data is eventually achieved in any future clinical trials, we may not be able to enter into strategic partnerships, licensing, or other similar arrangements that we may consider necessary or appropriate to commercialize product candidates successfully or even have the resources necessary to seek such arrangements. Furthermore, even if such a strategic relationship regarding any of our current and future products or product candidates is reached, development milestones, clinical data, or other such benchmarks may not be achieved. Therefore, our products and product candidates may never proceed toward commercialization or drive cash infusions for us, and we may ultimately not be able to monetize the patents, existing clinical data, and other intellectual property.
Our Limited Number of Staff May Affect our Ability to Conduct our Operations and Other Functions Effectively.
Our future success depends on our ability to attract, retain, and motivate highly skilled management, scientific and sales personnel. As of December 31, 2025, we had only ten full-time employees. Our ability to maintain and provide services to our customers and our ability to provide the necessary support as part of any collaborations depends upon our ability to hire and retain business development and scientific and technical personnel with the skills necessary to keep pace with continuing changes in regenerative biological therapy technologies. Our current liquidity situation makes it unlikely that we will be able to hire additional personnel in the immediate future. Even assuming that we can resolve our immediate liquidity concerns, competition for such personnel is intense; we compete with pharmaceutical, biotechnology and healthcare companies with greater access to resources. Our inability to hire qualified personnel may lead to higher recruitment, relocation, and compensation costs for such personnel. These increased costs may make hiring new key personnel impractical.
We Are Substantially Dependent Upon our Executive Officers.
Our success substantially depends on the continued service of key management, in particular David E. Jorden, our Chief Executive and Financial Officer, and Peter Clausen, our Chief Scientific and Operating Officer. We currently do not maintain key person insurance on Mr. Jorden or Dr. Clausen. The loss of Mr. Jorden or Dr. Clausen, or other key employees or executive officers, could adversely impact our ability to continue operations unless and until a replacement is identified.
We Rely on a Single Supplier for a Reagent Used for Aurix and an Interruption in our Supply Chain for any Reagent of Component Could Have a Material Adverse Effect on our Business.
A reagent used for our Aurix product, bovine thrombin (Thrombin JMI), is available exclusively through Pfizer. Pfizer may unilaterally raise the prices for the reagent. If a temporary or permanent interruption in the supply of the bovine thrombin or any other reagent were to occur, or the manufacturing costs charged by Pfizer or any other current supplier exceed what we can reasonably afford, we would have to seek alternative sources of supply. There is no assurance we would be able to identify a suitable second source of supply or do so without significant delay. Despite our efforts to maintain an adequate supply of inventory, the loss of a supplier or its inability to provide us with an adequate supply of a reagent, could cause delay in the manufacture of our product, thereby impairing our ability to meet the demand of our customers and causing significant harm to our business. Any disruption of this nature or increased expenses could harm our commercialization efforts and adversely affect our operating results.
We Could Be Affected by Malpractice or Product Liability Claims.
Providing medical care entails an inherent risk of professional malpractice and other claims. We do not control or direct the practice of medicine by physicians or health care providers who use our product and do not assume responsibility for compliance with regulatory and other requirements directly applicable to physicians. There is no assurance that claims, suits, or complaints relating to the use of our products, and treatment administered by physicians, will not be asserted against us in the future. The production, marketing and sale, and use of our product entails risks that product liability claims will be asserted against us. These risks cannot be eliminated, and we could be held liable for any damages that result from adverse reactions or infectious disease transmission. Such liability could materially and adversely affect our business, prospects, operating results, and financial condition. We currently maintain professional and product liability insurance coverage, but the coverage limits of this insurance may not be adequate to protect against all potential claims. We may not be able to obtain or maintain professional and product liability insurance in the future on acceptable terms or with adequate coverage against potential liabilities.
Risks Related to Distribution of Our Aurix Product
There Can Be No Assurance that Smith+Nephew Will Be Able to Establish a Market for its Private Label Product.
On March 31, 2025, we entered into a Distribution Agreement with Smith+Nephew, a global medical technology company. Under the Distribution Agreement, we will supply to Smith+Nephew its own Private Label of Aurix System. There is no assurance that Smith + Nephew will find a market for its Private Label product. The amount of sales we receive under the Distribution Agreement will depend in part on the amount of purchase orders that we receive from Smith+Nephew. If Smith+Nephew does not establish a sufficient market for its Private Label product, then our business and operating results and financial condition may be adversely affected.
Fulfilling Purchase Orders under the Distribution Agreement Will Place Demands on our Management and Financial Resources.
While we currently manufacture, package, and ship our Aurix product, we have no history operating as a supplier for a private label product. Establishing and maintaining logistics to supply Private Label product will necessitate that we meet certain deadlines, performance measures and other standards, and compliance and other requirements. This will place demands on our management and financial resources, which may be burdensome particularly for a smaller company like ours. The costs and expenses associated with fulfilling purchase orders resulting from and generally complying with the Distribution Agreement will reduce the resulting income we earn. There can be no assurance that the demands on our management and financial resources related to the Distribution Agreement will not adversely affect our business and operating results and financial condition.
The Existence of a Private Label Alternative to our Aurix Product May Limit the Potential Customers and Sales for our Aurix Product.
A private label arrangement represents an alternative to a supplier’s own branded product. Compared to Nuo, Smith+Nephew is a larger company with more resources and a more substantial number of sales representatives. Further, we will have no direct control over the prices that Smith+Nephew will charge its customers for its Private Label product. Although the Distribution Agreement provides Smith+Nephew with exclusive distribution of a private label Aurix product in the United States, we are entitled to maintain our current distributors for the Aurix product in addition to expanding the number of our sales agents. The existence of a competing distributor and product in the market may adversely affect our ability to increase sales of our own Aurix product.
If Smith+Nephew Determines that Marketing and Sales of its Private Label Product Do Not Meet Its Expectations or Priorities, then Smith+Nephew May Terminate the Distribution Agreement.
If Smith+Nephew determines that marketing and sales of its Private Label product do not meet its expectations or priorities, then Smith+Nephew may terminate the Distribution Agreement. The Distribution Agreement is for an initial term of five years, but Smith+Nephew has the ability to terminate upon 12 months’ notice. If Smith+Nephew determines that sales of its Private Label product do not meet expectation or priorities, or Smith+Nephew otherwise determines not to continue marketing the Private Label product, then Smith+Nephew may terminate the Distribution Agreement. In such an event, we would no longer generate revenues under the Distribution Agreement and our business and operating results and financial condition may be adversely affected.
Our Product Has Existing Competition in the Marketplace and We May Not Be Able to Compete Effectively.
In the market for biotechnology products, we face competition from pharmaceutical companies, biopharmaceutical companies, medical device companies, and other competitors. In addition to the Private Label product and our Distribution Agreement with Smith+Nephew, we will continue to face other competitive forces. The chronic wound market has many therapies that compete with Aurix that have established habitual use patterns and provider contracts to encourage standardized use. Furthermore, other companies have developed or are developing products that could be in direct future competition with our current product line. Biotechnology development projects are characterized by intense competition. Thus, we may not be the first to market with any newly developed products and we may not successfully be able to market these products. If we are not able to participate and compete in the regenerative biological therapy market, our financial condition will be materially and adversely affected. We may not be able to compete effectively against such companies in the future. Many of these companies have substantially greater capital resources, larger marketing staff and more experience in commercializing products than we do. Recently developed technologies, or technologies that may be developed in the future, may be the basis for developments that will compete with our current and future products.
Our Efforts to Secure Commercial Partners May Not Be Successful.
In addition and subject to the Distribution Agreement with Smith+Nephew, from time to time, we may engage in discussions with larger companies regarding potential strategic partnerships involving the broad commercialization of Aurix. The resources and expertise of such a partner would greatly facilitate the capture of market share within the wound care market but would require that the economic benefits of such a broad penetration would be shared with said partner. We may not be successful in securing such a partner. Furthermore, even if a partner is secured, the partnership may not attain the market penetration contemplated, and the profits ultimately realized by us, if any, may not be sufficient to allow us to execute our business strategy. Furthermore, under the Distribution Agreement, we must offer Smith+Nephew certain licensing and distribution rights in connection with improvements to our Aurix product and new products. These rights may prevent or limit our ability to secure an additional strategic partner.
We May Use Third-Party Collaborators and Service Providers to Help Us Support, Develop or Commercialize our Product Candidates, and our Ability to Commercialize Such Candidates May Be Impaired or Delayed if Such Collaborations or Engagements Are Unsuccessful.
In addition and subject to the Distribution Agreement with Smith+Nephew, we may in the future selectively pursue strategic collaborations or engagements for, among other purposes, development, data collection, analysis, and/or commercialization of our product candidates, domestically or otherwise. There can be no assurance as to our ability to utilize the data from such engagements to their potential. Nor can there be any assurance, in general, that we will be able to identify suitable future collaborators or negotiate collaboration agreements on terms that are acceptable to us or at all. In any current or future third-party collaborations, we are and would be dependent upon the success of the collaborators in performing their responsibilities and their continued cooperation and engagement. For a variety of reasons outside of our control, our collaborators or third-party providers may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to performing their responsibilities under our agreements with them. Our collaborators may choose to pursue alternative technologies in preference to those being developed in collaboration with us. The development and commercialization of our product candidates will be delayed if collaborators fail to conduct their responsibilities in a timely manner or in accordance with applicable regulatory requirements or if they breach or terminate their collaboration agreements with us. Disputes with our collaborators could also result in product development delays, decreased revenues and litigation expenses. Furthermore, under the Distribution Agreement, we must offer Smith+Nephew certain licensing and distribution rights in connection with improvements to our Aurix product and new products, as well as additional notification and negotiations rights described above. These rights may prevent or limit our ability to use third-party collaborators and service providers.
If We Are Unable to Maintain and Expand Our Network of Distributors and Sales Agents, We May Not Be Able to Generate Sales.
Our operating results are directly dependent upon the sales and marketing efforts of not only our employees, but also our current independent distributors and sales agents. We face significant challenges and risks in managing our geographically dispersed distribution network and retaining the individuals who make up that network. In addition, the Distribution Agreement with Smith+Nephew provides it with exclusive distribution rights for a private label of our Aurix product and limits our ability to engage new distributors. If certain of our current distributors and sales agents were to cease to do business with us, our sales could be adversely affected. Because of the intense competition for their services, we may be unable to recruit or retain additional qualified sales agents. We may not be able to enter into agreements with them on favorable or commercially reasonable terms, if at all. Failure to engage or retain qualified sales agents would prevent us from maintaining or expanding our business and generating sales.
Risks Related to Government Regulations
Our Product Is Subject to Governmental Regulation.
Our success is also impacted by factors outside of our control. Our current technology and products are subject to extensive regulation by numerous governmental authorities in the U.S., both federal and state, and in foreign countries by various regulatory agencies. Specifically, our product is subject to regulation by the FDA, and state regulatory agencies. The FDA regulates drugs, medical devices, and biologics that move in interstate commerce and requires that such products receive clearance or pre-marketing approval based on evidence of safety and efficacy. The regulations of government health ministries in foreign countries are analogous to those of the FDA in both application and scope. In addition, any change in current regulatory interpretations by, or the positions of, state regulatory officials where our product is used could materially and adversely affect our ability to sell our product in those states. The FDA will require us to obtain clearance or approval of new or modified devices when used for treating specific wounds or marketed with specific wound-healing claims, or for other products under development.
We believe our current product for sale is legally marketed. As we expand and offer and/or develop additional products in the U.S. and in foreign countries, clearance or approval from the FDA and comparable foreign regulatory authorities prior to introduction of any such products into the market may be required. We provide no assurance that we will be able to obtain all necessary approvals from the FDA or comparable regulatory authorities in foreign countries for these products. Failure to obtain the required approvals would have a material adverse impact on our business and financial condition.
Compliance with FDA and other governmental requirements imposes significant costs and expenses. Further, our failure to comply with these requirements could result in sanctions, limitations on promotional or other business activities, or other adverse effects on our business. Further, recent efforts to control healthcare costs could negatively affect demand for our current and future products and services.
We Must Comply with the Physician Payment Sunshine Act.
We are required to comply with the United States Physician Payment Sunshine Act, which requires certain manufacturers of drugs, medical devices, biologicals, and medical supplies that participate in U.S. federal healthcare programs to report certain payments and items of value given to physicians and teaching hospitals. Manufacturers are required to report this information annually to CMS. Manufacturers are required to report aggregate payment data to CMS by the 90th day of each subsequent calendar year. We cannot assure you that we will collect and report all data timely and accurately. If we fail to accurately and timely report this information, we could suffer severe penalties.
Any applicable manufacturer that fails to timely, accurately, or completely report the information required in accordance with the rules of the Sunshine Act is subject to a civil monetary penalty of, as of January 28, 2026, not less than $1,443, but not more than $14,432, for each payment or other transfer of value or ownership or investment interest not reported timely, accurately, or completely (up to $216,490). For “knowing” failures to report, the penalties increase to not less than $14,432, but not more than $144,329, for each such failure (up to $1,443,275). The amount of civil monetary penalties imposed on each applicable manufacturer or applicable group purchasing organization is aggregated separately. Subject to separate aggregate totals, the maximum combined annual total is $1,659,765.
Several of the U.S. states have parallel reporting laws, sometimes accompanied with “gift bans” prohibiting manufacturers from making gifts or other remunerations to prescribers. There also are various penalties associated with noncompliance with the state laws.
Legislative and Administrative Action May Have an Adverse Effect on the Company.
Political, economic, and regulatory influences are subjecting the health care industry in the U.S. to fundamental change. We cannot predict what other legislation relating to our business or to the health care industry may be enacted, including legislation relating to third-party reimbursement, or what effect such legislation may have on our business, prospects, operating results and financial condition. We expect federal and state legislators to continue to review and assess alternative health care delivery and payment systems and possibly adopt legislation affecting further changes in the health care delivery system. Such laws may contain provisions that may change the operating environment for hospitals and managed care organizations. Health care industry participants may react to such legislation by curtailing or deferring expenditures and initiatives, including those relating to our current and future products. Future legislation could result in modifications to the existing public and private health care insurance systems that would have a material adverse effect on the reimbursement policies discussed above. With growing pressures on government budgets, government efforts to contain or reduce health care spending in some way or another are likely to continue. Any measures to restrict health care spending could result in decreased revenue from products and decrease potential returns from any future research and development initiatives. Furthermore, we may not be able to successfully neutralize any lobbying efforts against any initiatives we may have with governmental agencies. In addition to legislative initiatives, we may be subject to changes in current regulations and policies affecting coverage and reimbursement for our current and future products. Administrative agencies such as the Centers for Medicare and Medicaid Services have broad discretion to adopt or modify polices through rulemaking, and adoption of rules that curtail access to our products or limit reimbursement could have a material adverse effect on the adoption of our current and future products by health care providers, which would have a material adverse effect on our business.
Failure to Obtain Regulatory Approval in International Jurisdictions Would Prevent Us from Marketing our Product Abroad.
We may in the future seek to market our product outside the U.S. In order to market our product in the European Union and many other jurisdictions, we must submit clinical data concerning our product and obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval from foreign regulators may be longer than the time required to obtain FDA approval. The regulatory approval process outside the U.S. may include all of the risks associated with obtaining FDA approval. In addition, in many countries outside the U.S., it is required that the product candidate be approved for reimbursement before it can be approved for sale in that country. In some cases, this may include approval of the price we intend to charge for our product, if approved. We may not obtain approvals from regulatory authorities outside the U.S. on a timely basis, or at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the U.S. does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA, but a failure or delay in obtaining regulatory approval in one country may negatively affect the regulatory process in other countries. We may not be able to file for regulatory approvals and may not receive the necessary approvals to commercialize any products in any market and therefore may not be able to generate sufficient revenues to support our business.
Risks Related to Our Intellectual Property and Cybersecurity
Our Intellectual Property Assets Are Critical to our Success.
We regard our trademarks, trade secrets and other intellectual property assets as critical to our success. We rely on a combination of trademarks, trade secret and copyright laws, as well as confidentiality procedures, contractual provisions, and other similar measures, to establish and protect our intellectual property. We attempt to prevent disclosure of our trade secrets by restricting access to sensitive information and requiring employees, consultants, and other individuals with access to our sensitive information to sign confidentiality agreements. Despite these efforts, we may not be able to prevent misappropriation of our technology or deter others from developing similar technology in the future. Furthermore, policing the unauthorized use of our intellectual property assets is difficult and expensive. Litigation could result in substantial costs and diversion of resources. We can provide no assurance that we will be successful in any litigation matter relating to our intellectual property assets. Any misappropriation of our intellectual property assets could have a material adverse effect on our ability to increase sales of our commercial product and/or continue the development of any future pipeline candidates.
If We Are Unable to Protect the Confidentiality of our Proprietary Information and Know-how, our Competitive Position Would Be Impaired.
A significant amount of our technology, especially regarding manufacturing processes, is unpatented and is maintained by us as trade secrets. The background technologies used in the development of our product candidates are known in the scientific community, and it is possible to duplicate the methods we use to create our product candidates. In an effort to protect these trade secrets, we require our employees, consultants and contractors to execute confidentiality agreements with us. These agreements require that all confidential information developed by the individual or made known to the individual by us during the individual’s relationship with us be kept confidential and not disclosed to third parties. These agreements, however, may not provide us with adequate protection against improper use or disclosure of confidential information, and these agreements may be breached. Adequate remedies may not exist in the event of unauthorized use or disclosure of our confidential information. A breach of confidentiality could affect our competitive position. In addition, in some situations, these agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants, collaborators or advisors have previous employment or consulting relationships. Also, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets. The disclosure of our trade secrets would impair our competitive position.
If We Infringe, or Are Alleged to Infringe, Intellectual Property Rights of Third Parties, our Business Could Be Harmed.
Our research, development, and commercialization activities, including any product candidates resulting from these activities, may infringe, or be claimed to infringe, patents or other proprietary rights owned by third parties, and to which we do not hold licenses or other rights. There may be patent applications owned by third parties that have been filed but not published that, when issued, could be asserted against us. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages.
Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. We have not conducted an exhaustive search or analysis of third-party patent rights to determine whether our research, development, or commercialization activities, including any product candidates resulting from these activities, may infringe or be alleged to infringe any third-party patent rights. As a result of intellectual property infringement claims, or to avoid potential claims, we may choose or be required to seek a license from the third party. These licenses may not be available on acceptable terms, or at all. Even if we are able to obtain a license, the licensee would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property.
Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. All of the issues described above could also affect our potential collaborators to the extent we have any collaborations then in place, which would also affect the success of the collaboration and therefore us. There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including inter partes review and/or interference proceedings declared by the U. S. Patent and Trademark Office and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to our product candidates and technology.
Our Business May Be Adversely Impacted by Information Systems Failures or Data Breaches.
We rely on information systems to process transactions, communicate with customers, manage our business, and process and maintain data and other information. We are not aware of any material losses to our business or results of operations due to information system failures, data breaches, or cybersecurity incidents. However, threats to information systems are evolving and disruptions can be caused by a variety of events, such as viruses, malicious malware, unauthorized access attempts to data, or other types of cybersecurity incidents. Such events could produce disruptions that result in an unexpected delay in operations, loss of confidential or otherwise protected information, corruption of data, and expenses related to the repair or replacement of our computer systems. We cannot be certain that our information system and cybersecurity protocols are sufficient to withstand a cybersecurity incident. The inability to maintain proper function, security, and availability of our information systems and the data maintained in those systems could interrupt our operations and could result in loss of sales or legal or regulatory claims which could adversely affect our revenues and profits or damage our reputation. We also rely on numerous third-party providers for information technology services, and we face similar risks relating to these providers. While our general insurance coverage may, subject to policy terms and conditions including deductibles, cover specific aspects of information systems and cybersecurity risks, such insurance coverage may be insufficient to cover all losses. As information system and cybersecurity risks continue to evolve, we may be required to expend additional resources to continue to enhance our information system and cybersecurity measures and to investigate and remediate any information system and cybersecurity vulnerabilities.
Data Privacy Security Failures or Breaches Could Expose us to Regulatory and Other Liability.
We are subject to various federal and state laws governing privacy and security of personally identifiable information. Despite safeguards by us, a data privacy security failure or breach could occur as a result of unintentional or deliberate acts to obtain unauthorized access to information, or to destroy, manipulate, or sabotage data. Information system threats, failures breaches, or incidents also could result in the loss or release of personally identifiable information. A privacy or cybersecurity failure or breach could cause a loss of business, regulatory enforcement, substantial legal liability, and reputational harm. Further, the adoption of new privacy and cybersecurity laws at the federal and state level could require us to incur significant compliance costs.
Risks Related to Our Common Stock
A Retail Trading Market for our Common Stock May Not Actively Develop.
Shares of our common stock currently resumed trading on the OTCQB on August 22, 2022. Prior to then, due to a prior lack of current and publicly available information about the Company, trading in shares of our common stock was eligible only for unsolicited quotes on the “Expert Market” of the OTC Markets Group. Because quotations in Expert Market securities are restricted from public viewing, the designation severely limits the number of buyers of and effectively prevents the development of an active trading market in, designated securities. Even though shares of our common stock now trade on the OTCQB, there can be no assurance as to whether OTC Markets Group will continue to enable shares of our common stock to be quoted on a retail market or whether shares of our common stock can successfully be traded on other trading platforms. As a result, any limited trading of shares of our common stock subject to a higher risk of wider spreads, increased volatility, and price dislocations.
Trading on an Over-the-Counter Market Could Adversely Affect the Liquidity of our Common Stock.
Trading in our common stock on the OTCQB since August 22, 2022 has been very limited and we cannot make any assurances that the trading volume will increase, or, if and when it increases, that it will be sustained at any level. Over-the-counter markets are generally considered to be less efficient than, and not as broad as, a stock exchange. Stockholders may have difficulties reselling significant numbers of shares of common stock at any particular time and may not be able to resell their shares of common stock at or above the price paid for such shares. As a result, stockholders may be required to hold shares of common stock for an indefinite period of time. In addition, sales of substantial amounts of common stock could lower the prevailing market price of our common stock.
U.S. Broker-Dealers May Be Discouraged from Effecting Transactions in Shares of our Common Stock.
Our Common Stock may be deemed a “penny stock” under SEC rules. As a result, trading in our common stock may be subject to the requirements of SEC rules that require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-exchange listed equity security that has a market price share of less than $5.00 per share, subject to certain exceptions) and a two business day “cooling off period” before broker and dealers can effect transactions in penny stocks. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction before the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. These, and the other burdens imposed upon broker-dealers by the penny stock requirements, could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of our common stock and the ability of holders of our common stock to sell it.
The Compliance and Reporting Requirements of Being a Public Reporting Company Can Be Time-Consuming and Costly.
We are a public reporting company and, accordingly, are subject to the information and reporting requirements of the Exchange Act, and other federal securities laws, including compliance with the Sarbanes-Oxley Act. Preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders is costly. In addition, we may face time consuming and costly effects to develop and implement internal controls and reporting procedures required by the Sarbanes-Oxley Act.
Our Officers, Directors and Principal Stockholders Can Exert Significant Influence Over Us and May Make Decisions That Are Not in the Best Interests of All Stockholders.
As of March 15, 2026, our officers and directors beneficially owned approximately 19.6% of our shares of common stock, while three other principal stockholders beneficially owned in the aggregate an additional approximately 40.7% of our shares of common stock. As a result, our officers, directors, and certain principal holders of common stock are able to affect the outcome of, or exert significant influence over, all matters requiring stockholder approval, including the election and removal of directors and the approval of a business combination. This concentration of ownership of our common stock could have the effect of delaying or preventing a change of control of us or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This, in turn, could have a negative effect on the market price of our common stock, if and when it commences trading. It could also prevent our stockholders from realizing a premium over the market prices for their shares of common stock. Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions or agreements that we would not otherwise consider.
Transactions Engaged in by our Officers, Directors or Principal Stockholders Involving our Common Stock May Have an Adverse Effect on the Value of our Common Stock.
Sales of our common stock by our officers, directors and principal stockholders could have the effect of lowering the price or value of our common stock. The perceived risk associated with the possible sale of a large number of shares of common stock by those stockholders could cause some of our stockholders to sell their stock, thus adversely affecting the value of our common stock. Our largest stockholders, directors and executive officers may sell a significant number of shares for a variety of reasons unrelated to the performance of our business. Our stockholders may perceive these sales as a reflection of management’s view of the business, which may result in some stockholders selling their shares of our common stock. These sales also could adversely affect the value of our common stock.
Volatility of our Stock Price Could Adversely Affect Current and Future Stockholders.
The market price of our common stock is likely to fluctuate widely in response to various factors which are beyond our control. The price of our common stock is not necessarily indicative of our operating performance or long-term business prospects. In addition, the securities markets have periodically experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Factors that could cause the market price to fluctuate substantially include, among others:
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our ability or inability to execute our business plan; |
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the dilutive effect or perceived dilutive effect of additional equity financings; |
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investor perception of our company and of the industry; |
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the success of competitive products or technologies; |
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regulatory developments in the U.S. or overseas; |
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developments or disputes concerning patents or other proprietary rights; |
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the recruitment or departure of key personnel; or |
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general economic, political and market conditions. |
The stock market in general can often experience extreme price and volume fluctuations. Any such market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. Price volatility could be worse if the trading volume of our common stock is low.
Notification, Negotiation, and Participation Rights We Provided to Smith+Nephew May Impact our Ability to License the Aurix Product to or Enter into a Business Combination with a Third Party, or our Ability to Sell Equity Securities during the Term of the Distribution Agreement.
Among the terms of the Distribution Agreement, we provided to Smith+Nephew for a period of 18 months a right of notification, and a right of first negotiation for 45 days, in the event we receive a proposal from another party for (a) the license, assignment, transfer, or disposal of our Aurix product or related products, or (b) a business combination that we submit or recommend to our stockholders. Under the Distribution Agreement, we also provided to Smith+Nephew a right of notification and participation in any proposed sale of our equity securities. There can be no assurance whether we will receive a proposal or offer, or consummate a relevant transaction, during the 18-month period through September 2026. There also can be no assurance whether we seek to sell equity securities during the term of the Distribution Agreement. The existence of these rights may adversely impact whether we receive licensing or similar proposals, whether we receive a business combination offer, or whether we seek to sell equity securities. Even if we receive such a proposal or offer, or sell securities, the existence of these rights held by Smith+Nephew may adversely affect to the price and terms of such a proposal, offer, or transaction, and the willingness of and timing for us or other parties to complete such a proposal, offer, or transaction.
ITEM 1B. Unresolved Staff Comments
Not applicable.
Our management recognizes the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers, and violation of data privacy or similar security laws.
Our principal executive offices are located in a leased space at 8285 El Rio Street, Suite 190, Houston, TX 77054.
The Company does not own any real property and does not intend to invest in any real property in the foreseeable future.
There are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition, or cash flows.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Shares of our common stock trade on the OTCQB tier of the over-the counter market operated by OTC Markets Group, Inc. under the symbol “AURX”. Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions.
Holders
According to information provided by the transfer agent of the Company, there were approximately 800 holders of record of our common stock as of March 15, 2026.
Dividends
We have never paid or declared cash distributions or dividends in our history, and we do not intend to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain all earnings, if and when generated, for reinvestment in our business.
Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common stock may be deemed a “penny stock.” The definition of penny stock under SEC rules generally includes equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which generally: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities’ laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; and defines significant terms in the disclosure document or in the conduct of trading in penny stocks. The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny stock, (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for shares of our common stock.
Issuer Purchases of Equity Securities
None.
Recent Sales of Unregistered Securities
None.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report. The discussion in this section regarding the Company’s business and operations includes “forward-looking statements”. See “Special Note Regarding Forward-Looking Statements” at the beginning of this Annual Report.
Overview
Nuo is a commercial-stage medical device company focused on developing and marketing regenerative therapies for chronic wound care primarily within the U.S. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous (i.e., from self or the patient’s own) biological therapies for tissue repair and regeneration is part of a clinical strategy designed to improve long-term recovery in complex chronic conditions with significant unmet medical needs.
Our only significant current commercial offering consists of point of care technology for the separation of autologous blood to produce a platelet-based therapy for the chronic wound care market. This offering is known as “Aurix” or the “Aurix System”. Although FDA cleared the Aurix System for marketing for wound care management in 2007 under Section 510(k) of the FDCA, CMS only established economically viable reimbursement for Aurix upon the issuance of a NCD for autologous blood-based products in April 2021. For 2026, the CMS national average reimbursement rate for the Aurix System is $2,108 in POS 22 and $1,064 in POS 11.
Our current commercial focus is to continue engaging and establishing relationships with providers treating chronic non-healing wounds to demonstrate the clinical benefits we believe result from the use of Aurix in the treatment of complex wounds. Increasing physician awareness of the differentiating attributes of Aurix will be key to establishing a base of product revenues upon which to grow. We anticipate developing these relationships with clinical providers and treatment facilities primarily by establishing a variety of distributor and sales agent arrangements primarily throughout the United States.
Distribution Agreement with Smith+Nephew
On March 31, 2025, we entered into the Distribution Agreement with Smith+Nephew, a global medical technology company. Although Smith+Nephew will be the sole and exclusive distributor in the United States of a private label Aurix product, we have the ability and will continue to market, distribute, and sell our own Aurix branded product.
Under the Distribution Agreement, Smith+Nephew will purchase Private Label product from us from time to time at agreed upon transfer pricing and we shall manufacture, package, and ship the Private Label product to Smith+Nephew’s customers in accordance with purchase orders and the Distribution Agreement. During the initial term of the Distribution Agreement commencing in October 2025, minimum annual purchase commitments will apply to Smith+Nephew of an average of approximately $500,000 per year for Smith+Nephew to maintain exclusive distribution rights.
As consideration for entering into the Distribution Agreement, Smith+Nephew paid us an upfront distribution fee of $1,500,000 for distribution rights and we are also eligible to be paid by Smith+Nephew an additional $750,000 in fees based on our establishment and maintenance of reimbursement in certain categories for the Aurix and the Private Label products. These fees will be refundable to Smith+Nephew on a pro rata basis for the unexpired initial term of the Distribution Agreement if we do not comply with certain terms and conditions.
The $1,500,000 upfront distribution fee will be recognized ratably as revenue on a straight-line basis over the initial five-year term of the Distribution Agreement. For the year ended December 31, 2025, we recognized $225,000 of license revenue under the Distribution Agreement.
We believe that Smith+Nephew will need time to establish full commercial sales of its Private Label product via its direct and indirect sales efforts. As a result, our revenues under the Distribution Agreement may increase modestly during the next 12 months. While the Distribution Agreement will provide us with revenues, we also will incur expenses under the Distribution Agreement to enable us to comply with its provisions as well as packaging, shipping, and related costs associated with delivering the Private Label product for Smith+Nephew. The amount of these expenses and costs will vary depending on the amount of purchase orders that we receive from Smith+Nephew.
On May 14, 2025, we entered into Amendment No. 1 (the “First Amendment”) to the Distribution Agreement. The First Amendment supplemented the Distribution Agreement by additionally providing for an interim sales agency arrangement whereby Smith+Nephew was entitled to act as sales agent on an interim basis for the sale of products under the Aurix brand to certain Smith+Nephew customers. As compensation, Smith+Nephew was entitled to a commission on net sales of the Nuo branded products sold to the Smith+Nephew customers. In accordance with its terms, the First Amendment's interim sales agency arrangement terminated on December 31, 2025. On December 30, 2025 and effective January 1, 2026, we entered into Amendment No. 2 to the Distribution Agreement to add certain expansion kits in connection with the Private Label product.
Loan and Security Agreement
On January 21, 2026, we entered into a Loan and Security Agreement (the “Loan Agreement”) with four lenders (collectively, the “Lenders”), including a director of Nuo. The Loan Agreement provides for loans in an aggregate principal amount of up to $1.6 million with (a) $1.0 million funded on the initial closing date (the “Initial Funding”) and (b) $600 thousand to be funded, if requested in advance by us and subject to closing conditions, on September 30, 2026 (the “Second Funding”). The closing of the Initial Funding occurred on January 23, 2026.
At the closing of the Initial Funding, we issued a Secured Promissory Note (each, an “Initial Note”) to each of the Lenders and upon any Second Funding, we will issue an additional Secured Promissory Note (each, if any, a “Second Note”). The Initial Note bears interest at an annual rate of 10%. If Nuo requests a Second Funding, the Second Note will bear interest at an annual rate of 12% and the interest rate of the Initial Note will also increase to an annual rate of 12% upon the Second Funding.
The maturity date of the Initial Note and any Second Note is December 31, 2028 (the “Maturity Date”).
Interest on the Initial Note and, if any, the Second Note (together, the “Notes”) will be payable in warrants and not in cash. Interest on the Notes will be payable and issued at the Maturity Date or earlier upon certain prepayments. Interest on the Notes will accrue on a quarterly calendar basis without regard to partial quarters. The Notes are interest only through December 31, 2026. The principal on the Notes is repayable in cash in equal quarterly installments on the last business day of each calendar quarter commencing March 31, 2027 and continuing to the Maturity Date.
We may, at our option on the last business day of a calendar quarter commencing December 31, 2026, voluntarily prepay the Notes in their entirety by paying the then outstanding principal balance and all accrued interest on the Notes, subject to a prepayment fee equal to 1.5% of the then outstanding principal balance if the Notes are prepaid on or after December 31, 2026 but before December 31, 2027, with no prepayment fee applicable to such prepayments on or after December 31, 2027. The prepayment fee, if any, is payable in Prepayment Warrants as described below, and not in cash, that will vest in the event of a voluntary prepayment.
In addition, the Loan Agreement mandates the prepayment of the Notes in the event of (A) an equity financing of at least $5 million, (B) certain changes in control as defined in the Loan Agreement, or (C) a default by Nuo. In the event of such an equity financing or change in control, we have agreed to repay the Notes in their entirety by paying the then outstanding principal balance and all accrued interest on the Notes, subject to a prepayment fee equal to 2.75% of the then outstanding principal balance if such event occurs before December 31, 2026 and 1.5% of the then outstanding principal balance if such event occurs on or after December 31, 2026 but before December 31, 2027, with no prepayment fee applicable if such event occurs on or after December 31, 2027. In the event of a default, we have agreed to repay the Notes in their entirety by paying the then outstanding principal balance and all accrued interest on the Notes, subject to a prepayment fee equal to 2.75% of the then outstanding principal balance. The prepayment fee, if any, is payable in warrants, and not in cash, that will vest in the event of a mandatory prepayment.
The Notes are secured by a lien upon and security interest in all of the Company’s assets, including intellectual property. The Loan Agreement contains customary representations, warranties, and covenants.
Comparison of the Years Ended December 31, 2025 and 2024
The revenue amounts presented in these comparison sections are rounded to the nearest thousand.
Revenue and Gross Profit
Total revenues for the year ended December 31, 2025 totaled approximately $3.3 million including $225,000 of distribution fee revenue related to the Smith+Nephew distribution agreement. Product revenues for the year ended December 31, 2025 totaled approximately $3.1 million in comparison to product and total revenues of approximately $1.4 million for the year ended December 31, 2024 representing an increase of approximately $1.7 million or approximately 126%. Product revenues associated with the Smith+Nephew private label distribution arrangement were recognized for the first time in the second half of 2025 consisting of (i) centrifuge devices sold to Smith+Nephew in anticipation of its Private Label product launch and (ii) initial fulfillment of purchase orders for stocking of Private Label kits. Associated gross profit was approximately $2.2 million for the year ended December 31, 2025 in comparison to approximately $1.1 million of gross profit in the year ended December 31, 2024.
The increase in revenues was due primarily to (i) increased Aurix product revenues resulting from an expanding customer base over the past year, (ii) the initial Smith+Nephew product revenues for centrifuge devices and kits solely in the second half of 2025 discussed above and (iii) distribution fee revenue recognized under the distribution agreement. Aggregate gross margin was approximately 67% for the year ended December 31, 2025 as compared to approximately 78% in the prior 2024 year. The gross margin decline was primarily due to centrifuge devices sold to Smith+Nephew at a near zero gross margin on the negotiated transfer price of the devices including the impact of tariff surcharges from the device manufacturer which was partially offset by distribution fee revenue having no associated cost.
Operating Expenses
Total operating expenses increased approximately $1,214,000 to approximately $4,735,000 comparing the year ended December 31, 2025 to the prior full year 2024 period. The increase from the prior year was due primarily to increases in (i) professional fees of approximately $399,000 due largely to the combination of increased legal fees associated with the negotiation and finalization of the Smith+Nephew distribution agreement and SEC registration statements filed during the year and consulting expenses for our quality management system and reimbursement support services, (ii) third party commission expense of approximately $314,000 for independent sales representatives and distributors resulting from increased Aurix product revenues, and (iii) compensation and benefit costs of approximately $272,000 attributable primarily to increased salary costs and added sales management personnel.
Interest Expense, net
Interest expense, net for the year ended December 31, 2025 of approximately $804 represents net interest expense attributable to the financing of insurance premiums income slightly in excess of interest income on excess cash balances. Conversely, interest income, net for the year ended December 31, 2024 of approximately $100 represents interest income on excess cash balances slightly in excess of interest expense attributable to the financing of insurance premiums.
Other Income (Expense)
Other income for the year ended December 31, 2025 was nominal in amount. Other income for the year ended December 31, 2024 primarily represents the gain of approximately $133,600 realized from the negotiated settlement of legacy accounts payable with third-party vendors including the full release of any ongoing payment liability.
Liquidity and Capital Resources
Overview
As of December 31, 2025, we had cash and cash equivalents of approximately $0.5 million, total current assets of approximately $1.4 million and total current liabilities of approximately $1.3 million. We have a history of losses and are not currently profitable. For the years ended December 31, 2025 and 2024, we incurred net losses of approximately $2.5 million and $2.3 million, respectively. As of December 31, 2025, our accumulated deficit was approximately $34.8 million and our stockholders’ deficit was approximately $1.0 million.
On May 12, 2025, the SEC declared our shelf registration statement on Form S-3 effective. The shelf registration statement enables us to offer and sell, from time to time in one or more offerings, shares of our common stock with an aggregate offering amount not exceeding $15 million, subject to the provisions of Form S-3. The shelf registration statement could provide us with access to liquidity from the public markets if we are able and should we decide to utilize it for that purpose.
We maintain our cash deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). We have not experienced any losses related to amounts in excess of FDIC limits.
Financing Activities
During the year ended December 31, 2025, we sold 527,612 shares of common stock to certain accredited investors pursuant to a Securities Purchase Agreement in a private placement which closed in July 2025 for total proceeds of $791,418. We issued 283,853 shares of common stock upon option exercises for gross proceeds of $113,541. As of December 31, 2025, $500,000 in secured notes were prefunded by two lenders which included $200,000 advanced from a related party.
During the year ended December 31, 2024, we sold 2,000,000 shares of common stock to certain accredited investors pursuant to Securities Purchase Agreements in two private placements which closed in May and September 2024 for total proceeds of $1,500,000. We issued 217,709 shares of common stock upon option exercises for gross proceeds of $90,417.
Effective January 1, 2024, pursuant to the provisions of the August 2022 Common Stock and Warrant Purchase Agreement, we issued Pacific Medical a warrant to purchase up to 500,000 shares of common stock at a price equal to $0.56, the 20-day volume weighted average closing price per share of our common stock ending December 31, 2023. The warrant was exercised on June 27, 2024 and we received proceeds of $151,200.
Going Concern
Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise substantial additional funds in order to continue to conduct our business. If we are unable to secure sufficient capital to fund our operating activities, we may be forced to delay further the completion of, or significantly reduce the scope of, our current business plan. It is uncertain whether we will be able to obtain such financing on satisfactory terms or at all.
We may not be able to obtain additional capital as required to finance our efforts, through equity or debt financing or any combination thereof, on satisfactory terms or at all. Additionally, any such financing, if at all obtained, may not be adequate to meet our capital needs and to support our operations.
Cash Flows
Net cash provided by (used in) operating, investing, and financing activities for the periods presented were as follows:
|
Year Ended December 31, 2025 |
Year Ended December 31, 2024 |
|||||||
|
Cash flows used in operating activities |
$ | (864,971 | ) | $ | (2,231,622 | ) | ||
|
Cash flows used in investing activities |
$ | (274,756 | ) | $ | (154,962 | ) | ||
|
Cash flow provided by financing activities |
$ | 1,404,959 | $ | 1,741,617 | ||||
Operating Activities
Cash used in operating activities for the year ended December 31, 2025 of approximately $0.9 million primarily reflects our net loss of approximately $2.5 million adjusted by (i) the $1,275,000 increase in deferred revenues, (ii) approximately $0.2 million in total amortization of right of use assets, property and equipment depreciation, and stock-based compensation and (iii) approximately $0.1 million in combined provisions for credit losses and inventory obsolescence. The deferred revenue is due to the receipt of the $1.5 million upfront distribution fee from Smith+Nephew in conjunction with the private label distribution agreement which was effective as of March 31, 2025.
Cash used in operating activities for the year ended December 31, 2024 of approximately $2.2 million primarily reflects our net loss of approximately $2.3 million adjusted by the net effect of (i) approximately $0.2 million in total for amortization of right of use assets, depreciation of property and equipment, and stock-based compensation, and (ii) approximately $0.1 million in combined provisions for credit losses and inventory obsolescence partially offset by the approximately $0.1 million gain on settlement of legacy accounts payable balances.
Investing Activities
Cash used in investing activities for year ended December 31, 2025 of approximately $275,000 primarily represents approximately $220,000 in expenditures for the purchase of Aurix centrifuge devices.
Cash used in investing activities for the year ended December 31, 2024 of approximately $155,000 primarily represents approximately $151,000 in expenditures for the purchase of Aurix centrifuge devices.
Financing Activities
Cash provided by financing activities for the year ended December 31, 2025 reflects proceeds of (i) $791,418 from the sale of 527,612 shares of common stock in a private placement which closed in July 2025, (ii) $113,541 from the exercise of common stock options, and (iii) $500,000 from the prefunding of two secured notes on December 31, 2025.
Cash provided by financing activities for the year ended December 31, 2024 of approximately $1.7 million represents proceeds of (i) $1.5 million from two equity private placements that closed in May and September 2024, (ii) $151,000 from the exercise of 270,000 warrants in June 2024, and (iii) approximately $90,000 from the exercise of options in December 2024.
Inflation
The Company does not believe that inflation has had a material effect on its operations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Critical Accounting Policies
This Management's Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. A summary of our significant accounting policies is included in Note 2 to the accompanying consolidated financial statements.
A “critical accounting policy” is one that is both important to the portrayal of our financial condition and results of operations and that requires management’s most difficult, subjective, or complex judgments. Such judgments are often the result of a need to make estimates about the effect of matters that are inherently uncertain. There are no accounting policies identified as critical.
Recent Accounting Pronouncements Not Yet Adopted
See the discussion of Recent Accounting Developments in Note 2 - Liquidity and Summary of Significant Accounting Policies.
The Company does not believe that any recently issued effective standards, or standards issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
ITEM 8. Financial Statements and Supplementary Data
The information required pursuant to this Item 8 is incorporated by reference herein to our consolidated financial statements beginning on page F-1 of this Annual Report.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our Chief Executive and Financial Officer, who is our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Annual Report, we concluded that, as of such date, our disclosure controls and procedures were not effective due to the existence of the material weaknesses in the Company’s internal control over financial reporting described below under “Material Weaknesses” and “Remediation Plan.”
Notwithstanding the conclusion that our disclosure controls and procedures as of the end of the period covered by this Annual Report were not effective, and notwithstanding the material weaknesses in our internal control over financial reporting described below, management believes that the consolidated financial statements and related financial information included in this Annual Report fairly present in all material respects our financial condition, results of operations and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with GAAP.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Our management conducted an assessment of our internal control over financial reporting as set forth in Item 308(a) of Regulation S-K promulgated under the Exchange Act and Section 404 of the Sarbanes-Oxley Act as of the end of the end of the period covered by this Annual Report. Based on this assessment, our management concluded that our internal control over financial reporting was not effective due to the continuing material weakness in our internal control over financial reporting described below under “Material Weaknesses” and “Remediation Plan.”
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of this Form 10-K and the consolidated financial statements and related disclosures herein, management identified the following material weaknesses.
Beginning in mid-2019, we ceased ongoing operational activities and terminated all our financial accounting and reporting resources as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. When we re-started commercial operations in 2022 and as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, we had not hired and did not maintain a sufficient complement of accounting and financial reporting resources. The lack of sufficient accounting and financial reporting resources also prevented us from maintaining appropriately designed, and monitoring the effectiveness of, internal control over financial reporting.
Remediation Plan
Since 2022, we have engaged outside consultants to assist with various accounting and financial reporting matters, and we will continue assessing the need for hiring additional internal accounting and third-party financial reporting resources. As we continue to obtain additional financial resources and as we continue to increase our operating activity, management, under the oversight of the Audit Committee of the Board of Directors, we intend to implement further measures designed to improve our internal control over financial reporting to remediate the identified material weaknesses, namely, to identify and engage, through internal hiring and the use of external third parties, a sufficient complement of accounting and financial reporting resources and to periodically assess the design and operating effectiveness of our internal controls.
While we believe that these efforts will improve our internal control over financial reporting, the implementation of these measures is ongoing and will continue to require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We cannot assure you that the measures we have taken to date, or that we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.
Changes in Internal Control over Financial Reporting
Other than as described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Rule 10b5-1 Plans
During the year ended December 31, 2025, of our directors or executive officers adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as such terms are defined under Item 408 of Regulation S-K.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
ITEM 10. Directors, Executive Officers, and Corporate Governance
Set forth below is information regarding the directors and executive officers of the Company. Officers are appointed by, and serve at the pleasure of, the Board of Directors.
|
Name |
Age |
Position |
||
|
David E. Jorden |
63 |
Chief Executive and Financial Officer, Secretary, Director |
||
|
C. Eric Winzer |
69 |
Independent Director |
||
|
Scott M. Pittman |
67 |
Independent Director |
||
|
Paul D. Mintz, MD |
77 |
Independent Director |
||
|
Peter A. Clausen |
59 |
Chief Scientific and Operating Officer |
David E. Jorden has been Chief Executive and Financial Officer of the Company since July 1, 2016 after serving as Acting Chief Executive Officer effective January 8, 2016 and Acting Chief Financial Officer effective May 2015. Mr. Jorden also serves as Secretary of the Company. He has served as a director of the Company since October 2008. Mr. Jorden is also presently serving since June 2013 as Chief Executive Officer for Nanospectra Biosciences, Inc., a private company developing nanoparticle directed photothermal ablation technology of solid tumors. From 2003 to 2008, he was with Morgan Stanley’s Private Wealth Management group where he was responsible for equity portfolio management. Prior to Morgan Stanley, Mr. Jorden served as Chief Financial Officer for Genometrix, Inc., a private genomics/life sciences company focused on high-throughput microarray applications. Mr. Jorden was previously a principal with Fayez Sarofim & Co. Mr. Jorden has an MBA from Northwestern University’s Kellogg School and a B.B.A. from University of Texas at Austin. He is a Chartered Financial Analyst and previously held a Certified Public Accountant designation.
Mr. Jorden was chosen to serve on the Board in part because of his extensive financial experience, particularly in the life sciences industry. As our current Chief Executive and Financial Officer, he provides the Board with critical insight into the day-to-day operations of the Company.
C. Eric Winzer has served as director since January 30, 2009. Mr. Winzer has over 30 years of experience in addressing diverse financial issues including raising capital, financial reporting, investor relations, banking, taxation, mergers and acquisitions, financial planning and analysis, and accounting operations. Mr. Winzer was the Chief Financial Officer at Immunomic Therapeutics, Inc., a privately-held clinical stage biotechnology company, from May 2015 until his retirement in April 2025. From June 2009 to April 2015 Mr. Winzer served as the Principal Accounting Officer, Senior Vice President of Finance, and Chief Financial Officer for OpGen Inc. (OPGN), a precision medicine company that went public in May 2015. Before his tenure with OpGen Inc., Mr. Winzer held multiple executive positions at Avalon Pharmaceuticals, Inc. (AVRX) including serving as its Chief Financial Officer and Executive Vice President, Principal Accounting Officer, and Secretary. Before joining Avalon Pharmaceuticals, Mr. Winzer held numerous senior financial positions over twenty years at Life Technologies Corporation (LIFE) (now part of Thermo Fisher Scientific (TMO)) and its predecessor companies, Invitrogen (IVGN) and Life Technologies, Inc. (LTEK). From 1980 to 1986, Mr. Winzer held various financial positions at Genex Corporation. Since 2020, Mr. Winzer has served on the Board of Directors, including Chair of its Audit Committee, of Asbury Communities, a system of not-for-profit senior living communities in the Mid-Atlantic region. Mr. Winzer holds a B.A. in Economics and Business Administration from Western Maryland College (now McDaniel College) and an M.B.A. from Mount Saint Mary's University.
Mr. Winzer was chosen to serve on the Board in part because of his executive experience in the life sciences industry and his substantial financial knowledge and expertise.
Scott M. Pittman has served as a director since May 5, 2016. Mr. Pittman has over 30 years in hospital executive management. Since 2014, he has served in operational and business development roles for, and currently is Senior Vice President of, Buchanan General Hospital. Since 2010, he has been a Registered Representative with Calton & Associates. From 2001 to 2009, he was a hospital CEO with Adventist Health Systems. During 1989 to 2001, he was a hospital executive and system COO for Princeton Community Hospital Assoc. Mr. Pittman has developed several multi-million-dollar hospital and program service expansions, healthcare entity acquisitions and mergers, and served on state and regional health planning organizations. He is a magna cum laude graduate of Southwestern Adventist University with B.A. and B.S. Degrees in Business and Finance, and a Masters of Hospital Administration from Medical College of Virginia.
Mr. Pittman was chosen to serve on the Board in part because of his extensive experience as a hospital administration executive.
Paul D. Mintz, MD has served as a director since April 7, 2017. Dr. Mintz is a consultant in the fields of transfusion medicine and other biotherapies. He most recently served as Senior Vice President and Chief Medical Officer of Verax Biomedical, Inc., (Verax Biomedical). Prior to joining Verax Biomedical in early 2016, Dr. Mintz served as Director, Division of Hematology Clinical Review, Office of Blood Research and Review, Center for Biologics Evaluation and Research of the U.S. Food and Drug Administration from 2011 to 2016. Prior to that, for more than 30 years, Dr. Mintz was a member of the faculty of the University of Virginia, School of Medicine, where he was a tenured Professor of Pathology and Internal Medicine. He also served as Vice-Chair of Pathology and Chief of the Division of Clinical Pathology, and as Medical Director of the Clinical Laboratories and Transfusion Medicine Services at the University of Virginia Health System. In addition, Dr. Mintz served as Co-Medical Director of Virginia Blood Services. He served as a director of Immucor, Inc. (BLUD) from 2009 to 2011. Dr. Mintz is a former President of the American Association of Blood Banks (now the Association for the Advancement of Blood and Biotherapies), or AABB, served on AABB’s Board of Directors for nine years, and chaired and was a member of numerous AABB committees. He has also served as a member of the Board of Trustees of the National Blood Foundation. A recipient of a Transfusion Medicine Academic Award from the National Heart, Lung and Blood Institute, Dr. Mintz was an inaugural inductee into the National Blood Foundation Hall of Fame. He has served as a member of the Medicare Coverage Advisory Committee of CMS. Dr. Mintz is author or co-author of more than 100 articles and editorials spanning clinical practice, blood safety and the evaluation of new transfusion medicine technologies and has designed and served as principal investigator for numerous clinical trials. He is the sole editor of the first three editions of Transfusion Therapy: Clinical Principles and Practice (AABB Press) and has served on several journal editorial boards. Dr. Mintz earned his BA with High Distinction in Philosophy from the University of Rochester and received his MD with Honors from the University of Rochester, School of Medicine.
Dr. Mintz was chosen to serve on the Board based in part on his recognized expertise in clinical practice, his extensive involvement in transfusion medicine, transfusion-related clinical trials, and regulatory leadership experience.
Peter A. Clausen has been our Chief Scientific and Operating Officer since January 1, 2022. He previously was appointed as the Chief Scientific Officer on March 30, 2014 and served in that position until December 31, 2019. He originally joined the Company in September 2008 and has more than 20 years of experience in the biotechnology industry. Dr. Clausen served as a senior product manager within the orthobiologics division at Arthrex Inc. from March 2020 to October 2021 where he was responsible for the development and launch of autologous biologics used to treat inflammatory mediated connective tissue disease. Prior to originally joining the Company, he was a founding member and Vice President of Research and Development at Marligen Bioscience, where he developed and commercialized innovative genomic and protein analysis products for the life sciences market. Dr. Clausen was the Manager of New Purification Technologies at Life Technologies and the Invitrogen Corporation. He also has significant experience within the commercial biotechnology industry developing peptide and small molecule therapeutics for application in the areas of inflammatory mediated disease and stem cell transplantation. He completed his post-doctoral training at the Laboratory of Molecular Oncology at the National Cancer Institute where his research efforts focused in the areas of oncology, hematopoiesis, and gene therapy. Dr. Clausen earned a Ph.D. in Biochemistry from Rush University in Chicago and a Bachelor of Science degree in Biochemistry from Beloit College.
There are no family relationships between any of the Company’s executive officers or directors and, other than as disclosed above, there are no arrangements or understandings between a director and any other person pursuant to which such person was elected as director.
Corporate Governance
Each director holds office for the term for which he or she is elected or until his or her successor is duly elected. The Company has not made any material changes to the procedures by which stockholders may recommend nominees to the Board of Directors of the Company since 2022.
Audit Committee Financial Expert
The Board has established an Audit Committee in accordance with section 3(a)(58)(A) of the Exchange Act. The Audit Committee currently is comprised of Mr. Winzer, Dr. Mintz, and Mr. Pittman. The Board has determined that Mr. Winzer is independent and is an audit committee financial expert as defined by Item 407(d)(5) of Regulation S-K. The Company applies Nasdaq Stock Market corporate governance requirements and standards in determining director and Audit Committee independence.
Code of Conduct and Ethics
The Board has adopted a Code of Conduct and Ethics applicable to all directors, officers, and employees in accordance with Item 406 of Regulation S-K. A copy of this Code of Conduct and Ethics is available under "Company Information" in the Investors section on our website at www.nuot.com. We intend to disclose any amendments to, or waivers from, the Code of Conduct and Ethics within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.
Insider Trading Policy
We have
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires officers, directors and persons who own more than ten percent of a registered class of equity securities to, within specified time periods, file certain reports of ownership and changes in ownership with the SEC.
Based solely on a review of the Section 16 reports filed electronically with the SEC and written representations from certain reporting persons, the Company believes that, during the fiscal year ended December 31, 2025, all Section 16(a) reports required to be filed by its officers, directors, and greater than ten percent beneficial owners were timely filed; except that (i) a report covering one transaction by Mr. Jorden, the Chief Executive and Financial Officer and a member of the Board of Directors, was filed one business day late, and (ii) a report covering two transactions by Mr. Winzer, a member of the Board of Directors, was filed one business day late.
ITEM 11. Executive Compensation
This following table presents information regarding compensation paid to our named executive officers for the fiscal years ended December 31, 2025 and 2024.
Summary Compensation Table
|
Name and Principal Position |
Year |
Salary |
Bonus |
Option and Equity Awards |
All Other Compensation |
Total |
|||||||||||||||
|
David E. Jorden |
2025 |
$ | 250,000 | (a) | $ | - | $ | - | $ | - | $ | 250,000 | |||||||||
|
Chief Executive and Financial Officer |
2024 |
$ | 225,000 | $ | - | $ | - | $ | - | $ | 225,000 | ||||||||||
|
Peter A. Clausen |
2025 |
$ | 237,500 | (a)(b) | $ | - | $ | - | $ | - | $ | 237,500 | |||||||||
|
Chief Scientific and Operating Officer |
2024 |
$ | 210,000 | (b) | $ | - | $ | - | $ | - | $ | 210,000 | |||||||||
|
(a) |
Effective October 1, 2025, Mr. Jorden's and Dr. Clausen's annual base salaries were increased to $325,000 and $290,000. |
| (b) |
Effective January 1, 2024, Dr. Clausen voluntarily reduced his salary by $15,000 to enable a salary increase for certain other Company employees. Effective April 1, 2025, Dr. Clausen's annual salary was reestablished at $225,000. |
Employment Agreements
On May 9, 2022, the Company entered into an employment agreement effective April 1, 2022 with David Jorden, the Company’s Chief Executive and Financial Officer. The employment agreement provides for a base salary to Mr. Jorden as determined by the Compensation, Nominating and Governance Committee of the Board (the "CNG Committee"), an annual bonus of up to 50% of such base salary. The employment agreement with Mr. Jorden also provides, upon certain circumstances, for a severance payment to him of twelve months base salary as in effect at the time upon termination of services, including due to a change in control of the Company. The terms of the employment agreement with Mr. Jorden contain other customary provisions.
On May 9, 2022, the Company also entered into an employment agreement effective January 1, 2022 with Peter Clausen, the Company’s Chief Scientific Officer and Chief Operating Officer. The employment agreement provides for a base salary to Dr. Clausen as determined by the CNG Committee, an annual bonus of up to 50% of such base salary. The employment agreement with Dr. Clausen also provides, upon certain circumstances, for a severance payment to him of twelve months base salary as in effect at the time upon termination of services, including due to a change in control of the Company. The terms of the employment agreement with Dr. Clausen contain other customary provisions.
The Company does not provide any pension plans/benefits or non-qualified deferred compensation.
Outstanding Equity Awards
The following table sets forth the outstanding equity awards held by our named executive officers as of December 31, 2025.
Outstanding Equity Awards at December 31, 2025
|
Name |
Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Unexercised Options Unexercisable |
Option Exercise Price |
Option Expiration Date |
|||||||||
|
David E. Jorden |
162,500 | (a) | - | $ | 1.00 |
6/30/2026 |
|||||||
| 125,000 | (b) | - | $ | 0.40 |
01/01/2026 |
||||||||
| 66,672 | (c) | - | $ | 0.50 |
03/03/2032 |
||||||||
| 125,000 | (d) | - | $ | 0.75 |
03/03/2032 |
||||||||
| Peter A. Clausen | 43,228 | (c) | - | $ | 0.50 |
03/03/2032 |
|||||||
| 275,000 | (e) | - | $ | 0.75 |
03/03/2032 |
||||||||
|
(a) |
62,500 vested immediately upon the January 9, 2017 date of grant, 50,000 vested on March 31, 2017, and 50,000 vested on December 31, 2017. |
|
(b) |
Fully vested upon the March 4, 2022 date of grant in settlement of $50,000 of accrued compensation liabilities for Mr. Jorden. |
|
(c) |
Fully vested upon the March 4, 2022 date of grant in settlement of $33,336 and $21,614 of accrued compensation liabilities for Mr. Jorden and Dr. Clausen, respectively. |
|
(d) |
Fully vested upon the March 4, 2022 date of grant. |
|
(e) |
One-third vested immediately upon the March 4, 2022 date of grant and the remainder vested quarterly over three years. |
Potential Payments Upon Termination or Change of Control
The May 9, 2022 employment agreements of each of Mr. Jorden and Dr. Clausen as described above provide, upon certain circumstances, for a severance payment of twelve months of his base salary as in effect at the time upon termination of services, including due to a change in control of the Company.
Director Compensation in 2025
Effective May 1, 2019, concurrent with the Company’s decision to furlough its remaining employees, compensation to the members of the Board ceased. Accordingly, for approximately five years, our non-executive directors received no cash or non-cash compensation. In July 2024, the CNG Committee resumed granting non-cash compensation to our non-executive directors. In August 2025, the CNG Committee resumed awarding cash compensation to the non-executive directors, with a one-time cash fee of $15,000 to each non-executive director for the remainder of his 2025 service.
The following table sets forth, for the fiscal year ended December 31, 2025, the cash and non-cash compensation of our non-executive directors.
|
Fees Earned or Paid in Cash |
Option and Equity Awards |
Total |
||||||||||
|
Name |
2025 |
2025 |
2025 |
|||||||||
|
C. Eric Winzer |
$ | 15,000 | $ | - | $ | 15,000 | ||||||
|
Scott M. Pittman |
$ | 15,000 | $ | - | $ | 15,000 | ||||||
|
Paul D. Mintz, MD |
$ | 15,000 | $ | - | $ | 15,000 | ||||||
Equity Grant Practices
We do
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Beneficial Ownership Table
The following tables set forth information regarding the beneficial ownership of shares of our common stock as of date indicated by (i) each director; (ii) each of the named executive officers, as identified under “Summary Compensation Table” in Item 11 above; (iii) all directors and executive officers as a group and (iv) principal stockholders known by the Company to be beneficial owners of more than five percent of our common stock.
Beneficial ownership is determined in accordance with the rules of the SEC. Except as otherwise noted, below, each named beneficial owner known to the Company has sole voting and investment power with respect to the shares listed. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common stock that could be issued upon the exercise of outstanding options or warrants held by that person that are exercisable at the date indicated or within 60 days thereof are considered outstanding; however, these shares are not considered outstanding when computing the percentage ownership of any other person.
Except as otherwise noted below, the address for each person or entity listed in the table is c/o Nuo Therapeutics, Inc., 8285 El Rio, Suite 190, Houston, TX 77054.
As of March 15, 2026
|
Beneficial Ownership (1) |
||||||||
|
Beneficial Owner |
Number of |
Percent of |
||||||
|
Directors and Named Executive Officers |
||||||||
|
David E. Jorden (2) |
2,400,546 | 4.9 | % | |||||
|
C. Eric Winzer (3) |
364,320 | * | ||||||
|
Scott M. Pittman (4) |
5,610,050 | 11.6 | % | |||||
|
Paul D. Mintz (5) |
253,710 | * | ||||||
|
Peter A. Clausen (6) |
1,091,856 | 2.2 | % | |||||
|
All Directors and Executive Officers as a Group (5 persons) (7) |
9,720,482 | 19.6 | % | |||||
|
Principal Stockholders |
||||||||
|
Charles E. Sheedy (8) |
11,574,198 | 24.0 | % | |||||
|
Boyalife Asset Holding II, Inc. (9) |
4,900,000 | 10.1 | % | |||||
|
Paul Anthony Jacobs (10) |
3,183,500 | 6.6 | % | |||||
|
* |
Less than 1% |
|
(1) |
Based on 48,289,296 shares of common stock outstanding. |
|
(2) |
Includes 454,172 shares issuable upon exercise of options. |
|
(3) |
Includes 191,666 shares issuable upon exercise of options. |
|
(4) |
Includes 180,000 shares issuable upon exercise of options and 30,050 shares issuable upon exercise of warrants |
|
(5) |
Includes 145,416 shares issuable upon exercise of options |
|
(6) |
Includes 318,328 shares issuable upon exercise of options. |
|
(7) |
Includes 1,219,632 shares issuable upon the exercise of options and warrants. |
|
(8) |
Based upon information available to the Company and information contained in Schedule 13D/A filed with the SEC on July 5, 2022 with respect to the beneficial ownership of shares of common stock as of July 5, 2022. According to the Schedule 13D/A, Charles Sheedy shares voting and dispositive power with respect to 3,365 shares held in trusts for the benefit of his children. The mailing address of Charles Sheedy is 6003 Pine Forest, Houston, Texas 77057. The Company has been informed that Andrew Sheedy holds a Statutory Durable Power of Attorney with respect to shares of common stock owned by Charles Sheedy. |
|
(9) |
Based upon information available to the Company and information contained in Schedule 13D/A filed with the SEC on September 21, 2017 with respect to the beneficial ownership of shares of common stock as of September 11, 2017. The mailing address of Boyalife Asset Holding II, Inc. is 2711 Citrus Road, Sacramento, CA 95742. |
|
(10) |
Based upon information contained in Schedule 13G/A filed with the SEC on February 12, 2026 with respect to the beneficial ownership of shares of common stock as of January 23, 2026. According to the Schedule 13G/A, Paul Anthony Jacobs has sole voting and dispositive power of 3,183,500 shares (including 43,500 shares issuable upon exercise of warrants). The mailing address of Mr. Jacobs is 5434 E. Lincoln Drive, Colonia Miramonte #28, Paradise Valley, AZ 85253. |
Securities Authorized for Issuance under Equity Compensation Plans
During the period covered by this Annual Report and currently, the sole equity compensation plan of the Company has been the Nuo Therapeutics, Inc. 2016 Omnibus Incentive Compensation Plan (the “Omnibus Plan”). Refer to Note 7 - Equity and Stock-Based Compensation in the Notes to the Consolidated Financial Statements in this Annual Report for additional information about our equity compensation plans and arrangements.
The following table sets forth information regarding the Omnibus Plan as of December 31, 2025.
|
Plan category |
Number of warrants, |
Weighted average warrants, |
Number of remaining future |
|||||||||
|
Equity compensation plans approved by security holders |
2,380,582 | $ | 0.73 |
928,583 |
||||||||
|
Equity compensation plans not approved by security holders |
— | $ | — | — | ||||||||
|
Total |
2,380,582 | $ | 0.73 |
928,583 |
||||||||
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
Transactions with Related Persons
Except as set forth below, we were not involved in any related person transactions since the beginning of 2023, and we are not involved in any related person transaction currently, that is required to be disclosed under Item 404(d) of Regulation S-K.
2026 Financing
Loan and Security Agreement
On January 21, 2026, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with four lenders (collectively, the “Lenders”). The Loan Agreement provides for loans in an aggregate principal amount of up to $1.6 million with (a) $1.0 million funded on the initial closing date (the “Initial Funding”) and (b) $600 thousand to be funded, if requested in advance by the Company and subject to closing conditions, on September 30, 2026 (the “Second Funding”). The closing of the Initial Funding occurred on January 23, 2026.
The Lenders include Scott M. Pittman, a member of the Board of Directors of the Company and a principal stockholder of the Company, and Paul Anthony Jacobs, a principal stockholder of the Company. Mr. Pittman loaned $200,000 in the Initial Funding and committed to loaning $210,000 in a Second Funding, if any. Mr. Jacobs loaned $300,000 in the Initial Funding and did not commit to loaning additional funds in a Second Funding.
At the closing of the Initial Funding, the Company issued a Secured Promissory Note (each, an “Initial Note”) to each of the Lenders and upon any Second Funding, the Company will issue an additional Secured Promissory Note (each, if any, a “Second Note”). The Initial Note bears interest at an annual rate of 10%. If the Company requests a Second Funding, the Second Note will bear interest at an annual rate of 12% and the interest rate of the Initial Note will also increase to an annual rate of 12% upon the Second Funding.
The maturity date of the Initial Note and any Second Note is December 31, 2028 (the “Maturity Date”). Interest on the Initial Note and, if any, the Second Note (together, the “Notes”) will be payable in Interest Warrants as described below, and not in cash. Interest on the Notes will be payable and issued at the Maturity Date (or earlier upon certain prepayments as described below). Interest on the Notes will accrue on a quarterly calendar basis without regard to partial quarters.
The Notes are secured by a lien upon and security interest in all of the Company’s assets, including intellectual property. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Loan and Security Agreement” for additional information.
Warrants
On January 23, 2026, the closing date of the Initial Funding, and pursuant to the Loan Agreement, the Company issued to each Lender warrants, some of which are subject to vesting provisions, to purchase shares of the Company’s common stock and agreed to issue additional warrants to purchase shares of the Company’s common stock as payment for accrued interest under the Notes.
The warrants issued by the Company at the closing of the Initial Funding consisted of: (i) warrants representing a fee of 0.75% of each Lender’s commitment pursuant to the Loan Agreement (the “Commitment Warrants”); (ii) warrants representing a fee of 1.0% of each Lender’s loan amount in the Initial Funding (the “Origination Initial Warrants”); (iii) warrants representing 20% coverage of each Lender’s loan amount in the Initial Funding (the “Capital Initial Warrants”); (iv) warrants representing a fee of 1.25% of each Lender’s loan commitment amount, if any, in a Second Funding, vesting on September 30, 2026 only upon the occurrence of a Second Funding (the “Origination Second Warrants”); (v) warrants representing 25% coverage of each Lender’s loan commitment amount, if any, in a Second Funding, vesting on September 30, 2026 only upon the occurrence of a Second Funding (the “Capital Second Warrants”); and (vi) warrants representing a fee, if any, vesting only in the event of a voluntary or mandatory prepayment and at a percentage of each Lender’s then outstanding principal balance (the “Prepayment Warrants”). In addition, warrants are issuable by the Company at the Maturity Date (or earlier upon voluntary or mandatory prepayment as described above) as payment for accrued interest on the Notes (the “Interest Warrants”).
Except as described above, each of the warrants issued and issuable under the Loan Agreement contains similar material terms. The exercise price of each of the warrants is $1.50 per share of the Company’s common stock. The determination of the number of shares issuable upon exercise of each of the warrants is calculated based upon the same $1.50 exercise price. Each of the warrants contains provisions for anti-dilution and certain other adjustments, such as due to stock dividends, stock splits, and reverse stock splits. The expiration date of each warrant is January 23, 2031 (the "Expiration Date"), which is five years from the closing date of the Initial Funding. Subject to the vesting provisions described above, each of the warrants is exercisable at any time, or from time to time up to and including the Expiration Date, by (a) making a cash payment equal to the exercise price multiplied by the quantity of shares, or (b) on a cashless basis by receiving a net number of shares calculated pursuant to the formula set forth in the warrant, provided that the shares issuable upon exercise are not registered for sale under the Securities Act of 1933, as amended.
As a party to the Loan Agreement, Mr. Pittman, a member of the Board of Directors and a principal stockholder of the Company, was among the Lenders to whom the Company agreed to issue warrants. In particular, Mr. Pittman was issued upon the Initial Funding on January 23, 2026: (i) a Commitment Warrant exercisable for 2,050 shares; (ii) an Origination Initial Warrant exercisable for 1,333 shares; (iii) a Capital Initial Warrant exercisable for 26,667 shares; (iv) an Origination Second Warrant exercisable, subject to vesting as described above, for 1,750 shares; (v) a Capital Second Warrant exercisable, subject to vesting as described above, for 35,000 shares; and (vi) a Prepayment Warrant exercisable, subject to vesting as described above, for up to 7,516 shares. In addition, an Interest Warrant exercisable for up to 55,100 shares is issuable to Mr. Pittman at the Maturity Date (or earlier upon voluntary or mandatory prepayment as described above).
As a party to the Loan Agreement, Mr. Jacobs, a principal stockholder of the Company, was among the Lenders to whom the Company agreed to issue warrants. In particular, Mr. Jacobs was issued upon the Initial Funding on January 23, 2026: (i) a Commitment Warrant exercisable for 1,500 shares; (ii) an Origination Initial Warrant exercisable for 2,000 shares; (iii) a Capital Initial Warrant exercisable for 40,000 shares; and (iv) a Prepayment Warrant exercisable, subject to vesting as described above, for up to 5,500 shares. In addition, an Interest Warrant exercisable for up to 48,000 shares is issuable to Mr. Jacobs at the Maturity Date (or earlier upon voluntary or mandatory prepayment as described above).
2025 Private Placements
On July 30, 2025, the Company entered into a Securities Purchase Agreement, dated as of July 23, 2025, with certain accredited investors for the sale of 527,612 shares of the Company’s common stock at a price of $1.50 per share for proceeds of $791,418 (the “2025 Private Placement”). The closing of the 2025 Private Placement occurred on July 31, 2025. The investors in the 2025 Private Placement included Scott M. Pittman, a member of the Board of Directors and a principal stockholder of the Company, Charles E. Sheedy, a principal stockholder of the Company, and Paul Anthony Jacobs, a principal stockholder of the Company. Messrs. Pittman, Sheedy, and Jacobs invested $5,919, $200,000, and $300,000 respectively in the 2025 Private Placement.
2024 Private Placements
On May 17, 2024, the Company entered into a Securities Purchase Agreement, dated as of May 10, 2024, with certain accredited investors for the sale of 867,833 shares of the Company’s common stock at a price of $0.75 per share for proceeds of $650,875 (the “May Private Placement”). The closing of the May Private Placement occurred on May 20, 2024. The investors in the May Private Placement included Scott M. Pittman, a member of the Board of Directors and principal stockholder of the Company, Peter A. Clausen, the Chief Scientific and Operation Officer of the Company, and Charles E. Sheedy, a principal stockholder of the Company. Messrs. Pittman, Clausen, and Sheedy invested $101,250, $11,250, and $75,000, respectively in the May Private Placement.
On September 18, 2024, the Company entered into a Securities Purchase Agreement, dated as of September 13, 2024, with certain accredited investors for the sale of 1,132,167 shares of the Company’s common stock at a price of $0.75 per share for proceeds of $849,125 (the “September Private Placement”). The closing of the September Private Placement occurred on September 19, 2024. The investors in the September Private Placement included Charles E. Sheedy, a principal stockholder of the Company. Mr. Sheedy invested $93,750 in the September Private Placement.
Director Independence
The Company’s current directors are David E. Jorden, C. Eric Winzer, Scott M. Pittman, and Paul D. Mintz. The Board has chosen to apply Nasdaq Stock Market corporate governance requirements and standards in determining director independence. The Board has determined that all of the Company’s current directors meet such independence requirements with the exception of Mr. Jorden, who serves as the Chief Executive and Financial Officer of the Company.
ITEM 14. Principal Accounting Fees and Services
Since June 7, 2024, MaloneBailey, LLP has been our independent registered public accounting firm. Previously beginning August 9, 2018, Marcum LLP had been our independent registered public accounting firm. The following table presents fees for professional services rendered by our principal accountants for the fiscal years 2025 and 2024:
|
2025 |
2024 |
|||||||
|
Audit Fees (1) |
$ | 139,000 | 135,000 | |||||
|
Audit-Related Fees |
– | – | ||||||
|
Tax Fees |
– | – | ||||||
|
All Other Fees |
– | – | ||||||
|
(1) |
Audit fees represent fees accrued and/or paid for annual professional services provided in connection with the audit of the Company’s annual financial statements, reviews of its quarterly financial statements, audit services provided in connection with statutory and regulatory filings for those years and fees related to non-routine SEC filings. In 2024, our audit fees paid to Marcum LLP totaled approximately $28,000 for review of our quarterly financial statements in early 2024 while MaloneBailey, LLP was paid approximately $106,000 subsequent to their June 2024 engagement. |
Pursuant to its charter, the Audit Committee must pre-approve audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditors. The Audit Committee may, when appropriate, form and delegate authority to subcommittees consisting of one or more members of the Audit Committee, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.
All audit services and permitted non-audit services were pre-approved by the Audit Committee.
ITEM 15. Exhibits and Financial Statement Schedules
|
(a)(1) |
Financial Statements |
See the Index to Consolidated Financial Statements at page F-1 of this Annual Report:
|
(a)(2) |
Financial Statement Schedules |
Financial statement schedules have been omitted since they either are not required, not applicable, or the information is otherwise included in our consolidated financial statements or the related footnotes.
|
(a)(3) |
Exhibits |
|
* |
Indicates a management contract or compensatory plan or arrangement. |
|
# |
Certain portions have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K by means of marking such portions with brackets (“[****]”) because the identified confidential portions are not material and are the type of information that the Registrant treats as private or confidential. |
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
|
NUO THERAPEUTICS, INC. |
||
|
Date: March 30, 2026 |
By: |
/s/ David E. Jorden |
|
David E. Jorden |
||
|
Chief Executive and Financial Officer and Director |
||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Date: March 30, 2026 |
/s/ David E. Jorden |
|
David E. Jorden |
|
|
Chief Executive and Financial Officer and Director |
|
|
(Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) |
|
|
Date: March 30, 2026 |
/s/ C. Eric Winzer |
|
C. Eric Winzer |
|
|
Director |
|
|
Date: March 30, 2026 |
/s/ Scott M. Pittman |
|
Scott M. Pittman |
|
|
Director |
|
|
Date: March 30, 2026 |
/s/ Paul D. Mintz |
|
Paul D. Mintz |
|
|
Director |
|
NUO THERAPEUTICS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
Audited Financial Statements |
|
|
Report of Independent Registered Public Accounting Firm (PCAOB Firm ID No. |
|
|
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) |
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Nuo Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Nuo Therapeutics, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Matter
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
www.malonebailey.com
We have served as the Company's auditor since 2024.
March 30, 2026
|
Consolidated Balance Sheets |
|
December 31, |
December 31, |
|||||||
|
2025 |
2024 |
|||||||
|
Assets |
||||||||
|
Current assets |
||||||||
|
Cash |
$ | $ | ||||||
|
Accounts receivable, net |
||||||||
|
Inventory, net |
||||||||
|
Prepaid expenses and other current assets |
||||||||
|
Total current assets |
||||||||
|
Property and equipment, net |
||||||||
|
Operating lease right of use assets |
||||||||
|
Total assets |
$ | $ | ||||||
|
Liabilities and Stockholders' Equity |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable |
$ | $ | ||||||
|
Accrued expenses |
||||||||
|
Deferred revenues |
||||||||
|
Current portion of operating lease liabilities |
||||||||
|
Total current liabilities |
||||||||
|
Deferred revenue – long term |
||||||||
|
Note payable |
||||||||
|
Note payable – related party |
||||||||
|
Non-current portion of operating lease liabilities |
||||||||
|
Total liabilities |
||||||||
|
Commitments and contingencies (Note 10) |
|
|
||||||
|
Stockholders' Equity (Deficit) |
||||||||
|
Common stock; $ |
||||||||
|
Additional paid-in capital |
||||||||
|
Accumulated deficit |
( |
) | ( |
) | ||||
|
Total stockholders' equity (deficit) |
( |
) | ||||||
|
Total liabilities and stockholders' equity (deficit) |
$ | $ | ||||||
|
Consolidated Statements of Operations |
|
Year ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Revenue |
||||||||
|
Product sales |
$ | $ | ||||||
|
License revenue |
||||||||
|
Total revenue |
||||||||
|
Costs of sales |
||||||||
|
Gross profit |
||||||||
|
Operating expenses |
||||||||
|
Selling, general and administrative |
||||||||
|
Total operating expenses |
||||||||
|
Loss from operations |
( |
) | ( |
) | ||||
|
Other income (expense) |
||||||||
|
Interest income (expense), net |
( |
) | ||||||
|
Gain on settlement of legacy accounts payable obligations |
||||||||
|
Other income |
||||||||
|
Loss before benefit for income taxes |
( |
) | ( |
) | ||||
|
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
Net loss per share – basic and diluted |
$ | ( |
) | $ | ( |
) | ||
|
Weighted average shares outstanding – basic and diluted |
||||||||
|
Consolidated Statements of Changes in Stockholders' Equity (Deficit) |
For the Years Ended December 31, 2025 and 2024
|
Common Stock |
||||||||||||||||||||
|
Shares |
Amount (par $0.0001) |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders' Equity (Deficit) |
||||||||||||||||
|
Balance, December 31, 2023 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Stock-based compensation expense |
- | |||||||||||||||||||
|
Issuance of common stock for cash proceeds |
||||||||||||||||||||
|
Issuance of common stock for warrant exercise |
||||||||||||||||||||
|
Issuance of common stock for cashless warrant exercise |
( |
) | ||||||||||||||||||
|
Issuance of common stock for option exercise |
||||||||||||||||||||
|
Net loss |
- | ( |
) | ( |
) | |||||||||||||||
|
Balance, December 31, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Stock-based compensation expense |
- | |||||||||||||||||||
|
Issuance of common stock for cash proceeds |
||||||||||||||||||||
|
Issuance of common stock for option exercises |
||||||||||||||||||||
|
Issuance of common stock for cashless option exercises |
( |
) | ||||||||||||||||||
|
Issuance of common stock for services rendered |
||||||||||||||||||||
|
Net loss |
- | ( |
) | ( |
) | |||||||||||||||
|
Balance, December 31, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Consolidated Statements of Cash Flows
|
Year ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
|
Depreciation expense |
||||||||
|
Stock-based compensation |
||||||||
|
Provision for credit losses |
||||||||
|
Provision for inventory obsolescence |
||||||||
|
Vendor expense settled in shares of common stock |
||||||||
|
Gain on settlement of accounts payable |
( |
) | ||||||
|
Amortization of operating lease right of use assets |
||||||||
|
Changes in operating assets and liabilities: |
||||||||
|
Accounts receivable, net |
( |
) | ( |
) | ||||
|
Inventory, net |
( |
) | ||||||
|
Prepaid expenses and other current assets |
||||||||
|
Accounts payable |
( |
) | ||||||
|
Accrued liabilities |
||||||||
|
Deferred revenue |
||||||||
|
Operating lease liabilities |
( |
) | ( |
) | ||||
|
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
|
Purchases of property and equipment |
( |
) | ( |
) | ||||
|
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
|
Net proceeds from issuance of common stock |
||||||||
|
Net proceeds from option exercises |
||||||||
|
Net proceeds from note payable issuance |
||||||||
|
Net proceeds from note payable issuance – related party |
||||||||
|
Net proceeds from warrant exercise |
||||||||
|
Net cash provided by financing activities |
||||||||
|
NET INCREASE (DECREASE) IN CASH |
( |
) | ||||||
|
Cash, beginning of period |
||||||||
|
Cash, end of period |
$ | $ | ||||||
|
SUPPLEMENTAL INFORMATION |
||||||||
|
Cash paid during the period for: |
||||||||
|
Interest |
$ | $ | ||||||
NUO THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Description of Business
Description of Business
Nuo Therapeutics, Inc. (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a Delaware corporation organized in 1998 under the name Informatix Holdings, Inc. In 1999, Autologous Wound Therapy, Inc., an Arkansas Corporation, merged with and into Informatix Holdings, Inc. and the name of the surviving corporation was changed to Autologous Wound Therapy, Inc. In 2000, Autologous Wound Therapy, Inc. changed its name to Cytomedix, Inc. (“Cytomedix”). In 2001, Cytomedix, filed for bankruptcy, from which it emerged in 2002 under a Plan of Reorganization. In September 2007, Cytomedix received Section 510(k) clearance from the U. S. Food and Drug Administration (“FDA”) for the AutoloGel™ System, now known as the Aurix System (“Aurix”), for processing peripheral blood into an autologous platelet rich plasma ("PRP") for wound management. In 2012, Cytomedix, acquired Aldagen, Inc. (“Aldagen”), a privately held developmental cell-therapy company. Aldagen remains a non-operational, wholly owned subsidiary of the Company.
In 2014, Cytomedix changed its name to Nuo Therapeutics, Inc. In 2016, Nuo filed for and emerged from bankruptcy under a Chapter 11 Plan of Reorganization. Effective May 1, 2019, Nuo furloughed its remaining employees and ceased standard operational activities as it awaited developments concerning its reconsideration request with the Centers for Medicare & Medicaid Services (“CMS”) regarding Medicare coverage for Aurix. In April 2021, CMS issued a favorable National Coverage Determination (“NCD”) for autologous PRP products and Nuo restarted business activities in October 2021. Nuo's principal offices are located in Houston, Texas.
Note 2 –Liquidity and Summary of Significant Accounting Policies
Liquidity
Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, and executing licensing arrangements, and to a lesser extent by generating royalties and product revenues. In mid-2019, we ceased ongoing operational activities as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. In April 2021, CMS issued an NCD mandating national reimbursement coverage for Aurix when used in chronic non-healing wounds where a clinical diagnosis of diabetes exists for the patient. During the year ended December 31, 2024, we sold
We have incurred, and continue to incur, recurring losses. As of December 31, 2025, we have an accumulated deficit of approximately $
The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due.
We believe based on the operating cash requirements and capital expenditures expected for the next twelve months from the date of issuance of the financial statements that our current resources and projected revenue from sales of Aurix products are insufficient to support our operations for the next 12 months. As such, we believe that substantial doubt about our ability to continue as a going concern exists. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Even assuming we succeed in raising sufficient additional funds in the near future to avoid a cessation of business operations, we require additional capital and will seek to continue financing our operations with external capital for the foreseeable future. Any debt financings may require us to comply with additional onerous financial covenants and restrict our business operations. Our ability to complete additional financings is dependent on, among other things, market reception of the Company and perceived likelihood of success of our business model, the state of the capital markets at the time of any proposed equity or debt offering, state of the credit markets at the time of any proposed loan financing, and on the relevant transaction terms, among other things. We may not be able to obtain additional capital as required to finance our efforts, through equity or debt financing, other transactions, or any combination thereof, on satisfactory terms or at all. Additionally, any such financing, if at all obtained, may not be adequate to meet our capital needs and to support our operations.
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen. All significant inter-company accounts and transactions are eliminated in consolidation. The Company operates its business in operating segment consisting of reporting unit.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying consolidated financial statements, estimates are used for, but not limited to stock-based compensation, the fair value of common stock and equity-linked and derivative financial instruments, recoverability and depreciable lives of long-lived assets, deferred taxes and associated valuation allowance, the valuation and classification of debt instruments, and allowances for inventory obsolescence and doubtful accounts. Actual results could differ from those estimates.
Credit Concentration
We generate accounts receivable from the sale of our products. Specific customer receivable balances in excess of 10% of total receivables at December 31, 2025 and December 31, 2024 are listed below.
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Customer A |
- | |||||||
|
Customer B |
* | |||||||
|
Customer C |
* | |||||||
|
Customer D |
* | |||||||
* less than 10%
Revenue from significant customers exceeding 10% of total revenues for the years ended December 31, 2025 and December 31, 2024 is listed below. During the year ended December 31, 2025, over
|
Year Ended December 31, 2025 |
Year Ended December 31, 2024 |
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Customer A |
- | |||||||
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Customer C |
* | |||||||
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Customer D |
* | |||||||
* less than 10%
Historically, we have used single suppliers for several components of the Aurix product line. We outsource the manufacturing of various product components to contract manufacturers. While we believe these manufacturers demonstrate competency, reliability and stability, there is no assurance that one or more of them will not experience an interruption or inability to provide us with the products needed to satisfy customer demand. Additionally, while most of the components of Aurix are generally readily available on the open market, a reagent, bovine thrombin, is available exclusively through Pfizer, with whom we have an existing supply agreement. Furthermore, we have historically sourced the ascorbic acid reagent component from a single supplier but have now established dual supply of this component.
Cash
When applicable, we consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Cash potentially subjects us to a concentration of credit risk, as approximately $
Accounts Receivables, net
We generate accounts receivables from the sale of the Aurix products and sales made to Smith+Nephew under the Distribution Agreement. Accounts receivable as of December 31, 2025 and December 31, 2024 reflects customer receivables from commercial sales activities.
We provide for an allowance against receivables for estimated losses that may result from a customer’s inability or unwillingness to pay. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. Accounts are written off against the allowance for doubtful accounts when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. During the years ended December 31, 2025 and 2024, we recorded provisions for credit losses of $
Inventory, net
Our inventory is produced by third-party manufacturers and consists of raw materials and finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. We maintain an inventory of kits, reagents, and other disposables having shelf-lives that generally range from 12 months to two years.
As of December 31, 2025, our inventory consisted of approximately $
We provide for an allowance against inventory for estimated losses that may result in excess and obsolete inventory (i.e., from the expiration of products). Our reserve for inventory obsolescence is estimated based upon the inventory’s remaining shelf-life and our anticipated ability to sell such inventory, which is estimated using past experience and future forecasts, within its remaining shelf life. Expired products are segregated and used for demonstration purposes only; we will record the associated expense for this reserve to cost of sales in the consolidated statements of operations. For the years ended December 31, 2025 and 2024, we recorded provisions for inventory obsolescence of $
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and amortization. Assets are depreciated, using the straight-line method, over their estimated useful life ranging from to years. Maintenance and repairs are charged to operations as incurred. On at least an annual basis, management determines if there are any depreciating assets that are no longer in use. If there are, the residual balances of such assets are considered impaired.
Leases
At the inception of a contract, we determine if the arrangement is, or contains, a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Rent expense is recognized on a straight-line basis over the lease term.
We have made certain accounting policy elections whereby we (i) do not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combine lease and non-lease elements of our operating leases.
Revenue Recognition
We analyze our revenue arrangements to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers; (ii) identification of distinct performance obligations in the contract; (iii) determination of contract transaction price; (iv) allocation of contract transaction price to the performance obligations; and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation. We recognize revenues upon the satisfaction of the performance obligations (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. In certain instances where the revenue is variable and we cannot estimate the amount of consideration to which we expect to be entitled, we are constrained from initially recognizing revenue. In these cases, once the estimate is no longer constrained, we recognize revenue in the amount of consideration to which we expect to be entitled.
We provide for the sale of our products, including disposable processing sets and supplies through our distribution agreements and directly to customers. Revenue from the sale of products is recognized upon shipment of products to the customers. We do not maintain a reserve for returned products, as in the past those returns have not been material and are not expected to be material in the future. Direct costs associated with product sales are recorded at the time that revenue is recognized.
For the year ended December 31, 2025, total product revenues are disaggregated between Aurix and Private Label kits of approximately $
Our distribution agreement with Smith+Nephew (See Note 4 – Distribution Agreement with Smith + Nephew for additional information) provides for an upfront distribution fee which will be recognized as revenue ratably on a straight-line basis over the initial 5-year term of the agreement. The sale to Smith+Nephew of the private label Aurix product is a bill and hold arrangement whereby Nuo is responsible for the fulfillment of Smith+Nephew customer orders. Revenue recognition under bill and hold arrangements occurs when control of the goods transfers to the customer (Smith+Nephew). The satisfaction of certain criteria are required to demonstrate the customer has obtained control of the goods. All of the criteria are satisfied and therefore revenue recognition is considered appropriate.
Stock-Based Compensation
The fair value of employee stock options is measured at the date of grant. Expected volatility for options are based on the equally weighted average historical volatility from comparable public companies with an expected term consistent with ours. Expected years until exercise represents the period of time that options are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. We recognize forfeitures of stock-based awards as they occur. We estimate that the dividend rate on our common stock will be zero. The assumptions are summarized in the following table:
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2025 |
2024 |
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|
Risk free rate |
- | ||||||||
|
Weighted average expected years until exercise |
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Expected stock volatility |
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Dividend yield |
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Income Taxes
We account for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. Tax rate changes are reflected in income during the period such changes are enacted. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid. We expect that tax law changes contained in the Inflation Reduction Act and CHIPS Act will not have a material impact on its provision for income taxes.
A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. All of our tax years remain subject to examination by the tax authorities.
Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no penalties and interest incurred in 2025 and 2024.
Fair Value Measurements
Our consolidated balance sheets may include certain financial instruments that are carried at fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:
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● |
Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; |
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● |
Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
|
|
● |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period if applicable, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.
Basic and Diluted Earnings (Loss) per Share
In periods of net loss, basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.
For periods of net income, diluted earnings per share is computed using the more dilutive of the “treasury method” or “two class method.” Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to common stockholders by the weighted- average number of shares outstanding plus the dilutive impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and convertible notes using the if-converted method.
The following table provides a reconciliation of the numerator and denominators used in the calculation of basic and diluted loss per share for the years ended December 31, 2025 and 2024:
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For the year ended December 31, |
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2025 |
2024 |
|||||||
|
Net Loss – basic and diluted |
$ | ( |
) | $ | ( |
) | ||
|
Weighted average shares outstanding – basic and diluted |
||||||||
|
Net Loss per Share – basic and diluted |
$ | ( |
) | $ | ( |
) | ||
The following table sets forth the potential dilutive securities excluded from the calculation of diluted loss per share for the years ended December 31, 2025 and 2024:
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For the year ended December 31, |
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2025 |
2024 |
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Options |
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Warrants |
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Performance Shares |
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Segment Information
Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) for which discrete financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive and Financial Officer. We view our operations and manages our business as a operating and reporting segment. All our long-lived assets are in the United States.
Recent Accounting Developments
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which applies to all public business entities. This standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted.
We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our consolidated results of operations, financial position, or cash flows.
Note 3 – Property and Equipment
Property and equipment, net consisted of the following:
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December 31, 2025 |
December 31, 2024 |
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|
Medical equipment |
$ | $ | ||||||
|
Office/warehouse equipment |
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|
Warehouse/production equipment |
||||||||
|
Less accumulated depreciation |
( |
) | ( |
) | ||||
|
Property and equipment, net |
$ | $ | ||||||
Depreciation expense was $
Note 4 – Distribution Agreement with Smith+Nephew
On March 31, 2025, we entered into a Distribution Agreement with Smith & Nephew, Inc (“Smith+Nephew”), a U.S. subsidiary of Smith & Nephew PLC, a global medical technology company. Under the agreement, we will supply to Smith+Nephew its own private label of our Aurix product. Although Smith+Nephew will be the sole and exclusive distributor in the United States of its own private label Aurix product, we have the right and will continue to market, sell, and distribute our branded Aurix product. During the year ended December 31, 2025, we recognized $
Under the agreement, Smith+Nephew will purchase private label product from us, from time to time at agreed upon transfer pricing and we will manufacture, package, and ship the product to Smith+Nephew’s customers in accordance with purchase orders and the agreement. During the 5-year initial term of the agreement commencing on the date of first sale by Smith+Nephew, minimum annual purchase commitments of an average of approximately $
As consideration for entering into the agreement, we received an upfront fee of $
The agreement is for an initial term of years and is renewable for additional -year terms subject to earlier termination in accordance with the terms and conditions of the agreement. Although the agreement is exclusive to Smith+Nephew in the United States, we are entitled to maintain our existing distributors and sales agents for the Aurix product. The agreement also contains other standard and negotiated terms and conditions including non-solicitation of each parties’ customers based on identified customer lists, and certain liability and indemnity clauses.
In connection with entering into the agreement, Smith+Nephew obtained certain additional information rights related to our business and corporate matters. In particular, we provided Smith+Nephew a right of notification and a right of first negotiation over a defined period, in the event we receive from another party a proposal for (a) the license, assignment, transfer, or disposal of our Aurix product or related products, or (b) a business combination that we submit or recommend to our stockholders. These rights continue for a limited period of the initial term of the agreement.
Note 5 — Accrued Liabilities
Accrued liabilities consisted of the following:
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December 31, |
December 31, |
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|
2025 |
2024 |
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Accrued vacation payable |
$ | $ | ||||||
|
Accrued commissions payable |
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Accrued professional fees |
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Other payables |
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|
Total accrued liabilities |
$ | $ | ||||||
Note 6 – Stock Purchase Warrants
The following schedule reflects outstanding stock purchase warrants as of December 31, 2025 and 2024:
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Description |
December 31, 2025 |
December 31, 2024 |
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2022 Sales incentive warrants |
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Total |
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During the year ended December 31, 2022, we issued two warrants to purchase (i)
Note 7 – Equity and Stock-Based Compensation
Under the Company’s Second Amended and Restated Certificate of Incorporation, we have the authority to issue a total of
Pacific Medical Common Stock and Warrant Purchase Agreement
In August 2022, we entered into a Common Stock and Warrant Purchase Agreement (the “Agreement”) with Pacific Medical, Inc. (“Pacific Med”) for the sale and issuance of shares of common stock and warrants to purchase shares of common stock. Pacific Med is the exclusive distributor for the Aurix System product within a territory that covers the states of Washington, Oregon, Idaho, Montana, Wyoming, most of California, the northern half of Nevada, plus Alaska.
Pursuant to the Agreement, Pacific Med purchased
As part of the Agreement and as additional incentive compensation with respect to Pacific Med’s performance under its existing sales and distribution arrangement, we also provided to Pacific Med two compensatory performance-based stock purchase warrants and certain contingently issuable performance shares. The first warrant entitled Pacific Med to purchase up to
2024 Private Placement Equity Issuances
We sold
2025 Private Placement Equity Issuance
We sold
Issuance of Common Stock for Vendor Services Rendered
During the year ended December 31, 2025, we issued
Stock-Based Compensation
In July 2016, the Board of Directors approved the 2016 Omnibus Incentive Plan (the “Plan”), and in November 2016, holders of a majority of our capital stock approved the Plan, as amended and restated, which provides for the grant of equity and cash incentive awards to officers, directors and employees of, and consultants to, Nuo Therapeutics and its subsidiaries. Further, in March 2022, the Board approved an amendment to the Plan to increase the shares available to
A summary of stock option activity under the 2016 Omnibus Plan for the years ended December 31, 2025 and 2024 is presented below:
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Stock Options – 2016 Omnibus Plan |
Shares |
Weighted Average |
Weighted |
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Outstanding at January 1, 2024 |
$ | |||||||||||
|
Granted |
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Exercised |
( |
) | ( |
) | - | |||||||
|
Forfeited or expired |
( |
) | ( |
) | - | |||||||
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Outstanding at December 31, 2024 |
$ | |||||||||||
|
Granted |
||||||||||||
|
Exercised |
( |
) | ( |
) | - | |||||||
|
Forfeited or expired |
( |
) | ( |
) | - | |||||||
|
Outstanding at December 31, 2025 |
$ | |||||||||||
|
Exercisable at December 31, 2025 |
$ | |||||||||||
During the year ended December 31, 2025, there were
The aggregate intrinsic value for outstanding and exercisable options as of December 31, 2025 was approximately $
For the years ended December 31, 2025 and 2024, the Company recorded total stock-based compensation expense of $
Note 8 — Income Taxes
Income tax expense (benefit) for the years ended December 31, 2025 and 2024 consisted of the following:
|
Year ended December 31, |
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|
2025 |
2024 |
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|
Current provision (benefit) |
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|
Federal |
$ | $ | ||||||
|
State |
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Deferred provision (benefit) |
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|
Federal |
||||||||
|
State |
( |
) | ||||||
|
Change in valuation allowance |
( |
) | ( |
) | ||||
|
Consolidated provision (benefit) |
$ | $ | ||||||
Significant components of the Company's deferred tax assets and liabilities consisted of the following at December 31, 2025 and 2024:
|
December 31, |
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|
2025 |
2024 |
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|
Deferred tax assets: |
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|
Net operating loss carryforwards and credits |
$ | $ | ||||||
| Deferred revenue | ||||||||
|
Property, equipment, intangible assets, and other |
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|
Stock-based compensation |
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|
Deferred tax liabilities |
||||||||
|
Valuation allowance |
( |
) | ( |
) | ||||
|
Net deferred tax assets |
$ | $ | ||||||
The following table presents a reconciliation between the U.S. federal statutory income tax rate and the Company's effective tax rate:
| Year ended December 31, | ||||||||||||||||
|
2025 |
2024 |
|||||||||||||||
|
Federal tax rate |
$ | ( |
) | % | $ | ( |
) | % | ||||||||
|
Non-taxable or non-deductible items |
( |
)% | ( |
)% | ||||||||||||
|
Federal NOLCF and credits expiration |
( |
)% | ( |
)% | ||||||||||||
|
Change in valuation allowance |
( |
) | % | ( |
) | % | ||||||||||
|
Other |
( |
)% | ||||||||||||||
|
Effective tax rate |
$ | % | $ | % | ||||||||||||
We have federal net operating loss carry-forwards of approximately $
Note 9 - Segment Information
We manage our business activities on a consolidated basis and operate as a operating segment dedicated to developing and marketing products for chronic wound care that harness the regenerative capacity of the human body to trigger natural healing. We derive our revenue from sales of the Aurix product line and products sold to Smith+Nephew under the Distribution Agreement. The accounting policies of the segment are the same as those described in Note 2.
Our CODM is Nuo’s Chief Executive and Financial Officer, David E. Jorden. Our CODM uses net loss, as reported in our Consolidated Statements of Operations, in evaluating the performance of our segment and determining how to allocate our resources as a whole. The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented.
The following table presents the operating results of the segment:
|
December 31, |
December 31, |
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|
2025 |
2024 |
|||||||
|
Total revenues |
$ | $ | ||||||
|
Less significant segment expenses: |
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|
Aurix cost of sales (excluding provision for inventory obsolescence and applicable depreciation expense) |
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|
Private label cost of sales |
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|
Total compensation and benefit costs (including third party commission expense) |
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|
Provisions for credit losses and inventory obsolescence |
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|
All other operating expenses (excluding depreciation and credit loss provision) (a) |
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|
Other segment items: |
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|
Depreciation, amortization of right of use assets, and stock-based compensation |
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|
Interest expense (income), net |
( |
) | ||||||
|
Other expense (income), net(b) |
( |
) | ( |
) | ||||
|
Consolidated net loss |
$ | ( |
) | $ | ( |
) | ||
(a)
(b)
Note 10 – Commitments and Contingencies
From time to time, the Company may be involved in various legal proceedings, claims, and investigations arising in the ordinary course of business. The Company records a liability when it is probable that a loss has been incurred and the amount can be reasonably estimated. While the outcome of such matters cannot be predicted with certainty, management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
In February 2022, we entered into a commercial operating lease for our primary office and warehouse/distribution space in Texas. The lease requires us to pay for insurance, taxes, and our share of common operating expenses. This lease expires in March 2027. This lease is classified as an operating lease, and we established a right of use asset and lease liability using a
The following table presents the components of rent expense:
|
For the Year Ended December 31, |
For the Year Ended December 31, |
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|
2025 |
2024 |
|||||||
|
Operating lease costs |
$ | $ | ||||||
|
Short term lease costs |
||||||||
|
Variable lease costs (common area maintenance and applicable taxes) |
||||||||
|
Total rent expense |
$ | $ | ||||||
Cash paid for amounts included in operating lease liabilities was approximately $
Future undiscounted cash flows under this lease are:
|
2026 |
$ | |||
|
2027 |
||||
|
Total operating lease payments |
||||
|
Discount factor |
( |
) | ||
|
Present value of operating lease liabilities |
||||
|
Current portion of operating lease liabilities |
( |
) | ||
|
Non-current portion of operating lease liabilities |
$ |
Note 11 – Subsequent Events
Secured Promissory Notes
As previously disclosed in Note 2 - Liquidity and Summary of Significant Accounting Policies, we received $
At the closing of the Initial Funding, we issued a Secured Promissory Note (each, an “Initial Note”) to each of the Lenders and upon any Second Funding, we will issue an additional Secured Promissory Note (each, if any, a “Second Note”). The Initial Note bears interest at an annual rate of
The maturity date of the Initial Note and any Second Note is December 31, 2028 (the “Maturity Date”).
Interest on the Initial Note and, if any, the Second Note (together, the “Notes”) will be payable in warrants and not in cash. Interest on the Notes will be payable and issued at the Maturity Date or earlier upon certain prepayments. Interest on the Notes will accrue on a quarterly calendar basis without regard to partial quarters. The Notes are interest only through December 31, 2026. The principal on the Notes is repayable in cash in equal quarterly installments on the last business day of each calendar quarter commencing March 31, 2027 and continuing to the Maturity Date.
We may, at our option on the last business day of a calendar quarter commencing December 31, 2026, voluntarily prepay the Notes in their entirety by paying the then outstanding principal balance and all accrued interest on the Notes, subject to a prepayment fee equal to
In addition, the Loan Agreement mandates the prepayment of the Notes in the event of (A) an equity financing of at least $
The Notes are secured by a lien upon and security interest in all of the Company’s assets, including intellectual property. The Loan Agreement contains customary representations, warranties, and covenants.
Warrants
On the closing date of the Initial Funding, and pursuant to the Loan Agreement, we issued to each Lender warrants, some of which are subject to vesting provisions, to purchase shares of Nuo’s common stock and agreed to issue additional warrants to purchase shares of our common stock as payment for accrued interest under the Notes.
The warrants issued by us at the closing of the Initial Funding consisted of: (i) warrants representing a fee of
Except as described above, each of the warrants issued and issuable under the Loan Agreement contains similar material terms. The exercise price of each of the warrants is $
Accordingly, on January 23, 2026, we issued: (i) Commitment Warrants immediately exercisable for an aggregate of
Issuance of Common Stock for Vendor Services Rendered
Subsequent to the year end, we issued
Issuance of Common Stock for Option Exercise
Subsequent to year end,
Option Grant
Subsequent to year end,