Nuo Therapeutics (AURX) Q1 2026: fast revenue growth, new debt and going-concern risk
Rhea-AI Filing Summary
Nuo Therapeutics reported sharply higher Q1 2026 revenue but remains loss‑making and financially constrained. Total revenue rose to about $1.3 million, up from $0.5 million a year earlier, driven by Aurix growth and new private‑label sales plus $77,941 of Smith+Nephew distribution fee revenue.
Gross profit increased to roughly $0.85 million, though gross margin slipped to about 65% as centrifuge devices were sold at near break‑even transfer prices. Operating expenses rose to about $1.3 million, reflecting higher compensation and commissions, and the company posted a net loss of $618,466, narrower than the prior‑year loss of $746,128.
Cash was only $263,827 at March 31, 2026 against current liabilities of about $1.4 million, and stockholders’ deficit widened to approximately $1.4 million. Management states there is “substantial doubt” about the ability to continue as a going concern and is relying on external capital, including a new secured note facility of up to $1.6 million with warrants, of which $1.0 million is funded.
Positive
- Strong top-line growth: Q1 2026 total revenue rose to approximately $1.3 million from $0.5 million a year earlier, driven by higher Aurix demand and new private-label and distribution fee revenue.
- Commercial validation via Smith+Nephew: A five-year U.S. distribution agreement with Smith+Nephew adds private-label Aurix volume, includes an upfront $1.5 million fee plus a $50,000 amendment fee, and sets minimum annual purchase commitments averaging about $500,000.
Negative
- Going-concern uncertainty: Management states there is substantial doubt about the company’s ability to continue as a going concern, given recurring losses, limited cash, and dependence on external funding.
- Weak balance sheet and rising leverage: Cash was only about $0.26 million versus $1.37 million of current liabilities, stockholders’ deficit was roughly $1.38 million, and new secured notes of $1.0 million add interest-bearing debt and warrant dilution.
Insights
Revenue is ramping quickly, but balance sheet risk remains high.
Nuo Therapeutics more than doubled Q1 2026 revenue to $1.3 million, helped by Aurix adoption and the Smith+Nephew private‑label agreement. Gross profit rose to roughly $0.85 million, showing the underlying product economics can support a higher cost base.
However, margins compressed as centrifuge devices to Smith+Nephew were sold at near zero gross margin, and operating expenses climbed to about $1.3 million. Net loss improved to $618,466, but the company still depends on scaling volume and managing commissions and overhead to approach breakeven.
Key swing factors are execution under the five‑year Smith+Nephew distribution deal, including minimum purchase commitments averaging about $500,000 per year, and continued growth in Aurix usage in physician offices and hospital outpatient settings as reimbursement stabilizes.
New secured debt and going‑concern warning highlight financial strain.
The company ended Q1 2026 with cash of only $263,827 versus current liabilities of about $1.4 million and a stockholders’ deficit of roughly $1.4 million. Management explicitly notes “substantial doubt” about the ability to continue as a going concern.
To bridge funding needs, Nuo entered a Loan and Security Agreement for up to $1.6 million of secured promissory notes, with $1.0 million funded and interest of 10–12% payable in warrants. Notes are secured by substantially all assets, including intellectual property, and carry mandatory prepayment triggers on sizeable equity financings or change‑of‑control events.
The structure adds leverage and warrant overhang, while interest and potential prepayment‑fee warrants dilute equity holders. Future liquidity will depend on accessing the remaining $0.6 million of capacity, meeting note covenants, and potentially raising additional capital beyond this facility.
Key Figures
Key Terms
going concern financial
Distribution Agreement financial
Coverage with Evidence Development medical
fair value option financial
secured promissory notes financial
platelet rich plasma medical
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period 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 ________
Commission file number
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of |
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(Address of Principal Executive Offices) (Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer ☐ |
Accelerated Filer ☐ |
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Smaller Reporting Company |
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Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 12, 2026, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was
NUO THERAPEUTICS, INC.
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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Item 1. Unaudited Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. Defaults Upon Senior Securities |
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Item 4. Mine Safety Disclosures |
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Item 5. Other Information |
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Item 6. Exhibits |
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Signatures |
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PART I
FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
NUO THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
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Total liabilities |
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Commitments and contingencies (Note 10) |
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See accompanying notes to unaudited consolidated financial statements.
NUO THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months ended March 31, 2026 |
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Revenue |
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Operating expenses |
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Net loss |
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Loss per common share |
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Weighted average common shares outstanding |
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See accompanying notes to unaudited consolidated financial statements.
NUO THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
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For the Three Months Ended March 31, 2026 and 2025
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Balance, January 1, 2026 |
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Issuance of common stock for cashless option exercise |
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Net loss |
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Balance, March 31, 2026 |
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Balance, January 1, 2025 |
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Stock compensation expense |
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Net loss |
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Balance, March 31, 2025 |
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See accompanying notes to unaudited consolidated financial statements.
NUO THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the Three Months Ended March 31, |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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NET DECREASE IN CASH |
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Cash paid during the period for interest expense |
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See accompanying notes to unaudited consolidated financial statements.
NUO THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 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, 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, 2025, we received an upfront distribution fee of $
We have incurred, and continue to incur, recurring losses. As of March 31, 2026, we have an accumulated deficit of approximately $
The accompanying unaudited 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 that our current resources and projected revenue from sales of Aurix products and the Private Label product to Smith+Nephew are insufficient to support our operations for the next 12 months from the date these financial statements are issued. As such, we believe that substantial doubt about our ability to continue as a going concern exists. The unaudited consolidated 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, we require additional capital and will seek to continue financing our operations with external capital for the foreseeable future. Any equity financing may cause further substantial dilution to our stockholders and could involve the issuance of securities with rights senior to the common stock. Any additional debt financing 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 unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The consolidated balance sheet at December 31, 2025, has been derived from our audited financial statements as of that date. The interim unaudited consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The unaudited consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen, Inc. (“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 unaudited consolidated financial statements, estimates are used for, but not limited to stock-based compensation, recoverability and depreciable lives of long-lived assets, deferred taxes, and associated valuation allowance and allowances for inventory obsolescence and credit losses. 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 March 31, 2026 and December 31, 2025 is listed below.
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March 31, 2026 |
December 31, 2025 |
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Customer A |
19% |
Revenue from significant customers exceeding 10% of total revenues for the three months ended March 31, 2026 and March 31, 2025 is listed below. All our revenue for both periods was generated within the U.S.
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Three Months Ended March 31, 2026 |
Three Months Ended March 31, 2025 |
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Customer A |
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Customer B |
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Customer C |
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Customer D |
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* 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. We maintain our cash in the form of money market deposit accounts with financial institutions that we believe are credit worthy.
Accounts Receivable, net
We generate accounts receivable from the sale of the Aurix products and sales made to Smith+Nephew under the Distribution Agreement. Accounts receivable as of March 31, 2026 and December 31, 2025 reflect 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. We estimate credit losses expected over the life of our 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 credit losses when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. For the three month periods ending March 31, 2026 and 2025, we recorded provisions for credit losses of and $
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 March 31, 2026, 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 allowance for expired inventory 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 record the associated expense for this reserve to cost of sales in the consolidated statements of operations. For the three-month periods ending March 31, 2026 and 2025, we recorded a provision for inventory obsolescence of and $
Property and Equipment, net
Property and equipment is stated at cost less accumulated depreciation. 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 the 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 any 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 three months ended March 31, 2026, 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 is 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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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.
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 such items in the three months ended March 31, 2026 and 2025.
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 |
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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.
Debt - Election of Fair Value Option
We have elected to account for the Secured Promissory Notes issued in the first quarter ended March 31, 2026 (see Note 6 - Secured Promissory Notes for further information) under the fair value option. Accordingly, we recorded the Secured Promissory Notes at their fair values on the date of issuance and will remeasure the fair value at each subsequent balance sheet date with the change being recognized through other income (expense) in the statement of operations. All unpaid accrued interest is included in the determination of fair value and changes thereto. All debt issuance costs related to the Secured Promissory Notes accounted for at fair value are expensed as incurred.
Basic and Diluted 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. Because none of the Company’s currently outstanding equity-linked financial instruments contain non-forfeitable rights to dividends, the “two class” method results in the same diluted earnings per share as the “treasury method.”
All of our potential dilutive securities are considered anti-dilutive for the three months ended March 31, 2026 and 2025. The following table sets forth the potential dilutive securities excluded from the calculation of diluted loss per share for the periods presented.
|
Three months ended March 31, 2026 |
Three months ended March 31, 2025 |
|||||||
|
Shares underlying: |
||||||||
|
Common stock options |
||||||||
|
Stock purchase warrants |
||||||||
|
Performance shares |
||||||||
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. The Company’s CODM is its Chief Executive and Financial Officer. The Company views its operations and manages its business as a single operating and reporting segment. All the Company’s 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:
|
March 31, 2026 |
December 31, 2025 |
|||||||
|
Medical equipment |
$ | $ | ||||||
|
Office/warehouse equipment |
||||||||
|
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 initial term of the agreement commencing in October 2025, minimum annual purchase commitments of an average of approximately $
Effective January 1, 2026, we entered into an amendment to the agreement to add certain expansion kits in connection with the Private Label product for which 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 – Stock Purchase Warrants
The following schedule reflects outstanding stock purchase warrants as of March 31, 2026 and December 31, 2025:
|
Description |
March 31, 2026 |
December 31, 2025 |
||||||
|
2022 sales incentive warrants |
||||||||
|
Stock purchase warrants |
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|
Total |
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During the three months ended March 31, 2026 in connection with the issuance of secured notes payable (See Note 6 – Secured Promissory Notes), we issued a series of warrants to purchase up to
The
Note 6 – 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”).
In connection with the issuance of the secured notes payable we issued up to
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 (i) 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.
We elected to account for the secured notes payable using the fair value option. See Note 8 - Fair Value for further information.
Note 7 – Equity and Stock-Based Compensation
Under the Second Amended and Restated Certificate of Incorporation, we have the authority to issue a total of
Issuance of Common Stock for Vendor Services Rendered
During the three months ended March 31, 2026, 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 Plan during the three months ended March 31, 2026 is presented below:
|
Stock Options – 2016 Omnibus Plan |
Shares |
Weighted Average |
Weighted |
|||||||||
|
Outstanding at January 1, 2026 |
$ | |||||||||||
|
Granted |
||||||||||||
|
Exercised |
( |
) | - | |||||||||
|
Forfeited or expired |
( |
) | - | |||||||||
|
Outstanding at March 31, 2026 |
$ | |||||||||||
|
Exercisable at March 31, 2026 |
$ | |||||||||||
During the three months ended March 31, 2026,
For the three months ended March 31, 2026 and 2025, we recorded stock-based compensation expense of $
Note 8 - Fair Value
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
We elected to account for the secured notes payable under the fair value option. The fair value of the secured notes payable is calculated using unobservable Level 3 inputs. At the date of issuance and March 31, 2026, the fair value of the secured notes is deemed to be equivalent to the face value of the loan plus accrued interest as the terms of the loan including maturity and interest rate are considered market based. We have no other financial assets or liabilities measured at fair value on a recurring basis.
Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
We had no financial assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2026 or December 31, 2025.
Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
We had no non-financial assets or liabilities measured at fair value on a recurring basis as of March 31, 2026 or December 31, 2025.
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
We measure our long-lived assets, including property and equipment and operating lease right of use assets, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No impairment was recognized during the three months ended March 31, 2026 or 2025.
The following table presents our liabilities measured at fair value as of March 31, 2026:
|
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
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|
Notes payable |
$ | $ | $ | |||||||||
|
Notes payable - related party |
||||||||||||
|
Total liabilities |
$ | $ | $ | |||||||||
The following table presents changes in the fair value of our Level 3 liabilities for the three months ending March 31, 2026:
|
Notes Payable |
Notes Payable - Related Party |
Total Notes Payable |
||||||||||
|
Balance at December 31, 2025 |
$ | $ | $ | |||||||||
|
Notes payable at issuance |
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|
Change in fair value |
||||||||||||
|
Balance at March 31, 2026 |
$ | $ | $ | |||||||||
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 product sales of the Aurix product line. The accounting policies of the segment are the same as those described in Note 2 – Liquidity and Summary of Significant Accounting Policies.
Our CODM is Nuo's Chief Executive and Financial Officer, David E. Jorden. The CODM uses net loss, as reported in our consolidated statements of operations, in evaluating the performance of the segment and determining how to allocate our resources of 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:
|
Three Months Ended March 31, |
Three Months Ended March 31, |
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|
2026 |
2025 |
|||||||
|
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 |
||||||||
|
Interest expense (income), net |
||||||||
|
Other expense (income), net |
( |
) | ( |
) | ||||
|
Consolidated net loss |
$ | ( |
) | $ | ( |
) | ||
(a) All other operating expenses included in consolidated net loss includes professional fees, lease expenses, insurance costs, travel and entertainment expenses, and all other selling, general and administrative expenses.
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
Total operating lease costs were 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
Issuance of Common Stock for Option Exercise
Subsequent to March 31, 2026,
Issuance of Common Stock for Vendor Services Rendered
Subsequent to March 31, 2026, we issued
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of Nuo Therapeutics, Inc. ("Nuo," the "Company," "we," "us," or "our") should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”), filed with the U.S. Securities and Exchange Commission (the "SEC") on March 30, 2026.
The Company owns or has rights to various copyrights, trademarks and trade names used in its business, including, but not limited to, Aurix®. This Quarterly 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 Quarterly Report are the property of the holder of such trademarks and trade names.
Special Note Regarding Forward Looking Statements
Certain statements, other than purely historical information in this Quarterly Report (including this section) 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 Company’s current view of future events and are subject to certain risks and uncertainties as noted in this Quarterly Report and in other reports filed by us with the SEC, including Forms 8-K, 10-Q, and 10-K. 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 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 “Risk Factors” in our Annual Report and the other filings referenced above, other sections of this Quarterly 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.
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.
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 the 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 three 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 March 31, 2026, 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.
Effective January 1, 2026, we entered into an amendment to the agreement to add certain expansion kits in connection with the Private Label product for which we received an upfront fee of $50,000. 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/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 numerous 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 vary 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:
|
● |
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 approximately 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.) |
Results of Operations
Comparison of Three Months Ended March 31, 2026 and 2025
The amounts presented in this comparison section are rounded to the nearest thousand.
Revenue and Gross Profit
Total revenues for the three months ended March 31, 2026 totaled approximately $1,302,000 including approximately $78,000 of distribution fee revenue related to the Smith+Nephew distribution agreement as amended. Product revenues for the three months ended March 31, 2026 totaled approximately $1,224,000 in comparison to product and total revenues of approximately $484,000 for the three months ended March 31, 2025 representing an increase of approximately $740,000 or approximately 153%. Product revenues associated with the Smith+Nephew private label distribution arrangement recognized during the three months ended March 31, 2026 consisted of (i) centrifuge devices sold to Smith+Nephew and (ii) fulfillment of purchase orders for stocking of Private Label kits. Associated gross profit was approximately $850,000 for the three months ended March 31, 2026 in comparison to approximately $363,000 of gross profit in the three months ended March 31, 2025.
The increase in revenues was due primarily to (i) increased Aurix product revenues resulting from an expanding customer base over the past year, (ii) Smith+Nephew related product revenues for centrifuge devices and kits solely and (iii) distribution fee revenue recognized under the distribution agreement as amended. Aggregate gross margin was approximately 65% for the three months ended March 31, 2026 as compared to approximately 75% for the three months ended March 31, 2025. The gross margin decline was primarily due to the centrifuge devices sold to Smith+Nephew at a near zero gross margin on the negotiated transfer price of the devices which was partially offset by distribution fee revenue having no associated cost.
Operating Expenses
Total operating expenses increased approximately $188,000 to approximately $1,296,000 comparing the three months ended March 31, 2026 to the three months ended March 31, 2025. The increase from the prior year was due primarily to increases in (i) compensation and benefit costs of approximately $110,000 and (ii) third party commission expense of approximately $158,000 for independent sales representatives and distributors resulting from increased Aurix product revenues which was partially offset by a decrease in professional fees of approximately $74,000 as the costs associated with the finalization of the Smith+Nephew distribution agreement were absent in the current year period.
Other Income (Expense)
Interest income (expense), net for the three months ended March 31, 2026 primarily represents (i) $25,000 of non-cash interest expense on the secured notes payable and (ii) $149,365 of debt discount amortization due to our election of the fair value option while other income (expense) for the three months ended March 31, 2025 was nominal.
Liquidity and Capital Resources
Overview
As of March 31, 2026, we had cash balances of approximately $0.3 million, total current assets of approximately $1.5 million and total current liabilities of approximately $1.4 million. As an operational business, 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 March 31, 2026, our accumulated deficit was approximately $35.4 million and our stockholders’ deficit was approximately $1.4 million.
In January 2026, we received funding proceeds from the issuance of secured notes payable of $500,000 in addition to $500,000 of proceeds which were pre-funded on December 31, 2025. The total amount of notes payable at closing was $1,000,000.
Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise 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. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 obtained, may not be adequate to meet our capital needs and to support our operations. As such, we believe that substantial doubt about our ability to continue as a going concern exists.
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.
Cash Flows
Net cash provided by (used in) operating, investing, and financing activities for the periods presented were as follows:
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Three months ended March 31, 2026 |
Three months ended March 31, 2025 |
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Cash flows provided by/(used in) operating activities |
$ | (784,272 | ) | $ | 1,825 | |||
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Cash flows used in investing activities |
$ | (847 | ) | $ | (229,884 | ) | ||
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Cash flow provided by financing activities |
$ | 500,000 | $ | - | ||||
Operating Activities
Cash used in operating activities for the three months ended March 31, 2026 of approximately $784,000 primarily reflects our net loss of approximately $618,000 adjusted by (i) approximately $423,000 net change in operating assets and liabilities, (ii) non-cash interest expense and amortization of debt discount on notes payable issued of approximately $175,000, and (iii) approximately $83,000 in total for amortization of right of use assets, depreciation of property and equipment, stock-based compensation, and vendor expense settled in shares of common stock.
Cash provided by operating activities for the three months ended March 31, 2025 of approximately $2,000 primarily reflects our net loss of approximately $746,000 adjusted by (i) approximately $474,000 net change in operating assets and liabilities (excluding deferred revenue), (ii) approximately $52,000 in total for amortization of right of use assets, depreciation of property and equipment, and stock-based compensation, and (iii) $200,000 increase in deferred revenue. The deferred revenue is due to the receipt in February 2025 of a $200,000 exclusivity payment from Smith+Nephew in conjunction with the private label distribution agreement which was executed as of March 31, 2025.
Investing Activities
Cash used in investing activities for the three months ended March 31, 2026 was nominal while cash used in investing activities for the three months ended March 31, 2025 primarily represents $220,000 in expenditures for the purchase of centrifuge devices.
Financing Activities
For the three months ended March 31, 2026, we received an additional $500,000 in loan proceeds under the secured notes payable after $500,000 of proceeds were pre-funded on December 31, 2025. We did not have any financing activities for the three months ended March 31, 2025.
Inflation
The Company believes that the rates of inflation in recent years have not had a significant impact on its operations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report are prepared in conformity with U.S. GAAP, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying notes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the unaudited consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report. There were no accounting policies identified as critical. There have been no material changes to our critical accounting policies or estimates and no significant estimation since December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of 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 Quarterly Report. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (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 Quarterly Report, we concluded that, as of such date, our disclosure controls and procedures were not effective due to the existence of the material weaknesses previously disclosed in our Annual Report as 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 Quarterly Report were not effective, management believes that the consolidated financial statements and related financial information included in this Quarterly 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.
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 our Annual Report and the consolidated financial statements and related disclosures therein, 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 since our Annual Report for the year ended December 31, 2021, 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
Beginning in 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 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
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
OTHER INFORMATION
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Item 1. |
Legal Proceedings. |
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.
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Item 1A. |
Risk Factors. |
There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
None.
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Item 3. |
Defaults Upon Senior Securities. |
None.
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Item 4. |
Mine Safety Disclosures. |
Not applicable.
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Item 5. |
Other Information. |
During the quarter ended March 31, 2026,
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Item 6. |
Exhibits. |
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Exhibit Number |
Description |
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3.1 |
Second Amended and Restated Certificate of Incorporation of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.1 to the registrant’s Registration Statement on Form 8-A and incorporated by reference herein). |
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3.2 |
Certificate of Designation of Series A Preferred Stock of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.3 to the registrant’s Current Report on Form 8-K and incorporated by reference herein). |
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3.3 |
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Nuo Therapeutics, Inc. (previously filed on September 5, 2018 as Exhibit 3.1 to the registrant’s Current Report on Form 8-K and incorporated by reference herein). |
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3.4 |
Amended and Restated By-Laws of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.2 to the registrant’s Registration Statement on Form 8-A and incorporated by reference herein). |
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| 4.1 | Form of Initial Warrants (as issued in connection with Loan and Security Agreement dated as of January 21, 2026) (previously filed on January 26, 2026 as Exhibit 4.1 to the registrant's Current Report on Form 8-K and incorporated herein by reference) | |
| 4.2 | Form of Second Warrants (as issued in connection with Loan and Security Agreement dated as of January 21, 2026) (previously filed on January 26, 2026 as Exhibit 4.2 to the registrant's Current Report on Form 8-K and incorporated by reference herein) | |
| 4.3 | Form of Prepayment Warrants (as issued in connection with Loan and Security Agreement dated as of January 21, 2026) (previously filed on January 26, 2026 as Exhibit 4.3 to the registrant's Current Report on Form 8-K and incorporated by reference herein) | |
| 4.4 | Form of Interest Warrants (as issuable in connection with Loan and Security Agreement dated as of January 21, 2026) (previously filed on January 26, 2026 as Exhibit 4.4 to the registrant's Current Report on Form 8-K and incorporated by reference herein) | |
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10.1 |
Loan and Security Agreement dated as of January 21, 2026 (previously filed on January 26, 2026 as Exhibit 10.1 to the registrant's Current Report on Form 8-K and incorporated by reference herein) |
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31 |
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32 |
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101 |
The following materials from Nuo Therapeutics, Inc. Form 10-Q for the quarter ended March 31, 2026, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Balance Sheets at March 31, 2026 and December 31, 2025, (ii) Consolidated Statements of Operations for the three month periods ended March 31, 2026 and 2025, (iii) Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three month periods ended March 31, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2026 and 2025 and (v) Notes to the Unaudited Consolidated Financial Statements. |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NUO THERAPEUTICS, INC. |
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Date: May 14, 2026 |
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By: |
/s/ David E. Jorden |
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David E. Jorden Chief Executive and Financial Officer |
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(Principal Executive and Financial Officer) |