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.
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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.
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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:
Cash flows used in operating activities $ (864,971 ) $ (2,231,622 )
Cash flows used in investing activities $ (274,756 ) $ (154,962 )
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.
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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.
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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.
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ITEM 9B. Other Information
Rule 10b5-1 Plans
During the year ended December 31, 2025, none 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.
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PART III
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.
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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 adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the Company’s securities applicable to our directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations. Our insider trading policy, among other things, (a) prohibits our directors, officers, and employees, and related persons and entities, from trading in our securities and securities of certain other companies while in possession of material nonpublic information, (b) prohibits our directors, officers, and employees from disclosing material, nonpublic information about the Company to others who may trade on the basis of that information, and (c) requires that our directors, executive officers, and employees only transact in our securities during a specified window period, subject to limited exceptions. It is also our policy that the Company itself will not engage in transactions in our securities, except in compliance with applicable securities laws. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report.
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.
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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
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.
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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
(d) Fully vested upon the March 4, 2022 date of grant.
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
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Equity Grant Practices
We do not have any formal policy that requires us to grant, or avoid granting, stock options at particular times. The Company has a small number of employees and directors. The Board and its Compensation, Nominating and Governance Committee grant stock option awards throughout the year based upon its determination of the Company’s and an individual grantee’s performance, and other relevant factors. During the period covered by this report, we did not grant any stock options to executive officers. We do not intend to time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
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 Shares Percent of Class
Directors and Named Executive Officers
All Directors and Executive Officers as a Group (5 persons) (7) 9,720,482 19.6 %
Principal Stockholders
* 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.
(5) Includes 145,416 shares issuable upon exercise of options
(6) Includes 318,328 shares issuable upon exercise of options.
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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- EquityandStock-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.
Equity compensation plans not approved by security holders — $ — —
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.
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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:
Audit-Related Fees – –
Tax Fees – –
All Other Fees – –
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.
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PART IV
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
Number Exhibit Table
19.1 Nuo Therapeutics, Inc. Insider Trading Policy
23.1 Consent of MaloneBailey, LLP, independent registered public accounting firm
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
* Indicates a management contract or compensatory plan or arrangement.
ITEM 16. Form 10-K Summary
None.
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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
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
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NUO THERAPEUTICS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Audited Financial Statements
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
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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/ MaloneBailey, LLP
www.malonebailey.com
We have served as the Company's auditor since 2024.
Houston, Texas
March 30, 2026
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Nuo Therapeutics, Inc.
Consolidated Balance Sheets
December 31, December 31,
Assets
Current assets
Prepaid expenses and other current assets 55,509 159,185
Liabilities and Stockholders' Equity
Current liabilities
Current portion of operating lease liabilities 76,410 66,861
Deferred revenue – long term 975,000 -
Note payable – related party 200,000 -
Non-current portion of operating lease liabilities 20,936 97,345
Commitments and contingencies (Note 10)
Stockholders' Equity (Deficit)
Total liabilities and stockholders' equity (deficit) $ 1,845,662 $ 1,189,508
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Nuo Therapeutics, Inc.
Consolidated Statements of Operations
Year ended December 31,
Revenue
Operating expenses
Other income (expense)
Interest income (expense), net (804 ) 105
Gain on settlement of legacy accounts payable obligations - 133,623
Net loss per share – basic and diluted $ (0.05 ) $ (0.05 )
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Nuo Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
For the Years Ended December 31, 2025 and 2024
Common Stock
Stock-based compensation expense - - 56,652 - 56,652
Issuance of common stock for cashless warrant exercise 86,889 9 (9 ) - -
Stock-based compensation expense - - 85,986 - 85,986
Issuance of common stock for cashless option exercises 520,844 52 (52 ) - -
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Nuo Therapeutics, Inc.
Consolidated Statements of Cash Flows
Year ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net loss to net cash used in operating activities:
Vendor expense settled in shares of common stock 51,000 -
Gain on settlement of accounts payable - (133,623 )
Amortization of operating lease right of use assets 71,476 73,247
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 103,676 15,286
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from note payable issuance 300,000 -
Net proceeds from note payable issuance – related party 200,000 -
Net proceeds from warrant exercise - 151,200
SUPPLEMENTAL INFORMATION
Cash paid during the period for:
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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 AutoloGelTM 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 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. During the year ended December 31, 2025, we received an upfront distribution fee of $1.5 million from Smith+Nephew in conjunction with the private label distribution agreement (See Note 4 – Distribution Agreement with Smith+Nephew). We also sold 527,612 shares of common stock to certain accredited investors pursuant to a Security Purchase Agreement which closed on July 30, 2025 and received $113,541 from the exercise of options. Additionally, we received proceeds of $500,000 at December 31, 2025 from the pre-funding of notes payable which officially closed in January 2026 with an initial funding of $1,000,000 (See Note 11 – Subsequent Events for additional information).
We have incurred, and continue to incur, recurring losses. As of December 31, 2025, we have an accumulated deficit of approximately $34.8 million and cash of approximately $0.5 million.
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.
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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 one operating segment consisting of one 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.
Customer A 19% -
Customer B * 18%
Customer C * 15%
Customer D * 12%
* 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 98% of our revenues was generated within the U.S. During the year ended December 31, 2024, all our revenue was generated within the U.S.
Customer A 23% -
Customer C * 16%
Customer D * 12%
* 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 $0.3million held in financial institutions was in excess of the FDIC insurance limit of $250,000 at December 31, 2025. We maintain our cash in the form of money market deposit accounts with financial institutions that we believe are credit-worthy.
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.
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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 $91,401 and $79,445, respectively. As of December 31, 2025 and 2024, the allowance for credit losses was $90,000 and approximately $25,000, respectively.
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 $139,000 of finished goods inventory and approximately $75,000 of raw materials acquired to facilitate the manufacturing of finished goods at our contract manufacturer and our warehouse/distribution facility. As of December 31, 2024, our inventory consisted of approximately $89,000 of finished goods inventory and approximately $61,000 of raw materials.
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 $19,371 and approximately $30,000, respectively. As of December 31, 2025 and December 31, 2024, the reserve for inventory obsolescence was approximately $10,000 and $18,700, respectively.
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 one to five 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 $2,777,000 and Aurix and Private Label centrifuge devices of approximately $312,000.
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.
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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:
Weighted average expected years until exercise 5.5 5.5
Expected stock volatility 75% 74%
Dividend yield - -
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:
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.
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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:
For the year ended December 31,
Net Loss per Share – basic and diluted $ (0.05 ) $ (0.05 )
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:
For the year ended December 31,
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 single 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:
Depreciation expense was $85,463 (of which $66,839 was charged to cost of good sold) and $23,022 (of which $7,543 was charged to cost of goods sold), respectively, for the years ended December 31, 2025 and December 31, 2024. None of the Company's long-lived assets were deemed to be impaired during the years ended December 31, 2025 and 2024.
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 $225,000of distribution fee revenue under the agreement.
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 $500,000 will apply for Smith+Nephew to maintain exclusive distribution rights.
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As consideration for entering into the agreement, we received an upfront fee of $1.5 million and we are eligible for an additional $750,000 in milestone fees based on our establishment and maintenance of reimbursement in certain categories for the Aurix and the private label products. Such fees will be refundable to Smith+Nephew on a pro rata basis for the unexpired initial term of the agreement if we do not comply with certain terms and conditions. The $1.5 million distribution fee is being recognized on a pro rata basis over the initial term of the agreement and the unearned distribution fee is treated as deferred revenue. During the year ended December 31, 2025, we recognized $225,000 of revenue under the agreement.
The 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 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:
December 31, December 31,
Note6 – Stock Purchase Warrants
The following schedule reflects outstanding stock purchase warrants as of December 31, 2025 and 2024:
During the year ended December 31, 2022, we issued two warrants to purchase (i) 250,000 shares of common stock at an exercise price of $1.00 per share and expiring December 31, 2027 and (ii) 200,000 shares of common stock at an exercise price of $1.50 per share and expiring December 31, 2028 to a distribution partner under an agreement whereby the warrants are exercisable subject to the distributor attaining certain performance goals set forth in the warrants based upon exceeding sales quota revenues for calendar years 2023 through potentially 2025. According to the warrants' vesting provisions, they will not be exercisable throughout the remainder of their terms. Furthermore, the warrants shall be considered cancelled and forfeited upon a determination that the performance goals cannot be attained upon the last of their respective determination dates. Therefore, the warrant for 250,000 shares expiring December 31, 2027 has been removed from the tabular presentation above as the final determination date was January 15, 2025 while the warrant for 200,000 will be considered cancelled and forfeited upon its final determination date of January 15, 2026.
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 101,000,000 shares of capital stock, consisting of: (i) 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share, which will have such rights, powers and preferences as our Board of Directors shall determine.
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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 500,000 shares of our common stock for $500,000. As part of the purchase of common stock, we agreed to grant to Pacific Med the right to participate in any financing of ours through December 31, 2023 (the “Participation Rights”) in connection with a listing of our common stock on a national securities exchange. The Participation Rights entitled Pacific Med to purchase up to 500,000 shares of common stock upon substantially the same terms, conditions, and price provided for in such financing. In the event such a financing did not occur by December 31, 2023, we agreed to issue Pacific Med a warrant with a January 1, 2024 issuance date and exercisable until June 30, 2024, to purchase up to 500,000 shares of Common Stock at a price equal to the lower of $2.00 per share or the 20-day volume weighted average closing price per share ending December 31, 2023 (the “2024 Financing Participation warrant”). The 2024 Financing Participation warrant was issued on January 1, 2024 with an exercise price of $0.56 per share. Pacific Med exercised (i) 270,000 of the warrants for cash proceeds of $151,200 and (ii) the remaining 230,000 warrants on a cashless basis in exchange for the issuance of 86,889 shares of common stock during the year ended December 31, 2024. The common stock, Participation Rights, and 2024 Financing Participation warrant are equity classified.
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 250,000 shares of common stock at a price of $1.00 per share (the “First Warrant”) upon Pacific Med attaining certain performance goals set forth in the First Warrant based upon exceeding sales quota revenue, as agreed between us and Pacific Med, for calendar years 2023 and/or 2024. The second warrant entitled Pacific Med to purchase up to 200,000 shares of Common Stock at a price of $1.50 per share (the “Second Warrant”) upon Pacific Med attaining certain performance goals set forth in the Second Warrant based upon exceeding sales quota revenue, as agreed between us and Pacific Med, for calendar years 2024 and/or 2025. The First Warrant expires December 31, 2027 and the Second Warrant expires December 31, 2028. The fair value of the First Warrant and Second Warrant at the date of issuance was approximately $434,000 and $345,000, respectively, based on a Black-Scholes option pricing model. As the exercisability of the two warrants was not considered probable as of December 31, 2025 or 2024, there was no recognition of stock-based compensation expense for the years then ended. When exercisability is determined to be probable, the issuance date fair value of the warrant earned through such date will be recognized with the balance of the fair value recognized ratably over the remaining period of performance. We also agreed to issue up to 300,000 shares of common stock to Pacific Med subject to and upon the achievement of certain milestones set forth in the Agreement based upon sales of our products over defined 12-month periods of between $4.5 million by June 30, 2024 through at least $12.5 million in calendar year 2025 (the Performance Shares”). The fair value of the Performance Shares at the date of issuance was approximately $615,000 based on the closing stock price on the closing of the Agreement. As the issuance of the Performance Shares was not considered probable as of December 31, 2025 and it was concluded upon the final determination date of January 15, 2026 that the Performance Shares would not be issued, there was no expense recognition for the year ended December 31, 2025 and none of the fair value will be recognized.
2024 Private Placement Equity Issuances
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 gross proceeds of $1,500,000. Certain related parties including a principal shareholder, a member of the Board of Directors, and a member of senior management invested an aggregate of $281,250 in the two 2024 private placement transactions.
2025 Private Placement Equity Issuance
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 proceeds of $791,418. Certain related parties including a principal shareholder and a member of the Board of Directors invested an aggregate of $205,919 in the 2025 private placement transaction.
Issuance of Common Stock for Vendor Services Rendered
During the year ended December 31, 2025, we issued 30,616 shares of common stock in exchange for services rendered from a vendor totaling $51,000.
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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 4,250,000 and remove an annual evergreen provision, which was approved by the holders of a majority of our outstanding common stock and which became effective in June 2022.
A summary of stock option activity under the 2016 Omnibus Plan for the years ended December 31, 2025 and 2024 is presented below:
During the year ended December 31, 2025, there were 176,000 options granted to employees and a third-party consultant and the fair value of the options vesting immediately and over three years was approximately $165,700. During the year ended December 31, 2025, 283,853 options were exercised for $113,541 while 689,273 options were exercised on a cashless basis resulting in the issuance of 520,844 shares of common stock. During the year ended December 31, 2024, there were 400,000 stock options granted to non-executive employees and members of the Board of Directors under the Plan. The fair value of the options vesting over one and three years was approximately $86,700. During the year ended December 31, 2024, 217,709 options were exercised for $90,417.
The aggregate intrinsic value for outstanding and exercisable options as of December 31, 2025 was approximately $2.9 and $2.3 million, respectively.
For the years ended December 31, 2025 and 2024, the Company recorded total stock-based compensation expense of $85,986 and $56,652, respectively. As of December 31, 2025, there was approximately $184,000 unrecognized compensation cost related to non-vested stock options which is expected to be recognized prior to year-end 2027.
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,
Current provision (benefit)
Federal $ - $ -
State - -
- -
Deferred provision (benefit)
Consolidated provision (benefit) $ - $ -
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Significant components of the Company's deferred tax assets and liabilities consisted of the following at December 31, 2025 and 2024:
December 31,
Deferred tax assets:
Property, equipment, intangible assets, and other 230,043 247,862
Deferred tax liabilities - -
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,
Effective tax rate $ - 0.0 % $ - 0.0 %
We have federal net operating loss carry-forwards of approximately $153.1 million as of December 31, 2025. The federal net operating loss carry-forwards are subject to annual limitation under Section 382 of the Internal Revenue Code as a result of our emergence from bankruptcy in 2016 as well as due to other changes in ownership subsequent to such emergence; any such limitation reduces our ability to use net operating loss carryforwards to offset future taxable income on an annual basis and may permanently reduce our ability to use such net operating loss carryforwards. Federal net operating loss carryforwards generated before 2018 have a 20-year life expiring through 2037, while net operating loss carryforwards generated after 2017 have an indefinite life. We have not filed our required state income tax returns since 2017 and intend to file all required state returns within the next 12 months. We have provided a full valuation allowance against the net deferred tax assets as it is more likely than not that those net assets will not be realized. We do not believe that we have any uncertain income tax positions.
Note 9- Segment Information
We manage our business activities on a consolidated basis and operate as a single 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.
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The following table presents the operating results of the segment:
December 31, December 31,
Less significant segment expenses:
Private label cost of sales 447,113 -
Provisions for credit losses and inventory obsolescence 110,772 109,445
Other segment items:
Interest expense (income), net 804 (105 )
(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.
(b) Other expense (income), net included in consolidated net loss includes net gain from settlement of legacy accounts payable obligations and other expense (income).
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 10% discount rate.
The following table presents the components of rent expense:
For the Year Ended December 31, For the Year Ended December 31,
Cash paid for amounts included in operating lease liabilities was approximately $80,300 and $86,600 for the years ended December 31, 2025 and 2024, respectively. We have no financing leases. The weighted average remaining lease term is 1.3 years at December 31, 2025. Our lease includes a renewal option to extend the lease for an additional 5 years. We have not included this term extension option as part of the present value calculation of lease liabilities as we are not reasonably certain to exercise the option.
Future undiscounted cash flows under this lease are:
Total operating lease payments 103,989
Discount factor (6,643 )
Present value of operating lease liabilities 97,346
Current portion of operating lease liabilities (76,410 )
Non-current portion of operating lease liabilities $ 20,936
Note 11 – Subsequent Events
Secured Promissory Notes
As previously disclosed in Note 2 - Liquidity and Summary of Significant Accounting Policies, we received $500,000 in proceeds from the pre-funding of loans which closed in January 2026. On January 21, 2026, we entered into a Loan and Security Agreement (the “Loan Agreement”) with four lenders (collectively, the “Lenders”), including a related party and 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.
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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 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 as described above and at a percentage as described above of each Lender’s then outstanding principal balance (the “Prepayment Warrants”). In addition, warrants are issuable by us 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. 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, 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, on either a cash or cashless basis.
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Accordingly, on January 23, 2026, we issued: (i) Commitment Warrants immediately exercisable for an aggregate of 8,000 shares; (ii) Origination Initial Warrants immediately exercisable for an aggregate of 6,667 shares; (iii) Capital Initial Warrants immediately exercisable for an aggregate of 133,333 shares; (iv) Origination Second Warrants, vesting upon a Second Funding, exercisable for an aggregate of 5,000 shares; (v) Capital Second Warrants, vesting upon a Second Funding, exercisable for an aggregate of 100,000 shares, and (vi) Prepayment Warrants, vesting upon a voluntary or mandatory prepayment event as described above, exercisable for an aggregate of up to 29,332 shares. In addition, we have agreed to issue Interest Warrants at the Maturity Date (or earlier upon voluntary or mandatory prepayment as described above) immediately then exercisable for an aggregate of up to 226,000 shares representing the maximum amount of $1.6 million potentially funded under the notes and then repaid by the Maturity Date per the terms of the Loan Agreement.
Issuance of Common Stock for Vendor Services Rendered
Subsequent to the year end, we issued 10,638 shares of common stock in exchange for services rendered from a vendor totaling $18,000.
Issuance of Common Stock for Option Exercise
Subsequent to year end,125,000 options were exercised on a cashless basis resulting in the issuance of 99,619 shares of common stock.
Option Grant
Subsequent to year end, 450,000 options were granted to employees. 250,000 options were granted pursuant to our standard three-year vesting schedule while 200,000 options were granted with vesting provisions through December 31, 2028 pursuant to the achievement of certain commercial sales targets for the years ended December 31, 2026 and 2027.
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