10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

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

For the Quarterly Period Ended March 31, 2011

OR

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

For the transition period from  to 

Commission file number 001-32518

 

CYTOMEDIX, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	23-3011702
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

209 Perry Parkway, Suite 7
Gaithersburg, MD 20877

(Address of Principal Executive Offices) (Zip Code)

(240) 499-2680

(Registrant’s Telephone Number, Including Area Code)

 

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

Large Accelerated Filer o	Accelerated Filer o
Non-accelerated Filer o	Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 6, 2011, the Company had 50,585,002 shares of common stock, par value $.0001, issued and outstanding.

CYTOMEDIX, INC.
  
TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION		1
Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3. Quantitative and Qualitative Disclosures About Market Risk		20
Item 4. Controls and Procedures		20
PART II. OTHER INFORMATION		21
Item 1. Legal Proceedings		21
Item 1A. Risk Factors		21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3. Defaults Upon Senior Securities		21
Item 4. [Removed and Reserved]		21
Item 5. Other Information		21
Item 6. Exhibits (see Exhibit Index at end of report)		21
Signatures		22
Exhibit Index		23

i

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements

CYTOMEDIX, INC.
  
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

	March 31, 2011			December 31, 2010
ASSETS
Current assets
Cash	$	1,050,447		$	638,868
Short-term investments, restricted		52,817			52,817
Accounts receivable, net		1,467,293			1,207,027
Inventory		340,474			627,984
Prepaid expenses and other current assets		568,941			610,409
Deferred costs, current portion		327,633			357,412
Total current assets		3,807,605			3,494,517
Property and equipment, net		1,226,436			1,324,996
Deferred costs		—			191,153
Other intangibles, net		3,116,167			3,182,875
Goodwill		706,823			706,823
Total assets	$	8,857,031		$	8,900,364
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	3,644,928		$	3,558,161
Note payable, current portion		541,506			1,520,947
Dividends payable on preferred stock		94,309			92,853
Total current liabilities		4,280,743			5,171,961
Note payable		2,960,649			1,981,208
Derivative and other liabilities		19,000			1,826,447
Total liabilities		7,260,392			8,979,616
Commitments and contingencies
Stockholders' equity (deficit)
Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding –  97,663 shares, liquidation preference of $97,663		10			10
Series B Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding –  65,784 shares, liquidation preference of $65,784		7			7
Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 shares; 2011 and 2010 issued and outstanding –  3,315 shares, liquidation preference of $3,315,000		—			—
Common stock; $.0001 par value, authorized 100,000,000 shares; 2011 issued and outstanding – 48,313,894 shares; 2010 issued and outstanding – 44,103,743 shares		4,831			4,410
Additional paid-in capital		50,673,654			47,587,964
Accumulated deficit		(49,081,863	)		(47,671,643	)
Total stockholders' equity (deficit)		1,596,639			(79,252	)
Total liabilities and stockholders' equity	$	8,857,031		$	8,900,364

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

1

CYTOMEDIX, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Three Months Ended March 31,
	2011			2010
Revenues
Sales	$	1,365,613		$	63,260
Royalties		—			115,474
Total revenues		1,365,613			178,734
Cost of revenues
Cost of sales		645,384			14,937
Cost of royalties		—			(189,380	)
Total cost of revenues		645,384			(174,443	)
Gross profit		720,229			353,177
Operating expenses
Salaries and wages		726,063			622,201
Consulting expenses		336,482			76,097
Professional fees		236,921			185,407
Research, development, trials and studies		59,946			64,491
General and administrative expenses		843,544			465,687
Total operating expenses		2,202,956			1,413,883
Income (loss) from operations		(1,482,727	)		(1,060,706	)
Other income (expense)
Interest, net		(250,381	)		(501	)
Change in fair value of derivative liabilities		378,125			(2,056	)
Other		(50,237	)		(4,703	)
Total other income (expenses)		77,507			(7,260	)
Income (loss) before provision for income taxes		(1,405,220	)		(1,067,966	)
Income tax provision		5,000			—
Net income (loss)		(1,410,220	)		(1,067,966	)
Preferred dividends:
Series A preferred stock		2,199			2,033
Series B preferred stock		1,496			1,383
Series D preferred stock		82,875			—
Net loss to common stockholders	$	(1,496,790	)	$	(1,071,382	)
Loss per common share -
Basic and diluted	$	(0.03	)	$	(0.03	)
Weighted average shares outstanding -
Basic and diluted		46,059,041			37,273,628

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

2

CYTOMEDIX, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Three Months Ended March 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,410,220	)	$	(1,067,966	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		159,581			8,970
Stock-based compensation		99,393			92,161
Change in fair value of derivative liabilities		(378,125	)		2,056
Discharge of deferred costs		84,389			4,703
Deferred income tax provision		5,000			—
Gain on disposal of assets		(1,928	)		—
Changes in assets and liabilities:
Accounts receivable, net		(260,266	)		135,919
Inventory		287,510			(5,804	)
Prepaid expenses and other current assets		41,468			(30,353	)
Accounts payable and accrued expenses		86,767			(19,236	)
Net cash used in operating activities		(1,286,431	)		(879,550	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(1,561	)		—
Proceeds from sale of equipment		9,176			—
Net cash provided by (used in) investing activities		7,615			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock		1,690,395			—
Net cash provided by financing activities		1,690,395			—
Net increase (decrease) in cash		411,579			(879,550	)
Cash, beginning of period		638,868			2,107,499
Cash, end of period	$	1,050,447		$	1,227,949

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

3

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Business and Presentation

Description of Business

Cytomedix, Inc. (“Cytomedix,” the “Company,” “we,” “us,” or “our”) develops, sells, and licenses regenerative biological therapies intended to aid the human body in regenerating/healing itself, to primarily address the areas of wound care, infection control, and orthopedic surgery. The Company currently markets the AutoloGel^TM System (“AutoloGel^TM”), as well as the Angel® Whole Blood Separation System (“Angel®”) and activAT® Autologous Thrombin Processing Kit (“activAT®”), both of which were acquired from Sorin in April 2010 (the “Angel Business”).

AutoloGel^TM is a device for the production of platelet rich plasma (“PRP”) gel derived from the patient’s own blood. The AutoloGel^TM System is cleared by the Food and Drug Administration (“FDA”) for use on a variety of exuding wounds. The Company is currently pursuing a multi-faceted strategy to penetrate the chronic wound market with its AutoloGel^TM System.

Angel® and activAT® are used primarily in operating rooms. Angel® is used for separation of whole blood into red cells, platelet poor plasma and platelet rich plasma. ActivAT® is designed to produce autologous thrombin serum from platelet poor plasma and is sold exclusively in Europe and Canada, where it provides a safe alternative to bovine-derived products.

The Company is also pursuing opportunities for the application of AutoloGel^TM and Angel® into other markets such as hair transplantation, pain management, and sports medicine, as well as actively seeking complementary products for regenerative medicine markets.

Basis of Presentation

The unaudited financial statements included herein are presented on a condensed consolidated basis and have been prepared by Cytomedix pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly state such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations.

The year-end balance sheet data were derived from audited financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America.

These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The results of operations for interim periods are not necessarily indicative of the results for any subsequent quarter or the entire fiscal year ending December 31, 2011.

Basic and diluted net losses per common share are presented in accordance with established standards for all periods presented. We compute basic and diluted net losses per common share using the weighted-average number of shares of Common stock outstanding during the period. During periods of net losses, shares associated with outstanding stock options, stock warrants, and convertible preferred stock are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per share). The total numbers of such shares excluded from diluted net loss per common share were 22,952,054 for the three months ended March 31, 2011, and 10,171,008 for the three months ended March 31, 2010.

4

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Liquidity Risks and Management’s Plans

The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Since inception, the Company has incurred, and continues to incur, significant losses from operations. The Angel® and ActivAT® product lines, acquired in April 2010, historically generated approximately $5 million in revenue per year. While the Company is currently generating revenue consistent with those historical levels, there is no assurance that it will be successful in maintaining or growing these revenues.

The Company needs to sustain and grow Angel® and ActivAT® product sales and increase sales of AutoloGel^TM to meet its business objectives. There is no assurance that the Company will be successful in this regard.

The promissory note payable to Sorin with a remaining face amount of $3.4 million as of March 31, 2011, was fully satisfied with a payment of $2.1 million in April 28, 2011, as more fully described in the Subsequent Events Note to these consolidated financial statements. This development removes a significant short term financing obligation. The $2.1 million was funded through a new promissory note raised from an existing shareholder, which note carries a 12% annual cash interest only obligation, payable quarterly beginning on September 30, 2011. The principal under this note is due April 28, 2015.

The Company also raised $325,000 in April 2011 through an offering of its shares of common stock at a purchase price of $0.33 per share to four investors. The shares were sold in transactions exempt from registration under the Securities Act of 1933. These funds will be used for general corporate and working capital purposes.

The Company will also require additional capital to finance the further development of its business operations. The Company intends to primarily access such capital through the purchase agreements entered into in October 2010 with Lincoln Park Capital Fund, LLC (“LPC”). These agreements allow the Company to sell up to 150,000 shares of common stock every other business day to LPC within certain pre-defined parameters (including a minimum share per price of $0.30), up to an aggregate amount of $11.5 million over a 25 month period. There is no assurance that the amounts raised under the Purchase Agreements will be sufficient to fund our operational cash flow needs and service the Note Payable. The Company raised approximately $1.7 million in the first quarter of 2011 under these agreements. Approximately $900,000 of this amount was used to fund the April 9, 2011 installment payment under the Sorin promissory note, plus interest.

The Company may therefore need to seek additional capital through other issuances of our equity securities, strategic collaborations, grant funding, or any other means we deem appropriate. There is no assurance that such capital will be available on acceptable terms or at all. As a result, there is substantial doubt as to the Company’s ability to continue as a going concern.

In the event the Company is unable to successfully sustain and increase product sales as described above and obtain additional capital, it is unlikely that the Company will have sufficient cash flows and liquidity to finance its business operations as currently contemplated. Accordingly, if the Company determines it will not be able to obtain the necessary financing to address its working capital needs for a reasonable period into the future, it may pursue alternative paths forward for the Company. These paths could include, but not be limited to, sale of the Company or its assets, merger, organized wind-down, going private/dark, fundamental shift in its strategic plan (e.g. abandon commercialization strategy and focus exclusively on licensing), bankruptcy, etc.

The financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

5

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Recent Accounting Pronouncements

ASU No. 2010-28, “Intangibles — Goodwill and Other (Topic 350) — When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist such as if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASU 2010-28 became effective for the Company on January 1, 2011 and did not have a significant impact on the Company’s financial statements.

Note 4 — Fair Value Measurements

The Company has certain derivative liabilities related to stock purchase warrants that are valued using Level 3 inputs. The change in fair value of the derivative liabilities is classified in other income (expense) in the Company’s statement of operations. The fair value of the Company's derivative liabilities related to stock purchase warrants was determined using the Black-Scholes model — a Level 3 input.

The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the three months ended March 31, 2011 and 2010:

Description	Balance at beginning of year		Exercise of Outstanding Warrants		Modification of Warrant Agreements			Change in Fair Value			Balance at March 31
Derivative liabilities:
2011	$	1,812,447	$	—	$	(1,434,322	)	$	(378,125	)	$	—
2010	$	623,853	$	—	$	—		$	2,056		$	625,909

The terms of the warrants were modified in January 2011, resulting in a reclassification of the fair value of these warrants to Additional Paid-In Capital (“APIC”).

Transaction costs of approximately $158,000 allocated to these warrants were recorded as deferred charges at the time of issuance. The deferred charges were being amortized on a straight-line basis over the contractual term of the warrants and recorded in other expense on the statement of operations. Unamortized deferred costs remaining at the time of the aforementioned warrant modification were also reclassed to APIC. As of March 31, 2011, there are no unamortized deferred costs relating to these warrants. The remaining portion of unamortized deferred costs at March 31, 2011 relate to deferred debt issuance costs associated with the note payable, as discussed in Note 10.

In October 2010, the Company purchased a Certificate of Deposit (“CD”) from its commercial bank in the amount of $52,800. This CD bears interest at an annual rate of 0.50% and matures on June 24, 2011. The $52,800 carrying value of the CD approximates its fair value. This CD collateralizes the Letter of Credit described in Commitment and Contingencies (see Note 14).

The Company does not have any non financial assets or liabilities that it measures at fair value.

6

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5 — Receivables

Accounts receivable, net consisted of the following:

	March 31, 2011			December 31, 2010
Trade receivables	$	620,961		$	578,936
Due from Sorin Group USA, net		634,775			637,132
Other receivables		256,791			26,476
		1,512,527			1,242,544
Less allowance for doubtful accounts		(45,234	)		(35,517	)
	$	1,467,293		$	1,207,027

Note 6 — Inventory

The carrying amounts of inventories are as follows:

	March 31, 2011		December 31, 2010
Raw materials	$	21,663	$	63,940
Finished goods		318,811		564,044
	$	340,474	$	627,984

Note 7 — Property and Equipment

Property and equipment consists of the following:

	March 31, 2011			December 31, 2010
Medical equipment	$	1,283,532		$	1,291,107
Office equipment		73,927			73,927
Manufacturing equipment		256,672			255,685
		1,614,131			1,620,719
Less accumulated depreciation		(387,695	)		(295,723	)
	$	1,226,436		$	1,324,996

For the three months ended March 31, 2011, we recorded depreciation expense of approximately $92,900 with $75,100 reported as cost of sales and $17,800 to general and administrative expenses. For the three months ended March 31, 2010, we recorded depreciation expense of approximately $9,000, all of which was charged to general and administrative expenses.

Note 8 — Goodwill and Identifiable Intangible Assets

Goodwill

As a result of its acquisition of the Angel® Business in April 2010, Cytomedix recorded goodwill of approximately $707,000. There were no changes in the carrying amount of goodwill for the three months ended March 31, 2011.

Prior to the acquisition of the Angel® Business, the Company had no goodwill. The Company conducts an impairment test of goodwill on an annual basis as of October 1 of each year. The Company will also conduct tests if events occur or circumstances change that would, more likely than not, reduce the fair value of the Company below its carrying value. No such triggering events were identified during the quarter ended March 31, 2011.

7

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Goodwill and Identifiable Intangible Assets  – (continued)

Identifiable Intangible Assets

Cytomedix’s identifiable intangible assets consist of trademarks, technology (including patents), and customer relationships. These assets were a result of the Angel® Business acquisition. The carrying value of those intangible assets, and the associated amortization, as of March 31, 2011 were as follows:

Trademarks	$	320,000
Technology		2,355,000
Customer relationships		708,000
Total	$	3,383,000
Less accumulated amortization		(266,833	)
	$	3,116,167

Cytomedix reevaluates the recoverability of its identifiable, finite lived intangible assets when changes in circumstances indicate the asset’s value may be impaired. If such indicators are identified the Company then would evaluate the assets to determine the amount of such impairment, if any. No such indicators have been identified since the acquisition. Amortization expense of approximately $39,000 was recorded to cost of sales and approximately $27,000 was recorded to general and administrative expense for the three months ended March 31, 2011. Amortization expense for the remainder of 2011 is expected to be approximately $201,000. Annual amortization expense based on our existing intangible assets and their estimated useful lives is expected to be approximately:

2012	$	267,000
2013	$	267,000
2014	$	267,000
2015	$	267,000
Thereafter	$	1,849,000

Note 9 — Accounts payable and accrued expenses

Accounts payable and accrued expenses consisted of the following:

	March 31, 2011		December 31, 2010
Trade payables	$	1,149,469	$	1,096,799
Due to Sorin Group Italia Srl, net		1,789,772		1,859,060
Accrued compensation and benefits		187,215		152,253
Accrued professional fees		93,677		100,000
Accrued interest		315,195		157,598
Other payables		109,600		192,451
	$	3,644,928	$	3,558,161

Note 10 — Note Payable

In April 2010, Cytomedix, entered in an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Sorin pursuant to which the Company purchased all title and interest in Sorin’s operation of the Angel® systems and activAT^TM (the “Business Assets”). In conjunction with the Asset Purchase Agreement entered into with Sorin, the Company executed a $5 million Promissory Note. The Promissory Note accrues interest at 2.7% per annum and is secured by a first priority security interest on the Business Assets acquired. The payment on the Promissory Note are payable as follows: (i) installments of $800,000 each on the 6 and 12 month anniversaries of the Promissory Note, (ii) installments of $1,200,000 each on the 18 and 24 month

8

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Note Payable  – (continued)

anniversaries of the Promissory Note, and (iii) an installment of $1,000,000 on the 30 month anniversary of the Note. In the event of default, the initial rate of interest on the Promissory Note will increase from 2.7% to 4% per annum. This Promissory Note may be prepaid at any time without premium or penalty. A portion of the foregoing payment obligations of the Company are guaranteed by certain guarantors as described below. The Promissory Note contains other terms and provisions that are customary for instruments of this nature. No interest has been paid for the three months ended March 31, 2011.

In conjunction with the Asset Purchase Agreement, certain existing shareholders of the Company (the “Guarantors”) executed guaranty agreements pursuant to which such Guarantors agreed to guaranty 50% of the first $4 million payable to Sorin under the promissory note (the “Guaranty Agreements”). In connection with the foregoing guaranties, the Company agreed to provide the following consideration to the Guarantors: (i) cash fee calculated as a percentage of the amount guaranteed (the “Cash Fee”) and (ii) 5 year warrants to purchase an aggregate 1,333,334 shares of Common stock of the Company at an exercise price of $0.5368 per share. These warrants were valued at approximately $655,000, were capitalized as deferred debt issuance costs and are being amortized to interest expense on a straight-line basis over the two year guarantee period. The Company determined that the straight line method of amortization did not yield a materially different amortization schedule from the effective interest method. At March 31, 2011, the short and long-term portions of the unamortized deferred costs were approximately $328,000 and $0, respectively.

On April 28, 2011 this note was fully satisfied under a settlement agreement and a concurrent new note payable, more fully described in the Subsequent Events note to these consolidated financial statements. Due to the change in nature of this obligation resulting from the re-financing, the outstanding balance at March 31, 2011 is classified as non-current, except for the portion relating to the principal payment made on April 9, 2011 pursuant to the terms of the original Promissory Note, which portion is classified as current.

Note 11 — Income Taxes

The Company accounts for income taxes under the liability method, which requires companies to account for deferred 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. 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. Tax rate changes are reflected in income during the period such changes are enacted.

At March 31, 2011, we have accumulated U.S. federal and state net operating tax losses that are available to offset future taxable income and reduce future federal and state income taxes during the carryforward period. The utilization of available losses depends on the generation of future taxable income to absorb the losses. We may not be able to use available losses within the carryforward period. In addition, based on generally accepted accounting principles, we have determined for financial accounting and reporting purposes that it is unlikely that we will be able to apply or use the available losses to reduce future federal or state income taxes during the carryforward period. This assessment is updated annually or more frequently based on changes in circumstances.

A valuation allowance is recorded against deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment for a valuation allowance requires judgment on the part of management with respect to the benefits that may be realized. The Company has concluded, based upon available evidence, it is more likely than not that the U.S. federal, state, and local deferred tax assets at March 31, 2011, will not be realized. For the quarter ended March 31, 2011, the income tax provision relates exclusively to a deferred tax liability associated with the amortization of goodwill. No further provision was recorded as a full

9

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11 — Income Taxes  – (continued)

valuation allowance has been provided against U.S. federal, state, and local deferred tax assets. The valuation allowance will be reversed at such time that realization is believed to be more likely than not. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The only periods subject to examination for the Company’s federal return are the 2003 through 2010 tax years. The Company believes that its income tax filing positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no such items during the periods covered in this report.

Note 12 — Capital Stock Activity

The Company issued 4,210,151 shares of Common stock during the three months ended March 31, 2011. The following table lists the sources of and the proceeds from those issuances:

Source	# of Shares		Total Proceeds
Common stock issued in lieu of cash for dividend payable on Series D Convertible Preferred shares		142,915	$	—
Sale of shares pursuant to October 2010 equity purchase agreements		3,963,804	$	1,690,395
Common stock issued in lieu of cash for fees incurred pursuant to October 2010 equity purchase agreements		103,432	$	—
Totals		4,210,151	$	1,690,395

The following table summarizes the stock options granted by the Company during the three months ended March 31, 2011. These options were granted to employees, board members, and a service provider under the Company’s Long-Term Incentive Plan.

Options Granted	Exercise Price
310,000	$	0.39 – $0.49

During the three months ended March 31, 2011, 4,499 options were forfeited by contract due to the termination of the underlying service arrangement.

No dividends were declared or paid on the Company’s Common stock in any of the periods discussed in this report.

The Company had the following outstanding warrants and options:

	# Outstanding
Equity Instrument	March 31, 2011		December 31, 2010
D Warrants(1)		304,033		304,033
Fitch/Coleman Warrants(2)		975,000		975,000
August 2008 Warrants(3)		1,000,007		1,000,007
August 2009 Warrants(4)		1,638,888		1,638,888
April 2010 Warrants(5)		4,128,631		4,128,631
Guarantor 2010 Warrants(6)		1,333,334		1,333,334
October 2010 Warrants(7)		1,863,839		1,863,839
Other warrants(8)		394,632		424,632
Options issued under the Long-Term Incentive Plan(9)		5,628,555		5,323,054

10

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Capital Stock Activity  – (continued)

(1) These warrants were issued in May 2006 and are voluntarily exercisable at $3.50 per share, provided that the exercise does not result in the holder owning in excess of 9.9% of the outstanding shares of the Company’s Common stock, and expire on May 1, 2011. The Company may call up to 100% of the class D warrants, provided that the Company’s Common stock must have been trading at a closing price greater than $4.50 for a period of at least ten (10) consecutive trading days prior to the date of delivery of the Call Notice, provided that the Registration Statement is then in effect and trading in the Common stock shall not have been suspended by the Securities and Exchange Commission or the securities exchange or quotation system on which the Common stock is then listed or traded.

(2) These warrants were issued in connection with the August 2, 2007 Term Sheet Agreement and Shareholders’ Agreement with the Company’s outside patent counsel, Fitch Even Tabin & Flannery and The Coleman Law Firm, and have a 7.5 year term. The strike prices on the warrants are: 325,000 at $1.25 (Group A); 325,000 at $1.50 (Group B); and 325,000 at $1.75 (Group C). The Company may call up to 100% of these warrants, provided that the closing stock price is at or above the following call prices for ten consecutive trading days: Group A — $4/share; Group B — $5/share; Group C — $6/share. If the Company exercises its right to call, it shall provide at least 45 days notice for one-half of the warrants subject to the call and at least 90 days notice for the remainder of the warrants subject to the call.

(3) These warrants were issued in connection with the August 2008 registered direct offering of Common stock and warrants, are voluntarily exercisable at $1.00 per share, provided that the exercise does not result in the holder owning in excess of 9.99% of the outstanding shares of the Company’s Common stock, and expire on August 29, 2012.

(4) These warrants were issued in connection with the August 2009 financing, are voluntarily exercisable at $0.58 per share and expire in February 2014. These amounts reflect adjustments for an additional 195,339 warrants due to anti-dilutive provisions. These warrants were previously accounted for as a derivative liability through January 28, 2011. At that time, they were modified to remove non-standard anti-dilution clauses and the associated derivative liability and related deferred financing costs were reclassified to APIC.

(5) These warrants were issued in connection with the April 2010 Series D preferred stock offering, are voluntarily exercisable at $0.54 per share and expire on April 9, 2015.

(6) These warrants were issued pursuant to the Guaranty Agreements executed in connection with the Promissory Note payable to Sorin. These warrants have an exercise price of $0.54 per share and expire on April 9, 2015.

(7) These warrants were issued in connection with the October 2010 registered direct offering of common stock. They have an exercise price of $0.60 and expire on April 7, 2016. These warrants were previously accounted for as a derivative liability through January 28, 2011. At that time, they were modified to remove non-standard anti-dilution clauses and the associated derivative liability and related deferred financing costs were reclassified to APIC.

(8) These warrants were issued to placement agents, consultants, and other professional service providers in exchange for services provided. They have terms ranging from 4 to 10 years with various expiration dates through February 24, 2014 and exercise prices ranging from $1.10 to $6.00. They are voluntarily exercisable once vested. There is no call provision associated with these warrants.

(9) These options were issued under the Company’s shareholder approved Long-Term Incentive Plan.

On March 28, 2011, the Board of Directors retired the Company’s Series C Convertible Preferred stock; there was no such stock outstanding at the time of retirement.

11

CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13 — Supplemental Cash Flow Disclosures — Non-Cash Transactions

Non-cash transactions for the three months ended March 31, 2011 include:

Accrued dividends on preferred stock	$	86,570
Preferred dividends paid by issuance of stock		(85,100	)
Abatement of derivative liabilities for modified warrant agreements		1,434,322
Discharge of previously deferred financing costs for modified warrant agreements		(136,543	)

Note 14 — Commitments and Contingencies

The Company is prohibited from granting a security interest in certain of the Company’s patents and/or future royalty streams under the terms of the Series A and B Convertible Preferred stock.

Under the Company’s plan of reorganization upon emergence from bankruptcy in July 2002, the Series A Preferred stock and the dividends accrued thereon that existed prior to emergence from bankruptcy are to be exchanged into one share of new Common stock for every five shares of Series A Preferred stock held as of the date of emergence from bankruptcy. This exchange is contingent on the Company’s attaining aggregate gross revenues for four consecutive quarters of at least $10,000,000 and would result in the issuance of 325,000 shares of Common stock. Through March 31, 2011, the Company had not reached such aggregate revenue levels.

In conjunction with its FDA clearance, the Company agreed to conduct a post-market surveillance study to further analyze the safety profile of bovine thrombin as used in the AutoloGel^TM System. This study is estimated to cost between $500,000 and $700,000 over a period of several years, which began in the third quarter of 2008. As of March 31, 2011, approximately $335,000 had been incurred.

In July 2009, in satisfaction of a new Maryland law pertaining to Wholesale Distributor Permits, the Company established a Letter of Credit, in the amount of $50,000, naming the Maryland Board of Pharmacy as the beneficiary. This Letter of Credit serves as security for the performance by the Company of its obligations under applicable Maryland law regarding this permit and is collateralized by the CD described in Fair Value Measurements (see Note 4).

In 2011, we are committed to $432,000 in capital expenditures representing Angel® machines sufficient to address forecasted customer demand.

The Company’s offices and warehouse facilities are located in Gaithersburg, Maryland, and comprise approximately 4,100 square feet under a 40 month operating lease expiring December 2013. Monthly rent, including our share of certain annual operating costs and taxes, is approximately $5,800 per month, with the first four months free.

The Company also rents office space in Rockville, Maryland, under a lease expiring in June 2011. The Company has agreed in principle with the landlord to an early termination of this lease. Amounts totaling $18,000 to be paid under the early termination agreement have been accrued as of March 31, 2011.

Note 15 — Subsequent Events

Sorin Settlement Agreement

In April 2010, Cytomedix, entered in an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Sorin pursuant to which the Company purchased all title and interest in Sorin’s operation of the Angel® systems and activAT^TM (the “Business Assets”). Pursuant to the terms of the Asset Purchase Agreement, in consideration for the sale of the Business Assets, the Company agreed to pay Sorin an aggregate amount equal to $7 million, as follows: (a) $2 million which was paid on the closing date of transaction, or April 9, 2010, and (b) $5 million which was to be paid in accordance with a secured promissory note in principal amount of $5 million with interest accruing at 2.7% per annum (the “Sorin Note”), payable as follows: (i) installments of $800,000 each on the 6 and 12 month anniversaries of the Sorin Note, (ii) installments of $1,200,000 each

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CYTOMEDIX, INC.
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Subsequent Events  – (continued)

on the 18 and 24 month anniversaries of the Sorin Note, and (iii) an installment of $1,000,000 on the 30 month anniversary of the Sorin Note.

On April 28, 2011, we entered into a Settlement Agreement (the “Settlement Agreement”) pursuant to which: (a) the Company agreed to satisfy in full the remaining $3,400,000 due under the Sorin Note, and (b) the parties agreed to settle disputes that had arisen between them related to certain ancillary agreements entered into at the time of acquisition.

Pursuant to the Settlement Agreement, the Company agreed to pay Sorin an amount equal to $2,100,000 in complete satisfaction of the $3,400,000 due under the Sorin Note. Upon receipt of this payment, Sorin agreed to waive its right to and release the Company from its obligation to pay the remaining $1,300,000 million due under the Sorin Note, and to release its security interest in the Business Assets and its rights under a subordination agreement that was issued in favor of Sorin at the time of acquisition. The $2,100,000 payment was made on April 29, 2011.

The Company agreed to repay approximately $1.2 million in net amounts due Sorin pursuant to distribution agreements entered into at the time of the acquisition in eight equal monthly installments commencing June 15, 2011.

Promissory Note Payable

In order to fund the $2.1 million payment to Sorin described above, on April 28, 2011, the Company borrowed $2.1 million pursuant to a secured promissory note that matures April 28, 2015. The note accrues interest at a rate of 12% per annum, and requires interest-only payments each quarter commencing September 30, 2011, with the then outstanding principal due on the maturity date, or April 28, 2015. The note may be accelerated by the lender if the borrowers default in the performance of the terms of the promissory note, if the representations and warranties made by the borrowers in the note are materially incorrect, or if borrowers undergo a bankruptcy event. The note is secured by Business Assets acquired from Sorin.

In connection with the issuance of the secured promissory note, the Company agreed to issue the lender a warrant to purchase up to 1,000,000 shares at an exercise price of $0.50 per share vesting as follows: (a) 666,667 shares upon issuance of the note, (b) 83,333 shares if the note has not been prepaid by the first anniversary of its issuance, (c) 116,667 shares if the note has not been prepaid by the second anniversary of its issuance, and (d) 133,333 shares if the note has not been prepaid by the third anniversary of its issuance.

Of the $2,100,000 due under the note, the borrowers payment obligations with respect to $1,400,000 under note were guaranteed by certain insiders, affiliates, and shareholders of the Company, including Mr. David Jorden, one of the Company’s directors. In connection with this guarantee, the Company agreed to issue the guarantors warrants to purchase an aggregate of up to 1,500,000 shares, on a pro rata basis based on the amount of the guarantee, at an exercise price of $0.50 per share vesting as follows: (a) 833,333 shares upon issuance of the note, (b) 166,667 shares if the note has not been prepaid by the first anniversary of its issuance, (c) 233,333 shares if the note has not been prepaid by the second anniversary of its issuance, and (d) 266,667 shares if the note has not been prepaid by the third anniversary of its issuance.

Sale of Common Stock

On April 29, 2011, the Company sold 984,850 shares of common stock at a purchase price of $0.33 per share to four investors. The shares were sold in transactions exempt from registration under the Securities Act of 1933, in reliance on Section 4(2) thereof and Rule 506 of Regulation D thereunder. Each purchaser represented that it was an “accredited investor” as defined in Regulation D.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements regarding Cytomedix, Inc. (“Cytomedix,” the “Company,” “we,” “us,” or “our”) and our business, financial condition, results of operations and prospects within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements. Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. When used in this document and other documents, releases and reports released by us, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “the facts suggest” and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted below. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. Actual events, transactions and results may materially differ from the anticipated events, transactions or results described in such statements. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward looking statements. Other unknown, unidentified or unpredictable factors could materially and adversely impact our future results. You should read the following discussion and analysis in conjunction with our unaudited financial statements contained in this report, as well as the audited financial statements, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Company undertakes no obligation to update the forward-looking statements contained in this report to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may occur as part of its ongoing periodic reports filed with the SEC. Given these uncertainties, the reader is cautioned not to place undue reliance on such statements.

Description of the Business

Overview

Cytomedix develops, sells, and licenses regenerative biological therapies intended to aid the human body in regenerating/healing itself, to primarily address the areas of wound care, infection control, and orthopedic surgery. The Company currently markets the AutoloGel^TM System (“AutoloGel^TM”), as well as the Angel® Whole Blood Separation System (“Angel®”) and activAT® Autologous Thrombin Processing Kit (“activAT®”), both of which were acquired from Sorin in April 2010.

AutoloGel^TM is a device for the production of platelet rich plasma (“PRP”) gel derived from the patient’s own blood. The AutoloGel^TM System is cleared by the Food and Drug Administration (“FDA”) for use on a variety of exuding wounds. The Company is currently pursuing a multi-faceted strategy to penetrate the chronic wound market with its AutoloGel^TM System.

Angel® and activAT® are used primarily in operating rooms. Angel® is used for separation of whole blood into red cells, platelet poor plasma and platelet rich plasma. ActivAT® is designed to produce autologous thrombin serum from platelet poor plasma and is sold exclusively in Europe and Canada, where it provides a safe alternative to bovine-derived products.

The Company is also pursuing opportunities for the application of AutoloGel^TM and Angel® into other markets such as hair transplantation, pain management, and sports medicine, as well as actively seeking complementary products for regenerative medicine markets.

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Angel® and ActivAT® Product Lines

The Angel® Whole Blood Separation System is designed for single patient use at the point of care, and provides a simple yet flexible means for producing quality platelet rich plasma (“PRP”) and platelet poor plasma (“PPP”) clinical blood components. The system is easy to set up and maintain. It is capable of processing up to 180 ml of whole blood. In surgical procedures, the PRP can be mixed with bone graft material prior to application. Growth factors released by platelets present in the PRP have been shown to control infection and aid in the healing process.

We have grown worldwide Angel® and activAT® sales each quarter since acquiring these product lines from Sorin in April 2010 and expect this trend to continue as we progress through 2011. We expect that future sales growth of these products will be driven through a combination of strengthened distributor relationships, collaborative agreements, and direct sales. In the fourth quarter of 2010, we added a number of independent agents in the U.S. They are now fully trained and we believe they will drive domestic sales growth in 2011. In April, we also added a Director of National Accounts to focus on large chains, managed care organizations, and commercial reimbursement matters. In Europe, we have established a small network of distributors serving the UK, Netherlands, Italy, and Belgium, and have also contracted with a distributor in Kuwait. We expect these distributors to drive increased sales in Europe in the coming quarters. In the long term, we expect new technology applications for Angel® and expansion into other surgical and orthopedic applications will provide future growth opportunities.

We continue to make progress on our efforts to obtain FDA clearance for additional indications for Angel®, specifically bone marrow aspirate processing and also for the re-transfusion of packed red blood cells separated during processing. We are aware that Angel has been used effectively in both these indications, giving us the confidence to proceed. Bone marrow is a rich source of stem cells used in regenerative procedures. Stem cells have the ability to grow and differentiate into specific tissues making them a critical component for tissue regeneration in addition to growth factors and other signal molecules. The protocol for collecting the data necessary for a 510(k) submission has been developed and has been shared with the FDA. Preliminary evaluations have been successfully completed and formal data collection has begun. In addition, total blood management has become an important aspect with surgical procedures. The ability to re-infuse blood components separated during processing of platelet rich plasma may improve patient outcomes by preventing the unnecessary loss of blood and plasma. The data supporting a 510(k) submission for re-infusion has been collected and is currently under review. We expect to be ready to file 510(k)s in these indications toward the end of the second quarter.

ActivAT® is designed to produce autologous thrombin serum from platelet poor plasma and is sold exclusively in Europe and Canada, where it provides a safe alternative to bovine-derived products. It is generally sold in conjunction with Angel®. It currently represents a very small fraction of our total revenues.

Integration of the Angel® and ActivAT® product lines is nearly complete. Sales, customer service, warehousing, distribution, quality/regulatory, and manufacturing are under Cytomedix control. During the transition period, we successfully worked to ensure no net attrition of sales and no major supply chain interruptions. Looking forward, our focus will be on growing sales in both the U.S. and Europe, and seeking efficiencies in the supply chain. Worldwide Angel® and ActivAT® sales in the first quarter of 2011 were up approximately 16% compared with similar revenues in the first quarter of 2010, which was the quarter immediately preceding the acquisition.

AutoloGel^TM System

We continue to execute our clinical/scientific based sales approach. This approach is yielding increased clinical awareness and acceptance of our AutoloGel^TM System. Sales of AutoloGel^TM were up approximately 38% in the first quarter of 2011 as compared to the same period in 2010. We continue to focus our sales efforts on Long-Term Acute Care Hospitals, Veterans Administration Facilities, and certain state Medicaid Agencies. The broader market, comprised of outpatient wound care centers, doctor’s offices, and others, is a longer range target of ours which we plan to address after obtainment of broad commercial reimbursement by Medicare and commercial third party payors.

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Regarding Medicare coverage, we expect to submit our formal request for reconsideration of coverage to Medicare in the coming weeks. On March 16, 2011, we had a pre-submission meeting with the coverage and analysis group at Centers for Medicare and Medicaid Services (“CMS”). CMS reviewed clinical data collected over the past three years and the scientific literature we subjected to a thorough systematic review. CMS representatives requested that we provide more information regarding the net health benefit for Medicare beneficiaries following PRP treatment such as the patient's ability to regain lost functionality and mobility. On May 10, 2011, we met again with Medicare to present our responses to its comments from the March 16, 2011 meeting. We are now finalizing our reconsideration request for submission to CMS. We believe this request is meaningfully enhanced by a number of factors, including, among others:

• the inclusion of 285 wounds from our wound registry versus the 40 wounds from our randomized controlled trial included in the previous submission

• a robust systematic review of all of the pertinent published journal articles which has yielded a significant amount of new data

• support and participation of key opinion leaders who have collaborated with us on the manuscript we are taking to CMS and who have or will join us at meetings with CMS

• legislative and advocacy support that did not exist at the time of our previous request

We intend to utilize this same data to approach commercial payors in the coming months.

We continue to build a body of clinical data in support of the use of our advanced plasma derived regenerative therapy in a number of indications for use in a variety of clinical settings. Following is a brief summary of presentations and articles recently published or expected to be published in the immediate future:

• Effect of Platelet Rich Plasma Gel in a Physiologically Relevant Platelet Concentration on Wounds in Persons with Spinal Cord Injury, authored by Dr. Laurie Rappl, our clinical development liaison, April 2011 Edition of the International Wound Journal.

• We have submitted data on the full data set of 285 wounds in our wound registry for publication in Advances in Wound Care and it has been accepted for publication in August.

• We have submitted an article for publication in the International Wound Journal. This article details the run-in data from a significant subset of the 285 wound registry. Analysis of the run-in period allowed us to evaluate the effectiveness of the AutoloGel^TM System as compared to earlier treatment used during the period of nonhealing. The healing benefits of AutoloGel^TM were highly statistically significant.

• We had several posters presented and displayed at the Symposium on Advanced Wound Care meeting held in the middle of April 2011. This is the largest annual gathering of wound care clinicians in the United States.

We continue to make progress on our enhanced separation device that we have been developing in conjunction with biomedical engineers in Israel. The new separation device provides the added convenience and effectiveness that treating clinicians are looking for at the point of care. Importantly, the new device allows for the whole blood collection and the separation of the platelet rich plasma to be accomplished with a single specially designed closed syringe system that maintains an aseptic environment. This streamlines the process, improves safety and ease-of-use and may be more conducive for certain developing orthopedic indications. The sterilization and platelet studies needed for our 510(k) filing are in process. We anticipate we will have several hundred systems ready for use once we receive regulatory clearance so we can immediately begin training and clinical evaluations with our customers.

We showcased the AutoloGel^TM System at the 18th annual scientific meeting of the International Society of Hair Restoration Surgery held in late October 2010 and received positive response at our exhibit booth. In order to leverage this opportunity, we have been working on a model with which to approach this market.

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In collaboration with an industry leader in hair restoration, we have developed a website based marketing program centered on a monthly membership fee for physicians wishing to use AutoloGel^TM to improve wound healing and potentially enhance hair follicle growth. We expect to begin direct sales outreach to potential customers in the coming weeks, and anticipate first sales into this market to occur in the middle of the third quarter 2011.

Comparison of Operating Results for the Three Month Periods Ended March 31, 2011 and 2010

Certain numbers in this section have been rounded for ease of analysis.

Sales and gross profits from AutoloGel^TM, while growing, continue to be modest. In April 2010, we acquired the Angel® and ActivAT® businesses from Sorin Group USA, Inc. We have grown revenues of these products in each successive quarter since the acquisition and believe there is opportunity for significant future growth.

However, even with the acquisition of Angel®, our revenues will be insufficient to cover our operating expenses in the near term. Operating expenses primarily consist of employee compensation, professional fees, consulting expenses, and other general business expenses such as insurance, travel related expenses, research and development, and sales and marketing related items. Operating expenses have risen to support the transition and ongoing support of the Angel® business, as well as to fund the increased investment in the commercialization efforts around AutoloGel^TM, the evaluation of additional products/technologies, and an enhanced investor relations effort. Moving forward, the Company will endeavor to streamline operating expenses without jeopardizing sales growth as it works toward achieving operational cash flow break-even.

Revenues

Revenues rose $1,187,000 (664%) to $1,366,000 comparing the three months ended March 31, 2011 to the same period last year.

The increase was due to higher product sales ($1,302,000), partially offset by lower royalty revenues ($115,000). The increased product sales were primarily due to $1,278,000 of sales in the Angel® product line, which we acquired from Sorin Group USA, Inc. on April 9, 2010. AutoloGel^TM sales were also up 38% to $87,000.

Gross Profit

Gross profit rose $367,000 (104%) to $720,000 for the three month period ended March 31, 2011 compared to the same period last year. The increase was a result of higher product sales primarily due to the Angel® product line discussed above.

Gross margin for product sales fell to 55% from 76%. The decrease is primarily due to the amortization of patents and technology acquired from Sorin, depreciation on revenue generating equipment, and a mix shift of revenues to the Angel products which have traditionally seen lower margins than Autologel^TM.

Operating Expenses

Operating expenses rose $789,000 (56%) to $2,203,000 comparing the three months ended March 31, 2011, to the same period last year. A discussion of the various components of operating expenses follows below.

Salaries and Wages

Salaries and wages rose $104,000 (17%) to $726,000 comparing the three months ended March 31, 2011 to the same period last year.

The increase was due to higher salaries ($73,000) due to additional employees and higher commissions ($56,000) associated with increased product sales. This increase was partly offset by lower stock based compensation ($24,000).

Consulting Expenses

Consulting expenses rose $260,000 (342%) to $337,000 comparing the three months ended March 31, 2011 to the same period last year. The increase was primarily due to new spending associated with regulatory compliance and CMS reimbursement efforts and the addition of dedicated consultants in the areas of marketing and European operations.

17

Professional Fees

Professional fees rose $52,000 (28%) to $237,000 comparing the three months ended March 31, 2011, to the same period last year. The increase was primarily due to legal and accounting costs associated with the Company’s prior period financial restatements.

General and Administrative Expenses

General and administrative expenses rose $378,000 (81%) to $844,000 comparing the three months ended March 31, 2011, to the same period last year.

The increase was primarily due to higher commissions paid to independent sales agents ($65,000) as the Company expanded its sales efforts, benefits ($21,000) due to additional personnel, travel ($32,000), amortization of intangibles ($28,000), setup fees ($70,000) related to the establishment of the Angel® and ActivAT® manufacturing lines, and marketing related items ($37,000) as the Company increased marketing efforts.

Other Income and Expense

Other income, net rose $85,000 to $78,000 comparing the three months ended March 31, 2011, to the same period last year. The increase was primarily due to the change in the fair value of derivative liabilities mainly due to the change in the Company’s stock price partly offset by higher interest expense resulting from the promissory note payable to Sorin.

Liquidity and Capital Resources

There is substantial doubt that the Company will continue as a going concern. Since inception we have incurred, and continue to incur significant losses from operations. The Company used approximately $1.3 million cash in operations in the first quarter of 2011. The Angel® and ActivAT® product lines, acquired in April 2010, historically generated approximately $5 million in revenue per year. While the Company is currently generating revenue consistent with those historical levels, there is no assurance that it will be successful in maintaining or growing these revenues.

The Company needs to sustain and grow Angel® and ActivAT® product sales and increase sales of AutoloGel^TM to meet its business objectives. There is no assurance that the Company will be successful in this regard.

The promissory note payable to Sorin with a remaining face amount of $3.4 million as of March 31, 2011, was fully satisfied with a payment of $2.1 million in April 2011, as more fully described in the Subsequent Events Note to the consolidated financial statements. This development removes a significant short term financing obligation. The $2.1 million was funded through a new promissory note raised from an existing shareholder, which note carries a 12% annual cash interest only obligation, payable quarterly beginning on September 30, 2011. The principal under this note is due April 28, 2015.

The Company also raised $325,000 in April 2011 through a private offering of its common stock at a purchase price of $0.33 per share to four “accredited” investors. The shares were sold in transactions exempt from registration under the Securities Act of 1933. These funds will be used for general corporate and working capital purposes.

The Company will also require additional capital to finance the further development of its business operations. The Company intends to primarily access such capital through the purchase agreements entered into in October 2010 with Lincoln Park Capital Fund, LLC (“LPC”). These agreements allow the Company to sell up to 150,000 shares of common stock every other business day to LPC within certain pre-defined parameters (including a minimum share per price of $0.30), up to an aggregate amount of $11.5 million over a 25 month period. There is no assurance that the amounts raised under the Purchase Agreements will be sufficient to fund our operational cash flow needs and service the Note Payable. The Company raised approximately $1.7 million in the first quarter of 2011 under these agreements. Approximately $900,000 of this amount was used to fund the April 9, 2011 installment payment under the Sorin promissory note, plus interest.

We believe that the amounts available under the purchase agreements with LPC (provided that the purchase price per share remains above $0.30) and significant planned sales growth of the Angel® and ActivAT®

18

products, along with the successful execution of our sales strategy for AutoloGel^TM, will be sufficient to fund our operations, service the interest on the new promissory note, and fund planned capital expenditures through 2011. There is no assurance that we will be able to meet our sales targets or that we will be able to raise sufficient capital through the LPC purchase agreements to fund our operations, meet our debt service commitments, or invest in planned capital expenditures.

Additional cash, in excess of those amounts secured under the LPC Purchase Agreements, may be required for the Company to pursue all elements of its strategic plan. Specific programs that may require additional funding include, without limitation, accelerated investment in the sales, marketing, distribution, and customer service areas, further expansion into the European market, significant new product development or modifications, conduct of any trials the Company may deem necessary in order to obtain CMS coverage, and pursuit of certain other attractive opportunities for the Company. We would likely raise such additional capital through the issuance of our equity securities, which may result in significant dilution to our investors. The Company’s ability to raise additional capital is dependent on, among other things, the state of the financial markets at the time of any proposed offering. Given the current state of the financial markets, the ability to raise capital may be significantly diminished. We are also exploring potential strategic partnerships, which could provide a capital infusion to the Company. However, it may be necessary to partner one or more of our technologies at an earlier stage of development, which could cause the Company to share a greater portion of the potential future economic value of those programs with its partners. The Company is also exploring the possibility of obtaining grant funding for some of its ongoing projects, but it is too early to determine whether these efforts are likely to be successful. Because of certain restrictive covenants relating to its preferred stock, we may not be able to obtain traditional debt financing. There is no assurance that additional funding, through any of the aforementioned means, will be available on acceptable terms, or at all. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, the Company’s operations could be materially negatively impacted.

The Company is currently conducting a post-market surveillance study per its understanding reached with the FDA. The Company estimates that this study, designed to treat 300 patients, which began in the third quarter of 2008, will cost between $500,000 and $700,000 in total. Of that amount, approximately $335,000 has been incurred through March 31, 2011. We have treated approximately 115 patients in this study so far, and no adverse events have been reported. We will likely seek a release from gathering further data based on the positive results received to date. However, there is no assurance that the FDA will grant such release.

In 2011, we are committed to $432,000 in capital expenditures representing Angel® machines sufficient to address forecasted customer demand.

Contractual Obligations

The Company’s offices and warehouse facilities are located in Gaithersburg, Maryland, and comprise approximately 4,100 square feet under a 40 month operating lease expiring December 2013. Monthly rent, including our share of certain annual operating costs and taxes, is approximately $5,800 per month, with the first four months free.

The Company also rents office space in Rockville, Maryland, under a lease expiring in June 2011. The Company has agreed in principle with the landlord to an early termination of this lease. Amounts totaling $18,000 to be paid under the early termination agreement have been accrued as of March 31, 2011.

The Company has also committed to purchase approximately $432,000 of new Angel® machines in order to support demand for the Angel® products.

Recent Accounting Pronouncements

ASU No. 2010-28, “Intangibles — Goodwill and Other (Topic 350) — When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist such as if an event occurs or circumstances change that would more likely than not

19

reduce the fair value of a reporting unit below its carrying amount. ASU 2010-28 became effective for the Company on January 1, 2011 and did not have a significant impact on the Company’s financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting issuer (as defined in Item 10(f)(1) of Regulation S-K), the Company is not required to report quantitative and qualitative disclosures about market risk specified in Item 305 of Regulation S-K.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures, as of March 31, 2011 (the “Evaluation Date”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective such that the material information required to be filed with our SEC reports is recorded, processed, summarized, and reported within the required time periods specified in the SEC rules and forms.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the first quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20

PART II
  
OTHER INFORMATION

Item 1. Legal Proceedings

At present, the Company is not engaged in or the subject of any material pending legal proceedings.

Item 1A. Risk Factors

There were no material changes from the risk factors as previously disclosed on our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company issued no unregistered shares of Common stock during the three months ended March 31, 2011.

The Company did not repurchase any of its equity securities during the quarter ended March 31, 2011.

Item 3. Defaults Upon Senior Securities

N/A

Item 4. Removed and Reserved

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are furnished as part of this report.

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CYTOMEDIX, INC.
Date: May 16, 2011	By: /s/ Martin P. Rosendale Martin P. Rosendale (Chief Executive Officer)
Date: May 16, 2011	By: /s/ Andrew S. Maslan Andrew S. Maslan (Chief Financial Officer)

22

EXHIBIT INDEX

Number	Exhibit Table
2.1	First Amended Plan of Reorganization with All Technical Amendments (Previously filed on June 28, 2002, as exhibit to Current Report on Form 8-K, File No. 000-28443, and incorporated by reference herein).
2.2	Amended and Restated Official Exhibits to the First Amended Plan of Reorganization of Cytomedix, Inc. with All Technical Amendments (Previously filed on May 10, 2004, as exhibit to Form 10-QSB for the quarter ended March 31, 2004, File No. 000-28443, and incorporated by reference herein).
2.3	Asset Purchase Agreement by and among Sorin Group USA, Inc., Cytomedix Acquisition Company and Cytomedix, Inc, dated as of April 9, 2010 (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
3(i)	Restated Certificate of Incorporation of Cytomedix, Inc. (Previously filed on November 7, 2002, as exhibit to Form 10-QSB for quarter ended June 30, 2001, File No. 000-28443, and incorporated by reference herein).
3(i)(1)	Amendment to Restated Certificate of Incorporation of Cytomedix, Inc. (Previously filed on November 15, 2004, as exhibit to Form 10-QSB for quarter ended September 30, 2004, File No. 000-28443, and incorporated by reference herein).
3(i)(2)	Certificate of Amendment to the Certificate of Incorporation (Previously filed on July 1, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
3(ii)	Restated Bylaws of Cytomedix, Inc. (Previously filed on November 7, 2002, as exhibit to Form 10-QSB for quarter ended June 30, 2001, File No. 000-28443, and incorporated by reference herein).
4.1	Form of Warrant (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
4.2	Certificate of Designation, Relative Rights and Preferences of the 10% Series D Convertible Preferred Stock (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
4.3	Form of Warrant (Previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K, File No. 001-32518, and incorporated by reference herein).
4.4	Form of Warrant
10.1	Form of Transition Agreement, dated as of April 9, 2010 (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
10.2	Form of Asset Transfer and Assumption Agreement, dated as of April 9, 2010 (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
10.3	Form of Subscription Agreement (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
10.4	Form of Registration Rights Agreement (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
10.5	Form of Promissory Note (Previously filed on April 12, 2010 as exhibit to the Current Report on Form 8-K, File no. 001-32518, and incorporated by reference herein).
10.6	Flex Space Office Lease by and between Cytomedix, Inc. and Saul Holdings Limited Partnership, dated as of May 19, 2010 (Previously filed on August 16, 2010, as exhibit to Form 10-Q for quarter ended June 30, 2010, File No. 001-32518, and incorporated by reference herein).

23

Number	Exhibit Table
10.7	Form of the Purchase Agreement (Previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K, File No. 001-32518, and incorporated by reference herein).
10.8	Form of the Registration Rights Agreement (Previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K, File No. 001-32518, and incorporated by reference herein).
10.9	Form of the Securities Purchase Agreement (Previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K, File No. 001-32518, and incorporated by reference herein).
10.10	Form of the Lincoln Purchase Agreement (Previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K, File No. 001-32518, and incorporated by reference herein).
10.11	Form of Settlement Agreement dated as of April 28, 2011
10.12	Form of Subscription Agreement
10.13	Form of Promissory Note dated as of April 28, 2011
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certificate of Chief Executive Officer pursuant to 18 U.S.C.ss.1350.
32.2	Certificate of Chief Financial Officer pursuant to 18 U.S.C.ss.1350.

24

EX-4.4

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR WITH ANY STATE SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS AND RULES.

CYTOMEDIX, INC.

WARRANT

Warrant No. [_] Dated: April [_], 2011

Cytomedix, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [_]or his registered assigns (including permitted transferees, the “Holder”), is entitled to purchase from the Company up to a total number of [_] fully paid, validly issued and nonassessable shares of Common Stock (as defined below) (as adjusted from time to time as provided in Section 9 hereof) and each such share (a “Warrant Share”) and all such shares (the “Warrant Shares”) at an exercise price equal to $0.50  (as adjusted from time to time as provided in Section 9 hereof, the “Exercise Price”); at any time and from time to time which Warrant shall be exercisable as set forth in Schedule I hereto through and including, April [_], 2016 (the “Expiration Date”), and subject to the following terms and conditions.  This Warrant is one of a series of similar warrants (the “Warrants”) issued pursuant to one of several Limited Guarantee Agreements, dated as of April 28, 2011, by and among the Company and certain other guarantors (each, a “Guarantee Agreement”), in connection with the Company’s issuance of a 12% interest only $2,100,000 secured promissory note dated as of the same date (the “Note”).  Capitalized terms used in this Warrant that are not defined herein shall have the respective meanings given such terms in the Guarantee Agreement.

1.           Definitions.  The capitalized terms used herein and not otherwise defined shall have the meanings set forth below:

“Affiliate” of any specified Person means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” means the power to direct the management and policies of such Person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“Common Stock” means the common stock of the Company.

“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

“Eligible Market” means any of the New York Stock Exchange, the NYSE Amex LLC, Nasdaq Stock Market or the Over-the-Counter Bulletin Board (the “OTCBB”).

“Market Price” shall mean (i) if the principal trading market for such securities is an exchange, the last reported sale price per share on such exchange, (ii) if clause (i) is not applicable, the average of the closing bid price per share for the last five previous Trading Days as set forth by Nasdaq or (iii) if clauses (i) and (ii) are not applicable, the average of the closing bid price per share for the last five previous Trading Days as set forth in the Pink Sheets®.  Notwithstanding the foregoing, if there is no reported sales price or closing bid price, as the case may be, on any of the ten (10) Trading Days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it.

“Original Issue Date” means April 28, 2011.

“Other Securities” refers to any capital stock (other than Common Stock) and other securities of the Company or any other Person that the Holder of this Warrant at any time shall be entitled to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to Common Stock, or that at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 9 hereof or otherwise.

“Person” means any court or other federal, state, local or other governmental authority or other individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 “Trading Day” means any day on which the Common Stock is listed or quoted on any Eligible Market.

“Warrant Shares” shall initially mean shares of Common Stock and in addition may include Other Securities and Distributed Property (as defined in Section 9(e)hereof) issued or issuable from time to time upon exercise of this Warrant.

2.           Registration of Warrant.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3.           Registration of Transfers.  The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto as Appendix A duly completed and signed, to the Company at its address specified herein. Upon any such registration and transfer, a new warrant in substantially the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

4.           Exercise and Duration of Warrant.

(a)           The registered Holder hereby agrees that all exercises of this Warrant shall be in compliance and consistent with the provisions of the exercise limitations set forth in this Section and Schedule I to this Warrant; provided, however, that such provisions are satisfied, this Warrant shall be exercisable by the registered Holder at any time and from time to time on and after the Original Issue Date  and up to and including the Expiration Date.  At 5:00 P.M. New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

(b)           A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto as Appendix B (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (as set forth in Section 4(d)below), and the date such items are received by the Company is an “Exercise Date.”  Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

(c)           The Holder shall pay the Exercise Price (i) in cash, by certified bank check payable to the order of the Company or by wire transfer of immediately available funds in accordance with the Company’s instructions or (ii) if  (x) there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder and (y) the Market Price exceeds the Exercise Price, by means of a “cashless exercise”, by presenting and surrendering to the Company this Warrant, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A] where:

X = the number of Warrant Shares to be issued to the Holder upon such cashless exercise;

Y = the number of Warrant Shares with respect to which this Warrant is being exercised;

A = the Market Price on the Exercise Date; and

B = the Exercise Price.

(d)           If an exercise of this Warrant is to be made in connection with a registered public offering or sale of the Company, such exercise may, at the election of the Holder, be conditioned on the consummation of the public offering or sale of the Company, in which case such exercise shall not be deemed effective until the consummation of such transaction.

5.           Delivery of Warrant Shares.

(a)           Subject to the exercise limitations set forth in Section 4 hereof, upon exercise of this Warrant, the Company shall within three Trading Days after receipt of the Exercise Notice attached hereto as Appendix B, issue or cause to be issued and deliver or cause to be delivered to the Holder, in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise bearing (only if such legend is required by applicable law) customary Securities Act restrictive legend.  The Holder, or any Person so designated by the Holder to receive the Warrant Shares, shall be deemed to have become holder of record of such Warrant Shares as of the Exercise Date.

(b)           This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

6.           Charges, Taxes and Expenses.  Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrant in a name other than that of the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.           Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and in substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.

8.           Reservation of Warrant Shares.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable and deliverable upon the exercise of this entire Warrant, free from all taxes, liens, claims, encumbrances with respect to the issuance of such Warrant Shares and will not be subject to any pre-emptive rights or similar rights (taking into account the adjustments and restrictions of Section 9hereof).  The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued, fully paid and nonassessable.  The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed or quoted, as the case may be.

9.           Certain Adjustments.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)           Stock Dividends.  If the Company, at any time while this Warrant is outstanding,  pays a dividend on its Common Stock payable in additional shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, then in each such case the Exercise Price shall be multiplied by a fraction, (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the opening of business on the day after the record date for the determination of stockholders entitle to receive such dividend or distribution and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to this Section 9(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution.

(b)           Stock Splits.  If the Company, at any time while this Warrant is outstanding, (i) subdivides outstanding shares of Common Stock into a larger number of shares, or (ii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment pursuant to this Section 9(b)shall become effective immediately after the effective date of such subdivision or combination.

(c)           Reclassifications.  A reclassification of the Common Stock (other than any such reclassification in connection with a merger or consolidation to which Section 9(f)applies) into shares of any other class of stock shall be deemed:

(i)           a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock for the purposes and within the meaning of this Section 9; and

(ii)           if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock for the purposes and within the meaning of Section 9(b) hereof.

(d)           Calculations.  All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.  The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(e)           Adjustments.  Notwithstanding any provision of thisSection 9, no adjustment of the Exercise Price shall be required if such adjustment is less than $0.01; provided, however, that any adjustments that by reason of thisSection 9(e) are not required to be made shall be carried forward and taken into account for purposes of any subsequent adjustment.

(f)           Notice of Adjustments.  Upon the occurrence of each adjustment pursuant to this Section 9, the Company will promptly deliver to the Holder a certificate executed by the Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring such adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price and the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable).  The Company will retain at its office copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by the Holder or any prospective purchaser of the Warrant designated by the Holder.

(g)           Notice of Corporate Events.  If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any subsidiary of the Company, or (ii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction at least 15 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

10.           Fractional Shares.  The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the Company shall make a cash payment to the Holder equal to (a) such fraction multiplied by (b) the Market Price on the Exercise Date of one full Warrant Share.

11.           Restricted Securities.  The Holder represents and warrants that it (i) understands that the Warrant and the Warrant Shares have not been registered under the Securities Act and (ii) understands the restrictions set forth on the legend printed on the face of this Warrant.

12.           Reserved.

13.           Remedies.  The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

14.           Notices.  Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise Notice) shall be in writing and shall be mailed by certified mail, return receipt requested, or by a nationally recognized courier service or delivered (in person or by facsimile), against receipt to the party to whom such notice or other communication is to be given. The address for such notices or communications shall be as set forth in the Guarantee Agreement entered into by the Holder and the Company.  Any notice or other communication given by means permitted by this Section 14shall be deemed given at the time of receipt thereof.

15.           Warrant Agent.  The Company shall serve as warrant agent under this Warrant.  Upon a prompt written notice to the Holder, the Company may appoint a new warrant agent.  Any Person into which any new warrant agent may be merged, any Person resulting from any consolidation to which any new warrant agent shall be a party or any Person to which any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act.  Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

16.           Miscellaneous.

(a)           This Warrant may be assigned by the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.  This Warrant may be modified, revised or amended only in writing signed by the Company and at least 66⅔% of the Holders of such Warrants and their successors and assigns.

(b)           The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment.  Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor upon exercise thereof, (ii) will take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, free from all taxes, liens, claims and encumbrances and (iii) will not close its shareholder books or records in any manner that interferes with the timely exercise of this Warrant.

(c)           The validity, construction and enforcement of this Warrant shall be governed by the laws of the State of Delaware and jurisdiction is hereby vested in the Courts of said State in the event of the institution of any legal action under this Warrant.

(d)           Neither party shall be deemed in default of any provision of this Warrant, to the extent that performance of its obligations or attempts to cure a breach hereof are delayed or prevented by any event reasonably beyond the control of such party, including, without limitation, war, hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike, lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or order of any court, government or governmental agency, provided that such party gives the other party written notice thereof promptly upon discovery thereof and uses reasonable best efforts to cure or mitigate the delay or failure to perform.

(e)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(f)           In case any one or more of the provisions of this Warrant shall be deemed invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision that shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

******************

The Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

Cytomedix, Inc.
By:
	Name:                  Andrew S. Maslan
	Title:                    Chief Financial Officer

APPENDIX A

Form of Assignment

(to be completed and signed only upon transfer of Warrant)

For Value Received, the undersigned hereby sells, assigns and transfers unto _________ the right represented by the within Warrant to purchase _____________ shares of Common Stock of Cytomedix, Inc. to which the within warrant relates and appoints __________________________ attorney to transfer said right on the books of Cytomedix, Inc. with full power of substitution in the premises.

Dated: ______________
	(Signature must conform in all respects to name of Holder as specified on face of the Warrant)
	Address of Transferee:

APPENDIX B

Form of Exercise Notice

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)

To: Cytomedix, Inc.

The undersigned is the Holder of Warrant No. ____ (the “Warrant”) issued by Cytomedix, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

1. The Warrant is currently exercisable to purchase a total of ______ Warrant Shares.

2. The undersigned Holder hereby exercises its right to purchase ___ Warrant Shares pursuant to the Warrant.

3. The Holder intends that payment of the Exercise Price shall be made as (check one):

Cash Exercise _______

Cashless Exercise _______

4. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $________ to the Company in accordance with the terms of the Warrant.

5. If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder for the number of shares equal to the whole number portion of the product of the calculation set forth below, which is ________.  The Company shall pay a cash adjustment in respect of the fractional portion of the product of the calculation set forth below in an amount equal to the product of the fractional portion of such product and the Market Price on the Exercise Day, which product is __________.

X = Y[(A-B)/A]

X = the number of Warrant Shares to be issued to the Holder.

Number of Warrant Shares being exercised:  (“Y”).

Market Price on the Exercise Day: (“A”).

Exercise Price:  (“B”)

6. Pursuant to this exercise, the Company shall deliver to the Holder Warrant Shares in accordance with the terms of the Warrant.

7. Following this exercise, the Warrant shall be exercisable to purchase a total of __________ Warrant Shares.

Dated: _____________________	Name of Holder:
	(Print)
	By:
	Name:
	Title:
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

1.

Schedule I

Warrant Vesting Schedule

Subject to the terms, provisions and limitations set forth in the Warrant hereof, the registered Holder of the Warrant is entitled to exercise this Warrant and to purchase the Warrant Shares at the following periods and in the following amounts:

Warrant Share Amount	Exercise Date
Initial [_] shares	April 28, 2011,
Additional [_] shares	April 28, 2012 only in the event any portion of the principal of the Note remains outstanding as of such first (1st) anniversary of the Note,
Additional [_] shares	April 28, 2013 only in the event any portion of the principal of the Note remains outstanding as of such second (2nd) anniversary of the Note, and
Remaining [_] shares	April 28, 2014 only in the event any portion of the principal of the Note remains outstanding as of such third (3rd) anniversary of the Note.

(1)            Capitalized terms used but not defined in this Schedule shall bear the same meaning as used in the Warrant of which this Schedule I is a part.

2.

EX-10.11

SETTLEMENT AGREEMENT

This agreement ("Agreement') dated as of April 28, 2011 is made by and among Sorin Group USA, Inc., a Delaware corporation ("Sorin") and Cytomedix Inc., a Delaware corporation and Cytomedix Acquisition Company, LLC, a Delaware limited liability company (collectively, "Cytomedix"). Cytomedix and Sorin are referred to herein as a "Party" or collectively as the "Parties".

Recitals

A.           The Parties entered into an Asset Purchase Agreement, dated April 9, 2010, pursuant to which Cytomedix acquired certain assets from Sorin, include those relating to the Angel product line (the "APA").

B.           A substantial portion of the purchase price under the APA was paid by delivery of a $5,000,000 Secured Promissory Note, dated April 9, 2010 from Cytomedix to Sorin (the "Note").

C.           In connection with entering into the APA, the Parties and certain Affiliates of Sorin entered into several ancillary agreements, including a Transition Services Agreement (the "TSA") and distribution agreements pursuant to which affiliates of Sorin were appointed as distributors of certain products of Cytomedix (collectively the Distribution Agreements").

D.           Certain disputes have arisen among the Parties and their Affiliates, and the Parties desire to resolve all such disputes on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above premises and the other covenants and agreements herein contained, and for other good and value consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.           Modification of Note. The current outstanding principal balance under the Note is U.S.$3,400,000. In consideration of Cytomedix accelerating payment of the Note, Sorin shall compromise and waive a portion of the unpaid the principal balance in exchange for the acceleration of payment. Therefore, subject to the condition precedent of Cytomedix paying Sorin an amount equal to U.S.$2,100,000 Two Million One Hundred Thousand Dollars (the "Compromise Prepayment") by not later than May 3, 2011, Sorin hereby waives its right to and releases Cytomedix from its obligation to pay the remaining U.S.$1,300,000 (One Million Three Hundred Thousand Dollars) of the principal amount under the Note and any accrued but unpaid interest. Upon receipt of the Compromise Prepayment, Sorin shall (i) release its security interest in the Collateral, and will authorize the filing of a termination statement in the applicable public records, and (ii) release and waive its rights under that certain Subordination Agreement, dated April 9, 2010, issued in favor of Sorin. Except as expressly modified hereby, the provisions of the Note shall remain in full force and effect.

2.           Outstanding Receivables. The Parties agree that (i) Sorin and its Affiliates owe Cytomedix in the aggregate an amount equal to U.S.$613,490.30 (the "Sorin Receivable") under the Distribution Agreements, and (ii) Cytomedix owes Sorin an amount equal to U.S.$1,796,894.41 (the "Cytomedix Receivable") pursuant to the TSA. The Parties hereby agree that the Sorin Receivable shall be deemed set-off against the Cytomedix Receivable, reducing the total amount owed by Cytomedix to U.S.$ 1,183,404.11 (the "Net Cytomedix Receivable") and the Sorin Receivable is as a result deemed paid in full. The Net Cytomedix Receivable shall be payable by Cytomedix to Sorin in eight equal monthly installments of U.S.$147,925.51 paid on the 15th day of each successive month with the first payment due on June 15, 2011.

3.           Sale of Products by Sorin. Sorin hereby agrees to sell to Cytomedix 4,000 units each of part number 966100021 and 966100038 (the "Goods") set forth in the Purchase Order attached as Exhibit A hereto. The purchase price for the Goods shall be U.S.$.75 per unit and shall be payable in cash prior to commencement of production of the Goods. The approximate delivery date of the Goods shall be 30 days after receipt by Sorin of the full purchase price therefor. In addition, Sorin will deliver to Cytomedix the molds (the "Molds") with which the Goods are produced that were previously purchased under the APA. Delivery of the Goods and the Molds shall be ex works the applicable Sorin facility. In the event that Cytomedix asks Sorin to arrange freight and/or insurance, Cytomedix must pay the estimated cost thereof in advance. THE GOODS AND THE MOLDS ARE PROVIDED AS IS WHERE IS WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND. ANY IMPLIED WARRANTIES, INCLUDING A WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE, ARE HEREBY DISCLAIMED

4.           Other Items. Sorin and Cytomedix have discussed the transfer of certain additional items that Cytomedix believes were part of the Purchased Assets under the APA. A preliminary list of such items is attached as Exhibit B hereto. The parties shall in good faith mutually agree to finalize such a list of items and promptly thereafter Sorin shall make such items available for shipment by Cytomedix.

5.           Lab Services. Sorin has provided certain lab services to Cytomedix pursuant to the TSA as such services are described on Exhibit C hereto (the "Lab Services"). Sorin agrees to continue to provide the Lab Services under the TSA for six months from the date hereof; provided, however, the fee for such Lab Services shall be Sorin's cost therefor (as determined by Sorin in good faith) plus 20% and such fee shall be paid prior to commencement of the Lab Services.

6.           Release. Cytomedix for itself and its affiliated companies and its and their respective directors, officers, shareholders, parent companies, successors, assigns, and representatives, hereby releases and discharges Sorin, its Affiliates, and its and their respective directors, officers, shareholders, successors, assigns, and representatives from any and all claims, demands, actions, remedies, causes of action, debts, liabilities, damages, costs, expenses and losses of every kind or nature whatsoever, whether known or unknown, fixed or contingent, existing on or prior to the date hereof, including, without limitation, any claims in respect of the nature of quality of performance by Sorin under the TSA.

7.           Miscellaneous.

(a)         Effectiveness. The obligations of each Party hereunder shall be subject to the condition precedent that Cytomedix pays to Sorin the Compromise Prepayment by not later than May 3, 2011 and if the Compromise Payment is not received by such time, this Agreement shall be deemed rescinded and of no force and effect.

(b)         Modifications and Amendments. This Agreement may not be amended or modified except by an instrument in writing signed by Sorin and Cytomedix.

(c)         Assignment. This Agreement may not be assigned by a Party without the express written consent of the other Party and any such attempted assignment without consent shall be null and void.

(d)         Counterparts. This Agreement may be executed in two or more counterparts being original or facsimile copies, each of which shall be deemed to be an original and all of which, taken together, shall be deemed to constitute one and the same Agreement.

(e)         Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, between Sorin and Cytomedix with respect to the subject matter hereof and thereof.

(f)          Dispute Resolution. Any dispute, claim or controversy arising from or related in any way to this Agreement or the interpretation, application, breach, termination or validity thereof, including any claim of inducement of this Agreement by fraud or otherwise, shall he resolved in the manner set forth in Sections 11.6 through 11.9 of the APA.

(g)         Waiver. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) to the extent permitted by applicable Law, waive compliance with any of the agreements of the other party or conditions to such party's obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

(h)         Governing Law. This Agreement shall be governed by Delawarelaw.

(i)          Time is of the Essence. Time is of the essence to each Party's obligations hereunder.

[Following page is the signature page]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above.

SORIN GROUP USA INC.
By:	/s/Dwayne Kowaliuk
Name:	Dwayne Kowaliuk
Title:	USA Country Leader/VP Finance
CYTOMEDIX ACQUISITION COMPANY LLC
By:	/s/ Martin P. Rosendale
Name:	Martin P. Rosendale
Title:	President
CYTOMEDIX INC.
By:	/s/Martin P. Rosendale
Name:	Martin P. Rosendale
Title:	CEO

EX-10.12

FORM OF SUBSCRIPTION AGREEMENT

Cytomedix, Inc.

209 Perry Parkway, Suite 7

Gaithersburg, MD 20877

Fax: (240) 499-2690

Ladies and Gentlemen:

1.           Subscription.  I (sometimes referred to herein as the “Investor”) hereby subscribe for and agree to purchase shares of common stock (the “Shares”) of Cytomedix, Inc., a Delaware corporation (the "Company”), in the amount set forth on the signature page hereto on the terms and conditions described herein (the “Subscription Agreement”).

2.           Disclosure.  Because this offering is limited to accredited investors as defined in Section 2(15)of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 501promulgated thereunder, in reliance upon the exemption contained in Section 4(2) of the Securities Act and applicable state securities laws, the Shares are being sold without registration under the Securities Act. I acknowledge that I have reviewed and understand the Company’s Form 10-K for the year ended December 31, 2010 and all filings made by the Company since December 31, 2010 pursuant to Section 13 of the Securities Exchange Act of 1934 (collectively, the “SEC Documents”) and that I have received all information and materials regarding the Company that I have requested.

3.           Investor Representations and Warranties.  I acknowledge, represent and warrant to, and agree with, the Company as follows:

(a)           I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment.

(b)           I am purchasing the Shares for my own account for investment purposes and not with a view to or for sale in connection with the distribution of the Shares, nor with any present intention of selling or otherwise disposing of all or any part of the foregoing securities. I agree that I must bear the entire economic risk of my investment for an indefinite period of time because, among other reasons, the Shares have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available.  Furthermore, I hereby acknowledge and agree that I will not sell, pledge, encumber, give or otherwise voluntarily dispose of, either publicly or privately, the Shares.  I hereby authorize the Company to place a legend denoting the restrictions on the Shares that may be issued to me.

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(c)           I fully understand that the Shares are a speculative investment which involves a high degree of risk of the loss of my entire investment. I fully understand the nature of the risks involved in purchasing the Shares and I am qualified by my knowledge and experience to evaluate investments of this type. I have carefully considered the potential risks relating to the Company and purchase of its securities and have, in particular, reviewed each of the risks set forth in the SEC Documents.  Both my advisors and I have had the opportunity to ask questions of and receive answers from representatives of the Company or persons acting on its behalf concerning the Company and the terms and conditions of a proposed investment in the Company and my advisors and I have also had the opportunity to obtain additional information necessary to verify the accuracy of information furnished about the Company.  Accordingly, I have independently evaluated the risks of purchasing the Shares.

(d)           I believe that the investment in the Shares is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company.

(e)           I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative as defined in Regulation D under the Securities Act in connection with evaluating such merits and risks.

(f)            I have relied solely upon my own investigation in making a decision to invest in the Company.

(g)           I have received no representation or warranty from the Company or any of its officers, directors, employees or agents in respect of my investment in the Company and in making my investment in the Shares I have not relied upon any information (written or otherwise) from them relating to this offering other than as set forth in the SEC Documents.

(h)           I am not participating in the offer as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

(i)            I am an “accredited investor” as that term is defined in Rule 501 of Regulation D of the Securities Act. One or more of the categories set forth in Exhibit 1 hereto correctly and in all respects describes me, and I have so indicated by signing on the blank line or lines following a category on each such Exhibit which so describes it.

(j)            I understand that (i) the Shares have not been registered under the Securities Act, or the securities laws of certain states in reliance on specific exemptions from registration, (ii) no securities administrator of any state or the federal government has recommended or endorsed this offering or made any finding or determination relating to the fairness of an investment in the Company and (iii) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws.

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(k)           I understand that since neither the offer nor sale of the Shares has been registered under the Securities Act or the securities laws of any state, the Shares may not be sold, assigned, pledged or otherwise disposed of unless they are so registered or an exemption from such registration is available.

(l)            If the Investor is a corporation, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an Investor in the Company and the person signing this Subscription Agreement on behalf of such entity has been duly authorized by such entity to do so.

(m)           I hereby acknowledge and am aware that except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription and any agreements made in connection herewith shall survive my death or disability.

4.           Indemnification.  I hereby agree to indemnify and hold harmless the Company and its officers, directors, shareholders, employees, agents, and counsel against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses, including reasonable attorneys' fees) incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained in this Subscription Agreement (including Exhibit 1), or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein or therein.

5.           Severability.  In the event any parts of this Subscription Agreement are found to be void, the remaining provisions of this Subscription Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

6.           Choice of Law.  This Subscription Agreement shall be governed by the laws of the State of Delaware as applied to contracts entered into and to be performed entirely within the State of Delaware.

7.           Counterparts.  This Subscription Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Subscription Agreement may be by actual or facsimile signature.

8.           Benefit.  This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto.

9.           Notices and Addresses.  Any party may send any notice, request, demand, claim or other communication hereunder to the undersigned at the address set forth on the signature page of this Agreement or to the Company at the address set forth above using any means (including personal delivery, expedited courier, messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written notice in the manner herein set forth.

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10.           Entire Agreement.  This Subscription Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription Agreement may not be changed, waived, discharged, or terminated orally but, rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.

11.           Section Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription Agreement.

12.           Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein shall survive the delivery of, and the payment for, the Shares.

RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS.  THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

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Number of Shares Being Purchased at $0.33 per share: ______________________

Manner in Which Title is to be Held. (check one)

___ Individual Ownership

___ Community Property

___ Joint Tenant with Right of Survivorship (both parties must sign)

___ Partnership

___ Tenants in common (both parties must sign)

___ Corporation or Limited Liability Company

___ Trust

___ IRA or Keough

___ Other (please indicate)

Dated:

INDIVIDUAL INVESTORS	ENTITY INVESTORS
	Name of entity, if any
Signature (Individual)

	By:
		*Signature
	Its
Signature (Joint)		Title
(all record holders must sign)

Name(s) Typed or Printed Name Typed or Printed

Address to Which Correspondence	Address to Which Correspondence
Should be Directed	Should be Directed
City, State and Zip Code	City, State and Zip Code
Tax Identification or	Tax Identification or
Social Security Number	Social Security Number

* If the Shares are being subscribed for by any entity, the Certificate of Signatory on the next page must also be completed

The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.

	Cytomedix, Inc.
Dated:	By:
		_________, _________

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CERTIFICATE OF SIGNATORY

(To be completed if Shares are being subscribed for by an entity)

I, ____________________________________, the ______________________________

(name of signatory)                                                   (title)

of______________________________ "Entity"),                                                  a

_________________________________________

(name of entity)

_________________________________________

(type of entity)

hereby certify that I am empowered and duly authorized by the Entity to execute the Subscription Agreement and to purchase the Shares, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this                  day of                                , 2011.

(Signature)

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EXHIBIT 1

The Investor hereby represents and warrants, pursuant to the attached Subscription Agreement, that he, she or it is correctly and in all respects described by the category or categories set forth below directly under which the Investor has signed his, her or its name.

[SIGN BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

1.           The Investor is a natural person whose net worth, either individually or jointly with such person’s spouse, at the time of purchase, exceeds $1,000,000 (excluding the value of the Investor’s home).

____________________________

2.           The Investor is a natural person who had individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in the last two calendar years, and reasonably expects to reach the same income level this year.

____________________________

3.           The Investor is a corporation, Company or organization described in Section 501(c)(3) of the Internal Revenue Code, or Massachusetts or similar business trust, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

____________________________

4.           The Investor is an entity in which all of the equity owners are accredited investors and described in one or more of the categories set forth in paragraphs 1 through 3 above.

____________________________

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EX-10.13

Execution Copy

SECURED PROMISSORY NOTE

$2,100,000.00 April 28, 2011

FOR VALUE RECEIVED, Cytomedix Acquisition Company, LLC, a Delaware limited liability company (“Borrower”), and Cytomedix, Inc., a Delaware corporation (“Parent”, and together with Borrower, “Obligors”), hereby jointly and severally promise to pay to the order of JP’s Nevada Trust dtd 2/3/2005 (“Lender”), without setoff or counterclaim , at the principal office of Lender in Henderson, Nevada, or such place as the holder of this Note may from time to time designate, the principal sum of Two Million One Hundred Thousand Dollars ($2,100,000), payable as follows: the principal sum of $2,100,000 or the principal amount then due on the note upon the 4 year anniversary of the Note on April 28, 2015  (the “Maturity Date”).  All amounts payable on this Note shall be payable in lawful money of the United States of America.  Each Obligor further covenants and agrees as follows:

1.           Certain Definitions.  As used in this Note, the following terms shall have the following meanings:

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in New York, New York are required or authorized to close.

“Note” shall mean this Secured Promissory Note.

Terms used and not otherwise defined in this Note and defined in the Uniform Commercial Code as in effect from time to time in the State of Delaware (the “Code”) shall have the meanings set forth in the Code.

2.           Interest.  The unpaid principal balance of this Note shall bear interest, payable in arrears on a quarterly basis beginning September 30, 2011, computed at the rate of 12% per annum.  All principal, interest and other amounts unpaid after an Event of Default shall bear interest, payable on demand, computed at a rate equal to 6% per annum plus the rate otherwise payable hereunder. Interest shall be calculated for the actual number of days elapsed, using a daily rate determined by dividing the annual rate by 360.

3.           Prepayment.  This Note may be prepaid by Obligors, in whole or in part, at any time and from time to time, without premium or penalty.

4.           Security Interest.  To secure payment of its obligations under this Note, Borrower grants to Lender a security interest in all of the property described below in which Buyer has or acquires an interest, wherever located, whether now owned or hereafter arising or acquired (collectively, the “Collateral”):  (a) all equipment, fixtures, and inventory, including all spare and repair parts, special tools, equipment and replacements for any of the foregoing, and any software embedded therein or related thereto; (b) all accounts, contract rights, documents, chattel paper (including electronic chattel paper), instruments, and general intangibles, and all returned or repossessed goods the sale of which gave rise to any of the foregoing; (c) all financial assets, investment property, securities, security entitlements, securities accounts, commodity contracts, and commodity accounts, including all substitutions and additions thereto, and all dividends, distributions and sums distributable or payable from, upon or in respect of such property; (d) all commercial tort claims; (e) all deposit accounts and all cash balances from time to time credited to such accounts;  (f) all letter-of-credit rights; (g) all supporting obligations that support the payment or performance of any of the foregoing; and (h) all additions and accessions to, all proceeds, products, offspring and profits of, and all rights and privileges incident to, any of the foregoing..

In order to induce Lender to accept this Note from Obligors, Borrower warrants that while any amount under this Note remains unpaid:  (a) Borrower is the owner of the Collateral free of all encumbrances and security interests except the security interests of Lender and other security interests Lender may permit in writing from time to time; (b) Lender has a valid and perfected security interest in the Collateral; (c) the execution and delivery of this Note will not violate or constitute a breach of any agreement or restriction to which Borrower is a party or is subject; (d) the name appearing below the signature of Borrower is Borrower’s correct and exact name; (e) Borrower does not use any other names; (f) the address appearing below Borrower’s name is Borrower’s principal business address (and Borrower shall advise Seller in writing at least thirty (30) days before any change of name or principal business address).

Borrower shall:  (a) keep the Collateral free from all liens, encumbrances and security interests (other than the security interests of Lender and other security interests Lender may permit in writing from time to time); (b) defend it against all claims and legal proceedings by persons other than Lender; (c) pay and discharge when due all taxes, license fees, levies and other charges upon it; (d) and not sell, lease, license or otherwise dispose of it except in the ordinary course of business prior to the occurrence of an Event of Default.  Loss of or damage to the Collateral shall not release Borrower from any of the obligations under this Note.  Borrower shall pay all expenses and, upon request, execute and deliver any further documents and take any further actions reasonably deemed advisable by Lender to preserve the Collateral or to establish, determine priority of, perfect, continue perfected, terminate and/or enforce Lender’s interest in it or rights under this Note.  Borrower shall pay and discharge all lawful taxes, assessments and governmental charges upon Borrower or against its properties prior to the date on which penalties attach, unless and to the extent only that such taxes, assessments and charges are contested in good faith and by appropriate proceedings by Borrower.

Seller has no duty to protect, insure, collect or realize upon the Collateral or preserve rights in it against prior parties.  Borrower authorizes Lender to prepare and file financing statements describing the Collateral in such jurisdictions as Seller deems appropriate. No delay on the part of Lender in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein specified are cumulative and not exclusive of any rights or remedies which Lender would otherwise have.

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5.           Rights of Holder.  Without affecting the liability of either Obligor, the holder of this Note may, from time to time and without notice, renew or extend the time for payment, accept partial payments, release or impair any collateral security for payment of this Note, or agree not to sue any party liable on it.

6.           Default.  If any one or more of the following conditions or events (each an “Event of Default”) shall occur:

a.           Default in Payment of Note:  If Obligors shall default in the payment of any principal, interest or other amount due under the terms of this Note; or

b.           Default in Compliance with Note Terms:  If Obligors shall default in the performance of or compliance with any term (other than payment of any principal or interest hereon) contained in this Note and such default shall not have been remedied within ten (10) Business Days after the occurrence thereof; or

c.           Breach of Representation or Warranty:  If any representation or warranty made by Obligors in this Note proves to be incorrect in any material respect or is breached in any material respect; or

d.           Bankruptcy; Insolvency; Involuntary or Voluntary Liquidation or Dissolution:  If either Obligor (1) shall make an assignment for the benefit of creditors, or (2) shall admit in writing its inability to pay a major part of its debts as they become due, or (3) shall become the subject of any insolvency, bankruptcy, receivership, or dissolution proceeding and, if such proceeding is instituted against such Obligor, shall have been consented to or acquiesced in by such Obligor, or shall remain un-dismissed for 90 days, or an order for relief shall have been entered against such Obligor (any event under this clause (e) being a (“Bankruptcy Default”));

Then Lender may at any time, (x) at the option of Lender, by written notice given to either Obligor, declare this Note to be, and this Note shall thereupon become, due and payable, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, and Obligors forthwith will pay to Lender (i) the whole of the principal balance of this Note (then outstanding), (ii) all interest owed, (iii) all other sums, as provided in this Note and (iv) all costs incurred by Lender in connection with this Note or any renewal, extension, or change of or substitution for this Note or any part thereof, whether made or incurred at the request of Obligors and including all costs of enforcement, including reasonable attorneys’ fees and (y) exercise any and all rights of a secured party upon default under the Code.  Notwithstanding the foregoing, in the event of a Bankruptcy Default all sums referred to in (i) through (iv) above shall automatically mature and become immediately payable by Obligors.  Lender’s receipt of any payment after the occurrence of an Event of Default shall not constitute a waiver of such default or any of the Lender’s rights and remedies.

7.           Guaranteed.   The obligations of each Obligor hereunder are secured, in part, by that certain Limited Guarantee Agreement dated the date hereof given by Charles Sheedy, David Jorden, George McDaniel, Mike McDaniel and William Miller in favor of Seller.

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8.           Waiver.  The obligations of each Obligor hereunder shall be joint and several, and the liability of each Obligor shall be absolute and unconditional, regardless of the liability of the other Obligor; and each Obligor acknowledges that Lender has not made any representations or warranties regarding the financial condition of any other Obligor or the value of any collateral.  Each Obligor and any indorsers, sureties or guarantors waive presentment, demand, notice of dishonor and protest, and agree to pay all costs of collection, before and after judgment, including reasonable attorneys’ fees and legal expenses.

9.           Governing Law.  This Note is governed by the internal laws of the State of Delaware, except to the extent superseded by federal law.

This Note was executed as of the date first written above.

CYTOMEDIX ACQUISITION COMPANY, LLC
By:	/s/Martin P. Rosendale
Name:  Martin P. Rosendale
Title:  President
CYTOMEDIX, INC.
By:	/s/Martin P. Rosendale
Name:  Martin P. Rosendale
Title:  CEO
OBLIGORS’ ADDRESS:
c/o Cytomedix, Inc.
209 Perry Parkway, Suite 7
Gaithersburg, MD 20877
Attention:  Martin Rosendale, Chief Executive Officer
Fax: 240.499.2690

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Martin P. Rosendale, certify that:

1. I have reviewed this Form 10-Q of Cytomedix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 16, 2011

/s/ Martin P. Rosendale

Martin P. Rosendale, Chief Executive Officer

A signed original of this written statement has been provided to Cytomedix, Inc. and will be retained by Cytomedix, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Andrew S. Maslan, certify that:

1. I have reviewed this Form 10-Q of Cytomedix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 16, 2011

/s/ Andrew S. Maslan

Andrew S. Maslan, Chief Financial Officer

A signed original of this written statement has been provided to Cytomedix, Inc. and will be retained by Cytomedix, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. §1350

Pursuant to 18 U.S.C. §1350 and in connection with the Quarterly Report on Form 10-Q of Cytomedix, Inc. (the “Company”) for the fiscal period ended March 31, 2011 (the “Report”), I, Martin P. Rosendale, Chief Executive Officer of the Company, hereby certify that to the best of my knowledge and belief:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for said period.

Date:  May 16, 2011

/s/ Martin P. Rosendale

Martin P. Rosendale

Chief Executive Officer

A signed original of this written statement has been provided to Cytomedix, Inc. and will be retained by Cytomedix, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. §1350

Pursuant to 18 U.S.C. §1350 and in connection with the Quarterly Report on Form 10-Q of Cytomedix, Inc. (the “Company”) for the fiscal period ended March 31, 2011 (the “Report”), I, Andrew S. Maslan, Chief Financial Officer of the Company, hereby certify that to the best of my knowledge and belief:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for said period.

Date:  May 16, 2011

/s/Andrew S. Maslan

Andrew S. Maslan

Chief Financial Officer

A signed original of this written statement has been provided to Cytomedix, Inc. and will be retained by Cytomedix, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.