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 September 30, 2014

OR

¨ 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

Nuo Therapeutics, 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.)

207A Perry Parkway, Suite 1
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 x 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 ¨	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 November 6, 2014, the Company had 124,410,100 shares of common stock, par value $.0001, issued and outstanding.

TABLE OF CONTENTS

NUO THERAPEUTICS, 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	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	34
PART II. OTHER INFORMATION	35
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	37
Signatures	38
Exhibit Index	39

PART I
 
FINANCIAL INFORMATION

Item 1. Financial Statements

NUO THERAPEUTICS, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

	September 30,			December 31,
	2014			2013
ASSETS
Current assets
Cash and cash equivalents	$	20,036,100		$	3,286,713
Short-term investments, restricted		53,356			53,257
Accounts and other receivable, net		1,785,142			3,926,681
Inventory		544,741			1,111,507
Prepaid expenses and other current assets		2,216,672			1,258,282
Deferred costs, current portion		1,091,387			316,551
Total current assets		25,727,398			9,952,991
Property and equipment, net		757,230			919,469
Deferred costs		3,819,854			482,349
Intangible assets, net		28,824,864			33,768,954
Goodwill		1,128,517			1,128,517
Total assets	$	60,257,863		$	46,252,280
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1,673,402		$	3,351,844
Accrued expenses		4,887,418			4,666,828
Deferred revenues, current portion		402,377			740,990
Note payable, current portion		—			1,800,000
Total current liabilities		6,963,197			10,559,662
Notes payable		—			3,620,593
Convertible debt, net of discount		251,600			202,658
Deferred revenues		1,139,956			1,441,852
Derivative liabilities		38,106,375			3,248,595
Other liabilities		1,024,863			366,926
Total liabilities		47,485,991			19,440,286
Commitments and contingencies (See Note 10)
Conditionally redeemable common stock (909,091 issued and outstanding)		500,000			500,000
Stockholders' equity
Common stock; $.0001 par value, authorized 425,000,000 shares;
2014 issued and outstanding - 124,410,100 shares;
2013 issued and outstanding - 107,164,855 shares		12,350			10,626
Common stock issuable		392,950			432,100
Additional paid-in capital		124,834,282			117,097,844
Accumulated deficit		(112,967,710	)		(91,228,576	)
Total stockholders' equity		12,271,872			26,311,994
Total liabilities and stockholders' equity	$	60,257,863		$	46,252,280

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

1

NUO THERAPEUTICS, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenues
Product sales	$	1,200,719		$	2,925,971		$	4,474,970		$	7,541,874
License fees		100,594			67,063			301,783			67,063
Royalties		390,714			244,350			1,087,307			369,646
Other revenue		—			128,835			—			128,835
Total revenues		1,692,027			3,366,219			5,864,060			8,107,418
Cost of revenues
Cost of sales		1,290,449			2,817,386			4,552,317			5,439,401
Cost of royalties		43,853			32,504			132,543			41,578
Total cost of revenues		1,334,302			2,849,890			4,684,860			5,480,979
Gross profit		357,725			516,329			1,179,200			2,626,439
Operating expenses
Salaries and wages		1,950,307			1,967,965			6,220,302			6,011,337
Consulting expenses		204,985			415,947			1,374,616			1,596,576
Professional fees		303,083			385,344			935,112			827,198
Research, development, trials and studies		636,239			922,999			2,547,559			3,050,038
General and administrative expenses		1,760,379			1,433,611			4,387,700			5,415,768
Impairment of IPR&D and trademarks		—			—			4,683,829			—
Total operating expenses		4,854,993			5,125,866			20,149,118			16,900,917
Loss from operations		(4,497,268	)		(4,609,537	)		(18,969,918	)		(14,274,478	)
Other income (expense)
Interest, net		(818,493	)		(378,587	)		(2,587,366	)		(1,323,900	)
Change in fair value of derivative liabilities		542,868			5,789			(158,631	)		250,349
Other		(8,045	)		12,076			(9,284	)		12,331
Total other income (expense)		(283,670	)		(360,722	)		(2,755,281	)		(1,061,220	)
Loss before provision for income taxes		(4,780,938	)		(4,970,259	)		(21,725,199	)		(15,335,698	)
Income tax provision		4,645			4,890			13,935			14,670
Net loss	$	(4,785,583	)	$	(4,975,149	)	$	(21,739,134	)	$	(15,350,368	)
Loss per common share —
Basic and diluted	$	(0.04	)	$	(0.05	)	$	(0.18	)	$	(0.15	)
Weighted average shares outstanding —
Basic and diluted		123,968,305			104,890,396			118,990,010			102,891,983

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

2

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

	Nine Months Ended
	September 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(21,739,134	)	$	(15,350,368	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Bad debt expense		57,633			42,775
Depreciation and amortization		481,114			875,084
Stock-based compensation		939,478			537,958
Change in fair value of derivative liabilities		158,631			(250,349	)
Non-cash interest expense:
Amortization of deferred costs		840,043			186,931
Amortization of debt discount		515,739			222,282
Deferred income tax provision		13,935			14,670
Loss (Gain) on disposal of assets		131,575			(594,173	)
Loss on abandonment of lease		242,466			—
Impairment of IPR&D and trademarks		4,683,829			—
Effect of amendment to contingent consideration		—			1,006,159
Loss on early extinguishment of debt		—			19,867
Effect of issuance of warrants for term loan modification		—			303,517
Change in operating assets and liabilities, net of those acquired:
Accounts and other receivable, net		2,083,906			(441,436	)
Inventory		566,766			(631,812	)
Prepaid expenses and other current assets		(958,489	)		(561,095	)
Accounts payable		(1,678,442	)		1,609,084
Accrued expenses		106,096			755,318
Deferred revenues		(640,509	)		4,044,700
Other liabilities		588,268			124,212
Net cash used in operating activities		(13,607,095	)		(8,086,676	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment acquisitions		(209,462	)		(600,373	)
Proceeds from sale of equipment		133,767			2,139,672
Net cash (used in) provided by investing activities		(75,695	)		1,539,299
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt, net		32,967,060			4,235,797
Proceeds from issuance of common stock, net		3,666,260			4,910,237
Repayment of notes payable		(6,201,143	)		(570,000	)
Net cash provided by financing activities		30,432,177			8,576,034
Net increase in cash and cash equivalents		16,749,387			2,028,657
Cash and cash equivalents, beginning of period		3,286,713			2,615,805
Cash and cash equivalents, end of period	$	20,036,100		$	4,644,462

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

3

NUO THERAPEUTICS, INC.
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Business and Presentation

Description of Business

At our 2014 Annual Meeting, our shareholders voted to approve the name change amendment to our Certificate of Incorporation. The new name of our Company is “Nuo Therapeutics, Inc.” and the name change was effective upon filing of the Certificate of Amendment to our Certificate of Incorporation in the State of Delaware. Nuo Therapeutics, Inc., formerly Cytomedix, Inc., (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a biomedical company marketing products within the U.S. and internationally. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous from self-biological therapies for tissue repair and regeneration is part of a transformative clinical strategy designed to improve long term recovery in complex chronic conditions with significant unmet medical needs. Growth drivers in the U.S. include Medicare coverage for the treatment of chronic wounds under a National Coverage Determination when registry data is collected under Coverage with Evidence Development (“CED”), and a worldwide distribution and licensing agreement that allows our partner to promote the Angel System for all uses other than wound care.

Our current commercial offerings consist of point of care technologies for the safe and efficient separation of autologous blood and bone marrow to produce platelet based therapies or cell concentrates. We currently have two distinct platelet rich plasma (“PRP”) devices, the AutoloGel ^TM System (relaunched as Aurix ^™ in October 2014) for wound care and the Angel^™ concentrated Platelet Rich Plasma (“cPRP”) System for orthopedics markets. Our sales are predominantly in the United States, where we sell our products through direct sales representatives and distributors. Since August 8, 2013, Arthrex, Inc. (“Arthrex”), as our exclusive distributor for Angel, accounted for 100% of our Angel sales.

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, licensing arrangements, royalties, and product revenues. We have incurred, and continue to incur, recurring losses and negative cash flows. On March 31, 2014, we entered into a $35,000,000 convertible debt facility, $9,000,000 of which was funded on March 31, 2014 and the remaining $26,000,000 was funded on June 25, 2014. In addition, on March 31, 2014 we raised $2.0 million of gross proceeds from the sale of our common stock and warrants to an accredited investor (See Note 2 - Recent Financing and Other Capital Transactions and Note 8 - Equity and Equity-Linked Securities for additional details.) We used approximately $5.9 million of the net proceeds from these transactions to retire outstanding debt and interest, approximately $0.34 million to repay a portion of previously outstanding convertible debt and interest, and we converted approximately $3.1 million previously outstanding convertible debt and interest into common stock (See Note 2 - Recent Financing and Other Capital Transactions and Note 7 - Debt for additional details.)

At September 30, 2014, we had approximately $20.0 million of cash on hand. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on significant customers, lack of operating history and uncertainty of future profitability and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due. We believe that our current resources will be sufficient to fund our operations through the next twelve months. Accordingly, management believes the going-concern basis is appropriate for the accompanying consolidated financial statements.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The condensed consolidated balance sheet at December 31, 2013, has been derived from audited financial statements of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our annual report on Form 10-K for the year ended December 31, 2013. Certain prior period information has been reclassified to conform to the current period presentation.

4

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and controlled subsidiary. All significant inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, valuation of derivative liabilities, valuation and probability of contingent liabilities, fair value of long-lived assets, deferred taxes and associated valuation allowance, and the depreciable lives of fixed assets (including intangible assets and goodwill). Actual results could differ from those estimates.

Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

In connection with the Deerfield Facility Agreement (See Note 7 - Debt for additional details), the Company is required to maintain a compensating cash balance of $5,000,000 in deposit accounts subject to control agreements in favor of the lenders.

Accounts Receivable and Credit Concentration

We generate accounts receivable from the sale of our products. Our trade receivables balance at September 30, 2014 was primarily from Arthrex (41%).

We provide for a reserve against receivables for estimated losses that may result from a customer’s inability or unwillingness to pay. The allowance for doubtful accounts is estimated primarily based upon historical write-off percentages, known problem accounts, and current economic conditions. Accounts are written off against the allowance for doubtful accounts when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. At September 30, 2014 and December 31, 2013, we maintained an allowance for doubtful accounts of $58,000 and $16,000, respectively.

We use single suppliers for several components of the Angel and Aurix^™ product lines. We outsource the manufacturing of various products, including component parts for Angel, to contract manufacturers. While we believe these manufacturers to be of sufficient competency, quality, reliability, and stability, there is no assurance that one or more of them will not experience an interruption or inability to provide us with the products needed to satisfy customer demand. Additionally, while most of the components of Aurix^™ are generally readily available on the open market, a reagent, bovine thrombin, is available exclusively through Pfizer, with whom we have an established vendor relationship.

Inventory

Our inventory is produced by third party manufacturers and consists primarily of finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. At September 30, 2014 and December 31, 2013, we did not have a balance in our reserve for the lower of cost or market or excess and obsolete inventory. Our primary product is the Angel Processing set which has a shelf life of three years. We also maintain an inventory of kits, reagents, and other disposables that have shelf lives that generally range from ten months to five years. Expired products are segregated and used for demonstration purposes only; we write off expired inventory through cost of sales.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over its estimated useful life ranging from three to five years for all assets except for furniture, lab, and manufacturing equipment which is depreciated over seven and ten years, respectively. Leasehold improvements are stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from three to six years. Amortization of leasehold improvements is included in depreciation expense. Maintenance and repairs are charged to operations as incurred. When assets are disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expenses.

Centrifuges may be sold, leased, or placed at no charge with customers. Depreciation expense for centrifuges that are available for sale, leased, or placed at no charge with customers are charged to cost of sales. Depreciation expense for centrifuges used for sales and marketing and other internal purposes are charged to operations. When the centrifuges are sold the net book value is charged to cost of sales.

Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

5

Exit Activities

On May 5, 2014, we announced preliminary efficacy and safety results of our RECOVER-Stroke Phase 2 clinical trial in patients with neurological damage arising from ischemic stroke and treated with ALD-401. Observed improvements in the primary endpoint (mean modified Rankin Score or mRS) of the trial were not clinically or statistically significant. In light of this outcome, we discontinued further funding of the ALD-401 development program, decided to close our facilities in Durham, NC, and terminated certain employees.

The discontinuance of this development program is considered an exit activity. As such, we recognized the following expenses in the second and third quarters of 2014:

	Quarter ended
	June 30, 2014		September 30, 2014
Severance costs	$	320,000	$	-
Loss on abandonment of lease		-		243,000
Loss on disposal of assets		-		132,000
Total	$	320,000	$	375,000

Approximately $486,000 of the above costs remained accrued and unpaid as of September 30, 2014, of which $438,000 remained in accrued loss on abandonment of the lease. The accrued loss will be amortized over the life of the lease against future rental payments made and sublet income payments received. Severance expense is classified as “salaries and wages” and the loss on abandonment and loss on disposal of assets is classified as “general and administrative expenses” in the accompanying consolidate statements of operations. The severance accrual and accrued loss on abandonment are included in “accrued expenses” in the accompanying condensed consolidated balance sheet.

Intangible Assets and Goodwill

Intangible assets were acquired as part of our acquisition of the Angel business and Aldagen, and consist of definite-lived and indefinite-lived intangible assets, including goodwill.

Definite-lived intangible assets

Our definite-lived intangible assets include trademarks, technology (including patents) and customer relationships, and are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any indicators were present, we test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), we would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. We periodically reevaluate the useful lives for these intangible assets to determine whether events and circumstances warrant a revision in their remaining useful lives. During the second quarter of 2014, as a result of recent events and changes in circumstances, the Company performed an assessment of our trademarks and concluded that the carrying value of the trademarks was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Indefinite-lived intangible assets

We evaluate our indefinite-lived intangible asset, consisting solely of in-process research and development (“IPR&D”) acquired in the Aldagen acquisition, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, and at least on an annual basis on October 1 of each year, by comparing the fair value of the asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we would recognize an impairment loss in the amount of that excess. During the second quarter of 2014 the Company performed an assessment of our IPR&D as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the carrying value of the IPR&D was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Goodwill

Goodwill represents the purchase price of acquisitions in excess of the amounts assigned to acquired tangible or intangible assets and assumed liabilities. Amounts allocated to goodwill are tax deductible in all relevant jurisdictions. As a result of our acquisition of Aldagen in February 2012, we recorded goodwill of approximately $422,000. Prior to the acquisition of Aldagen, we had goodwill of approximately $707,000 as a result of the acquisition of the Angel business in April 2010.

We conduct an impairment test of goodwill on an annual basis as of October 1 of each year, and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce the Company’s fair value below its net equity value impaired. The Company conducted an impairment test of our Goodwill as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the fair value was not impaired (See Note 5 — Goodwill and Intangible Assets for additional details.)

6

Conditionally Redeemable Common Stock

The Maryland Venture Fund (“MVF,” part of Maryland Department of Business and Economic Development) has an investment in our common stock, and can require us to repurchase the common stock, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. MVF’s common stock is are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheets.

Revenue Recognition

We recognize revenue when the four basic criteria for recognition are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

Sales of products

We provide for the sale of our products, including disposable processing sets and supplies to customers. Revenue from the sale of products is recognized upon shipment of products to the customers. We do not maintain a reserve for returned products as in the past those returns have not been material.

Usage or leasing of blood separation equipment

As a result of the acquisition of the Angel^™ business in 2010, we acquired various multiple element revenue arrangements that combine the (i) usage or leasing of blood separation processing equipment, (ii) maintenance of processing equipment, and (iii) purchase of disposable processing sets and supplies. We assigned these multiple element revenue arrangements to Arthrex on August 7, 2013. (See Note 3 — Distribution and License Agreement with Arthrex for additional details.) Under these arrangements, the total arrangement consideration was allocated to the various elements based on their relative estimated selling prices. The usage of the blood separation processing equipment was accounted for as an operating lease; since customer payments were contingent upon the customer ordering new products, rental income was recorded following the contingent rental method when rental income was earned and collectability was reasonably assured. The sale of disposable processing sets and supplies and maintenance were deemed a combined unit of accounting; since (a) any consideration for disposable processing sets and supplies and maintenance was contingent upon the customer ordering additional disposable processing sets and supplies and (b) both the disposable products and maintenance services were provided over the same term, we recognized revenue for this combined unit of accounting following the contingent revenue method at the time disposable products were delivered based on prices contained in the agreement.

Percentage-based fees on licensee sales of covered products are generally recorded as products are sold by licensees and are reflected as “Royalties” in the consolidated statements of operations. Direct costs associated with product sales and royalty revenues are recorded at the time that revenue is recognized.

Deferred revenue at September 30, 2014 consists of prepaid licensing revenue of approximately $1,542,000. Revenue of approximately $302,000 related to the prepaid license was recognized during the nine months ended September 30, 2014. On January 1, 2013 a medical device excise tax came into effect that required manufacturers to pay tax of 2.3% on the sale of certain medical devices. We report the medical device excise tax on a gross basis, recognizing the tax as both revenue and cost of sales.

Segments and Geographic Information

We operate in one business segment. Approximately 50% and 30% of our product sales were generated outside of the United States for the three month and nine month periods ended September 30, 2014, respectively. Approximately 6% and 13% of our product sales were generated outside of the United States for the three and nine month periods ended September 30, 2013.

Research and Development Expenses

Research and development costs are expensed as incurred and primarily consist of expenses relating to product development.

Stock-Based Compensation

We have a stock-based compensation plan that includes stock options and other equity awards, which are awarded in exchange for employee, non-employee director and other non-employee services.

Stock-based compensation cost for employee and non-employee director stock options is determined at the grant date using an option pricing model and stock-based compensation cost for restricted stock is based on the closing market price of the stock at the grant date. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the employee's requisite service period. Stock-based compensation for awards granted to non-employees is periodically remeasured as the underlying options and warrants vest. We recognize an expense for such awards throughout the performance period as the services are provided by the non-employees, based on the fair value of these options and warrants at each reporting period.

7

Valuation of stock awards requires management to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the future volatility of the Company’s stock price, dividend yields, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can affect the fair value estimate. We recognize the estimated fair value of stock-based awards and classify the expense where the underlying salaries or other related costs are classified.

Stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 was as follow:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Salaries and wages	$	362,046	$	121,929	$	834,240	$	434,790
Consulting		246		-		9,921		-
General and administrative		28,597		28,134		95,317		103,168
Total share-based compensation expense	$	390,889	$	150,063	$	939,478	$	537,958

Income Taxes

We account for income taxes using the asset and liability approach, which requires the recognition of future tax benefits or liabilities on the temporary differences between the financial reporting and tax bases of our assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. We also recognize a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. Our policy is to recognize interest and penalties on uncertain tax positions as a component of income tax expense. 

Income tax expense was $4,645 and $4,890 during the three months ended September 30, 2014 and 2013 and $13,935 and $14,670 during the nine months ended September 30, 2014 and 2013, respectively. These relate exclusively to the generation of a deferred tax liability associated with the tax amortization of goodwill, which is included as a component of other long-term liabilities on our condensed consolidated balance sheets.

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and convertible preferred stock and convertible debt using the if-converted method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive. The total number of anti-dilutive shares, common stock options, warrants exercisable for common stock, convertible preferred stock and convertible debt, which have been excluded from the computation of diluted earnings (loss) per share, were 224,287,504 and 28,207,642 for the nine months ended September 30, 2014 and 2013, respectively.

Recent Accounting Pronouncements

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The Financial Accounting Standards Board (FASB or Board) and the International Accounting Standards Board (IASB) (collectively, the Boards) jointly issued a long-awaited standard that will supersede virtually all of the revenue recognition guidance in U.S. GAAP. The FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB has set an effective date of fiscal years beginning after December 15, 2016. Early adoption is not permitted for public entities. FASB ASU No. 2014-09 will amend FASB Accounting Standards Codification™ (ASC) by creating Topic 606, Revenue from Contracts with Customers and Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. This document reorganizes the guidance contained in FASB ASC 606 (revenue recognition standard), to follow the five step revenue recognition model along with other guidance impacted by this standard. The potential effects of the adoption of ASU 2014-09, Topic 606 on our results of operations and the Company’s Condensed Consolidated Financials have not been determined at this time.

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ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Previously, there was no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. FASB issued ASU 2014-15 to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact, if any, that the adoption will have on its financial statements.

Note 2 — Recent Financing and Other Capital Transactions

In 2014, we raised capital by issuing various debt, equity and equity-linked securities, and have modified, redeemed, extinguished or converted several previously outstanding securities.

December 2013 Convertible Bridge Note – 2^nd Tranche

In January 2014, we closed on the second tranche of our December 2013 convertible bridge notes, issuing convertible debt for $750,000 of gross proceeds. As a result of certain non-standard anti-dilution provisions, we classified the conversion option embedded in the convertible notes as a derivative liability, initially at its estimated fair value of approximately $0.6 million and re-measured the conversion option to fair value at each balance sheet date. As a result, we recognized a discount on the convertible notes of $0.6 million; we amortized the discount on the notes over the term of the notes using the effective interest method. On March 31, 2014 the holders of the December 2013 convertible bridge notes (except for one holder) agreed to convert their outstanding notes pursuant to its terms, converting into 5,981,859 shares of common stock. The Company repaid, in its entirety, the portion of the debt excluded from the conversion (including interest and prepayment penalties) pursuant to its terms, for a total cash payment of approximately $339,000. The unamortized balance of the related debt discount, deferred fees, and derivative liability for the embedded conversion feature, were reclassified to additional paid-in capital.

2014 Convertible Debt Financing

On March 31, 2014, we executed an agreement (“Facility Agreement”) with Deerfield Management Company (“Deerfield”) for the issuance of a five-year senior convertible credit facility. The facility provided for an initial draw of $9 million of 5.75% senior secured convertible notes, initially convertible into a fixed number of shares of our common stock at $0.52 per share, and matures on March 31, 2019. In connection with the convertible debt, we also issued to Deerfield seven-year detachable stock purchase warrants to acquire 25,115,384 shares of our common stock at an initial exercise price of $0.52 per share.

As a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes as derivative liabilities, initially at their estimated relative fair value of approximately $6.0 million and $3.0 million, respectively. As a result, we recognized a discount on the convertible notes of $9.0 million which we are amortizing over the term of the notes using the effective interest method. We re-measure the warrants and the conversion option to fair value at each balance sheet date.

The convertible credit facility also provided for a second tranche of $26.0 million contingent upon shareholder approval of the authorization of a sufficient number of common shares available for conversion. On June 25, 2014, following satisfaction of closing conditions, the Company completed the second draw under the Facility Agreement in the aggregate amount of $26.0 million (the “Second Draw”). Further, pursuant to the terms of the Facility Agreement and at the time of the Second Draw, the Company issued to Deerfield 67,500,000 warrants to purchase shares of the Company’s common stock at the exercise price of $0.52 per share, subject to adjustments. These warrants are substantially identical to the warrants issued to Deerfield in the connection with the First Draw and as a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes as derivative liabilities, initially at their estimated relative fair value of approximately $20.5 million and $5.3 million, respectively. As a result, we recognized a discount on the convertible notes of $25.8 million, which we are also amortizing over the term of the notes using the effective interest method. We also re-measure the warrants and the conversion option associated with the Second Draw to fair value at each balance sheet date. Accrued interest on the 2014 convertible credit facility is included in long-term-liabilities- Other liabilities on the Condensed Consolidated Balance Sheets.

March 2014 Equity Offering

On March 31, 2014 we raised $2.0 million from the private placement of 3,846,154 shares of common stock (at a price of $0.52 per share) and five-year stock purchase warrants to purchase 2,884,615 shares of common stock at $0.52 per shares. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $1.1 million. We re-measure the warrants to fair value at each balance sheet date. Issuance costs, in the form of warrants and fees, were valued at approximately $136,000 and were recorded to additional paid-in-capital.

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March 2014 Amendment to Existing Note

To facilitate the Deerfield financing discussed above, we modified our existing $2.1 million note with JP Nevada Trust to subordinate the note to the new convertible notes. In exchange for the subordination, we issued to JP Nevada Trust five-year stock purchase warrants to acquire 750,000 shares of our common stock at $0.52 per share. As a result of certain exercise contingencies, non-standard anti-dilution provisions and cash settlement features contained in the warrants, we initially classified the detachable stock purchase warrants as derivative liabilities at their estimated relative fair value of approximately $14,000. The $2.1 million note with JP Nevada Trust was retired in conjunction with the Second Draw under the Facility Agreement in June 2014 and the warrants expired pursuant to their terms upon repayment of the debt.

2014 Placement Agent Costs

In connection with the March 2014 Deerfield financing and equity offering discussed above, we paid the placement agent cash fees of $880,000 and issued to them five-year stock purchase warrants to purchase 1,474,615 shares of common stock at $0.52 per share. The total fees were allocated to the debt and equity components (as deferred financing fees and additional paid in capital, respectively) on a relative fair value basis. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we initially classified the detachable stock purchase warrants as derivative liabilities at their estimated relative fair value of approximately $0.5 million. We re-measure the warrants to fair value at each balance sheet date.

In connection with the closing of the second draw on the Deerfield facility, the Company paid the placement agent an additional $1.71 million cash commission and issued to them additional five-year stock purchase warrant to acquire 3,525,000 shares of the Company’s common stock on the terms and provisions substantially similar to first draw. The total fees associated with the debt were recorded as deferred financing fees. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $0.90 million. We re-measure the warrants to fair value at each balance sheet date.

Mid-Cap Term Loan pay-off

We paid off in its entirety the Mid-Cap Financial term loan for a total cash payment of $3,811,767 on March 31, 2014, including principal of $3,450,000 and accrued interest of approximately $31,717. In connection with this transaction, we incurred and expensed prepayment penalties of $330,050 which are classified as interest expense in the accompanying condensed consolidated statements of operations.

(See Note 7 – Debt and Note 8 — Equity and Equity-Linked Securities for additional details regarding our debt and equity transactions.)

Note 3 — Distribution and License Agreement with Arthrex

On August 7, 2013, we entered into a Distributor and License Agreement (the “Arthrex Agreement”) with Arthrex, Inc., a privately held Florida based company (“Arthrex”). Under the terms of the Arthrex Agreement, Arthrex will obtain the exclusive rights to sell, distribute, and service the Angel Concentrated Platelet System and ActivAt (“Products”), throughout the world, for all uses other than chronic wound care. We granted Arthrex a limited license to use our intellectual property as part of enabling Arthrex to sell the Products. Arthrex will purchase Products from us to distribute and service at certain purchase prices, which may be changed after an initial period. Arthrex has the right, on written notice to us, to assume responsibility for the manufacture and supply of the Products, either by assuming our existing manufacturing and supply agreements or by entering into new manufacturing and supply agreements. Arthrex will also pay a certain royalty rate based upon volume of the Products sold. The exclusive nature of Arthrex rights to sell, distribute and service the Products is subject certain existing supply and distribution agreements such that Arthrex may instruct us to terminate or not renew any of such agreements. In addition, Arthrex’s rights to sell, distribute and service the Products is not exclusive in the non-surgical dermal and non-surgical aesthetics markets. In connection with the execution of the Arthrex Agreement, Arthrex agreed to pay us a nonrefundable upfront payment of $5.0 million. The term of the Arthrex Agreement is five years, automatically renewable for an additional three-year period unless Arthrex gives us a termination notice at least one year in advance of the end of the initial five-year period. The Arthrex Agreement contains other terms and provisions that are customary to the agreements of this nature.

Immediately following the execution of the Arthrex Agreement and at the request of Arthrex, we agreed to temporarily provide certain services to Arthrex during a transition period (“Transition Services”). These Transition Services primarily involve customer service, sales order fulfillment, customer billing and collections, and technical support for the Products. For these services, Arthrex will pay us an agreed upon fee. The Transition Services period concluded in the first quarter of 2014.

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Note 4 — Receivables

Accounts and royalties receivables, net consisted of the following:

	September 30,			December 31,
	2014			2013
Trade receivables	$	295,667		$	2,449,199
Other receivables		1,547,804			1,493,979
		1,843,471			3,943,178
Less allowance for doubtful accounts		(58,329	)		(16,497	)
	$	1,785,142		$	3,926,681

Other receivables consist primarily of royalties due from Arthrex and the cost of raw materials needed to manufacture the Angel products that are sourced by the Company and immediately resold, at cost, to the contract manufacturer.

Note 5 — Goodwill and Intangible Assets

Our intangible assets consist of trademarks, technology (including patents), customer relationships, and the IPR&D. These assets are a result of the Angel Business and Aldagen acquisitions. The carrying value of our intangible assets, and the associated amortization, were as follows:

	September 30,			December 31,
	2014			2013
Trademarks	$	1,047,000		$	2,310,000
Technology		2,355,000			2,355,000
Customer relationships		708,000			708,000
In-process research and development		25,926,000			29,585,000
Total	$	30,036,000		$	34,958,000
Less accumulated amortization		(1,211,136	)		(1,189,046	)
	$	28,824,864		$	33,768,954

As a result of our discontinuance of ALD-401 in the second quarter of 2014, we performed an assessment of our Aldagen related trademarks and IPR&D as of June 30, 2014 and determined these assets were impaired. At September 30, 2014 the carrying value reflects the impairment charge made to these assets. There was no impairment recognized in the three month period ending September 30, 2014.

The Company performed a quantitative assessment of our Aldagen related trademarks, and assessed changes to driving factors used in valuing that intangible asset, including the projected revenue stream, discount factor, and remaining useful life, and considered the impact of such changes to the discounted future cash flows used to value the trademarks.  We concluded that the initial fair value of the Aldagen related trademarks of approximately $1.8 million was impaired as of June 30, 2014. An impairment charge of approximately $1.0 million was taken in the three month period ending June 30, 2014 to reflect the current fair value of approximately $0.8 million.

The Company also performed a quantitative assessment of our IPR&D, and assessed changes to driving factors used in valuing that intangible asset, including the projected diagnostic revenue and expenses as well as the discount factor, and considered the impact of such changes to the discounted future cash flows used to value the IPR&D. We concluded that the initial fair value of the IPR&D of approximately $29.6 million was impaired as of June 30, 2014. An impairment charge of approximately $3.7 million was taken in the three month period ending June 30, 2014 to reflect the current fair value of approximately $25.9 million. (See Note 9 — Fair Value Measurements for additional details.)

We are currently conducting (i) a Phase 1/2 clinical trial in critical limb ischemia (PACE) that is being funded by the National Institutes of Health, and (ii) a Phase 1 clinical trial in grade IV malignant glioma following surgery that is funded by Duke University, both using the intellectual property and know-how encompassed by the IPR&D and trademarks. We have no current plans to change our approach with respect to these programs.

Amortization expense associated with our definite-lived intangible assets of $117,750 was recorded to cost of royalties and $142,511 was recorded to general and administrative expense for the nine months ended September 30, 2014. Amortization expense for the remainder of 2014 is expected to be $77,100. Annual amortization expense based on our existing intangible assets and their estimated useful lives is expected to be approximately:

11

2015	308,300
2016	308,300
2017	308,300
2018	242,000
2019	219,800
Thereafter	1,434,800

The Company also performed an impairment test of goodwill as of June 30, 2014. U.S. GAAP provides for a two-step process for measuring for impairment of goodwill. Step 1 of the impairment process is to determine if the fair value of the reporting unit exceeds its carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is unnecessary. The Company’s goodwill is contained in its sole operating segment and reporting unit. Based on our assessment, the fair value of the reporting unit, determined with reference to its quoted market cap, exceeded its carrying value at June 30, 2014 and the Company determined goodwill was not impaired. Accordingly, the Step Two analysis was not performed.

Note 6 — Accrued Expenses

	September 30,		December 31,
	2014		2013
Customer deposits	$	2,500,524	$	1,795,803
Accrued compensation and benefits		969,160		795,584
Other payables		729,043		242,993
Accrued interest		3,375		2,250
Due to Arthrex		322,794		1,630,564
Accrued professional fees		259,346		199,634
Accrued loss on abandonment of lease, current portion		103,176		--
	$	4,887,418	$	4,666,828

Note 7 — Debt

Outstanding Debt as of September 30, 2014

At September 30, 2014 we have outstanding debt consisting of the Deerfield 5.75% convertible debt due March 31, 2019.

(See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

On March 31, 2014, we executed agreements with Deerfield for the issuance of a five-year senior secured convertible credit facility. Under the terms of this agreement, Deerfield agreed to provide to us a convertible credit facility (the “Facility Agreement”) in an amount up to $35 million which was disbursed as follows: (i) the initial draw of $9 million of the Facility Agreement was disbursed on March 31, 2014 (the “First Draw”), and (ii) following the authorization by our shareholders to increase our authorized capital stock (the “Share Authorization Event”), which occurred on June 9, 2014, we were required to draw and Deerfield was required to fund, the remaining $26 million of the Facility Agreement (the “Second Draw”). In addition to the convertible notes, we issued stock purchase warrants to purchase up to 97,614,999 shares of our common stock at an initial exercise price of $0.52 per share (subject to adjustments). (See Note 8 — Equity and Equity-Linked Securities for additional details.)

Outstanding amounts under the Facility Agreement are due in full on March 31, 2019. The Facility Agreement is structured as a purchase of senior secured convertible notes (the “Notes”), which bear interest at a rate of 5.75% per annum, payable quarterly in arrears in cash or, at our election after the Second Draw, registered shares of common stock; provided, that during the first five quarters following the closing, we have the option of having all or any portion of accrued interest added to the principal balance of the Facility Agreement.

Following the Share Authorization Event, which occurred on June 9, 2014, Deerfield has the right to convert the principal amount of the Facility Agreement into shares of our common stock (“Conversion Shares”) at a per share price equal to $0.52. In addition, we granted to Deerfield the option to require the Company to redeem up to 33.33% of the total amount drawn under the Facility Agreement together with any accrued and unpaid interest thereon, on each of the second, third, and fourth anniversaries of the closing with the option right triggered upon the Company’s net revenues failing to be equal or exceed the quarterly milestone amounts set forth in the Facility Agreement. We also granted Deerfield the option to require us to apply 35% of the proceeds received by us in equity-raising transaction(s) to redeem outstanding principal and interest of the Notes, provided that the first $10 million so raised by us will be exempt from this put option. We entered into a security agreement which provides, among other things, that our obligations under the Notes will be secured by a first priority security interest, subject to customary permitted liens, on all our assets. We also entered into a Registration Rights Agreement dated as of the same date (the “Deerfield Registration Rights Agreement”) pursuant to which we agreed to file a registration statement to register the resale of the Conversion Shares and the Deerfield Warrant Shares of our common stock following the Share Authorization Event. Such Registration Rights Agreement was filed on July 10, 2014. ) (See Note 11 – Commitments and Contingencies for additional details.)

As a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes associated with the First Draw and Second Draw as derivative liabilities. The derivative liabilities associated with the First Draw were recorded initially at their estimated relative fair value of approximately $6.6 million and $3.0 million, respectively and those associated with the Second Draw, initially at their estimated relative fair value of approximately $21.5 million and $5.3 million respectively. As a result, we recognized a discount on the convertible notes of $9.0 million associated with the First Draw and $25.8 million associated with the Second Draw. We are amortizing the discount on both of the notes over the term of the notes using the effective interest method. In addition, we re-measure the warrants and the conversion option to fair value at each balance sheet date. The issuance costs, in the form of warrants and fees, related to the First Draw and Second Draw were valued at approximately $1.5 million and $2.6 million, respectively, were recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method). The issuance costs associated with the Second Draw included a yield enhancement fee, for which we issued 2,709,677 shares of the Company’s commons stock, with a fixed value of approximately $1.1 million which was also recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

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Debt No Longer Outstanding at September 30, 2014

JP Nevada Trust 12% Note

On April 28, 2011, we borrowed $2.1 million pursuant to a secured promissory note that matures May 20, 2016. The note accrued interest at a rate of 12% per annum, and required interest-only payments each quarter commencing September 30, 2011, with the then outstanding principal due on the maturity date. The note was secured by our Angel assets. In connection with the issuance of the secured promissory note, we issued the lender a warrant to purchase up to 1,000,000 shares at an exercise price of $0.50 per share, with variable vesting provisions.

Of the $2,100,000 due under the note, our payment obligations with respect to $1,400,000 under the note were guaranteed by certain insiders, affiliates, and shareholders. In connection with this guarantee, we issued 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 with variable vesting provisions.

The warrants issued to the lender and the guarantors were valued at approximately $546,000, were recorded as deferred debt issuance costs, and were being amortized to interest expense on a straight-line basis over the guarantee period (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

On March 31, 2014 in connection with the Deerfield Facility, JP Nevada Trust agreed to subordinate its security interest in the note. In consideration, we issued to the holder a 5-year warrant to purchase 750,000 shares of our common stock at an exercise price of $0.52 per share. The warrants were valued at approximately $14,000 and are classified as derivative liabilities.

(See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

The $2.1 million note with JP Nevada Trust was retired in conjunction with the Second Draw under the Facility Agreement in June 2014 and the warrants expired pursuant to their terms upon repayment of the debt. The corresponding deferred debt issuance costs of $298,000 were charged to interest expense in the condensed consolidated statements of operations and we re-measured the corresponding warrants to fair value at June 30, 2014. (See Note 8 – Equity and Equity-Linked Securities for additional details.)

JMJ 4% Convertible Notes

On July 15, 2011, we issued $1.3 million of our 4% Convertible Notes (the “July 4% Convertible Notes”) to JMJ Financial. The July 4% Convertible Notes were scheduled to mature on May 23, 2016 and included a one-time interest charge of 4% due on maturity. The July 4% Convertible Notes (plus accrued interest) converted at the option of the holder, in whole or in part and from time to time, into shares of our common stock at a conversion rate equal to (i) the lesser of $0.80 per share or (ii) 80% of the average of the three lowest closing prices of our common stock for the previous 20 trading days prior to conversion (subject to a “floor” price of $0.25 per share). On April 28, 2014, the remaining balance of the face amount of the July 4% Convertible Notes and accrued interest were converted into approximately 347,000 shares of common stock at a conversion price of $0.41 per share.

Mid-Cap Financial Term Loan

On February 19, 2013, we entered into a Credit and Security Agreement (the “Credit Agreement”) with Mid-Cap Financial (“MidCap”) that provided for aggregate term loan commitments of $7.5 million, subsequently modified to $4.5 million. We received the first tranche of $4.5 million on February 27, 2013. On March 31, 2014, we repaid the term loan in its entirety along with approximately $330,000 in early payment penalties and fees. The balance of the unamortized debt discount of approximately $381,000 and deferred fees of approximately $142,000 were charged to interest expense in the condensed consolidated statements of operations.

In connection with term loan, we issued the lender a seven-year warrant to purchase 1,079,137 shares of the Company’s Common stock at the warrant exercise price of $0.70 per share. The exercise price and the number of shares issuable upon exercise of the warrant is subject to standard anti-dilution adjustments and contains a cashless exercise provision. The warrants issued to the lender were valued at approximately $568,000, were recorded as a debt discount, and were being amortized to interest expense over the term of the loan (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method). The warrants are classified in equity.

On December 10, 2013, we revised the exercise price of the warrants to $0.46 per share (“Amendment to the MidCap Warrant”). As a result of the Amendment to the MidCap Warrant, the fair value of the warrants were modified and the change was recognized as an increase to debt discount and amortized over the remaining life of the loan. The change in the fair value of the warrants was approximately $12,000.

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December 2013 Convertible Bridge Note

On November 21, 2013, we executed agreements with certain investors for the subsequent issuance of 10% subordinated convertible notes (“10% Subordinated Convertible Notes”) and stock purchase warrants, for gross proceeds of up to $3 million. The eventual closing was contingent upon several factors; we received $2.25 million of the expected gross proceeds at the first closing, which occurred on December 10, 2013 after the Company received an acceptable Centers for Medicare and Medicaid Services (“CMS”) reimbursement determination for Aurix^™. We received $0.75 million of the gross proceeds in February 2014. (See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

On March 31, 2014 the holders of the December 2013 convertible bridge notes (except for one holder), agreed to convert their outstanding notes pursuant to its terms, converting into 5,981,859 shares of common stock. The Company repaid, in its entirety, the portion of the debt excluded from the conversion (including interest and prepayment penalties) pursuant to its terms, for a total cash payment of approximately $339,000. The unamortized balance of the related debt discount, deferred fees, and derivative liability for the embedded conversion feature, were reclassified to additional paid-in capital.

The conversion option embedded in the 10% Subordinated Convertible Notes and related warrants issued to the investors was accounted for as a derivative liability and was recorded at full fair value relative to the total gross proceeds which totaled $2.25 million at December 10, 2013, resulting in a debt discount of $2.25 million. The debt discount was amortized as additional interest expense using the interest rate method through the maturity date. The embedded conversion option and the warrants were recorded at fair value and marked to market at each period, with the resulting change in fair value reflected as “change in fair value of derivative liabilities” in the accompanying condensed consolidated statements of operations.

In connection with the issuance of the Notes, we also agreed to issue to the investors in the Offering five-year warrants (the “Warrants”) to purchase shares of our Common stock in the amount equal to 75% of the number of shares into which the Notes may be converted at the Closing, at an exercise price equal to 125% of the Market Price (as defined). The Warrants also contain non-standard anti-dilution adjustments and contain certain net settlement features.

Warrants issued to the placement agent were value at approximately $69,000, were recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

As a result of the scheduled expiration of non-standard anti-dilution clauses contained within the investors and placement agent warrants, the warrants were reclassified to equity at their fair value on June 9, 2014.

Note 8 — Equity and Equity-Linked Securities

We issued 17,245,245 shares of Common stock during the nine months ended September 30, 2014. The following table lists the sources of and the net proceeds from those issuances:

Source	# of Shares		Total Net Proceeds
Sale of shares pursuant to private offering		3,846,154	$	1,911,695
Sale of shares pursuant to February 2013 equity purchase agreement		3,750,000	$	1,754,565
Issuance of shares in lieu of cash for fees incurred pursuant to February 2013 equity purchase agreement		43,865	$	—
Issuance of shares for conversion of 4% Convertible Notes		886,690	$	—
Issuance of shares for conversion of 10% Convertible Notes		5,981,859	$	—
Issuance of shares to Class 4A Equity shareholder pursuant to June 2002 Reorganization Plan		27,000	$	—
Issuance of shares in lieu of cash for the Deerfield facility yield enhancement		2,709,677	$	—
Totals		17,245,245	$	3,666,260

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Lincoln Park Transaction

On February 18, 2013, we entered into a purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the terms and subject to the conditions of the Purchase Agreement, we have the right to sell to and Lincoln Park is obligated to purchase up to $15 million in shares of our common stock, subject to certain limitations, from time to time, over the 30-month period commencing on July 17, 2013. We may direct Lincoln Park every other business day, at our sole discretion and subject to certain conditions, to purchase up to 150,000 shares of common stock in regular purchases, increasing to amounts of up to 200,000 shares depending upon the closing sale price of the common stock. In addition, we may direct Lincoln Park to purchase additional amounts as accelerated purchases if on the date of a regular purchase the closing sale price of the common stock is not below $1.00 per share. The purchase price of shares of common stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to 12 business days leading up to such time), but in no event will shares be sold to Lincoln Park on a day the common stock closing price is less than the floor price of $0.45 per share, subject to adjustment. Our sales of shares of common stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of the common stock.

In connection with the Purchase Agreement, we issued to Lincoln Park 375,000 shares of common stock and are required to issue up to 375,000 additional shares of common stock pro rata as we require Lincoln Park to purchase shares under the Purchase Agreement over the term of the agreement. To date, we have raised approximately $2.4 million under the terms of the purchase agreement.

Common Stock and Warrant Registered Offering

On February 19, 2013, we entered into securities purchase agreements with certain institutional accredited investors, including certain current shareholders of the Company, to raise gross proceeds of $5,000,000, before fees and other offering expenses, in a registered offering. We issued to the investors units consisting, in the aggregate, of 9,090,911 shares of our common stock and five-year warrants to purchase 6,363,638 shares of common stock. The purchase price paid by investors was $0.55 for each unit. Each warrant is immediately exercisable at $0.75 per share on or after February 22, 2013 and is subject to transfer restrictions, including among others, compliance with the state securities laws. The closing of the offering took place on February 22, 2013. Proceeds from the transaction will be used for general corporate and working capital purposes. The warrants are classified in equity. 

In connection with this offering, we paid cash fees to the agent in the amount of $350,000 and granted to the placement agent warrants to purchase 136,364 shares of our common stock. The warrants will have the same terms as the investor warrants in this offering, except that the exercise price will be 120% of the exercise price of the investor warrants and may also be exercised on a cashless basis. The warrants are classified in equity.

In connection with this offering, the Company and the Maryland Venture Fund (Maryland Department of Business and Economic Development), an investor in the above referenced offering (“MVF”), in compliance with MVF’s investment policies, agreed to execute a certain Stock Repurchase Agreement which requires us to repurchase the MVF’s investment, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. The common shares issued to MVF are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheet. The value of the warrants and offering expenses allocable to the contingently redeemable common shares was not material.

Release of the Worden Security Interest in the Licensed Patents

On February 19, 2013, Charles E. Worden Sr., an individual holder of security interest in patents pursuant to the Substitute Royalty Agreement, dated November 4, 2001 (the “SRA”), executed an amendment to the SRA (the “SRA Amendment”) for the purposes of terminating and releasing the security interest and the reversionary interest under the terms of the SRA in exchange for the following consideration: (i) a one-time cash payment of $500,000 (to replace all future minimum monthly royalty payments), (ii) issuance of 250,000 shares of our common stock (the “Worden Shares”), and (iii) grant of the right to acquire up to 250,000 shares of our common stock pursuant to a seven-year warrant with the exercise price of $0.70 per share (the “Worden Warrant”). In addition, under the terms of the Amendment, Mr. Worden’s future annual royalty stream limitation was increased from $600,000 to $625,000. The exercise price and the number of shares issuable upon exercise of the Worden Warrant is subject to standard anti-dilution provisions. The Worden Warrants contain provisions that are customary for the instruments of this nature, including, among others, a cashless exercise provision. The warrants are classified as equity.

March 2014 Equity Offering

On March 31, 2014 we raised $2.0 million from the private placement of 3,846,154 shares of common stock (at a price of $0.52 per share) and five-year stock purchase warrants to purchase 2,884,615 shares of common stock at $0.52 per shares. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $1.1 million. We re-measure the warrants to fair value at each balance sheet date. Issuance costs, in the form of warrants and fees, were valued at approximately $136,000 and were recorded to additional paid-in-capital.

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Stock-Based Awards

The Company, from time to time, may issue stock options or stock awards to employees, directors, consultants, and other service providers under its 2002 Long-Term Plan (“LTIP”) or 2013 Equity Incentive Plan (“EIP”). At the special meeting of shareholder held on June 9, 2014, the Company’s shareholders approved a proposed amendment to the 2013 EIP to increase the number of shares of common stock authorized to be issued under the Plan from 3.0 million shares to 18.0 million shares. All equity-based compensation, consisting primarily of stock option awards, is estimated on the date of grant using the Black-Scholes-Merton option-pricing formula. For stock options, expected volatilities are based on historical volatility of our stock price. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using company historical information. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. A summary of option activity under the LTIP and EIP for the nine months ended September 30, 2014 is presented below:  

Stock Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		8,520,816		$	1.19
Granted		7,715,800		$	0.57
Exercised		0			—
Forfeited or expired		(2,338,607	)	$	1.22
Outstanding at September 30, 2014		13,898,009		$	0.84		7.3
Exercisable at  September 30, 2014		7,077,797		$	1.09		5.2

The weighted-average grant-date fair value of stock options granted under the 2002 LTIP and the 2013 EIP for the nine months ended September 30, 2014 was $0.57. No stock options were exercised during the nine month period ended September 30, 2014.

The following tables summarize the stock options granted by the Company during the three and nine months ended September 30, 2014. These options were granted to employees and board members under our 2002 LTIP and 2013 EIP.

Three Months Ended				Nine Months Ended
September 30, 2014				September 30, 2014
Options Granted		Exercise Price		Options Granted		Exercise Price
	1,363,900		$0.39-$0.60		7,715,800		$0.39-$0.61

During the three and nine months ended September 30, 2014, 148,916 and 2,338,607 stock options were forfeited by contract due to the termination of the underlying service arrangement or expiration of the awards, respectively.

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The following table summarizes information about stock options outstanding as of September 30, 2014:

	Options Outstanding						Options Exercisable
			Weighted		Weighted				Weighted
Range of	Number of		Average		Average				Average
Exercise	Outstanding		Remaining		Exercise		Number		Exercise
Prices	Shares		Contract Life		Price		Exercisable		Price
$0.30 - $0.50		2,311,800		7.79	$	0.42		960,998	$	0.43
$0.51 - $0.75		7,738,066		8.65	$	0.60		2,509,159	$	0.60
$0.76 - $1.25		825,831		5.56	$	0.95		719,163	$	0.97
$1.26 - $1.75		2,062,646		4.67	$	1.42		1,950,646	$	1.42
$1.76 - $2.75		889,666		2.53	$	2.30		867,831	$	2.30
$2.76 - $4.50		0		—		—		0		—
$4.51 - $6.00		70,000		1.28	$	5.20		70,000	$	5.20

As of September 30, 2014, there was approximately $2.5 million of total unrecognized compensation cost related to non-vested stock options granted under the LTIP and EIP. That cost is expected to be recognized over a weighted-average period of 2.9 years.

The Company has issued certain warrants outside of the LTIP and EIP, in exchange for the performance of services. A summary of service provider warrant activity, excluding warrants issued to investors and bankers in connection with various financings, for the nine months ended September 30, 2014, and changes during the nine months ended September 30, 2014 is presented below:

Warrants to Service Providers	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		1,661,364		$	1.24		1.9
Granted		20,000		$	0.40
Exercised		0			—
Forfeited or expired		(200,000	)	$	1.50
Outstanding at September 30, 2014		1,481,364		$	1.20		1.5
Exercisable at  September 30, 2014		1,466,364		$	1.20		1.5

As of September 30, 2014, there was approximately $1,800 of total unrecognized compensation cost related to these warrants. That cost is expected to be recognized over a weighted-average period of 0.7 years. These warrant are included in the Stock Purchase Warrant table outstanding shown below.

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

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Stock Purchase Warrants

Warrant activity for the nine months ended September 30, 2014 was as follows:

Warrants outstanding at December 31, 2013 (i)	23,019,301
Warrants issued in connection with convertible bridge notes (February 2014)	232,964
Warrants issued in connection with March 2014 equity placement (Anson)	2,884,615
Warrants issued in connection with March 2014 Convertible Notes (Deerfield)	25,115,384
Warrants issued in connection with March 2014 Convertible Notes (agent)	1,474,615
Warrants issued in connection with JP Nevada Trust Note amendment	750,000
Warrants issued in connection with a consulting agreement	20,000
Warrants issued in connection with June 2014 Convertible Notes (Deerfield)	67,500,000
Warrants issued in connection with June 2014 Convertible Notes (agent)	3,525,000
February 2013 subordination warrants (June 2014) (ii)	(800,000	)
JP Nevada Trust Note amendment March 2014 warrants (June 2014) (iii)	(750,000	)
Other warrants expired in 2014	(200,000	)
Warrants outstanding at September 30, 2014	122,771,879

(i) The December 31, 2013 warrants outstanding figure includes:

a) February 2012 Inducement warrants - 30% (354,156) which were immediately exercisable; 70% (826,391) would be exercisable upon successful ALD-401 Stroke trial.  (See Note 12 – Subsequent Events for additional details.)

b) February 2012 Aldagen warrants - 30% (634,672) which were immediately exercisable; 70% (1,480,924) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.)

(ii) The February 2013 Subordination warrants (800,000), which expire February 18, 2018, are included in the warrants outstanding at December 31, 2013. However, these warrants were only exercisable if the JPNT Note remained outstanding on or after April 28, 2015 (50% of the total) and April 15, 2016 (remainder). The JPNT Note was retired on June 25, 2014, therefore, these warrants cannot be exercised and therefore are not included in warrants outstanding at June 30, 2014.

(iii) The warrants issued in connection with March 2014 JP Nevada Trust Note amendment (750,000), which expire March 31, 2019, were exercisable only upon the occurrence of the “Warrant Exercise Event” as defined in the warrant. Since the “Warrant Exercise Event” cannot occur as defined, the warrants issued in connection with the March 2014 JP Nevada Trust Note (750,000) cannot be exercised. Therefore, these warrants are not included in the warrants outstanding at June 30, 2014.

2014 Convertible Debt Financing – March 2014 & June 2014

In connection with the Deerfield Facility Agreement and at the time of the First Draw, we issued to Deerfield and the placement agent warrants to purchase 25,115,384 and 1,474,615 shares of our common stock, respectively, at the exercise price of $0.52 per share. These warrants contain certain non-standard anti-dilution provisions and cash settlement features. At the time of the Second Draw, we issued to Deerfield and the placement agent additional warrants to purchase 67,500,000 and 3,525,000 shares of our common stock, respectively, at the exercise price of $0.52. These warrants are substantially identical to the warrants issued in the connection with the First Draw and contain, among other things, limitations that prevent the holder of any warrants from acquiring shares upon exercise of a warrant that would result in the number of shares beneficially owned by it and its affiliates to exceed 9.98% of the total number of shares of our common stock then issued and outstanding.

Note 9 — Fair Value Measurements

Our balance sheets include various financial instruments that are carried at fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than Level I prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

Financial Instruments

We have segregated our financial assets and liabilities that are measured at fair value into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The inputs used in measuring the fair value of cash and short-term investments are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of other short-term financial instruments (primarily accounts receivable and accounts payable and accrued expenses) approximate their carrying values because of their short-term nature. The carrying value of our debt approximates its fair value at September 30, 2014.

We account for our derivative financial instruments, consisting solely of certain stock purchase warrants that contain non-standard anti-dilutions provisions and/or cash settlement features, and certain conversion options embedded in our convertible instruments, at fair value using level 3 inputs. We determine the fair value of these derivative liabilities using the Black-Scholes option pricing model when appropriate, and in certain circumstances using binomial lattice models or other accepted valuation practices.

When determining the fair value of our financial instruments using the Black-Scholes option pricing model, we are required to use various estimates and unobservable inputs, including, among other things, contractual terms of the instruments, expected volatility of our stock price, expected dividends, and the risk-free interest rate. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the instrument. Increases in expected term, anticipated volatility and expected dividends generally result in increases in fair value, while decreases in the unobservable inputs generally result in decreases in fair value.

When determining the fair value of our financial instruments using binomial lattice models or other accepted valuation practices, we also are required to use various estimates and unobservable inputs, including in addition to those listed above, the probability of certain events.

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The following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013:

	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Total investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Liabilities
Embedded conversion options	$	—	$	—	$	1,515,540	$	1,515,540
Stock purchase warrants		-		-		1,733,055		1,733,055
Total derivative liabilities	$	—	$	—	$	3,248,595	$	3,248,595

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Total investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Liabilities
Embedded conversion options	$	—	$	—	$	7,524,851	$	7,524,851
Stock purchase warrants		-		-		30,581,524		30,581,524
Total derivative liabilities	$	—	$	—	$	38,106,375	$	38,106,375

The Level 1 assets measured at fair value in the above table are classified as “cash and cash equivalents” in the accompanying condensed consolidated balance sheets.

The Level 3 liabilities measured at fair value in the above table are classified as “derivative liabilities” in the accompanying condensed consolidated balance sheets. Gains and losses in the fair value of the contingent consideration are classified as the “change in fair value of contingent consideration” in the accompanying consolidated statements of operations. All other gains and losses in the fair value of derivative instruments are classified as the “change in the fair value of derivative instruments” in the accompanying condensed consolidated statements of operations.

The following tables set forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2014:

	Balance at				Effect of			Reclassed to						Balance at
	December 31,		Established in		Conversion to			Additional			Change in			September 30,
Description	2013		2014		Common Stock			Paid-In Capital (1)			Fair Value			2014
Derivative liabilities:
Embedded conversion options	$	1,515,540	$	8,825,935	$	(1,932,693	)	$	—		$	(883,931	)	$	7,524,851
Stock purchase warrants	$	1,733,055	$	29,137,683	$	—		$	(1,331,776	)	$	1,042,562		$	30,581,524
	$	3,248,595	$	37,963,618	$	(1,932,693	)	$	(1,331,776	)	$	158,631		$	38,106,375

(1) Various warrants were reclassified to additional paid-in capital as a result of the expiration of non-standard anti-dilution clauses contained within the warrants.

In February 2014, we purchased a Certificate of Deposit (“CD”) from a commercial bank in the amount of $53,000. The CD bears interest at an annual rate of 0.10% and matures on June 24, 2015. The $53,000 carrying value of the CD approximates its fair value. This CD collateralizes a letter of credit. (See Note 11 – Commitments and Contingencies for additional details.)

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Non-Financial Assets and Liabilities

We have no non-financial assets and liabilities that are measured at fair value on a recurring basis. Property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis (upon impairment). The intangible assets in the table below are measured at fair value on a non-recurring basis and are presented at fair value as of the date of impairment.

(See Note 5 — Goodwill and Intangible Assets for additional details.)

We determined the fair value for IPR&D by using the royalty savings method of the income approach. In applying this method, we used the existing royalty income that was being generated by the Company and expected future royalty revenues to get to the expected net cash flows. We then applied an asset-specific discount rate to the forecasted net cash flows to arrive at a net present value amount. Significant estimates and assumptions used in this approach were the (i) amount and timing of the projected revenues; (ii) royalty rate based on comparable IPR&D; (iii) discount rate, which reflects the various risks involved in future cash flows; and (iv) tax rate.

We determined the fair value for the Trademark by using the royalty savings method of the income approach. In applying this method, we used the expected future royalty revenues, generated by the Trademark, to get to the expected net cash flows. We then applied an asset-specific discount rate to the forecasted net cash flows to arrive at a net present value amount. Significant estimates and assumptions used in this approach were the (i) amount and timing of the projected revenues; (ii) royalty rate based on comparable trademarks; (iii) estimated useful life; and (iv) discount rate, which reflects the various risks involved in future cash flows; and (v) tax rate.

The following table represents the fair value hierarchy for our non-financial assets measured on a non-recurring basis during the first nine months of 2014:

	Level 1		Level 2		Level 3		Total
Intangible assets
Intangible assets - IPR&D	$	—	$	—	$	25,926,000	$	25,926,000
Intangible assets - Trademarks		-		-		716,614		716,614
Total	$	—	$	—	$	26,642,614	$	26,642,614

The carrying fair value of our Aldagen related trademarks and in-process research and development in the table above is presented as of the date of impairment, since they are not measured at fair value on a recurring basis. These assets are included in "intangible assets, net" in the accompanying condensed consolidated balance sheets.

Note 10 — Supplemental Cash Flow Information

Non-cash investing and financing transactions for the nine months ended September 30, 2014 include:

	2014
Conversion of convertible debt to common stock	$	3,067,423
Reclassification of the unamortized balance of debt discount and derivative liability, related to the extinguishment and conversion of the subordinated convertible debt, to additional paid-in capital		2,860,627
Derivative liability created from conversion option embedded in Deerfield convertible credit facility		8,825,935
Warrants issued in connection with convertible debt and equity facility		29,137,683
Reclassification of warrant derivative liability to additional paid-in capital as a result of the expiration of non-standard anti-dilution clause contained in warrants		1,331,776
Issuance of common stock in connection with convertible debt facility		1,050,000
Accrued property and equipment		114,494

Note 11 — Commitments and Contingencies

Series A Preferred stock contingency

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 were 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 was contingent on the Company’s attaining aggregate gross revenues for four consecutive quarters of at least $10,000,000 and if met would result in the issuance of 325,000 shares of the Company’s Common stock. The Company reached such aggregate revenue levels as of the end of the quarter ended June 30, 2012. This Common stock issuable is classified as equity.

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Aldagen Contingent Consideration

Aldagen’s former investors have the right to receive up to 20,309,723 shares of our common stock, contingent upon the achievement of certain milestones related to the current ALD-401 Phase 2 clinical trial. Under the terms of the February 2013 amendment to the Exchange and Purchase Agreement by and among Nuo Therapeutics, Inc., Aldagen, Inc. and Aldagen Holdings, LLC, the parties to the agreement modified the terms of the post-closing contingent consideration under the terms of the original agreement. Following and as a result of the amendment, Nuo Therapeutics recognized approximately $1,006,000 as operating expense with the offset to equity.

Deerfield Registration Rights Agreement

On March 31, 2014, we entered into a Registration Rights Agreement (the “RRA”) with Deerfield investors pursuant to the terms and provisions of the March 31, 2014 Facility Agreement and agreed to register, among others, shares of our common stock issuable upon conversion and exercise of convertible notes and related common stock warrants sold in the March 31 and June 30 Deerfield financings. At the time of the closing of the March 31st draw, we issued to Deerfield warrants to purchase 25,115,384 shares of the Company’s common stock at an exercise price of $0.52 per share; at the time of the June 25th draw - warrants to purchase 67,500,000 shares of the Company’s common stock at an exercise price of $0.52 per share. The maximum number of shares of our common stock that can be issued pursuant to the conversion of the Deerfield facility is 67,307,692 shares; the maximum number of shares of our common stock that can be issued pursuant to the terms of the Deerfield warrants is 92,615,385 shares. In accordance with the RRA, we are obligated to file and maintain an effective registration statement, all in accordance with the terms of the RRA until the date when all shares underlying the convertible notes and related warrants (and any other securities issued or issuable with respect to in exchange for such shares) have been sold or at any time following the six month anniversary of the date of issuance, all warrant shares issuable upon exercise of the warrants should be eligible for immediate resale pursuant to Rule 144 under the Securities Act.

FDA clearance

In conjunction with its FDA clearance, we agreed to conduct a post-market surveillance study to further analyze the safety profile of bovine thrombin as used in the Aurix^™ System. This study was 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 September 30, 2014, approximately $383,000 had been incurred. Since the inception of this study, we have enrolled 120 patients, noting no adverse events. Based on the additional positive safety data, we suspended further enrollment in this study pending further discussion with the FDA.

Letter of Credit

In July 2009, in satisfaction of a Maryland law pertaining to Wholesale Distributor Permits, we 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 us of its obligations under applicable Maryland law regarding this permit and is collateralized by a Certificate of Deposit (“CD”) purchased from our commercial bank. This CD bears interest at an annual rate of 0.10% and matures on June 24, 2015.

MVF Stock Repurchase Agreement

The Company and the MVF, in compliance with MVF’s investment policies, agreed to execute a certain Stock Repurchase Agreement which requires us to repurchase the MVF’s investment, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. The common shares issued to MVF are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheet. The value of the warrants and offering expenses allocable to the contingently redeemable common shares was not material. Upon the termination of the stock repurchase agreement or the sale of the stock by MVF, the temporary equity will be re-classed to permanent equity.

Facility Leases

Our primary office and warehouse facilities are located in Gaithersburg, Maryland, and comprise approximately 12,000 square feet. This facility falls under two leases with monthly rent, including our share of certain annual operating costs and taxes, at approximately $9,000 and $3,000 per month with the leases expiring August 2019 and September 2019, respectively. We lease a 16,300 square foot facility located in Durham, North Carolina. This facility falls under one lease with monthly rent, including our share of certain annual operating costs and taxes, at approximately $20,000 per month with the lease expiring December 31, 2018. As a result of our discontinuance of the ALD-401 clinical trial, the Company ceased use of the facility in Durham, North Carolina on July 31, 2014 and sublet the facility beginning August 1, 2014. The sublease expires December 31, 2018. The Company executed a lease beginning October 1, 2014 for a facility located in Nashville, TN, comprised of approximately 2,076 square feet, at approximately $4,000 per month expiring on April 30, 2018.

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Purchase commitments

 The Company has a purchase commitment with a certain vendor to purchase $573,000 of Aurix^™ centrifuges in 2014.

Note 12 — Subsequent Events

Aldagen Contingent Consideration - Second Amendment to the February 8, 2012 Exchange and Purchase Agreement

On November 11, 2014, Nuo Therapeutics, Inc., a Delaware corporation (“Nuo Therapeutics”), Aldagen, Inc., a Delaware corporation (“Aldagen”, and together with “Nuo Therapeutics”, the “Company”) and Aldagen Holdings, LLC, a North Carolina limited liability company (“Aldagen Holdings”), executed that certain Second Amendment (the “Second Amendment”) to the February 8, 2012 Exchange and Purchase Agreement, as amended on February 8, 2013 (as amended to date, the “Exchange Agreement”). All disinterested members of the Board reviewed and approved the terms and provisions of the Second Amendment. Pursuant to the terms of the Second Amendment, the terms of the post-closing consideration originally contemplated under the Exchange Agreement and structured around the achievement of certain milestone events relating to the Company’s ALD-401 Phase 2 clinical trials were amended such that, in full satisfaction of all the post-closing issuance obligations of the Company to Aldagen Holdings, the Company agreed to a one-time issuance of 1,270,000 shares of Nuo Therapeutics common stock (the “Post-Closing Amended Shares”), out of the 20,309,723 shares of our common stock held in reserve, which were contingently issuable upon the achievement of certain milestones related to the current ALD-401 Phase 2 clinical trial. In addition, the parties to the Second Amendment agreed to terminate the originally contemplated registration requirements with respect to any post-closing share issuance. The Second Amendment provides Aldagen Holdings with “piggy-back” registration rights with respect to the Post-Closing Amended Shares for the duration of twelve months following the date of the Second Amendment such that the Company will use its reasonable best efforts to include the Post-Closing Amended Shares in its registration statements to register the resale of such shares by Aldagen Holdings. The Company issued the Post-Closing Amended Shares in reliance upon an exemption from registration contained in Section 4(2) and Rule 506 under the Securities Act; such shares may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

In November 2014, the Board of Directors of the Company determined, among other things, that following the Company's May 2014 determination that the RECOVER-Stroke Phase 2 clinical trial in patients treated with ALD-401 were not clinically or statistically significant and the Company's subsequent determination to discontinue further funding of the ALD-401 development program and close the R&D Facility in Durham, NC, approximately 20.3 million shares of the Company's common stock reserved under the terms of the Exchange and Purchase Agreement, as amended, are to be released from reserve into the Company's capital stock.

Nashville, Tennessee facility lease

The Company executed a lease beginning on October 1, 2014 for a facility located in Nashville, Tennessee, comprised of approximately 2,076 square feet, at approximately $4,000 per month expiring on April 30, 2018.

Amendment to 2013 Equity Incentive Plan

On November 12, 2014 at our 2014 Annual Meeting our shareholders voted to amend the 2013 Equity Incentive Plan to increase the maximum number of shares of common stock which may be (i) issued to key employees as stock options in any calendar year, (ii) used for stock awards and/or stock unit awards intended to qualify as “performance-based” to any key employee in any calendar year under Section 162(m) of the Internal Revenue Code, and (iii) used for stock awards and/or stock unit awards, all as described in more detail in the Proxy Statement.

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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 Nuo Therapeutics, Inc. (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) and our business, financial condition, results of operations and prospects. 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, 2013 and as amended in our subsequent SEC filings. 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

Corporate Overview

At our 2014 Annual Meeting, our shareholders voted to approve the name change amendment to our Certificate of Incorporation. The new name of our Company is “Nuo Therapeutics, Inc.” and the name change became effective upon the filing of the Certificate of Amendment to our Certificate of Incorporation in the State of Delaware on November 12, 2014.

We are a biomedical company marketing products within the U.S. and internationally. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous self biological therapies for tissue repair and regeneration is part of a transformative clinical strategy designed to improve long term recovery in complex chronic conditions with significant unmet medical needs.

Our current commercial offerings consist of point of care technologies for the safe and efficient separation of autologous blood and bone marrow to produce platelet based therapies or cell concentrates. Today, we have two distinct platelet rich plasma (PRP) devices, the Aurix^™ System for wound care and the Angel concentrated Platelet Rich Plasma (cPRP) System for orthopedics markets. Our sales are predominantly in the United States, where we sell our products through direct sales representatives and distributors. Following our August 2013 licensing and distributorship arrangement with Arthrex (discussed below), Arthrex accounted for all of our Angel sales and at September 30, 2014 represented approximately 41% of our trade receivables. There was no other single customer that represented a concentration in either revenue or receivables at September 30, 2014 or 2013, respectively.

Our growth drivers in the U.S. include Medicare coverage for the treatment of chronic wounds under a National Coverage Determination when registry data is collected under Coverage with Evidence Development, and a worldwide distribution and licensing agreement that allows our partner to promote the Angel System for all uses other than wound care.

Our principal administrative and executive offices are located at 207A Perry Parkway, Suite 1, Gaithersburg, MD 20877 and our telephone number is (240) 499-2680. Our website address is http://www.nuot.com. Information contained on our website is not deemed part of this report.

The AutoloGel ^TM System (relaunched as Aurix^™ in October 2014)

In October 2014, we relaunched our AutoloGel chronic wound care system under the Aurix^™ brand, as a part of our marketing plan for the commercialization of Aurix^™ in the U.S. chronic wound care market.

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The Aurix^™ System (formerly, AutoloGel System) is a biodynamic hematogel and a point of care device for the production of a platelet based bioactive wound treatment derived from a small sample of the patient’s own blood. It is cleared by the FDA for use on exuding wounds and is currently marketed in the U.S. chronic wound market. The most significant growth driver for this system is the 2012 National Coverage Determination from the Centers for Medicare and Medicaid Services (CMS), which reversed a 20-year old non-coverage decision for autologous blood products used in wound care. Using the patient’s own platelets as a therapeutic agent, Aurix^™ harnesses the body’s natural healing processes to deliver growth factors, chemokines and cytokines known to promote angiogenesis and to regulate cell growth and the formation of new tissue. Once applied to the prepared wound bed, the biologically active platelet gel can restore the balance in the wound environment to transform a non-healing wound to a wound that heals naturally. There have been nine peer-reviewed scientific and clinical publications demonstrating the effectiveness of AutoloGel in the management of chronic wounds since the device and gel was cleared by the FDA in 2007.

Medicare reimbursement involves three steps: coverage, assignment of eligible reimbursement codes and in many cases an associated fee schedule to stipulate the amount of reimbursement. In October 2011, CMS reopened and revised Section 270.3 of the “Medicare NCD Manual”, which addresses Autologous Blood-Derived Products for Chronic Non-Healing Wounds. Subsequently, a National Coverage Determination for autologous PRP with data collection as a condition of coverage was issued by CMS in August 2012. In March 2013, CMS approved four data collection protocols submitted by the Company. In June of the same year, CMS established HCPCS Code G0460 (Autologous PRP for ulcers) for payment effective July 1, 2013 for the treatment of chronic non-healing diabetic, venous and/or pressure wounds only in the context of an approved study. This determination permitted data collection with reimbursement. On December 2, 2013, CMS designated that this code be paid at a national average rate of $411 per treatment encounter under the Hospital Outpatient Prospective Payment System.

In October 2014, CMS denied a fifth data collection protocol. We intend to pursue all available avenues to have this denial determination reversed. We anticipate that the December 2013 payment decision will expand the reimbursement coverage for Aurix^™ and allow healthcare providers in the outpatient setting to treat a broader patient population that includes those with diabetic foot ulcers, pressure ulcers and venous ulcers. In the final rule, CMS also made it clear that this payment level will be reviewed annually, allowing for the incorporation of resource utilization data collected throughout 2014 to potentially change future payment decisions. In a related decision to control Medicare spending for wound care, CMS finalized rules that will package the payment for various skin substitute products into the payment for the associated clinical procedures. When fully implemented, these revised payment amounts and procedures are expected to enhance the Company’s economic value proposition of Aurix^™ in the market for advanced wound care therapies. In addition, CMS issued the final payment rules for the Medicare Physician Fee Schedule, directing Medicare Administrative Contractors (MACs), to set the payment rates for reimbursement claims based on charges submitted by physician offices. The MACs will determine these payments through the use of invoices and other documentation provided by physician offices. This payment level is consistent with the proposed rule announced by CMS in July 2014. These rules took effect January 1, 2014. The CMS rules for the 2015 calendar year will go into effect on January 1, 2015 and do not contain any material changes from the 2014 rules.

We have made advancements on a next generation Aurix^™ PRP Preparation device, which is designed to enhance the separation of blood components to provide the added convenience and effectiveness that treating clinicians are looking for at the point of care. Importantly, the new device will allow 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 will streamline the process and improve safety and ease-of-use. The sterilization studies have been completed; we expect to file a 510(k) application with the FDA upon the completion of platelet characterization and validation studies. We plan to conduct market research to confirm the market viability of this next generation product.

In August 2014, we partnered with Net Health to develop functionality in Net Health’s WoundExpert software that enables collection of patient data for our Coverage with Evidence Development (CED) program. Under this arrangement, we will work with Net Health to develop functionality within the WoundExpert software to allow clinics to identify patients that may qualify for the Aurix^™ CED program and track the necessary data points for those patients. CMS relies on clinical evidence to determine whether particular items and services are reasonable and necessary. It developed the Coverage with Evidence Development (CED) Program to address coverage of items and services that were believed to be promising but whose ultimate impact on Medicare beneficiary health outcomes remained unconfirmed. The CED program requires more evidence to be collected to determine the full potential benefit of new technologies. Under the CED program, Medicare reimburses for promising new technologies while further evidence is developed.

The Company will continue to pursue potential partnerships and commercial agreements for the product with interested parties.

Angel Product Line

We acquired the Angel cPRP System from Sorin USA, Inc. (“Sorin”) in April 2010. This system is designed for single patient use at the point of care, and provides a simple and flexible means for producing quality PRP and platelet poor plasma from whole blood or bone marrow. The Angel cPRP System is a multi-functional cell separation device which produces concentrated platelet rich plasma for use in the operating room and clinic and is used in a range of orthopedic and cardiovascular indications. It is a point of care device for the production of a concentrated, aseptic platelet-based bioactive therapy derived from a small sample of the patient’s own blood. The resulting cPRP is applied at the site of injury to promote healing.

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In November 2012, we obtained a second 510(k) clearance for our Angel cPRP System for processing a mixture of blood and bone marrow aspirate, which could be utilized as a safe alternative to bone morphogenic protein solutions used in orthopedic surgery. Samples of bone marrow aspirate are routinely collected using a needle to obtain a small amount of the soft sponge like fluid found inside of bones. Aspirated bone marrow is frequently used with bone grafting procedures to treat conditions associated with bone loss and delayed union and nonunion fractures. In the U.S., approximately 400,000 spinal fusion procedures are performed each year and the application of bone marrow or bone marrow concentrates has been the historical “gold standard.” Concentrated PRP produced from blood and bone marrow may be used in up to 90% of spinal fusion procedures. The U.S. biologics market associated with spinal fusion procedures is estimated to be approximately $700 million annually. We believe that the 510(k) clearance for bone marrow aspirate processing enhances our ability to support and advance markets within personalized regenerative medicine.

In addition, the Angel product line also includes ancillary products such as phlebotomy and applicator supplies, and activAT. 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. Market growth and adoption of the technology is driven by an ever expanding base of scientific and clinical literature supporting its use and reports in the popular press of athletes benefiting from treatment. PRP is one of the fastest growing segments in the $1.7 billion U.S. orthobiologics market. We have grown worldwide sales of Angel steadily since acquiring the product line in April 2010 and expect that its worldwide sales will continue to grow following the Arthrex licensing and distribution arrangement described below.

In August 2013, we entered into a Distributor and License Agreement with Arthrex, Inc., a privately held Florida based company. Under the terms of this agreement, Arthrex obtained the exclusive rights to sell, distribute, and service our Angel Concentrated Platelet System and ActivAT throughout the world for all uses other than chronic wound care. We granted Arthrex a limited license to use our intellectual property as part of enabling Arthrex to sell these products. Arthrex purchases these products from us to distribute and service. Arthrex pays us a certain royalty rate based upon volume of the products sold. The exclusive nature of Arthrex’s rights to sell, distribute and service the products is subject to certain existing supply and distribution agreements such that Arthrex may instruct us to terminate or not renew any of such agreements. In addition, Arthrex’s rights to sell, distribute and service the products is not exclusive in the non-surgical dermal and non-surgical aesthetics markets.

Reorganization of the Research and Development Operations

In September 2013, we announced our decision to begin a strategic reorganization of the Company’s research and development operations that involved the RECOVER-Stroke trial and ALDH Bright Cell platform. We acquired the Bright Cell Technology with the acquisition of Aldagen in February 2012. Originally licensed by Aldagen from Duke University and Johns Hopkins University, this technology offered a novel approach to cell-based regenerative medicine which utilizes an intracellular enzyme marker to facilitate fractionation of essential regenerative cells from a patient’s bone marrow. Following the January 2014 completion of the trial enrollment, in May 2014 we announced preliminary efficacy and safety results of our RECOVER-Stroke Phase 2 clinical trial in patients with neurological damage arising from ischemic stroke and treated with ALD-401. Observed improvements in the primary endpoint (mean modified Rankin Score or mRS) of the trial were not clinically or statistically significant. In light of this outcome, we discontinued further funding of the ALD-401 development program and closed our R&D facility in Durham, NC. This decision to close down the facility was in line with the overall realignment of our commercial operations to focus on the wound care market. Following the foregoing actions and events, we performed an assessment of the Aldagen tradename, IPR&D and goodwill and concluded that the fair value of the Aldagen trade name and its IPR&D was impaired. (For more discussion on this topic please refer to Note 8 – Fair Value Measurement in the Notes to Condensed Consolidated Financial Statements.)

We continue to conduct a Phase 1/2 clinical trial in critical limb ischemia (PACE) that is being funded by the National Institutes of Health and a Phase 1 clinical trial in grade IV malignant glioma following surgery that is funded by Duke University.

Results of Operations

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

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, clinical trial costs, and other general business expenses such as insurance, travel related expenses, and sales and marketing related items. We expect our operating expenses to increase as a result of various commercial efforts with regard to Medicare reimbursement for Aurix^™. The Company restructured its research and development activities to reduce costs and refocus its efforts on the commercial wound care market. However, we expect losses to continue for the foreseeable future.

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Comparison of Operating Results for the Three-Month Period Ended September 30, 2014 and 2013

Revenue and Gross Profit

Revenues decreased $1,674,000 (50%) to $1,692,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to a one-time, non-recurring sale to Arthrex in 2013 of $1,294,000 for existing, placed Angel centrifuges made pursuant to the terms and provisions of the Arthrex Agreement. In addition, there were lower product sales of approximately $431,000 and transition services revenue of $129,000 primarily offset by an increase in royalty revenue as a result of increased sales by Arthrex of $147,000. The additional decrease in product sales was primarily due to a reduction in Angel average selling price under the terms of the Arthrex Agreement. In 2013, Arthrex had agreed to pay the Company a service fee to provide certain services during a transition period.

Gross profit decreased $158,000 (31%) to $358,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to the sale of Angel disposable products and centrifuges under the Arthrex Agreement. Under the agreement, the contractual selling price of Angel products to Arthrex is significantly lower than our historical average selling price. The decrease in Angel product gross profit was partially offset by an increase in gross profit from Angel related license fees and royalty revenue.

Overall gross margin increased to 21% from 15% for the three months ended September 30, 2014 as compared to the same period last year. The increase was primarily due to the sale of existing, placed Angel centrifuges to Arthrex in 2013. The sale price of these centrifuges, and the related cost of sales under the Arthrex Agreement, were recorded at the estimated fair value resulting in a zero-margin transaction. Additionally, gross margin on product sales decreased to a negative margin of 7% from 4%.

The following table discloses additional information regarding the gross margin related to our revenues:

	Three Months Ended September 30,
	Aurix						Angel						Bright Cell						Total
	2014			2013			2014			2013			2014			2013			2014			2013
Product sales	$	94,000		$	114,000		$	1,107,000		$	2,808,000		$	-		$	4,000		$	1,201,000		$	2,926,000
License Fees		-			-			100,000			67,000			-			-			100,000			67,000
Royalties		-			-			333,000			182,000			58,000			62,000			391,000			244,000
Other revenue		-			-			-			129,000			-			-			-			129,000
Total revenues		94,000			114,000			1,540,000			3,186,000			58,000			66,000			1,692,000			3,366,000
Product cost of sales		92,000			77,000			1,198,000			2,740,000			-			-			1,290,000			2,817,000
License fees cost of sales		-			-			-			-			-			-			-			-
Royatly cost of sales		-			-			39,000			27,000			5,000			6,000			44,000			33,000
Other revenue cost of sales		-			-			-			-			-			-			-			-
Total cost of revenues		92,000			77,000			1,237,000			2,767,000			5,000			6,000			1,334,000			2,850,000
Gross profit/(loss)		2,000			37,000			303,000			419,000			53,000			60,000			358,000			516,000
Gross margin		2	%		32	%		20	%		13	%		91	%		91	%		21	%		15	%

Aurix^™ product sales decreased $20,000 and gross profit decreased $35,000 comparing the three months ended September 30, 2014 to the same period last year. Sales was impacted by a reduction in the average selling price. To assist with the expansion of the Company’s sales efforts in addressing the Medicare beneficiary population and driving enrollment in the CED program, the Company has modified the Aurix^™ selling price so that it is structured around the price point designated to the reimbursement code assigned to Aurix^™ by CMS. Low sales in relation to fixed costs was the primary cause of the decrease in gross profit and gross margin.

Angel product sales decreased $1,701,000 and product sales gross profit decreased $159,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease in sales was primarily due to a one-time, zero margin non-recurring sale to Arthrex in 2013 of $1,294,000 for existing, placed Angel centrifuges made pursuant to the terms and provisions of the Arthrex Agreement. In addition, sales and gross profit decreased due to a lower average selling price under the Arthrex Agreement. The Angel product gross loss was primarily due to Angel machine warranty costs of $40,000 and logistical costs.

Operating Expenses

Operating expenses decreased $271,000 (5%) to $4,855,000 comparing the three months ended September 30, 2014 to the same period last year. A discussion of the various components of operating expenses follows.

Salaries and Wages

Salaries and wages decreased $18,000 (1%) to $1,950,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to approximately $460,000 in lower compensation expense as a result of the closing of our research and development facility related to the ALD-401 clinical trial and lower sales commission expense of approximately $40,000 primarily due to the licensing of Angel to Arthrex in 2013. This was partially offset by approximately $250,000 in higher salaries primarily due to the planned expansion of our commercial organization, product rebranding activities, the implementation of our protocols under CED and higher stock based compensation expense of approximately $240,000.

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Consulting Expenses

Consulting expenses decreased $211,000 (51%) to $205,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to lower expenses related to Angel international sales consulting of approximately $130,000, ALD-401 clinical trials of approximately $80,000 and Angel product development of approximately $30,000 which were partially offset by increased consulting expense of approximately $40,000 related to employee compensation matters.

Professional Fees

Professional fees decreased $82,000 (21%) to $303,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to lower legal fees related to product licensing of approximately $60,000 and financing matters of approximately $20,000, along with approximately $40,000 in lower accounting fees related to financial reporting matters. These were primarily offset by higher legal fees of $40,000 related to commercial activities and $20,000 related to securities filing matters.

Research, Development, Trials and Studies

Research, development, trials and studies expenses decreased $287,000 (31%) to $636,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to lower ALD-401 clinical trial related costs of approximately $740,000 partially offset by increased CED development costs of approximately $500,000.

General and Administrative Expenses

General and administrative expenses increased $327,000 (23%) to $1,760,000 comparing the three months ended September 30, 2014 to the same period last year. The increase was primarily due to higher expenses of $200,000 primarily related to the planned expansion of our commercial organization, product rebranding activities, the implementation of our protocols under CED and higher investor services of $40,000. Additionally, the closing of our research and development facility resulted in a net increase of $155,000, due to a loss on abandonment of lease of $243,000 and a $132,000 loss on disposal of fixed assets offset by a reduction in other associated general and administrative expenses of $220,000. We also recognized lower commission of approximately $40,000 paid to independent representatives, due to the licensing of Angel to Arthrex in 2013, and lower dues and subscriptions of $30,000.

Other Income and Expense

Other expense, net decreased $77,000 (21%) to $284,000 comparing the three months ended September 30, 2014 to the same period last year. The decrease was primarily due to a $537,000 increase in other income as a result of the change in the fair value of derivative liabilities which was partially offset by an increase in interest paid of $300,000 primarily as a result of the Deerfield Facility Agreement and an increase in the non-cash amortization of deferred issuance costs of $220,000, less a decrease in interest expense associated with debt discount of approximately $60,000.

Comparison of Operating Results for the Nine-Month Period Ended September 30, 2014 and 2013

Revenue and Gross Profit

Revenues decreased $2,243,000 (28%) to $5,864,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease was primarily due to a one-time, zero margin non-recurring sale to Arthrex in 2013 of $1,294,000 for existing, placed Angel centrifuges made pursuant to the terms and provisions of the Arthrex Agreement. In addition, there were lower product sales of $1,773,000 and transition services revenue of $129,000 offset by an increase in royalty revenue as a result of increased sales by Arthrex of $718,000 and license fee revenue of $235,000. The additional decrease in product sales was primarily due to a reduction in the Angel average selling price under the terms of the Arthrex Agreement. Under the agreement, the contractual selling price of Angel products to Arthrex is significantly lower than our historical average selling price.

Gross profit decreased $1,447,000 (55%) to $1,179,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease was primarily due to the sale of Angel disposable products and centrifuges under the Arthrex Agreement. Under the agreement, the contractual selling price of Angel products to Arthrex is significantly lower than our historical average selling price. The decrease in Angel product gross profit was partially offset by an increase in gross profit from Angel related license fees and royalty revenue.

Overall gross margin decreased to 20% from 32% for the nine months ended September 30, 2014 as compared to the same period last year. The decrease was primarily due to the sale of Angel products under the Arthrex Agreement. Under the Arthrex Agreement, the contractual selling price of Angel products to Arthrex is significantly lower than our historical average selling price, therefore, the corresponding gross margin is also lower. This was partially offset by the gross margin realized from license fees and royalty revenue related to the Arthrex Agreement. Additionally, gross margin on product sales decreased to a negative margin of 2% from 28%.

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The following table discloses additional information regarding the gross margin related to our revenues:

	Nine Months Ended September 30,
	Aurix						Angel						Bright Cell						Total
	2014			2013			2014			2013			2014			2013			2014			2013
Product sales	$	379,000		$	362,000		$	4,096,000		$	7,176,000		$	-		$	4,000		$	4,475,000		$	7,542,000
License Fees		-			-			302,000			67,000			-			-			302,000			67,000
Royalties		-			-			902,000			182,000			185,000			187,000			1,087,000			369,000
Other revenue		-			-			-			129,000			-			-			-			129,000
Total revenues		379,000			362,000			5,300,000			7,554,000			185,000			191,000			5,864,000			8,107,000
Product cost of sales		271,000			205,000			4,281,000			5,234,000			-			-			4,552,000			5,439,000
License fees cost of sales		-			-			-			-			-			-			-			-
Royatly cost of sales		-			-			118,000			26,000			15,000			16,000			133,000			42,000
Other revenue cost of sales		-			-			-			-			-			-			-			-
Total cost of revenues		271,000			205,000			4,399,000			5,260,000			15,000			16,000			4,685,000			5,481,000
Gross profit/(Loss)		108,000			157,000			901,000			2,294,000			170,000			175,000			1,179,000			2,626,000
Gross margin		28	%		43	%		17	%		30	%		92	%		92	%		20	%		32	%

Aurix^™ product sales increased $17,000 while gross profit decreased $49,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease in gross profit was primarily due to cost of sales related to royalty expense amortization that began March 2013 and higher depreciation expense. The royalty expense is related to the release of the Worden security interest in Aurix^™ patents to the Company.

Angel product sales decreased $3,080,000 while gross profit decreased $2,127,000 comparing the nine months ended September 30, 2014 to the same period last year. Product sales have decreased as a result of the one-time, zero margin non-recurring sale to Arthrex in 2013 of $1,294,000 for existing, placed Angel centrifuges made pursuant to the terms and provisions of the Arthrex Agreement. In addition, sales and gross profit decreased due to a lower average selling price under the Arthrex Agreement. The Angel gross loss was primarily due to Angel machine warranty costs of $107,000 and logistical costs.

Operating Expenses

Operating expenses increased $3,248,000 (19%) to $20,149,000 comparing the nine months ended September 30, 2014 to the same period last year. A discussion of the various components of operating expenses follows below.

Salaries and Wages

Salaries and wages increased $209,000 (3%) to $6,220,000 comparing the nine months ended September 30, 2014 to the same period last year. The increase was primarily due to $399,000 in higher stock-based compensation expense and approximately $280,000 in higher salaries primarily due to the planned expansion of our commercial organization, product rebranding activities, the implementation of our protocols under CED and higher severance of $70,000. This was offset by a net decrease of $370,000, due to lower compensation of $740,000 and higher severance of $370,000, as a result of the closing of our research and development facility. There was also lower sales commission expense of approximately $180,000 primarily due to the licensing of Angel to Arthrex in 2013.

Consulting Expenses

Consulting expenses decreased $222,000 (14%) to $1,375,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease was primarily due to lower expenses related to the ALD-401 clinical trials of $330,000, international sales consulting of $180,000, quality assurance of $90,000, and Angel product development of $70,000, partially offset by increased consulting expense related to the management, promotion, and roll-out of CED protocols and CMS reimbursement matters of $150,000, the commercialization of Aurix^™ of $130,000, employment consultation of $70,000, and $40,000 related to the selection of business management software.

Professional Fees

Professional fees increased $108,000 (13%) to $935,000 comparing the nine months ended September 30, 2014 to the same period last year. The increase was primarily due to higher legal fees related to commercialization matters of $130,000, employment matters of $90,000, and securities filing matters of $40k partially offset by lower legal fees related to capital funding matters of $40,000 and product licensing of $60,000 along with lower accounting fees of $70,000 related to financial reporting matters.

Research, Development, Trials and Studies

Research, development, trials and studies expenses decreased $502,000 (16%) to $2,548,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease was primarily due to lower ALD-401 clinical trial related costs of approximately $1,420,000 and lower manufacturing and design fees related to the development of Aurix^TM and Angel products of approximately $190,000 which were partially offset by increased CED development costs of approximately $1,100,000.

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General and Administrative Expenses

General and administrative expenses decreased $1,028,000 (19%) to $4,388,000 comparing the nine months ended September 30, 2014 to the same period last year. The decrease was primarily due to a non-cash charge of $1,006,000 recognized in 2013 due to the effect of the amendment to the contingent consideration associated with the Aldagen acquisition, as well as, decreases of approximately $130,000 in franchise tax as a result of a refund, $150,000 in independent sales commissions due to the licensing of Angel to Arthrex in 2013, and $30,000 in placement fees. These were partially offset by higher expenses of $220,000 primarily related to the planned expansion of our commercial organization, product rebranding activities, the implementation of our protocols under CED and higher investor services expense of $80,000. Additionally, the closing of our research and development facility resulted in a loss on abandonment of $243,000, a $132,000 loss on disposal of fixed assets, and a reduction in other associated general and administrative expenses of approximately $290,000.

Impairment of Trademarks and IPR&D

As a result of our decision to discontinue further funding of the ALD-401 development program we recognized an impairment charge of approximately $3,659,000 to our in-process research and development asset and $1,025,000 to our trademarks in the second quarter of 2014.

Other Income and Expense

Other expense, net increased $1,694,000 (160%) to $2,755,000 comparing the nine months ended September 30, 2014 to the same period last year. The increase was primarily due to higher non-cash interest of $653,000 from the amortization of deferred issuance costs, $293,000 of non-cash interest from the amortization of debt discount and an increase in interest paid of approximately $80,000 primarily as a result of the Deerfield Facility Agreement and prepayment fees of $260,000 primarily related to the settlement of a term note. In addition, there was a $409,000 change in in the fair value of derivative liabilities from $250,000 in other income for the nine months ended September 30, 2013 to $159,000 in other expense for the nine months ended September 30, 2014.

Liquidity and Capital Resources

Since inception we have incurred, and continue to incur, significant losses from operations. For the nine months ended September 30, 2014, we have incurred a net loss of approximately $21.7 million and an accumulated deficit at September 30, 2014 of $113.0 million. We had working capital at September 30, 2014 of $18.8 million as compared to working capital of $1.0 million at September 30, 2013. At September 30, 2014, we had approximately $20.0 million of cash. Historically, we have financed our operations through a combination of sale of debt, equity and equity-linked securities, licensing, royalty, and product revenues.

Our primary source of cash was provided from the net proceeds of the Deerfield Facility Agreement, completed in two tranches in March and June 2014, respectively, and a private placement of our securities completed in March 2014. Specifically, on March 31, 2014, we executed various agreements with Deerfield for the issuance of a five-year senior secured convertible credit facility. Deerfield agreed to provide to us a convertible credit facility in an amount of up to $35 million which was disbursed as follows: (i) the initial draw of $9 million of the Facility Agreement was disbursed on March 31, 2014, and (ii) the remaining $26 million of the Facility Agreement on June 25, 2014. Also, on March 31, 2014, we raised $2 million in the private placement of 3,846,154 shares of common stock and five-year stock purchase warrants to purchase 2,884,615 shares of common stock to Anson Investments.

In addition, when it is available under its terms and provisions, we avail ourselves of the proceeds from the sales of our common stock under the Lincoln Park Purchase Agreement. Under this agreement, we have the right to sell to and Lincoln Park is obligated to purchase up to $15 million in shares of our common stock, subject to certain limitations, from time to time, over the 30-month period which commenced in July 2013. During the nine months ended September 30, 2014, we raised approximately $1.8 million under the terms of this agreement.

Our future capital requirements will depend on many factors, including, commercial product sales and royalties, which are primarily impacted by our licensing arrangement with Arthrex, the time and cost involved in obtaining approval of our CED protocols and CMS reimbursement efforts, our ability to service our debt obligations under the Deerfield Facility Agreement, the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; changes in competing technological and marketing developments; our ability to establish collaborative arrangements and to enter into licensing agreements and contractual arrangements with others; and any future change in our business strategy may require us to depend upon additional capital infusions to meet our short and long-term cash needs, among other factors. If we continue to incur negative cash flow from sources of operating activities for longer than expected, our ability to continue as a going concern could be in substantial doubt and if we are unable to obtain necessary financing, our operations may be curtailed and materially adversely affected. We will require additional funds through debt facilities, and/or public or private equity or debt financings to continue operations. We cannot provide any assurance that we will be able to obtain the capital we require on a timely basis or on terms acceptable to us. We believe that our current resources will be sufficient to fund our operations through the next 12 months. Our unaudited condensed consolidated financial statements have been prepared on a basis which assumes that we will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments that might result if the carrying amount of recorded assets and liabilities are not realized.

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Net cash provided by (used in) operating, investing, and financing activities for the nine months ended September 30, 2014 and 2013 were as follows:

	September 30,			September 30,
	2014			2013
	(in millions)
Cash flows (used in) operating activities	$	(13.6	)	$	(8.1	)
Cash flows (used in) provided by investing activities	$	(0.1	)	$	1.5
Cash flows provided by financing activities	$	30.4		$	8.6

Operating Activities

Cash used in operating activities for the nine months ended September 30, 2014 of $13.6 million primarily reflects our net loss of $21.7 million adjusted by a (i) $4.7 million increase for the impairment of trademarks and IPR&D, (ii) $1.4 million increase for amortization of deferred costs and debt discount, (iii) $0.9 million increase for stock-based compensation, (iv) $0.5 million increase for depreciation and amortization, (v) $0.2 million increase for change in derivative liabilities, (vi) $0.2 million increase for a loss on the abandonment of the Aldagen North Caroline lease and (vii) $0.1 million increase for the loss on the disposal of property and equipment.

Cash used in operating activities for the nine months ended September 30, 2013 of $8.1 million primarily reflects our net loss of $15.4 million adjusted by a (i) $4.9 million increase for changes in assets and liabilities, (ii) $1.0 million increase due to the non-cash effect of the amendment to the contingent consideration, (iii) $0.9 million increase for depreciation and amortization, (iv) $0.5 increase for stock-based compensation, (v) $0.3 million increase due to the non-cash effect of the issuance of warrants for the term loan modification, (vi) $0.3 million decrease for change in derivative liabilities, and (vii) $0.6 million gain on disposal of assets. The $4.9 million increase for changes in assets and liabilities, in part reflects a net $4.0 million increase in deferred revenue for pre-paid license fees and Angel products under the Arthrex Agreement.

Investing Activities

Cash used in investing activities in 2014 and 2013 primarily reflects the net activity of purchases and sales of Angel and Aurix™ centrifuge equipment. In addition, in 2014 we capitalized $0.1 million in business software implementation costs and received $0.1 million from the sale of assets resulting from the closing of our research and development facility related to the ALD-401 clinical trial.

Financing Activities

For the nine months ended September 30, 2014, we raised $3.7 million through the issuance of common stock and received $35.8 million from convertible debt facilities, both before placement agent fees and offering expenses. This was offset by $2.8 million in debt issuance costs, a $0.3 million cash repayment of a portion of our convertible debt, and a $5.9 million principal balance pay-out of our term loans.

For the nine months ended September 30, 2013, we raised $5.0 million through the issuance of common stock and received $4.5 million from a term loan, both before placement agent fees and offering expenses. This was offset by $0.3 million in debt issuance costs, a $0.3 million cash repayment of our convertible debt, and $0.3 million in principal payments towards our term loan.

Off Balance Sheet Arrangements

As of September 30, 2014 we had no off-balance sheet arrangements.

Contractual Obligations

Our primary office and warehouse facilities are located in Gaithersburg, Maryland, and comprise approximately 12,000 square feet. This facility falls under two leases with monthly rent, including our share of certain annual operating costs and taxes, at approximately $9,000 and $3,000 per month with the leases expiring August 2019 and September 2019, respectively. We also lease a 16,300 square foot facility located in Durham, NC. This facility falls under one lease with monthly rent, including our share of certain annual operating costs and taxes, at approximately $20,000 per month with the lease expiring December 31, 2018. The Company closed its R&D Facility in Durham, NC in May 2014 as a result of the Company’s decision to discontinue the ALD-401 program and a sublease to the facility was executed during the three month period ending September 30, 2014. The sublease expires December 31, 2018. A loss on abandonment of lease was recognized during the three month period ending September 30, 2014. (See Note 1 – Business and Presentation of the condensed consolidated financial statements for additional details.)

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The Company has a purchase commitment with a certain vendor to purchase $573,000 of Aurix^™ centrifuges in 2014.

Critical Accounting Policies

In preparing our condensed consolidated financial statements, we make estimates and assumptions that can have a significant impact on our financial position and results of operations. The application of our critical accounting policies requires an evaluation of a number of complex criteria and significant accounting judgments by us. In applying those policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions. We have identified the following policies as critical to our business operations and the understanding of our results of operations. For further information on our critical and other significant accounting policies, see our Annual Report on Form 10-K for the year ended December 31, 2013.

Basic and Diluted Loss Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and convertible preferred stock and convertible debt using the if-converted method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive. The total number of anti-dilutive shares, common stock options, warrants exercisable for common stock, convertible preferred stock and convertible debt, which have been excluded from the computation of diluted earnings (loss) per share, were 224,287,504 and 28,207,642 for the nine months ended September 30, 2014 and 2013, respectively.

Goodwill and Intangible Assets

Intangible assets were acquired as part of our acquisition of the Angel business and Aldagen, and consist of definite-lived and indefinite-lived intangible assets, including goodwill.

Definite-lived intangible assets

Our definite-lived intangible assets include trademarks, technology (including patents) and customer relationships, and are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any indicators were present, we test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i. e., the asset is not recoverable), we would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. We periodically reevaluate the useful lives for these intangible assets to determine whether events and circumstances warrant a revision in their remaining useful lives. During the second quarter of 2014 the Company performed an assessment of our trademarks and concluded that the fair value of the trademarks was impaired. (See Note 5 — Goodwill and Intangible Assets for additional information.)

Indefinite-lived intangible assets

We evaluate our indefinite-lived intangible asset, consisting solely of in-process research and development (“IPR&D”) acquired in the Aldagen acquisition, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, and at least on an annual basis on

October 1 of each year, by comparing the fair value of the asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we would recognize an impairment loss in the amount of that excess. During the second quarter of 2014 the Company performed an assessment of our IPR&D and concluded that the fair value of the IPR&D was impaired. (See Note 5 — Goodwill and Intangible Assets for additional information).

Goodwill

Goodwill represents the purchase price of acquisitions in excess of the amounts assigned to acquired tangible or intangible assets and assumed liabilities. Amounts allocated to goodwill are tax deductible in all relevant jurisdictions. As a result of our acquisition of Aldagen in February 2012, we recorded goodwill of approximately $422,000. Prior to the acquisition of Aldagen, we had goodwill of approximately $707,000 as a result of the acquisition of the Angel business in April 2010.

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We conduct an impairment test of goodwill on an annual basis as of October 1 of each year, and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce the Company’s fair value below its net equity value. During the second quarter of 2014 the Company performed an impairment test of our goodwill and concluded that there was no impairment (See Note 5 — Goodwill and Intangible Assets for additional details.)

Fair Value Measurements

The balance sheets include various financial instruments that are carried at fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than Level I prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

The Company accounts for derivative instruments under ASC 815, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted. ASC 815 requires that we recognize all derivatives on the balance sheet at fair value. Certain warrants issued December 2013 and prior met the definition of derivative liabilities. We determine the fair value of these derivative liabilities using the Black-Scholes option pricing model. When determining the fair value of our financial instruments using the Black-Scholes option pricing model, we are required to use various estimates and unobservable inputs, including, among other things, contractual terms of the instruments, expected volatility of our stock price, expected dividends, and the risk-free interest rate. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the instrument. Increases in expected term, anticipated volatility and expected dividends generally result in increases in fair value, while decreases in the unobservable inputs generally result in decreases in fair value.

In March and June 2014, we issued stock purchase warrants and convertible notes that contained embedded conversion options; the embedded conversion options are accounted for as a derivative liability. We determine the fair value of these derivative liabilities using the binomial lattice model. When determining the fair value of our financial instruments using binomial lattice models, we also are required to use various estimates and unobservable inputs, including in addition to those listed above, the probability of certain events.

Changes in fair value are classified in “other income (expense)” in the consolidated statement of operations.

Recent Accounting Pronouncements

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The Financial Accounting Standards Board (FASB or Board) and the International Accounting Standards Board (IASB) (collectively, the Boards) jointly issued a long-awaited standard that will supersede virtually all of the revenue recognition guidance in U.S. GAAP. The FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB has set an effective date of fiscal years beginning after December 15, 2016. Early adoption is not permitted for public entities. FASB ASU No. 2014-09 will amend FASB Accounting Standards Codification™ (ASC) by creating Topic 606, Revenue from Contracts with Customers and Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. This document reorganizes the guidance contained in FASB ASC 606 (revenue recognition standard), to follow the five step revenue recognition model along with other guidance impacted by this standard. The potential effects of the adoption of ASU 2014-09, Topic 606 on our results of operations and the Company’s Condensed Consolidated Financials have not been determined at this time.

ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Currently, there is no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. FASB issued ASU 2014-15 to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact, if any, that the adoption will have on its financial statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Under the scaled disclosure requirements applicable to smaller reporting companies (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

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Report. Based on that evaluation, the Certifying Officers concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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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

Except for certain updates set forth below, there are no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 31, 2014 for the year ended December 31, 2013 and the Company’s subsequent filings with the SEC.

Our Efforts to Secure Medicare Reimbursement May Not be Successful

In October 2014, we relaunched our AutoloGel chronic wound care system under the Aurix^™ brand, as a part of our marketing plan for the commercialization of Aurix^™ in the U.S. chronic wound care market. In our view, the most significant growth driver for this system is the 2012 National Coverage Determination (NCD) from the Centers for Medicare and Medicaid Services (CMS), which reversed a 20-year old non-coverage decision for autologous blood products used in wound care. Under the NCD, CMS approved coverage for autologous platelet rich plasma (“PRP”) in patients with diabetic, pressure and/or venous wounds via its Coverage with Evidence Development (“CED”) program. CED is a process through which CMS provides reimbursement coverage for items and services while generating additional clinical data to demonstrate their impact on health outcomes. In March 2013, CMS approved four data collection protocols that we submitted. In June of the same year, CMS established HCPCS Code G0460 (Autologous PRP for ulcers) for payment effective July 1, 2013 for the treatment of chronic non-healing diabetic, venous and/or pressure wounds only in the context of an approved study. This determination permitted data collection with reimbursement. On December 2, 2013, CMS designated that effective January 1, 2014 this code be paid at a national average rate of $411 per treatment encounter under the Hospital Outpatient Prospective Payment System.

In October 2014, CMS denied a fifth data collection protocol. We intend to pursue all available avenues to have this denial determination reversed. The Aurix^™ system is marketed to healthcare providers. Some of these providers, in turn, seek reimbursement from third-party payers such as Medicare, Medicaid, and other private insurers. Under such healthcare systems, reimbursement is often a determining factor in predicting a product’s success, with some physicians and patients strongly favoring only those products for which they will be reimbursed. In light of the foregoing and other related factors, we provide no assurance that we will ultimately be successful with our reimbursement strategy, including, without limitation, obtain additional necessary CMS or other regulatory approvals or our ability to reverse the most recent protocol denial determination by CMS, and that CMS will determine that the evidence collected under CED is sufficient to provide unrestricted Medicare coverage for the Aurix^™ system and autologous PRP, which, in turn, could have material adverse effect on our financial state and business operations. If it is later determined that a new randomized, controlled trial is necessary, it could cost several millions of dollars and take multiple years to complete. We would almost certainly need to obtain additional, outside financing to fund such a trial. In any case, we may never be successful in securing unrestricted Medicare coverage for our products.

Our Sales and Marketing Strategy for the AutoloGel System May Not Succeed

In October 2014, we relaunched our AutoloGel chronic wound care system under the Aurix^™ brand, as a part of our marketing plan for the commercialization of Aurix^™ in the U.S. chronic wound care market. Since January 2009, the sales and marketing strategy for this system was focused on intensive clinician to clinician interaction with both prospective and existing customers, and the scientific explanation of the system’s mechanism of action. However, the primary goal of this effort was to help secure the additional data necessary to obtain Medicare coverage. Following the 2012 determination by the CMS which, in essence, permitted coverage of Aurix^™ under its CED program, we have been positioning the Company to expand its sales efforts to address the Medicare beneficiary population. This will require selling to wound care clinics, individual physician practices, and other venues that have traditionally not been available to us due to the previously standing non-coverage determination by CMS. There is no assurance that the Company’s efforts in this new sales channel will be successful or that it will yield sufficient sales and profits to realize the Company’s goals and conform to its plans. If and to the extent CMS makes significant changes to its previously issued approval determinations, we are unable to reverse the October 2014 protocol denial determination, or the currently approved protocols are not enrolled in a timely manner, our sales and marketing strategy may be adversely affected. In addition, from time to time, we engage in discussions with larger companies regarding potential strategic partnerships involving the broad commercialization of Aurix^™. The resources and expertise of such a partner would greatly facilitate the capture of market share within the wound car market, but would require that the economic benefits of such a broad penetration would be shared with said partner. There is no assurance that we will be successful in securing a partner. Furthermore, there is no assurance that if a partner is secured, that the partnership will attain the market penetration contemplated or that the profits ultimately realized by Nuo Therapeutics will be sufficient to allow us to execute our business strategy.

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We May Use Third-party Collaborators and Service Providers to Help us Support, Develop or Commercialize Our Product Candidates, and Our Ability to Commercialize Such Candidates May be Impaired or Delayed if such Collaborations or Engagements are Unsuccessful

We do presently and may in the future selectively pursue strategic collaborations or engagements for, among other purposes, development, data collection, analysis, and/or commercialization of our product candidates, domestically or otherwise. There can be no assurance as to our ability to utilize the data from such engagements to their potential. Nor can there be any assurance, in general, that we will be able to identify future suitable collaborators or negotiate collaboration agreements on terms that are acceptable to us or at all. In any current or future third-party collaborations, we are and would be dependent upon the success of the collaborators in performing their responsibilities and their continued cooperation and engagement. For a variety of reasons outside of our control, our collaborators or third-party providers may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to performing their responsibilities under our agreements with them. Our collaborators may choose to pursue alternative technologies in preference to those being developed in collaboration with us. The development and commercialization of our product candidates will be delayed if collaborators fail to conduct their responsibilities in a timely manner or in accordance with applicable regulatory requirements or if they breach or terminate their collaboration agreements with us. Disputes with our collaborators could also result in product development delays, decreased revenues and litigation expenses.

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

The Company did not repurchase any of its equity securities during the three months ended September 30, 2014. All information regarding the unregistered sales of securities during the three months ended September 30, 2014 has been previously disclosed in Current Reports on Form 8-K or the Company’s most recently filed Annual Report on Form 10-K for the fiscal period ended December 31, 2013 and the Company’s subsequent filings with the SEC.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Second Amendment to the Exchange and Purchase Agreement

On November 11, 2014, the Company (together with its wholly-owned subsidiary, Aldagen, Inc.) and Aldagen Holdings, LLC, a North Carolina limited liability company (“Aldagen Holdings”), executed Second Amendment (the “Second Amendment”) to the February 8, 2012 Exchange and Purchase Agreement, as amended to date the “Exchange Agreement”). All disinterested members of the Board reviewed and approved the terms and provisions of the Second Amendment. Pursuant to the terms of the Second Amendment, the terms of the post-closing consideration originally contemplated under the Exchange Agreement and structured around the achievement of certain milestone events relating to the Company’s ALD-401 Phase 2 clinical trials were amended such that, in full satisfaction of all the post-closing issuance obligations of the Company to Aldagen Holdings, the Company agreed to a one-time issuance of 1,270,000 shares of the Company common stock (the “Post-Closing Amended Shares”). In addition, the parties to the Second Amendment agreed to terminate the originally contemplated registration requirements with respect to any post-closing share issuance. The Second Amendment provides Aldagen Holdings with “piggy-back” registration rights with respect to the Post-Closing Amended Shares for the duration of twelve months following the date of the Second Amendment such that the Company will use its reasonable best efforts to include the Post-Closing Amended Shares in its registration statements to register the resale of such shares by Aldagen Holdings. The Company issued the Post-Closing Amended Shares in reliance upon an exemption from registration contained in Section 4(2) and Rule 506 under the Securities Act; such shares may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The foregoing description of the terms of the Second Amendment does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of such document, which is filed as exhibit to this filing and is incorporated herein by reference. The representations, warranties and covenants contained in such document were made only for purposes of such agreement and as of specific date, were solely for the benefit of the parties to such agreement, and (i) should not be treated as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in the agreement by disclosures that were made to the other party in connection with the negotiation of the agreement; (iii) may apply contract standards of "materiality" that are different from "materiality" under the applicable securities laws; and (iv) were made only as of the date of such agreement or such other date or dates as may be specified in the agreement.

Submission of Matters to a Vote of Security Holders at the 2014 Annual Meeting

On November 12, 2014, the Company held its 2014 Annual Meeting of Shareholders at its executive offices in Gaithersburg, Maryland. Set forth below are the final voting results for each of the proposals submitted to a vote of the Company’s shareholders at the Annual Meeting:

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Proposal 1 (Election of Directors) - The shareholders elected Richard S. Kent, Lyle Hohnke, Martin P. Rosendale, David E. Jorden, Mark T. McLoughlin, C. Eric Winzer, Stephen N. Keith and Joseph Del Guercio as directors of the Company to hold office until the next annual meeting of shareholders and until their successors are duly elected. A summary of votes cast follows below (with 41,123,344 broker non-votes on this Proposal)

Nominee	Votes for	Votes Withheld
Mark T. McLoughlin	60,725,239	3,540,376
C. Eric Winzer	60,735,052	3,530,563
Stephen N. Keith	60,733,239	3,532,376
Joseph Del Guercio	60,613,552	3,653,063
Richard S. Kent	60,654,667	3,610,948
Lyle Hohnke	61,483,050	2,782,565
Martin P. Rosendale	61,325,588	2,940,027
David E. Jorden	61,627,674	2,637,941

Proposal 2 (Ratification of Auditors) – The shareholders voted to ratify the appointment of Stegman & Company as independent registered public accounting firm of the Company for the fiscal year ending December 31, 2014 with 102,767,867 shares voting for and 1,652,877 shares voting against (968,215 shares abstaining).

Proposal 3 (Name Change Amendment) – The shareholders voted to approve an amendment to the Company’s Certificate of Incorporation to change the name of the Company to “Nuo Therapeutics, Inc.” with 102,419,182 shares voting for and 2,218,588 shares voting against (751,189 shares abstaining).

Proposal 4 (Amendments to the 2013 Equity Incentive Plan) – The shareholders voted to approve amendments to the 2013 Equity Incentive Plan with 54,685,879 shares voting for and 9,031,190 shares voting against (548,546 shares abstaining).

Indemnification Agreements

On November 11, 2014, the Company entered into indemnification agreements with each of the current directors and executive officers of the Company. The agreements are intended to supplement indemnification provisions already contained in the Company’s Bylaws and contain terms and provisions that are customary for the agreements of this nature. This description of the indemnification agreements is not complete and is qualified in its entirety by reference to the full text of the form of indemnification agreement, which is filed as an exhibit to this filing.

Item 6. Exhibits

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

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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.

	NUO THERAPEUTICS, INC.
Date: November 13, 2014	By:	/s/ Martin P. Rosendale
		Martin P. Rosendale, CEO
		(Principal Executive Officer)
Date: November 13, 2014	By:	/s/ Steven A. Shallcross
		Steven A. Shallcross, CFO
		(Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Number	Exhibit Table
2.1	First Amended Plan of Reorganization, as amended (previously filed on June 28, 2002, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
2.2	Amended and Restated Official Exhibits to the First Amended Plan of Reorganization of Cytomedix, Inc., as amended (previously filed on May 10, 2004, as exhibit to Form 10-QSB for the quarter ended March 31, 2004 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 exhibit to the Current Report on Form 8-K and incorporated by reference herein).
2.4	Exchange and Purchase Agreement by and among, Cytomedix, Inc., Aldagen, Inc., a Delaware corporation and Aldagen Holdings, LLC, dated February 8, 2012 (previously filed on February 9, 2012, as exhibit to Current Report on Form 8-K 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 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 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 and incorporated by reference herein).
3(i)(3)	Certificate of Amendment to the Certificate of Incorporation (previously filed on May 21, 2012 as exhibit to the Current Report on Form 8-K and is incorporated by reference herein).
3(i)(4)	Certificate of Amendment to the Certificate of Incorporation (previously filed on June 6, 2013 as an exhibit to the Current Report on Form 8-K and is incorporated by reference herein).
3(i)(5)	Certificate of Amendment to the Certificate of Incorporation, as amended (previously filed on June 9, 2014 as an exhibit to the Current Report on Form 8-K and is incorporated by reference herein).
3(i)(6)	Certificate of Amendment to the Certificate of Incorporation.
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 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 and incorporated by reference herein).
4.2	Form of Warrant (previously filed on October 8, 2010 as exhibit to the Current Report on Form 8-K and incorporated by reference herein).
4.3	Form of Warrant (previously filed on May 16, 2011 as exhibit to the Quarterly Report on Form 10-Q and incorporated by reference herein).
4.4	Form Warrant (previously filed on February 9, 2012, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
4.5	Form of Investor Warrant (previously filed on February 20, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
4.6	Form of Warrant (previously filed on February 20, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
4.7	Form 10% Subordinated Convertible Note (previously filed on November 27, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
4.8	Form Common Stock Warrant (previously filed on November 27, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
4.9	Warrant dated March 31, 2014 (previously filed on April 7, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
10.1	Distributor and License Agreement with Arthrex, Inc. dated August 7, 2013 (previously filed on November 11, 2013, as exhibit to Form 10-Q for quarter ended September 30, 2013 and incorporated by reference herein).

39

10.2	Consent and First Amendment to Security Agreement dated August 7, 2013 (previously filed on November 11, 2013, as exhibit to Form 10-Q for quarter ended September 30, 2013 and incorporated by reference herein).
10.3	Form Subscription Agreement (previously filed on November 27, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
10.4	Form Registration Rights Agreement (previously filed on November 27, 2013, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
10.5	First Amendment No. 1 to Subscription Agreement dated December 3, 2013 (previously filed on December 3, 2013 as exhibit to the Current Report on Form 8-K and incorporated by reference herein).
10.6	Facility Agreement, dated March 31, 2014 (previously filed on March 31, 2014, as exhibit to Annual Report on Form 10-K and incorporated by reference herein).
10.7	Guaranty and Security Agreement, dated March 31, 2014 (previously filed on March 31, 2014, as exhibit to Annual Report on Form 10-K and incorporated by reference herein).
10.8	Registration Rights Agreement dated March 31, 2014 (previously filed on March 31, 2014, as exhibit to Annual Report on Form 10-K and incorporated by reference herein).
10.9	Subscription Agreement dated March 31, 2014 (previously filed on April 7, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
10.10	Registration Rights Agreement dated March 31, 2014 (previously filed on April 7, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).
10.11	Martin P. Rosendale Employment Agreement dated May 14, 2014 (previously filed on May 15, 2014, as exhibit to Annual Report on Form 10-Q and incorporated by reference herein).*
10.12	Employment Agreement for S. Shallcross dated as of May 30, 2014 (previously filed on May 30, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).*
10.13	Employment Agreement for D. Tozer dated as of May 30, 2014 (previously filed on May 30, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).*
10.14	Employment Agreement for P. Clausen dated as of as of May 30, 2014 (previously filed on May 30, 2014, as exhibit to Current Report on Form 8-K and incorporated by reference herein).*
10.15	Amendment to Employment Agreement – M. Rosendale (previously filed on July 18, 2014, as exhibit to Current Report on Form 8-K/A and incorporated by reference herein).*
10.16	Amendment to Employment Agreement – S. Shallcross (previously filed on July 18, 2014, as exhibit to Current Report on Form 8-K/A and incorporated by reference herein).*
10.17	Amendment to Employment Agreement – D. Tozer (previously filed on July 18, 2014, as exhibit to Current Report on Form 8-K/A and incorporated by reference herein).*
10.18	Amendment to Employment Agreement – P. Clausen (previously filed on July 18, 2014, as exhibit to Current Report on Form 8-K/A and incorporated by reference herein).*
10.19	Form Indemnification Agreement.
10.20	Second Amendment to the Exchange and Purchase Agreement by and among, Cytomedix, Inc., Aldagen, Inc., and Aldagen Holdings, LLC, dated February 8, 2012.
21	List of Subsidiaries (previously filed on March 31, 2014, as exhibit to Annual Report on Form 10-K and incorporated by reference herein).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
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.

* Indicates a management contract or compensatory plan or arrangement.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101. CAL	XBRL Taxonomy Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

40

EX-3.I6

Exhibit 3(i)(6)

STATE OF DELAWARE 

CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF CYTOMEDIX, INC.

Cytomedix, Inc., a Delaware corporation (the “Corporation”), for the purpose of amending the Certificate of Incorporation of the Corporation, as amended to date, in accordance with the General Corporation Law of Delaware, does hereby make and execute this Certificate of Amendment to the Certificate of Incorporation and does hereby certify that:

1. Article 1 of the Certificate of Incorporation is amended to read in its entirety as follows:

1. The name of the Corporation is Nuo Therapeutics, Inc.

2. The amendment herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

3. The amendment is effective on the date of filing of this Certificate with the Secretary of State of the State of Delaware.

IN WITNESS WHEREOF, the undersigned has signed this Certificate of Amendment as of this November 12, 2014.

CYTOMEDIX, INC.
By:	/s/ Steven A. Shallcross
Name: Steven A. Shallcross
Title: Executive VP, Chief Financial Officer and Secretary

EX-10.19

Exhibit 10.19

Indemnification Agreement

This Indemnification Agreement (this “Agreement”) is made as of , 2014, by and between Cytomedix, Inc., a Delaware corporation (the “Company”), and (“Indemnitee”).

RECITALS

WHEREAS, in the current market and legal environment, qualified persons have become more reluctant to serve corporations as directors unless they are provided with adequate protection through insurance or adequate indemnification against significant risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, directors and other persons in service to business enterprises are being increasingly subjected to expensive and time consuming litigation;

WHEREAS, the uncertainties relating to liability insurance and to indemnification have increased the difficulty of retaining existing and attracting future qualified persons to serve on the board and to serve the company in other capacities;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to retain current and attract future qualified individuals to serve on the Board, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the company and its subsidiaries from certain liabilities, even if, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, the Company desires and intends hereby to provide indemnification and advancement of expenses against any and all liabilities asserted against or incurred by the Indemnitee as allowed by the General Corporation Law of the State of Delaware (including but not limited to section 145 of said law), and further desires and intends that the terms of indemnification and advancement of costs be reduced to written agreement;

WHEREAS, this agreement is a supplement to and in furtherance of the indemnification provisions of the Company’s Certificate of Incorporation, as amended to date, and any resolutions adopted pursuant thereto, and except as specifically provided herein shall not be a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee.

NOW THEREFORE, in consideration of the premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Indemnitee do hereby covenant and agree as follows:

1. Indemnification.

(a) Third-Party Proceedings. To the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding (other than a Proceeding by or in the right of the Company to procure a judgment in the Company’s favor), against all Expenses, judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

(b) Proceedings By or in the Right of the Company. To the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is threatened to be made a party to or a participant (as a witness or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in the Company’s favor, against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, except that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudicated by court order or judgment to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

(c) Success on the Merits. To the fullest extent permitted by applicable law and to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 1(a) or Section 1(b) or the defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. Without limiting the generality of the foregoing, if Indemnitee is successful on the merits or otherwise as to one or more but less than all claims, issues or matters in a Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such successfully resolved claims, issues or matters to the fullest extent permitted by applicable law. If any Proceeding is disposed of on the merits or otherwise (including a disposition without prejudice), without (1) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and (v) with respect to any criminal Proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

(d) Witness Expenses. To the fullest extent permitted by applicable law and to the extent that Indemnitee is a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding.

2. Indemnification Procedure.

(a) Advancement of Expenses. To the fullest extent permitted by applicable law, the Company shall advance all Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding within thirty (30) days after receipt by the Company of a statement requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Such advances shall be unsecured and interest free and shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Indemnitee shall be entitled to continue to receive advancement of Expenses pursuant to this Section 2(a) unless and until the matter of Indemnitee’s entitlement to indemnification hereunder has been finally adjudicated by court order or judgment from which no further right of appeal exists. Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it ultimately is determined that Indemnitee is not entitled to be indemnified by the Company under the other provisions of this Agreement. Indemnitee shall qualify for advances upon the execution and delivery of this Agreement, which shall constitute the requisite undertaking with respect to repayment of advances made hereunder and no other form of undertaking shall be required to qualify for advances made hereunder other than the execution of this Agreement. Notwithstanding any of the foregoing or anything else in this Agreement or any other document to the contrary, the Indemnittee understands and agrees that the advancement of expenses contemplated hereunder shall be conditioned upon and subject to the Indemnitee’s full and faithful cooperation with the Company and any insurer in the defense of any matter and, further that any assistance of a party plaintiff or proposed party plaintiff or any action by an Indemnittee that threatens (or has such effect of threatening) coverage for any insured under any director & officer insurance liability coverage then in place and to which the Company is a party, will vitiate the advancement of expenses obligation contemplated hereunder ab initio.

(b) Notice and Cooperation by Indemnitee. Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter for which indemnification will or could be sought under this Agreement. Such notice to the Company shall include a description of the nature of, and facts underlying, the Proceeding, shall be directed to the Chief Executive Officer of the Company and shall be given in accordance with the provisions of Section 13(d) below. In addition, Indemnitee shall give the Company such additional information and cooperation as the Company may reasonably request. Indemnitee’s failure to so notify, provide information and otherwise cooperate with the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement, except to the extent that the Company is adversely affected by such failure.

(c) Determination of Entitlement. Notwithstanding any other provision in this Agreement, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of a Proceeding. Subject to the foregoing, promptly after receipt of a statement requesting payment with respect to the indemnification rights set forth in Section 1, to the extent required by applicable law, the Company shall take the steps necessary to authorize such payment in the manner set forth in Section 145 of the General Corporation Law of Delaware. The Company shall pay any claims made under this Agreement, under any statute, or under any provision of the Company’s Certificate of Incorporation or Bylaws providing for indemnification or advancement of Expenses, within thirty (30) days after a written request for payment thereof has first been received by the Company, and if such claim is not paid in full within such thirty (30) day-period, Indemnitee may, but need not, at any time thereafter bring an action against the Company in the Delaware Court of Chancery to recover the unpaid amount of the claim and, subject to Section 12, Indemnitee shall also be entitled to be paid for all Expenses actually and reasonably incurred by Indemnitee in connection with bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for advancement of Expenses under Section 2(a)) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement and the Company shall have the burden of proof to overcome that presumption with clear and convincing evidence to the contrary. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, in the case of a criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful. In addition, it is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for the court to decide, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct. If any requested determination with respect to entitlement to indemnification hereunder has not been made within ninety (90) days after the final disposition of the Proceeding, the requisite determination that Indemnitee’s entitlement to indemnification shall be deemed to have been made.

(d) Payment Directions. To the extent payments are required to be made hereunder, the Company shall, in accordance with Indemnitee’s request (but without duplication), (i) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses.

(e) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 2(b) hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(f) Defense of Claim and Selection of Counsel. In the event the Company shall be obligated under Section 2(a) hereof to advance Expenses with respect to any Proceeding, the Company, if appropriate, shall be entitled to assume the defense of such Proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee shall have the right to employ counsel in any such Proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not, in fact, have employed counsel to assume the defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if there exists a potential, but not an actual conflict of interest between the Company and Indemnitee, the actual and reasonable legal fees and expenses incurred by Indemnitee for separate counsel retained by Indemnitee to monitor the Proceeding (so that such counsel may assume Indemnitee’s defense if the conflict of interest between the Company and Indemnitee becomes an actual conflict of interest) shall be deemed to be Expenses that are subject to indemnification hereunder. The existence of an actual or potential conflict of interest, and whether such conflict may be waived, shall be determined pursuant to the rules of attorney professional conduct and applicable law. The Company shall not be required to obtain the consent of Indemnitee for the settlement of any Proceeding the Company has undertaken to defend if the Company assumes full and sole responsibility for each such settlement; provided, however, that the Company shall be required to obtain Indemnitee’s prior written approval, which shall not be unreasonably withheld, before entering into any settlement which (1) does not grant Indemnitee a complete release of liability, (2) would impose any penalty or limitation on Indemnitee, or (3) would admit any liability or misconduct by Indemnitee.

3. Additional Indemnification Rights.

(a) Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws, as may be then in effect, or by statute. In the event of any change, after the date of this Agreement, in any applicable law, statute, or rule which expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, such changes shall be deemed to be within the purview of Indemnitee’s rights and the Company’s obligations under this Agreement. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement shall have no effect on this Agreement or the parties’ rights and obligations hereunder.

(b) Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested members of the Company’s Board of Directors, the General Corporation Law of Delaware, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding such office.

(c) Interest on Unpaid Amounts. If any payment to be made by the Company to Indemnitee hereunder is delayed by more than ninety (90) days from the date the duly prepared request for such payment is received by the Company, interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies or is obligated to indemnify for the period commencing with the date on which Indemnitee actually incurs such Expense or pays such judgment, fine or amount in settlement and ending with the date on which such payment is made to Indemnitee by the Company.

(d) Information Sharing. If Indemnitee is the subject of or is implicated in any way during an investigation, whether formal or informal, and subject to the execution of a mutually acceptable joint defense and confidentiality agreement, the Company shall share with Indemnitee any information the Company has furnished to any third parties concerning the investigation provided that, at the time such information is so furnished to such third party, Indemnitee continues to serve in one or more capacities giving rise to the Company’s indemnification obligations under Section 1.

(e) Third-Party Indemnification. The Company hereby acknowledges that Indemnitee has or may from time to time obtain certain rights to indemnification, advancement of expenses and/or insurance provided by one or more third parties (collectively, the “Third-Party Indemnitors”). The Company hereby agrees that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third-Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), and that the Company will not assert that the Indemnitee must seek expense advancement or reimbursement, or indemnification, from any Third-Party Indemnitor before the Company must perform its expense advancement and reimbursement, and indemnification obligations, under this Agreement. No advancement or payment by the Third-Party Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing. The Third-Party Indemnitors shall be subrogated to the extent of such advancement or payment to all of the rights of recovery which Indemnitee would have had against the Company if the Third-Party Indemnitors had not advanced or paid any amount to or on behalf of Indemnitee. If for any reason a court of competent jurisdiction determines that the Third-Party Indemnitors are not entitled to the subrogation rights described in the preceding sentence, the Third-Party Indemnitors shall have a right of contribution by the Company to the Third-Party Indemnitors with respect to any advance or payment by the Third-Party Indemnitors to or on behalf of the Indemnitee.

4. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines or amounts paid in settlement, actually and reasonably incurred in connection with a Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses, judgments, fines and amounts paid in settlement to which Indemnitee is entitled.

5. Director and Officer Liability Insurance Tail Coverage. In the event of a Change of Control or the Company’s becoming insolvent (including being placed into receivership or entering the federal bankruptcy process and the like), the Company shall maintain in force any and all insurance policies then maintained by the Company in providing insurance (directors’ and officers’ liability, fiduciary, employment practices or otherwise) in respect of Indemnitee, for a period of six years thereafter.

6. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

7. Exclusions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Proceedings initiated or brought voluntarily by Indemnitee or Proceedings in which Indemnity voluntarily assists one or more Plaintiffs in the prosecution of their claims against the Company, and not by way of defense, except with respect to Proceedings brought to establish, enforce or interpret a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the General Corporation Law of Delaware, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board of Directors finds it to be appropriate; provided, however, that the exclusion set forth in the first clause of this subsection shall not be deemed to apply to any investigation initiated or brought by Indemnitee to the extent reasonably necessary or advisable in support of Indemnitee’s defense of a Proceeding to which Indemnitee was, is or is threatened to be made, a party;

(b) Lack of Good Faith. To indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee to establish, enforce or interpret a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the General Corporation Law of Delaware, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous;

(c) Insured Claims. To indemnify Indemnitee for Expenses to the extent such Expenses have been paid directly to Indemnitee by an insurance carrier under an insurance policy maintained by the Company; or

(d) Certain Exchange Act Claims. To indemnify Indemnitee in connection with any claim made against Indemnitee for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or any similar successor statute or any similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); provided, however, that to the fullest extent permitted by applicable law and to the extent Indemnitee is successful on the merits or otherwise with respect to any such Proceeding, the Expenses actually and reasonably incurred by Indemnitee in connection with any such Proceeding shall be deemed to be Expenses that are subject to indemnification hereunder.

8. Contribution Claims.

(a) If the indemnification provided in Section 1 is unavailable in whole or in part and may not be paid to Indemnitee for any reason other than those set forth in Section 7, then in respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permitted by applicable law, the Company, in lieu of indemnifying Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, fines or amounts paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

(b) With respect to a Proceeding brought against directors, officers, employees or agents of the Company (other than Indemnitee), to the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee from any claims for contribution that may be brought by any such directors, officers, employees or agents of the Company (other than Indemnitee) who may be jointly liable with Indemnitee, to the same extent Indemnitee would have been entitled to such indemnification under this Agreement if such Proceeding had been brought against Indemnitee.

9. No Imputation. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or the Company itself shall not be imputed to Indemnitee for purposes of determining any rights under this Agreement.

10. Determination of Good Faith. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or the Board of Directors of the Enterprise or any counsel selected by any committee of the Board of Directors of the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, investment banker, compensation consultant, or other expert selected with reasonable care by the Enterprise or the Board of Directors of the Enterprise or any committee thereof. The provisions of this Section 10 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct. Whether or not the foregoing provisions of this Section are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company.

11. Defined Terms and Phrases. For purposes of this Agreement, the following terms shall have the following meanings:

(a) “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated under the Exchange Act as in effect on the date hereof.

(b) “Change of Control” shall be deemed to occur upon the earliest of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors and such acquisition would not constitute a Change of Control under part (iii) of this definition.

(ii) Change in Board of Directors. Individuals who, as of the date of this Agreement, constitute the Company’s Board of Directors (the “Board”), and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who were directors on the date of this Agreement (collectively, the “Continuing Directors”), cease for any reason to constitute at least a majority of the members of the Board.

(iii) Corporate Transaction. The effective date of a reorganization, merger, or consolidation of the Company (a “Business Combination”), in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors and with the power to elect at least a majority of the Board or other governing body of the surviving entity; (2) no Person (excluding any corporation resulting from such Business Combination) is the Beneficial Owner, directly or indirectly, of 15% or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of such corporation except to the extent that such ownership existed prior to the Business Combination; and (3) at least a majority of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination.

(iv) Liquidation. The approval by the Company’s stockholders of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than factoring the Company’s current receivables or escrows due (or, if such approval is not required, the decision by the Board to proceed with such a liquidation, sale or disposition in one transaction or a series of related transactions).

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item or any similar schedule or form) promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirement.

(c) “Company” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that if Indemnitee is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of any other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

(d) “Enterprise” means the Company and any other enterprise that Indemnitee was or is serving at the request of the Company as a director, officer, partner (general, limited or otherwise), member (managing or otherwise), trustee, fiduciary, employee or agent.

(e) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(f) “Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including all attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payment under this Agreement (including taxes that may be imposed upon the actual or deemed receipt of payments under this Agreement with respect to the imposition of federal, state, local or foreign taxes), fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in a Proceeding. Expenses also shall include any of the forgoing expenses incurred in connection with any appeal resulting from any Proceeding, including the principal, premium, security for, and other costs relating to any costs bond, supersedes bond, or other appeal bond or its equivalent. Expenses also shall include any interest, assessment or other charges imposed thereon and costs incurred in preparing statements in support of payment requests hereunder. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(g) “Person” shall have the meaning as set forth in Section 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any direct or indirect majority owned subsidiaries of the Company; (iii) any employee benefit plan of the Company or any direct or indirect majority owned subsidiaries of the Company or of any corporation owned, directly or indirectly, by the Company’s stockholders in substantially the same proportions as their ownership of stock of the Company (an “Employee Benefit Plan”); and (iv) any trustee or other fiduciary holding securities under an Employee Benefit Plan.

(h) “Proceeding” shall include any actual, threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by a third party, a government agency, the Company or its Board of Directors or a committee thereof, whether in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, legislative or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is, will or might be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, by reason of any action (or failure to act) taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as a director, officer, employee or agent of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, partner (general, limited or otherwise), member (managing or otherwise), trustee, fiduciary, employee or agent of any other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement.

(i) In addition, references to “other enterprise” shall include another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by Indemnitee with respect to an employee benefit plan, its participants, or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement; references to “include” or “including” shall mean include or including, without limitation; and references to Sections, paragraphs or clauses are to Sections, paragraphs or clauses in this Agreement unless otherwise specified.

12. Attorneys’ Fees. In the event that any Proceeding is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding, unless a court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such Proceeding were not made in good faith or were frivolous. In the event of a Proceeding instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless a court of competent jurisdiction determines that each of Indemnitee’s material defenses to such action were made in bad faith or were frivolous.

13. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Binding Effect. Without limiting any of the rights of Indemnitee described in Section 3(b), this Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions and supersedes any and all previous agreements between them covering the subject matter herein. The indemnification provided under this Agreement applies with respect to events occurring before or after the effective date of this Agreement, and shall continue to apply even after Indemnitee has ceased to serve the Company in any and all indemnified capacities.

(c) Amendments and Waivers. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(d) Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by fax or 48 hours after being sent by nationally-recognized courier or deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or fax number as set forth below or as subsequently modified by written notice.

(e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(f) Successors and Assigns. This Agreement shall be binding upon the Company and its successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, and inure to the benefit of Indemnitee and Indemnitee’s heirs, executors, administrators, legal representatives and assigns. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(g) No Employment Rights. Nothing contained in this Agreement is intended to create in Indemnitee any right to continued employment.

(h) Company Position. The Company shall be precluded from asserting, in any Proceeding brought for purposes of establishing, enforcing or interpreting any right to indemnification under this Agreement, that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary.

(i) Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce such rights.

[Signature Page Follows]

The parties have executed this Agreement as of the date first set forth above.

CYTOMEDIX, INC.

By:

(Signature)

Name:

Title:

AGREED TO AND ACCEPTED:

INDEMNITEE:

(PRINT NAME)

(Signature)

EX-10.20

Exhibit 10.20

SECOND AMENDMENT TO EXCHANGE AND PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO EXCHANGE AND PURCHASE AGREEMENT (this “Amendment”), dated as of November 11, 2014, amends that Exchange and Purchase Agreement dated February 8, 2012, as amended by that Amendment to Exchange and Purchase Agreement dated February 18, 2013 (as amended, the “Agreement”), by and among Cytomedix, Inc., a Delaware corporation (“Parent”), Aldagen, Inc., a Delaware corporation (the “Company”) and Aldagen Holdings, LLC, a North Carolina limited liability company (“Selling Equity Holder”). Capitalized terms used in this Amendment and not defined herein shall have the meanings given such terms in the Agreement.

W I T N E S S E T H:

WHEREAS, Article II of the Agreement provides for post-closing consideration to be issued by the Parent to the Selling Equity Holder based upon certain Milestones.

WHEREAS, the parties have reached an agreement regarding the issuance of the Post-Closing Parent Stock Consideration and desire to amend the Agreement in accordance with such agreement.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Article II POST-CLOSING CONSIDERATION is hereby amended and restated by deleting Article II of the Agreement and replacing it in its entirety as follows:

“ARTICLE II

POST-CLOSING CONSIDERATION

2.1 Post-Closing Consideration. In full satisfaction of all obligations from the Parent and the Company to the Selling Stockholder under the Agreement, no later than ten (10) days from the date hereof Parent shall issue 1,270,000 shares of Parent Common Stock to the Selling Equity Holder (the “Agreed Post-Closing Shares”).”

2. Section 9.7(a) of the Agreement is hereby amended to provide that the final two sentences of such paragraph (a) shall be amended and restated in their entirety as follows:

“Grant of Registration Rights. The Selling Stockholder shall have the right to include, at any time during the twelve (12) months following the date of this Amendment, the Agreed Post-Closing Shares as part of registration of securities filed by the Company (other than a registration statement (i) filed in connection with any employee stock option or other benefit plan pursuant to Form S-8 or any equivalent form, (ii) for an exchange offer or offering of securities solely to the Company’s existing shareholders, or (iii) for a dividend reinvestment plan), in each case on the same terms and conditions as any similar securities of the Company being registered (other than duration of the registration rights, which shall be governed solely by this Section) and to permit the sale or other disposition of such Agreed Post-Closing Shares in accordance with the intended method(s) of distribution thereof only to the extent such Agreed Post-Closing Shares have not been previously registered for resale by the Selling Stockholder or are otherwise able to be resold immediately without registration under the Securities Act either pursuant to Rule 144 of the Securities Act or otherwise; provided, however, that, in the case of an underwritten offering, if, in the written opinion of the Company’s managing underwriter or underwriters, if any, for such offering, the inclusion of the Agreed Post-Closing Shares, when added to the securities being registered by the Company or the selling stockholder(s), will exceed the maximum amount of the Company’s securities which can be marketed without materially and adversely affecting the entire offering, then the Company will still be required to include the Agreed Post-Closing Shares, but may require the Selling Stockholder to agree, in writing, to delay the sale of all or any portion of the Agreed Post-Closing Shares for a period of ninety (90) days from the effective date of the underwritten offering.

The Company shall bear all fees and expenses attendant to registering the Agreed Post-Closing Shares contemplated hereunder. In the event of such a proposed registration, the Company shall furnish the then Selling Stockholder of outstanding Agreed Post-Closing Shares with not less than five (5) days written notice prior to the proposed date of filing of such registration statement. The holders of the Agreed Post-Closing Shares shall exercise the “piggy-back” rights provided for herein by giving written notice, within five (5) days of the receipt of the Company’s notice of its intention to file a registration statement.”

3. Each of the Selling Stockholder and the Parent, for itself and its respective direct and indirect affiliates, members, officers, directors and managers (the “Releasing Parties”), for and in consideration of the execution and delivery of this Agreement and the issuance of the Agreed Post-Closing Shares, does hereby fully, finally and forever release, acquit and discharge the other party to this Agreement (as well as its successors and assigns) and each of their directors, managers, officers, employees, agents, shareholders, members, partners, owners, attorneys, principals and fiduciaries (the “Released Parties”), from any and all claims, causes of action, liabilities, obligations, demands, costs and expenses of every kind and nature whatsoever, whether direct or indirect, absolute or contingent, liquidated or unliquidated or due or to become due, whether based upon contract, tort, act, omission, representation, negligence, tortious interference with contractual relations or any other claim, which the Releasing Parties even had or now have against the Released Parties as it relates to the Agreement, the Milestone Event or the issuance of Parent Common Stock to the Selling Stockholder; provided, however that, for the avoidance of doubt, the foregoing shall in no way release claims with respect to matters which specifically survive the Closing pursuant to the express terms of this Agreement.

4. Except as expressly provided in this Amendment, the Agreement is hereby confirmed and ratified in all respects.

5. This Amendment may be executed in counterparts (whether facsimile or original), each of which shall be deemed to be an original as against the party whose signature appears thereon, and both of which shall together constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.

CYTOMEDIX, INC.
By:	/s/ Martin Rosendale
Name: Martin Rosendale
Title: Chief Executive Officer
ALDAGEN, INC.
By:	/s/ Martin Rosendale
Name: Martin Rosendale
Title: Chief Executive Officer
ALDAGEN HOLDINGS, LLC
By:	/s/ William Brooke
Name:  William W. Brooke
Title: Manager

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Martin P. Rosendale, certify that:

1. I have reviewed this Form 10-Q of Nuo Therapeutics, 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: November 13, 2014	/s/ Martin P. Rosendale
	Martin P. Rosendale, CEO
	(Principal Executive Officer)

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

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Steven A. Shallcross, certify that:

1. I have reviewed this Form 10-Q of Nuo Therapeutics, 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: November 13, 2014	/s/ Steven A. Shallcross
	Steven A. Shallcross, CFO
	(Principal Financial and Accounting Officer)

A signed original of this written statement has been provided to Nuo Therapeutics, Inc. and will be retained by Nuo Therapeutics, 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 Nuo Therapeutics, Inc. (the “Company”) for the fiscal period ended September 30, 2014 (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: November 13, 2014	/s/ Martin P. Rosendale
	Martin P. Rosendale, CEO
	(Principal Executive Officer)

A signed original of this written statement has been provided to Nuo Therapeutics, Inc. and will be retained by Nuo Therapeutics, 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 Nuo Therapeutics, Inc. (the “Company”) for the fiscal period ended September 30, 2014 (the “Report”), I, Steven A. Shallcross, 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: November 13, 2014	/s/ Steven A. Shallcross
	Steven A. Shallcross, CFO
	(Principal Financial and Accounting Officer)

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

XML

Equity and Equity-Linked Securities (Details 2) (Equity Incentive plan 2013 [Member], Employees and Board [Member], USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Options Granted	1,363,900	7,715,800
Maximum [Member]
Exercise Price	$ 0.60	$ 0.61
Minimum [Member]
Exercise Price	$ 0.39	$ 0.39

XML

Supplemental Cash Flow Information (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Condensed Cash Flow Statements, Captions [Line Items]
Conversion of convertible debt to common stock	$ 3,067,423
Reclassification of the unamortized balance of debt discount and derivative liability, related to the extinguishment and conversion of the subordinated convertible debt, to additional paid-in capital	2,860,627
Derivative liability created from conversion option embedded in Deerfield convertible credit facility	8,825,935
Warrants issued in connection with convertible debt and equity facility	29,137,683
Reclassification of warrant derivative liability to additional paid-in capital as a result of the expiration of non-standard anti-dilution clause contained in warrants	1,331,776
Issuance of common stock in connection with convertible debt facility	1,050,000
Accrued property and equipment	$ 114,494

XML

Fair Value Measurements (Details 2) (Fair Value, Measurements, Nonrecurring [Member], USD $)	Sep. 30, 2014
Intangible Assets Fair Value Disclosure	$ 26,642,614
Trademarks [Member]
Finite-lived Intangible Assets, Fair Value Disclosure	716,614
In-Process Research and Development Expense [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure	25,926,000
Fair Value, Inputs, Level 1 [Member]
Intangible Assets Fair Value Disclosure	0
Fair Value, Inputs, Level 1 [Member] | Trademarks [Member]
Finite-lived Intangible Assets, Fair Value Disclosure	0
Fair Value, Inputs, Level 1 [Member] | In-Process Research and Development Expense [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure	0
Fair Value, Inputs, Level 2 [Member]
Intangible Assets Fair Value Disclosure	0
Fair Value, Inputs, Level 2 [Member] | Trademarks [Member]
Finite-lived Intangible Assets, Fair Value Disclosure	0
Fair Value, Inputs, Level 2 [Member] | In-Process Research and Development Expense [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure	0
Fair Value, Inputs, Level 3 [Member]
Intangible Assets Fair Value Disclosure	26,642,614
Fair Value, Inputs, Level 3 [Member] | Trademarks [Member]
Finite-lived Intangible Assets, Fair Value Disclosure	716,614
Fair Value, Inputs, Level 3 [Member] | In-Process Research and Development Expense [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure	$ 25,926,000

XML

Goodwill and Intangible Assets (Details 1) (USD $)	Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
2015	$ 308,300
2016	308,300
2017	308,300
2018	242,000
2019	219,800
Thereafter	$ 1,434,800

XML

Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2014

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Non-cash investing and financing transactions for the nine months ended September 30, 2014 include:

	2014
Conversion of convertible debt to common stock	$	3,067,423
Reclassification of the unamortized balance of debt discount and derivative liability, related to the extinguishment and conversion of the subordinated convertible debt, to additional paid-in capital		2,860,627
Derivative liability created from conversion option embedded in Deerfield convertible credit facility		8,825,935
Warrants issued in connection with convertible debt and equity facility		29,137,683
Reclassification of warrant derivative liability to additional paid-in capital as a result of the expiration of non-standard anti-dilution clause contained in warrants		1,331,776
Issuance of common stock in connection with convertible debt facility		1,050,000
Accrued property and equipment		114,494

XML

Subsequent Events (Details Textual) (USD $)	0 Months Ended	9 Months Ended	0 Months Ended
	Nov. 11, 2014 Aldagen Contingent Consideration [Member]	Sep. 30, 2014 Aldagen Contingent Consideration [Member]	Nov. 11, 2014 Subsequent Event [Member] Research and Development [Member]	Nov. 11, 2014 Subsequent Event [Member] Aldagen Contingent Consideration [Member]	Oct. 01, 2014 Subsequent Event [Member] Nashville, Tennessee facility lease [Member] acre
Subsequent Event [Line Items]
Operating Leases, Area					2,076
Lease Expiration Date					Apr. 30, 2018
Business Acquisition Contingent Consideration Shares Issuable1	1,270,000
Operating Leases, Future Minimum Payments Due					$ 4,000
Business Acquisitions Contingent Consideration Shares Issuable		20,309,723	20,300,000	20,309,723

XML

Equity and Equity-Linked Securities (Details 5)	9 Months Ended
	Sep. 30, 2014
Warrants outstanding at December 31, 2013	23,019,301	[1]
Warrants issued in connection with convertible bridge notes (February 2014)	232,964
Warrants issued in connection with March 2014 equity placement (Anson)	2,884,615
Warrants issued in connection with March 2014 Convertible Notes (Deerfield)	25,115,384
Warrants issued in connection with March 2014 Convertible Notes (agent)	1,474,615
Warrants issued in connection with JP Nevada Trust Note amendment	750,000
Warrants issued in connection with a consulting agreement	20,000
Warrants issued in connection with June 2014 Convertible Notes (Deerfield)	67,500,000
Warrants issued in connection with June 2014 Convertible Notes (agent)	3,525,000
February 2013 subordination warrants (June 2014)	(800,000)	[2]
JP Nevada Trust Note amendment March 2014 warrants (June 2014)	(750,000)	[3]
Other warrants expired in 2014	(200,000)
Warrants outstanding at September 30, 2014	122,771,879

[1] The December 31, 2013 warrants outstanding figure includes: a) February 2012 Inducement warrants - 30% (354,164) which were immediately exercisable; 70% (826,391) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.) b) February 2012 Aldagen warrants - 30% (634,679) which were immediately exercisable; 70% (1,480,924) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.)

[2] The February 2013 Subordination warrants (800,000), which expire February 18, 2018, are included in the warrants outstanding at December 31, 2013. However, these warrants were only exercisable if the JPNT Note remained outstanding on or after April 28, 2015 (50% of the total) and April 15, 2016 (remainder). The JPNT Note was retired on June 25, 2014, therefore, these warrants cannot be exercised and therefore are not included in warrants outstanding at June 30, 2014.

[3] The warrants issued in connection with March 2014 JP Nevada Trust Note amendment (750,000), which expire March 31, 2019, were exercisable only upon the occurrence of the ”Warrant Exercise Event” as defined in the warrant. Since the ”Warrant Exercise Event” cannot occur as defined, the warrants issued in connection with the March 2014 JP Nevada Trust Note (750,000) cannot be exercised. Therefore, these warrants are not included in the warrants outstanding at June 30, 2014.

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Equity and Equity-Linked Securities (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares New Issues (in shares)	17,245,245
Proceeds From Issuance Or Sale Of Equity	$ 3,666,260
Private Placement [Member]
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares Other (in shares)	3,846,154
Proceeds From Issuance Or Sale Of Equity	1,911,695
Equity Purchase Agreement [Member]
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares Other (in shares)	3,750,000
Proceeds From Issuance Or Sale Of Equity	1,754,565
Lieu of Cash for Fees to Equity Purchase Agreement [Member]
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares Other (in shares)	43,865
Proceeds From Issuance Or Sale Of Equity	0
Convertible Notes 4 Percent [Member]
Schedule of Equity Method Investments [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in shares)	886,690
Proceeds From Issuance Or Sale Of Equity	0
Convertible Notes 10 Percent [Member]
Schedule of Equity Method Investments [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in shares)	5,981,859
Proceeds From Issuance Or Sale Of Equity	0
Reorganization Plan [Member]
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares New Issues (in shares)	27,000
Proceeds From Issuance Or Sale Of Equity	0
Lieu Of Cash For Deerfield Facility Yield Enhancement [Member]
Schedule of Equity Method Investments [Line Items]
Stock Issued During Period Shares Other (in shares)	2,709,677
Proceeds From Issuance Or Sale Of Equity	$ 0

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Fair Value Measurements (Details Textual) (USD $)	1 Months Ended	9 Months Ended
	Feb. 28, 2014	Sep. 30, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time Deposits, at Carrying Value	$ 53,000
Time Deposits Annual Interest Rate	0.10%
Time Deposits Maturity Date	Jun. 24, 2015	Jun. 24, 2015

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Receivables

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4 — Receivables

Accounts and royalties receivables, net consisted of the following:

	September 30,		December 31,
	2014		2013
Trade receivables	$	295,667	$	2,449,199
Other receivables		1,547,804		1,493,979
		1,843,471		3,943,178
Less allowance for doubtful accounts		(58,329)		(16,497)
	$	1,785,142	$	3,926,681

Other receivables consist primarily of royalties due from Arthrex and the cost of raw materials needed to manufacture the Angel products that are sourced by the Company and immediately resold, at cost, to the contract manufacturer.

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Equity and Equity-Linked Securities (Details Textual) (USD $)	0 Months Ended	1 Months Ended	9 Months Ended			9 Months Ended				1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended			1 Months Ended			0 Months Ended	9 Months Ended	0 Months Ended		0 Months Ended		3 Months Ended	9 Months Ended
	Feb. 19, 2013	Mar. 31, 2014	Sep. 30, 2014	Dec. 31, 2013		Sep. 30, 2014 Private Placement [Member]	Sep. 30, 2014 Equity Incentive plan 2013 [Member]	Jun. 09, 2014 Equity Incentive plan 2013 [Member] Before Amendment [Member]	Jun. 09, 2014 Equity Incentive plan 2013 [Member] After Amendment [Member]	Mar. 31, 2014 Equity Offering [Member] Private Placement [Member]	Sep. 30, 2014 Long Term and Equity Incentive Plan [Member]	Sep. 30, 2014 Long Term and Equity Incentive Plan [Member]	Mar. 31, 2014 March 2014 Equity Offering [Member]	Jun. 30, 2014 March 2014 Equity Offering [Member]	Dec. 31, 2013 February 2012 Inducement Warrants [Member]	Dec. 31, 2013 February 2012 Aldagen Warrants [Member]	Feb. 28, 2013 Lincoln Park [Member]	Feb. 28, 2013 Worden [Member]	Feb. 19, 2013 Worden [Member]	Feb. 19, 2013 Minimum [Member] Worden [Member]	Sep. 30, 2014 Maximum [Member]	Feb. 19, 2013 Maximum [Member] Worden [Member]	Feb. 19, 2013 February 2013 Worden Warrants [Member]	Feb. 19, 2013 February 2013 Warrants [Member]	Feb. 19, 2013 February 2013 Warrants [Member] Worden Shares [Member]	Sep. 30, 2014 Warrant [Member]	Sep. 30, 2014 Warrant [Member]	Mar. 31, 2014 Warrant [Member]
Schedule of Equity Method Investments [Line Items]
Class Of Warrant Or Right Outstanding			122,771,879	23,019,301	[1]																		250,000		250,000
Common Stock Capital Shares Reserved For Future Issuance Value																	$ 15,000,000
Shares Issuable Under Purchase Agreements																	150,000
Increase In Shares Issuable Under Purchase Agreements																	200,000
Minimum Closing Sale Price Per Share																	$ 1.00
Stock Issued During Period Share Purchase Agreement																	375,000
Stock Issued During Period Additional Shares Issued Under Purchase Agreement																	375,000
Proceeds from Issuance of Private Placement	5,000,000	2,000,000												2,000,000
Share Price	$ 0.55
Placement Fee																								350,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	6,363,638									2,884,615														136,364
Royalty Expense																		500,000
Future Annual Royalty Limitation																				600,000		625,000
Shares Issued In Private Placement Maximum Percentage																	9.99%
Stock Issued During Period Shares Investors	9,090,911
Stock Issued During Period, Shares, New Issues			17,245,245
Condition For Accelerated Purchase By Accredited Investor Minimum Share Price																	$ 0.45
Derivative Liability																												1,100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period											148,916	2,338,607
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant								3,000,000	18,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value							$ 0.57
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options			2,500,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years 10 months 24 days																								8 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted																										0	20,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options																										1,800	1,800
Stock Issued During Period, Value, New Issues																	2,400,000
Payments of Stock Issuance Costs													$ 136,000
Ownership Percentage of Issued and Outstanding Common Stock																					9.98%
Stock Issued During Period, Shares, Other						3,846,154				3,846,154
Investment Warrants, Exercise Price	$ 0.75													$ 0.52										$ 120
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.52	$ 0.52							$ 0.52									$ 0.70
Class Of Warrant Or Right Exercisable															(354,156)	(634,672)
Class Of Warrant Or Right Exercisable Upon Completion															(826,391)	(1,480,924)
Debt Instrument Warrants Issued For Convertible Notes			25,115,384
Debt Instrument Warrants Issued For Convertible Notes One			1,474,615
Debt Instrument Warrants Issued For Convertible Notes Two			67,500,000
Debt Instrument Warrants Issued For Convertible Notes Three			3,525,000

[1] The December 31, 2013 warrants outstanding figure includes: a) February 2012 Inducement warrants - 30% (354,164) which were immediately exercisable; 70% (826,391) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.) b) February 2012 Aldagen warrants - 30% (634,679) which were immediately exercisable; 70% (1,480,924) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.)

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Recent Financing and Other Capital Transactions (Details Textual) (USD $)	0 Months Ended	1 Months Ended		3 Months Ended	1 Months Ended			9 Months Ended			3 Months Ended									3 Months Ended			1 Months Ended	3 Months Ended
	Feb. 19, 2013	Mar. 31, 2014	Nov. 21, 2013 Subordinated Convertible Notes [Member]	Mar. 31, 2014 Subordinated Convertible Notes [Member]	Jun. 25, 2014 Second Draw [Member]	Sep. 30, 2014 Second Draw [Member]	Sep. 30, 2014 Second Draw [Member] Detachable Stock Purchase Warrants [Member]	Sep. 30, 2014 Deerfield facility [Member]	Sep. 30, 2014 Deerfield facility [Member] Detachable Stock Purchase Warrants [Member]	Mar. 31, 2014 Warrant [Member]	Sep. 30, 2014 Bridge Loan [Member]	Mar. 31, 2014 Bridge Loan [Member] Subordinated Convertible Notes [Member]	Sep. 30, 2014 Term Loan [Member]	Mar. 31, 2014 Term Loan [Member]	Sep. 30, 2014 Convertible Debt Financing [Member]	Sep. 30, 2014 Convertible Debt Financing [Member] Bridge Loan [Member]	Mar. 31, 2014 Convertible Debt Financing And Equity Offering [Member]	Mar. 31, 2014 Mid-Cap Financial Term Loan [Member]	Sep. 30, 2014 Conversion Option [Member] Second Draw [Member]	Jun. 30, 2014 March 2014 Equity Offering [Member]	Sep. 30, 2014 March 2014 Equity Offering [Member]	Mar. 31, 2014 March 2014 Equity Offering [Member]	Jan. 31, 2014 December 2013 Convertible Bridge Note [Member]	Sep. 30, 2014 2014 Convertible Debt Financing [Member]	Sep. 30, 2014 2014 Convertible Debt Financing [Member] Maximum [Member]	Sep. 30, 2014 2014 Convertible Debt Financing [Member] Minimum [Member]	Sep. 30, 2014 2014 Convertible Debt Financing [Member] Deerfield Management Company [Member]
Proceeds from Convertible Debt			$ 3,000,000																				$ 750,000
Embedded Derivative, Fair Value Of Embedded Derivative Liability															14,000		500,000				1,100,000		600,000		6,000,000	3,000,000
Debt Instrument, Unamortized Discount						25,800,000																	600,000
Debt Instrument, Convertible, Conversion Price																								$ 0.52
Warrant Issued To Purchase Common Stock					67,500,000				3,525,000						750,000		1,474,615			2,884,615				25,115,384
Investment Warrants, Exercise Price	$ 0.75				$ 0.52										$ 0.52					$ 0.52				$ 0.52
Convertible Credit Facility For Second Tranche																								26,000,000
Proceeds from Issuance of Private Placement	5,000,000	2,000,000																		2,000,000
Shares, Issued																					3,846,154
Shares Issued, Price Per Share																					$ 0.52	$ 0.52
Extinguishment of Debt, Amount													2,100,000	2,100,000
Payments for Brokerage Fees																	880,000
Debt Instrument Prepayment Penalties																		330,050
Debt Instrument Principal And Interest Payment																		3,811,767
Principal Payment																		3,450,000
Interest Payment																		31,717
Debt Conversion, Converted Instrument, Shares Issued				5,981,859												5,981,859
Repayments of Convertible Debt											339,000	339,000
Derivative Liability							20,500,000	900,000		1,100,000									5,300,000
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs																				136,000
Convertible Notes Payable					26,000,000																						9,000,000
Payments for Commission on Notes Payables								$ 1,710,000
Convertible Note payable, Percentage of interest																								5.75%

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Business and Presentation (Details Textual) (USD $)	1 Months Ended	3 Months Ended		9 Months Ended				1 Months Ended	3 Months Ended	9 Months Ended			9 Months Ended	3 Months Ended		9 Months Ended
	Jan. 31, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Research and Development Arrangement [Member]	Jun. 25, 2014 Convertible Debt Facility [Member]	Mar. 31, 2014 Convertible Debt Facility [Member]	Sep. 30, 2014 Arthrex [Member] Accounts Receivable [Member]	Sep. 30, 2014 Aldagen Inc [Member]	Sep. 30, 2014 Angel [Member]	Sep. 30, 2014 Angel [Member] Arthrex [Member]	Sep. 30, 2014 Non United States [Member]	Sep. 30, 2013 Non United States [Member]	Sep. 30, 2014 Non United States [Member]	Sep. 30, 2013 Non United States [Member]
Percentage Of Product Sales														50.00%	6.00%	30.00%	13.00%
Concentration Risk, Percentage													100.00%
Percentage of accounts receivable										41.00%
Allowance for Doubtful Accounts Receivable		$ 58,000		$ 58,000		$ 16,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net											422,000	707,000
Income Tax Expense (Benefit)		4,645	4,890	13,935	14,670
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				224,287,504	28,207,642
Convertible Debt									35,000,000
Proceeds from Convertible Debt								26,000,000	9,000,000
Proceeds From Issuance Of Common Stock And Warrants									2,000,000
Repayments of Notes Payable				6,201,143	570,000				5,900,000
Repayments of Convertible Debt									340,000
Debt Conversion, Converted Instrument, Amount				3,067,423					3,100,000
Cash		20,000,000		20,000,000
Deferred Licensing Revenue		1,542,000		1,542,000
Licenses Revenue		100,594	67,063	301,783	67,063
Medical Device Excise Tax Percentage	2.30%
Minimum Cash Balance		5,000,000		5,000,000
Restructuring Reserve		$ 486,000		$ 486,000			$ 438,000

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Fair Value Measurements (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock purchase warrants	$ 38,106,375	$ 3,248,595
Fair Value, Measurements, Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in money market funds	19,518,766	2,303,556
Total investment in money market funds	19,518,766	2,303,556
Embedded conversion options	7,524,851	1,515,540
Stock purchase warrants	30,581,524	1,733,055
Total derivative liabilities	38,106,375	3,248,595
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in money market funds	19,518,766	2,303,556
Total investment in money market funds	19,518,766	2,303,556
Embedded conversion options	0	0
Stock purchase warrants	0	0
Total derivative liabilities	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in money market funds	0	0
Total investment in money market funds	0	0
Embedded conversion options	0	0
Stock purchase warrants	0	0
Total derivative liabilities	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in money market funds	0	0
Total investment in money market funds	0	0
Embedded conversion options	7,524,851	1,515,540
Stock purchase warrants	30,581,524	1,733,055
Total derivative liabilities	$ 38,106,375	$ 3,248,595

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Distribution and License Agreement with Arthrex (Details Textual) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014
Arthrex Distributor And License Agreement [Line Items]
Retainage Deposit	$ 5.0

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Receivables (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Trade receivables	$ 295,667	$ 2,449,199
Other receivables	1,547,804	1,493,979
Accounts Receivable, Gross, Current	1,843,471	3,943,178
Less allowance for doubtful accounts	(58,329)	(16,497)
Accounts and Other Receivables, Net, Current	$ 1,785,142	$ 3,926,681

XML

Distribution and License Agreement with Arthrex

9 Months Ended

Sep. 30, 2014

Distributors And License Agreement [Abstract]

Distributors And License Agreement [Text Block]

Note 3 — Distribution and License Agreement with Arthrex

On August 7, 2013, we entered into a Distributor and License Agreement (the “Arthrex Agreement”) with Arthrex, Inc., a privately held Florida based company (“Arthrex”). Under the terms of the Arthrex Agreement, Arthrex will obtain the exclusive rights to sell, distribute, and service the Angel Concentrated Platelet System and ActivAt (“Products”), throughout the world, for all uses other than chronic wound care. We granted Arthrex a limited license to use our intellectual property as part of enabling Arthrex to sell the Products. Arthrex will purchase Products from us to distribute and service at certain purchase prices, which may be changed after an initial period. Arthrex has the right, on written notice to us, to assume responsibility for the manufacture and supply of the Products, either by assuming our existing manufacturing and supply agreements or by entering into new manufacturing and supply agreements. Arthrex will also pay a certain royalty rate based upon volume of the Products sold. The exclusive nature of Arthrex rights to sell, distribute and service the Products is subject certain existing supply and distribution agreements such that Arthrex may instruct us to terminate or not renew any of such agreements. In addition, Arthrex’s rights to sell, distribute and service the Products is not exclusive in the non-surgical dermal and non-surgical aesthetics markets. In connection with the execution of the Arthrex Agreement, Arthrex agreed to pay us a nonrefundable upfront payment of $5.0 million. The term of the Arthrex Agreement is five years, automatically renewable for an additional three-year period unless Arthrex gives us a termination notice at least one year in advance of the end of the initial five-year period. The Arthrex Agreement contains other terms and provisions that are customary to the agreements of this nature.

Immediately following the execution of the Arthrex Agreement and at the request of Arthrex, we agreed to temporarily provide certain services to Arthrex during a transition period (“Transition Services”). These Transition Services primarily involve customer service, sales order fulfillment, customer billing and collections, and technical support for the Products. For these services, Arthrex will pay us an agreed upon fee. The Transition Services period concluded in the first quarter of 2014.

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Goodwill and Intangible Assets (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 30,036,000		$ 34,958,000
Less accumulated amortization	(1,211,136)		(1,189,046)
Intangible assets, net	28,824,864		33,768,954
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	1,047,000		2,310,000
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	2,355,000		2,355,000
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	708,000		708,000
In-process research and development [Member]
Finite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	$ 25,926,000	$ 29,600,000	$ 29,585,000

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Equity and Equity-Linked Securities (Details 3) (Long Term and Equity Incentive Plan [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Exercise Price Range One [Member]
Exercise Price Lower Range Limit	$ 0.30
Exercise Price Upper Range Limit	$ 0.50
Options Outstanding - Shares	2,311,800
Options Outstanding - Weighted Average Remaining Contract Life	7 years 9 months 14 days
Options Outstanding - Weighted Average Exercise Price	$ 0.42
Options Exercisable - Shares	960,998
Options Exercisable - Weighted Average Exercise Price	$ 0.43
Exercise Price Range Two [Member]
Exercise Price Lower Range Limit	$ 0.51
Exercise Price Upper Range Limit	$ 0.75
Options Outstanding - Shares	7,738,066
Options Outstanding - Weighted Average Remaining Contract Life	8 years 7 months 24 days
Options Outstanding - Weighted Average Exercise Price	$ 0.60
Options Exercisable - Shares	2,509,159
Options Exercisable - Weighted Average Exercise Price	$ 0.60
Exercise Price Range Three [Member]
Exercise Price Lower Range Limit	$ 0.76
Exercise Price Upper Range Limit	$ 1.25
Options Outstanding - Shares	825,831
Options Outstanding - Weighted Average Remaining Contract Life	5 years 6 months 22 days
Options Outstanding - Weighted Average Exercise Price	$ 0.95
Options Exercisable - Shares	719,163
Options Exercisable - Weighted Average Exercise Price	$ 0.97
Exercise Price Range Four [Member]
Exercise Price Lower Range Limit	$ 1.26
Exercise Price Upper Range Limit	$ 1.75
Options Outstanding - Shares	2,062,646
Options Outstanding - Weighted Average Remaining Contract Life	4 years 8 months 1 day
Options Outstanding - Weighted Average Exercise Price	$ 1.42
Options Exercisable - Shares	1,950,646
Options Exercisable - Weighted Average Exercise Price	$ 1.42
Exercise Price Range Five [Member]
Exercise Price Lower Range Limit	$ 1.76
Exercise Price Upper Range Limit	$ 2.75
Options Outstanding - Shares	889,666
Options Outstanding - Weighted Average Remaining Contract Life	2 years 6 months 11 days
Options Outstanding - Weighted Average Exercise Price	$ 2.30
Options Exercisable - Shares	867,831
Options Exercisable - Weighted Average Exercise Price	$ 2.30
Exercise Price Range Six [Member]
Exercise Price Lower Range Limit	$ 2.76
Exercise Price Upper Range Limit	$ 4.50
Options Outstanding - Shares	0
Options Outstanding - Weighted Average Remaining Contract Life	0 years
Options Outstanding - Weighted Average Exercise Price	$ 0
Options Exercisable - Shares	0
Options Exercisable - Weighted Average Exercise Price	$ 0
Exercise Price Range Seven [Member]
Exercise Price Lower Range Limit	$ 4.51
Exercise Price Upper Range Limit	$ 6.00
Options Outstanding - Shares	70,000
Options Outstanding - Weighted Average Remaining Contract Life	1 year 3 months 11 days
Options Outstanding - Weighted Average Exercise Price	$ 5.20
Options Exercisable - Shares	70,000
Options Exercisable - Weighted Average Exercise Price	$ 5.20

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 20,036,100	$ 3,286,713
Short-term investments, restricted	53,356	53,257
Accounts and other receivable, net	1,785,142	3,926,681
Inventory	544,741	1,111,507
Prepaid expenses and other current assets	2,216,672	1,258,282
Deferred costs, current portion	1,091,387	316,551
Total current assets	25,727,398	9,952,991
Property and equipment, net	757,230	919,469
Deferred costs	3,819,854	482,349
Intangible assets, net	28,824,864	33,768,954
Goodwill	1,128,517	1,128,517
Total assets	60,257,863	46,252,280
Current liabilities
Accounts payable	1,673,402	3,351,844
Accrued expenses	4,887,418	4,666,828
Deferred revenues, current portion	402,377	740,990
Note payable, current portion	0	1,800,000
Total current liabilities	6,963,197	10,559,662
Notes payable	0	3,620,593
Convertible debt, net of discount	251,600	202,658
Deferred revenues	1,139,956	1,441,852
Derivative liabilities	38,106,375	3,248,595
Other liabilities	1,024,863	366,926
Total liabilities	47,485,991	19,440,286
Commitments and contingencies (See Note 10)
Conditionally redeemable common stock (909,091 issued and outstanding)	500,000	500,000
Stockholders' equity
Common stock; $.0001 par value, authorized 425,000,000 shares; 2014 issued and outstanding - 124,410,100 shares; 2013 issued and outstanding - 107,164,855 shares	12,350	10,626
Common stock issuable	392,950	432,100
Additional paid-in capital	124,834,282	117,097,844
Accumulated deficit	(112,967,710)	(91,228,576)
Total stockholders' equity	12,271,872	26,311,994
Total liabilities and stockholders' equity	$ 60,257,863	$ 46,252,280

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Fair Value Measurements (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	$ 3,248,595
Established in 2014	37,963,618
Effect of Conversion to Common Stock	(1,932,693)
Reclassed to Additional Paid-In Capital	(1,331,776)	[1]
Change in Fair Value	158,631
Balance	38,106,375
Stock purchase warrants [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	1,733,055
Established in 2014	29,137,683
Effect of Conversion to Common Stock	0
Reclassed to Additional Paid-In Capital	(1,331,776)	[1]
Change in Fair Value	1,042,562
Balance	30,581,524
Embedded conversion options [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	1,515,540
Established in 2014	8,825,935
Effect of Conversion to Common Stock	(1,932,693)
Reclassed to Additional Paid-In Capital	0	[1]
Change in Fair Value	(883,931)
Balance	$ 7,524,851

[1] Various warrants were reclassified to additional paid-in capital as a result of the expiration of non-standard anti-dilution clauses contained within the warrants.

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Business and Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations [Text Block]

Note 1 — Business and Presentation

Description of Business

At our 2014 Annual Meeting, our shareholders voted to approve the name change amendment to our Certificate of Incorporation. The new name of our Company is “Nuo Therapeutics, Inc.” and the name change was effective upon filing of the Certificate of Amendment to our Certificate of Incorporation in the State of Delaware. Nuo Therapeutics, Inc., formerly Cytomedix, Inc., (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a biomedical company marketing products within the U.S. and internationally. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous from self-biological therapies for tissue repair and regeneration is part of a transformative clinical strategy designed to improve long term recovery in complex chronic conditions with significant unmet medical needs. Growth drivers in the U.S. include Medicare coverage for the treatment of chronic wounds under a National Coverage Determination when registry data is collected under Coverage with Evidence Development (“CED”), and a worldwide distribution and licensing agreement that allows our partner to promote the Angel System for all uses other than wound care.

Our current commercial offerings consist of point of care technologies for the safe and efficient separation of autologous blood and bone marrow to produce platelet based therapies or cell concentrates. We currently have two distinct platelet rich plasma (“PRP”) devices, the AutoloGel ^TM System (relaunched as Aurix ^™in October 2014) for wound care and the Angel^™ concentrated Platelet Rich Plasma (“cPRP”) System for orthopedics markets. Our sales are predominantly in the United States, where we sell our products through direct sales representatives and distributors. Since August 8, 2013, Arthrex, Inc. (“Arthrex”), as our exclusive distributor for Angel, accounted for 100% of our Angel sales.

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, licensing arrangements, royalties, and product revenues. We have incurred, and continue to incur, recurring losses and negative cash flows. On March 31, 2014, we entered into a $35,000,000 convertible debt facility, $9,000,000 of which was funded on March 31, 2014 and the remaining $26,000,000 was funded on June 25, 2014. In addition, on March 31, 2014 we raised $2.0 million of gross proceeds from the sale of our common stock and warrants to an accredited investor (See Note 2 - Recent Financing and Other Capital Transactions and Note 8 - Equity and Equity-Linked Securities for additional details.) We used approximately $5.9 million of the net proceeds from these transactions to retire outstanding debt and interest, approximately $0.34 million to repay a portion of previously outstanding convertible debt and interest, and we converted approximately $3.1 million previously outstanding convertible debt and interest into common stock (See Note 2 - Recent Financing and Other Capital Transactions and Note 7 - Debt for additional details.)

At September 30, 2014, we had approximately $20.0 million of cash on hand. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on significant customers, lack of operating history and uncertainty of future profitability and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due. We believe that our current resources will be sufficient to fund our operations through the next twelve months. Accordingly, management believes the going-concern basis is appropriate for the accompanying consolidated financial statements.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The condensed consolidated balance sheet at December 31, 2013, has been derived from audited financial statements of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our annual report on Form 10-K for the year ended December 31, 2013. Certain prior period information has been reclassified to conform to the current period presentation.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and controlled subsidiary. All significant inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, valuation of derivative liabilities, valuation and probability of contingent liabilities, fair value of long-lived assets, deferred taxes and associated valuation allowance, and the depreciable lives of fixed assets (including intangible assets and goodwill). Actual results could differ from those estimates.

Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

In connection with the Deerfield Facility Agreement (See Note 7 - Debt for additional details), the Company is required to maintain a compensating cash balance of $5,000,000 in deposit accounts subject to control agreements in favor of the lenders.

Accounts Receivable and Credit Concentration

We generate accounts receivable from the sale of our products. Our trade receivables balance at September 30, 2014 was primarily from Arthrex (41%).

We provide for a reserve against receivables for estimated losses that may result from a customer’s inability or unwillingness to pay. The allowance for doubtful accounts is estimated primarily based upon historical write-off percentages, known problem accounts, and current economic conditions. Accounts are written off against the allowance for doubtful accounts when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. At September 30, 2014 and December 31, 2013, we maintained an allowance for doubtful accounts of $58,000 and $16,000, respectively.

We use single suppliers for several components of the Angel and Aurix^™ product lines. We outsource the manufacturing of various products, including component parts for Angel, to contract manufacturers. While we believe these manufacturers to be of sufficient competency, quality, reliability, and stability, there is no assurance that one or more of them will not experience an interruption or inability to provide us with the products needed to satisfy customer demand. Additionally, while most of the components of Aurix^™ are generally readily available on the open market, a reagent, bovine thrombin, is available exclusively through Pfizer, with whom we have an established vendor relationship.

Inventory

Our inventory is produced by third party manufacturers and consists primarily of finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. At September 30, 2014 and December 31, 2013, we did not have a balance in our reserve for the lower of cost or market or excess and obsolete inventory. Our primary product is the Angel Processing set which has a shelf life of three years. We also maintain an inventory of kits, reagents, and other disposables that have shelf lives that generally range from ten months to five years. Expired products are segregated and used for demonstration purposes only; we write off expired inventory through cost of sales.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over its estimated useful life ranging from three to five years for all assets except for furniture, lab, and manufacturing equipment which is depreciated over seven and ten years, respectively. Leasehold improvements are stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from three to six years. Amortization of leasehold improvements is included in depreciation expense. Maintenance and repairs are charged to operations as incurred. When assets are disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expenses.

Centrifuges may be sold, leased, or placed at no charge with customers. Depreciation expense for centrifuges that are available for sale, leased, or placed at no charge with customers are charged to cost of sales. Depreciation expense for centrifuges used for sales and marketing and other internal purposes are charged to operations. When the centrifuges are sold the net book value is charged to cost of sales.

Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

Exit Activities

On May 5, 2014, we announced preliminary efficacy and safety results of our RECOVER-Stroke Phase 2 clinical trial in patients with neurological damage arising from ischemic stroke and treated with ALD-401. Observed improvements in the primary endpoint (mean modified Rankin Score or mRS) of the trial were not clinically or statistically significant. In light of this outcome, we discontinued further funding of the ALD-401 development program, decided to close our facilities in Durham, NC, and terminated certain employees.

The discontinuance of this development program is considered an exit activity. As such, we recognized the following expenses in the second and third quarters of 2014:

	Quarter ended
	June 30, 2014		September 30, 2014
Severance costs	$	320,000	$	-
Loss on abandonment of lease		-		243,000
Loss on disposal of assets		-		132,000
Total	$	320,000	$	375,000

Approximately $486,000 of the above costs remained accrued and unpaid as of September 30, 2014, of which $438,000 remained in accrued loss on abandonment of the lease. The accrued loss will be amortized over the life of the lease against future rental payments made and sublet income payments received. Severance expense is classified as “salaries and wages” and the loss on abandonment and loss on disposal of assets is classified as “general and administrative expenses” in the accompanying consolidate statements of operations. The severance accrual and accrued loss on abandonment are included in “accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheet.

Intangible Assets and Goodwill

Intangible assets were acquired as part of our acquisition of the Angel business and Aldagen, and consist of definite-lived and indefinite-lived intangible assets, including goodwill.

Definite-lived intangible assets

Our definite-lived intangible assets include trademarks, technology (including patents) and customer relationships, and are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any indicators were present, we test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), we would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. We periodically reevaluate the useful lives for these intangible assets to determine whether events and circumstances warrant a revision in their remaining useful lives. During the second quarter of 2014, as a result of recent events and changes in circumstances, the Company performed an assessment of our trademarks and concluded that the carrying value of the trademarks was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Indefinite-lived intangible assets

We evaluate our indefinite-lived intangible asset, consisting solely of in-process research and development (“IPR&D”) acquired in the Aldagen acquisition, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, and at least on an annual basis on October 1 of each year, by comparing the fair value of the asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we would recognize an impairment loss in the amount of that excess. During the second quarter of 2014 the Company performed an assessment of our IPR&D as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the carrying value of the IPR&D was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Goodwill

Goodwill represents the purchase price of acquisitions in excess of the amounts assigned to acquired tangible or intangible assets and assumed liabilities. Amounts allocated to goodwill are tax deductible in all relevant jurisdictions. As a result of our acquisition of Aldagen in February 2012, we recorded goodwill of approximately $422,000. Prior to the acquisition of Aldagen, we had goodwill of approximately $707,000 as a result of the acquisition of the Angel business in April 2010.

We conduct an impairment test of goodwill on an annual basis as of October 1 of each year, and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce the Company’s fair value below its net equity value impaired. The Company conducted an impairment test of our Goodwill as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the fair value was not impaired (See Note 5 — Goodwill and Intangible Assets for additional details.)

Conditionally Redeemable Common Stock

The Maryland Venture Fund (“MVF,” part of Maryland Department of Business and Economic Development) has an investment in our common stock, and can require us to repurchase the common stock, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. MVF’s common stock is are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheets.

Revenue Recognition

We recognize revenue when the four basic criteria for recognition are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

Sales of products

We provide for the sale of our products, including disposable processing sets and supplies to customers. Revenue from the sale of products is recognized upon shipment of products to the customers. We do not maintain a reserve for returned products as in the past those returns have not been material.

Usage or leasing of blood separation equipment

As a result of the acquisition of the Angel^™ business in 2010, we acquired various multiple element revenue arrangements that combine the (i) usage or leasing of blood separation processing equipment, (ii) maintenance of processing equipment, and (iii) purchase of disposable processing sets and supplies. We assigned these multiple element revenue arrangements to Arthrex on August 7, 2013. (See Note 3 — Distribution and License Agreement with Arthrex for additional details.) Under these arrangements, the total arrangement consideration was allocated to the various elements based on their relative estimated selling prices. The usage of the blood separation processing equipment was accounted for as an operating lease; since customer payments were contingent upon the customer ordering new products, rental income was recorded following the contingent rental method when rental income was earned and collectability was reasonably assured. The sale of disposable processing sets and supplies and maintenance were deemed a combined unit of accounting; since (a) any consideration for disposable processing sets and supplies and maintenance was contingent upon the customer ordering additional disposable processing sets and supplies and (b) both the disposable products and maintenance services were provided over the same term, we recognized revenue for this combined unit of accounting following the contingent revenue method at the time disposable products were delivered based on prices contained in the agreement.

Percentage-based fees on licensee sales of covered products are generally recorded as products are sold by licensees and are reflected as “Royalties” in the consolidated statements of operations. Direct costs associated with product sales and royalty revenues are recorded at the time that revenue is recognized.

Deferred revenue at September 30, 2014 consists of prepaid licensing revenue of approximately $1,542,000. Revenue of approximately $302,000 related to the prepaid license was recognized during the nine months ended September 30, 2014. On January 1, 2013 a medical device excise tax came into effect that required manufacturers to pay tax of 2.3% on the sale of certain medical devices. We report the medical device excise tax on a gross basis, recognizing the tax as both revenue and cost of sales.

Segments and Geographic Information

We operate in one business segment. Approximately 50% and 30% of our product sales were generated outside of the United States for the three month and nine month periods ended September 30, 2014, respectively. Approximately 12% and 14% of our product sales were generated outside of the United States for the three and nine month periods ended September 30, 2013.

Research and Development Expenses

Research and development costs are expensed as incurred and primarily consist of expenses relating to product development.

Stock-Based Compensation

We have a stock-based compensation plan that includes stock options and other equity awards, which are awarded in exchange for employee, non-employee director and other non-employee services.

Stock-based compensation cost for employee and non-employee director stock options is determined at the grant date using an option pricing model and stock-based compensation cost for restricted stock is based on the closing market price of the stock at the grant date. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the employee's requisite service period. Stock-based compensation for awards granted to non-employees is periodically remeasured as the underlying options and warrants vest. We recognize an expense for such awards throughout the performance period as the services are provided by the non-employees, based on the fair value of these options and warrants at each reporting period.

Valuation of stock awards requires management to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the future volatility of the Company’s stock price, dividend yields, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can affect the fair value estimate. We recognize the estimated fair value of stock-based awards and classify the expense where the underlying salaries or other related costs are classified.

Stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 was as follow:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Salaries and wages	$	362,046	$	121,929	$	834,240	$	434,790
Consulting		246		-		9,921		-
General and administrative		28,597		28,134		95,317		103,168
Total share-based compensation expense	$	390,889	$	150,063	$	939,478	$	537,958

Income Taxes

We account for income taxes using the asset and liability approach, which requires the recognition of future tax benefits or liabilities on the temporary differences between the financial reporting and tax bases of our assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. We also recognize a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. Our policy is to recognize interest and penalties on uncertain tax positions as a component of income tax expense. 

Income tax expense was $4,645 and $4,890 during the three months ended September 30, 2014 and 2013 and $13,935 and $14,670 during the nine months ended September 30, 2014 and 2013, respectively. These relate exclusively to the generation of a deferred tax liability associated with the tax amortization of goodwill, which is included as a component of other long-term liabilities on our condensed consolidated balance sheets.

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and convertible preferred stock and convertible debt using the if-converted method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive. The total number of anti-dilutive shares, common stock options, warrants exercisable for common stock, convertible preferred stock and convertible debt, which have been excluded from the computation of diluted earnings (loss) per share, were 224,287,504 and 28,207,642 for the nine months ended September 30, 2014 and 2013, respectively.

Recent Accounting Pronouncements

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The Financial Accounting Standards Board (FASB or Board) and the International Accounting Standards Board (IASB) (collectively, the Boards) jointly issued a long-awaited standard that will supersede virtually all of the revenue recognition guidance in U.S. GAAP. The FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB has set an effective date of fiscal years beginning after December 15, 2016. Early adoption is not permitted for public entities. FASB ASU No. 2014-09 will amend FASB Accounting Standards Codification™ (ASC) by creating Topic 606, Revenue from Contracts with Customers and Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. This document reorganizes the guidance contained in FASB ASC 606 (revenue recognition standard), to follow the five step revenue recognition model along with other guidance impacted by this standard. The potential effects of the adoption of ASU 2014-09, Topic 606 on our results of operations and the Company’s Condensed Consolidated Financials have not been determined at this time. ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Previously, there was no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. FASB issued ASU 2014-15 to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact, if any, that the adoption will have on its financial statements.

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Accrued Expenses (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Customer deposits	$ 2,500,524	$ 1,795,803
Accrued compensation and benefits	969,160	795,584
Other payables	729,043	242,993
Accrued interest	3,375	2,250
Due to Arthrex	322,794	1,630,564
Accrued professional fees	259,346	199,634
Accrued loss on abandonment of lease, current portion	103,176	0
Accrued Liabilities, Current	$ 4,887,418	$ 4,666,828

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2014

Accrued Liabilities, Current [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2,014		2,013
Customer deposits	$	2,500,524	$	1,795,803
Accrued compensation and benefits		969,160		795,584
Other payables		729,043		242,993
Accrued interest		3,375		2,250
Due to Arthrex		322,794		1,630,564
Accrued professional fees		259,346		199,634
Accrued loss on abandonment of lease, current portion		103,176		--
	$	4,887,418	$	4,666,828

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Debt (Details Textual) (USD $)	0 Months Ended	9 Months Ended				9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended		9 Months Ended		1 Months Ended	0 Months Ended	1 Months Ended	3 Months Ended				9 Months Ended		9 Months Ended				0 Months Ended		3 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended			0 Months Ended	3 Months Ended
	Dec. 10, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014	Feb. 19, 2013	Sep. 30, 2014 Second Draw [Member]	Mar. 31, 2014 Deerfield Facility Agreement [Member]	Sep. 30, 2014 Deerfield Facility Agreement [Member]	Mar. 31, 2014 Deerfield Facility Agreement [Member] First Draw [Member]	Jun. 30, 2014 Deerfield Facility Agreement [Member] First Draw [Member]	Sep. 30, 2014 Deerfield Facility Agreement [Member] Second Draw [Member]	Sep. 30, 2014 Senior Secured Convertible Notes [Member]	Sep. 30, 2014 Promissory Note [Member]	Sep. 30, 2011 Promissory Note [Member]	Nov. 18, 2011 JMU 4 Convertible Notes [Member]	Dec. 10, 2013 Subordinated Convertible Notes [Member]	Nov. 21, 2013 Subordinated Convertible Notes [Member]	Mar. 31, 2014 Subordinated Convertible Notes [Member]	Sep. 30, 2014 Subordinated Convertible Notes [Member]	Feb. 28, 2014 Subordinated Convertible Notes [Member]	Feb. 19, 2013 Worden [Member]	Sep. 30, 2014 JP Nevada Trust 12% Note [Member]	Mar. 31, 2014 JP Nevada Trust 12% Note [Member]	Sep. 30, 2014 JP Nevada Trust 12% Note [Member] Second Draw [Member]	Sep. 30, 2014 JP Nevada Trust 12% Note [Member] Promissory Note [Member]	Apr. 28, 2011 JP Nevada Trust 12% Note [Member] Promissory Note [Member]	Sep. 30, 2014 JP Nevada Trust 12% Note [Member] Guarantee [Member]	Dec. 10, 2013 Midcap Financial Llc [Member]	Feb. 19, 2013 Midcap Financial Llc [Member]	Mar. 31, 2014 Midcap Financial Llc [Member]	Sep. 30, 2014 Midcap Financial Llc [Member]	Feb. 19, 2013 July Four Percent Convertible Notes [Member]	Mar. 31, 2014 July Four Percent Convertible Notes [Member]	Sep. 30, 2014 July Four Percent Convertible Notes [Member]	Apr. 28, 2014 July Four Percent Convertible Notes [Member]	Jul. 15, 2011 July Four Percent Convertible Notes [Member]	Apr. 28, 2014 July Four Percent Convertible Notes [Member] Common Stock [Member]	Sep. 30, 2014 Bridge Loan [Member]	Mar. 31, 2014 Bridge Loan [Member] Subordinated Convertible Notes [Member]
Debt Conversion [Line Items]
Secured Debt																										$ 2,100,000										$ 1,300,000
Debt Instrument, Convertible, Terms Of Conversion Feature																																		The July 4% Convertible Notes were scheduled to mature on May 23, 2016 and included a one-time interest charge of 4% due on maturity. The July 4% Convertible Notes (plus accrued interest) converted at the option of the holder, in whole or in part and from time to time, into shares of our common stock at a conversion rate equal to (i) the lesser of $0.80 per share or (ii) 80% of the average of the three lowest closing prices of our common stock for the previous 20 trading days prior to conversion (subject to a floor price of $0.25 per share).
Debt Instrument, Issuance Date													Apr. 28, 2011																				Jul. 15, 2011
Debt Instrument, Interest Rate, Stated Percentage								5.75%				5.75%		12.00%					10.00%														4.00%
Debt Instrument, Maturity Date													May 20, 2016																			May 23, 2016
Debt Instrument, Unamortized Discount									9,000,000		25,800,000
Debt Discount Balance Expensed																														381,000
Debt Conversion, Converted Instrument, Warrants or Options Issued																						1,000,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					6,363,638						97,614,999												750,000				1,500,000				1,079,137
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.52		$ 0.52																	$ 0.70	$ 0.50	$ 0.52		$ 0.50			$ 0.46			$ 0.70
Guarantor Obligations, Maximum Exposure, Undiscounted																						1,400,000
Term Loan Commitments																													7,500,000
Proceeds from Convertible Debt																	3,000,000
Debt Instrument, Face Amount																	2,250,000			750,000
Debt Discount Conversion of Options And Warrants																2,250,000		2,250,000
Derivative Liability																							14,000
Equity Raising Transaction Proceeds Percentage Applied For Redemption								35.00%
Put Options Amount Exempt								10,000,000
Debt Instrument, Convertible, Conversion Price																																			$ 0.41
Warrants Fair Value									6,600,000		21,500,000
Warrants Initial Value		1,100,000							1,500,000		2,600,000
Floor Price															$ 0.25
Term Loan Commitments Amount Modified																													4,500,000
Term Loan FirstTranche																													4,500,000
Deferred Fee																														142,000
Debt Conversion, Converted Instrument, Shares Issued																		5,981,859																			347,000
Percentage In Number Of Shares	75.00%
Exercise Price On Market Price	125.00%
Deferred Debt Issuance Cost																69,000
Gains (Losses) on Extinguishment of Debt, before Write off of Deferred Debt Issuance Cost																														330,000
Amortization of Deferred Charges, Total		840,043	186,931																					298,000
Changes In Fair Value Warrants																												12,000
Debt Instrument, Fair Value Disclosure																						2,100,000
Line of Credit Facility, Maximum Amount Outstanding During Period							35,000,000			9,000,000	26,000,000
Debt Instrument, Redemption Price, Percentage								33.33%
Embedded Derivative, Fair Value Of Embedded Derivative Liability									3,000,000		5,300,000
Repayments of Convertible Debt																																						339,000	339,000
Fair Value Of Warrants Issued																						$ 546,000							$ 568,000
Stock Issued During Period, Shares, Other						2,709,677

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule Of Financial Assets And Liabilities At Fair Value [Table Text Block]

The following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013:

	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Total investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Liabilities
Embedded conversion options	$	—	$	—	$	1,515,540	$	1,515,540
Stock purchase warrants		-		-		1,733,055		1,733,055
Total derivative liabilities	$	—	$	—	$	3,248,595	$	3,248,595

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Total investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Liabilities
Embedded conversion options	$	—	$	—	$	7,524,851	$	7,524,851
Stock purchase warrants		-		-		30,581,524		30,581,524
Total derivative liabilities	$	—	$	—	$	38,106,375	$	38,106,375

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

The following tables set forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2014:

Description	Balance at  December 31,  2013		Established in 2014		Effect of  Conversion to  Common Stock		Reclassed to  Additional  Paid-In Capital (1)		Change in Fair Value		Balance at  September 30, 2014
Derivative liabilities:
Embedded conversion options	$	1,515,540	$	8,825,935	$	(1,932,693)	$	—	$	(883,931)	$	7,524,851
Stock purchase warrants	$	1,733,055	$	29,137,683	$	—	$	(1,331,776)	$	1,042,562	$	30,581,524
	$	3,248,595	$	37,963,618	$	(1,932,693)	$	(1,331,776)	$	158,631	$	38,106,375

(1) Various warrants were reclassified to additional paid-in capital as a result of the expiration of non-standard anti-dilution clauses contained within the warrants.

Schedule of Impaired Intangible Assets [Table Text Block]

The following table represents the fair value hierarchy for our non-financial assets measured on a non-recurring basis during the first nine months of 2014:

	Level 1		Level 2		Level 3		Total
Intangible assets
Intangible assets - IPR&D	$	—	$	—	$	25,926,000	$	25,926,000
Intangible assets - Trademarks		-		-		716,614		716,614
Total	$	—	$	—	$	26,642,614	$	26,642,614

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Recent Financing and Other Capital Transactions

9 Months Ended

Sep. 30, 2014

Securities Financing Transactions [Abstract]

Recent Financing And Other Capital Transactions [Text Block]

Note 2 — Recent Financing and Other Capital Transactions

In 2014, we raised capital by issuing various debt, equity and equity-linked securities, and have modified, redeemed, extinguished or converted several previously outstanding securities.

December 2013 Convertible Bridge Note – 2^nd Tranche

In January 2014, we closed on the second tranche of our December 2013 convertible bridge notes, issuing convertible debt for $750,000 of gross proceeds. As a result of certain non-standard anti-dilution provisions, we classified the conversion option embedded in the convertible notes as a derivative liability, initially at its estimated fair value of approximately $0.6 million and re-measured the conversion option to fair value at each balance sheet date. As a result, we recognized a discount on the convertible notes of $0.6 million; we amortized the discount on the notes over the term of the notes using the effective interest method. On March 31, 2014 the holders of the December 2013 convertible bridge notes (except for one holder) agreed to convert their outstanding notes pursuant to its terms, converting into 5,981,859 shares of common stock. The Company repaid, in its entirety, the portion of the debt excluded from the conversion (including interest and prepayment penalties) pursuant to its terms, for a total cash payment of approximately $339,000. The unamortized balance of the related debt discount, deferred fees, and derivative liability for the embedded conversion feature, were reclassified to additional paid-in capital.

2014 Convertible Debt Financing

On March 31, 2014, we executed an agreement (“Facility Agreement”) with Deerfield Management Company (“Deerfield”) for the issuance of a five-year senior convertible credit facility. The facility provided for an initial draw of $9 million of 5.75% senior secured convertible notes, initially convertible into a fixed number of shares of our common stock at $0.52 per share, and matures on March 31, 2019. In connection with the convertible debt, we also issued to Deerfield seven-year detachable stock purchase warrants to acquire 25,115,384 shares of our common stock at an initial exercise price of $0.52 per share.

As a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes as derivative liabilities, initially at their estimated relative fair value of approximately $6.0 million and $3.0 million, respectively. As a result, we recognized a discount on the convertible notes of $9.0 million which we are amortizing over the term of the notes using the effective interest method. We re-measure the warrants and the conversion option to fair value at each balance sheet date.

The convertible credit facility also provided for a second tranche of $26.0 million contingent upon shareholder approval of the authorization of a sufficient number of common shares available for conversion. On June 25, 2014, following satisfaction of closing conditions, the Company completed the second draw under the Facility Agreement in the aggregate amount of $26.0 million (the “Second Draw”). Further, pursuant to the terms of the Facility Agreement and at the time of the Second Draw, the Company issued to Deerfield 67,500,000 warrants to purchase shares of the Company’s common stock at the exercise price of $0.52 per share, subject to adjustments. These warrants are substantially identical to the warrants issued to Deerfield in the connection with the First Draw and as a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes as derivative liabilities, initially at their estimated relative fair value of approximately $20.5 million and $5.3 million, respectively. As a result, we recognized a discount on the convertible notes of $25.8 million, which we are also amortizing over the term of the notes using the effective interest method. We also re-measure the warrants and the conversion option associated with the Second Draw to fair value at each balance sheet date. Accrued interest on the 2014 convertible credit facility is included in long-term-liabilities- Other liabilities on the Condensed Consolidated Balance Sheets.

March 2014 Equity Offering

On March 31, 2014 we raised $2.0 million from the private placement of 3,846,154 shares of common stock (at a price of $0.52 per share) and five-year stock purchase warrants to purchase 2,884,615 shares of common stock at $0.52 per shares. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $1.1 million. We re-measure the warrants to fair value at each balance sheet date. Issuance costs, in the form of warrants and fees, were valued at approximately $136,000 and were recorded to additional paid-in-capital.

March 2014 Amendment to Existing Note

To facilitate the Deerfield financing discussed above, we modified our existing $2.1 million note with JP Nevada Trust to subordinate the note to the new convertible notes. In exchange for the subordination, we issued to JP Nevada Trust five-year stock purchase warrants to acquire 750,000 shares of our common stock at $0.52 per share. As a result of certain exercise contingencies, non-standard anti-dilution provisions and cash settlement features contained in the warrants, we initially classified the detachable stock purchase warrants as derivative liabilities at their estimated relative fair value of approximately $14,000. The $2.1 million note with JP Nevada Trust was retired in conjunction with the Second Draw under the Facility Agreement in June 2014 and the warrants expired pursuant to their terms upon repayment of the debt.

2014 Placement Agent Costs

In connection with the March 2014 Deerfield financing and equity offering discussed above, we paid the placement agent cash fees of $880,000 and issued to them five-year stock purchase warrants to purchase 1,474,615 shares of common stock at $0.52 per share. The total fees were allocated to the debt and equity components (as deferred financing fees and additional paid in capital, respectively) on a relative fair value basis. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we initially classified the detachable stock purchase warrants as derivative liabilities at their estimated relative fair value of approximately $0.5 million. We re-measure the warrants to fair value at each balance sheet date.

In connection with the closing of the second draw on the Deerfield facility, the Company paid the placement agent an additional $1.71 million cash commission and issued to them additional five-year stock purchase warrant to acquire 3,525,000 shares of the Company’s common stock on the terms and provisions substantially similar to first draw. The total fees associated with the debt were recorded as deferred financing fees. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $0.90 million. We re-measure the warrants to fair value at each balance sheet date.

Mid-Cap Term Loan pay-off

We paid off in its entirety the Mid-Cap Financial term loan for a total cash payment of $3,811,767 on March 31, 2014, including principal of $3,450,000 and accrued interest of approximately $31,717. In connection with this transaction, we incurred and expensed prepayment penalties of $330,050 which are classified as interest expense in the accompanying condensed consolidated statements of operations.

(See Note 7 – Debt and Note 8 — Equity and Equity-Linked Securities for additional details regarding our debt and equity transactions.)

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Sep. 30, 2014	Dec. 31, 2013
Temporary equity, shares issued	909,091	909,091
Temporary equity, shares outstanding	909,091	909,091
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	425,000,000	425,000,000
Common stock, issued	124,410,100	107,164,855
Common stock, outstanding	124,410,100	107,164,855

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 12 — Subsequent Events

Aldagen Contingent Consideration - Second Amendment to the February 8, 2012 Exchange and Purchase Agreement

On November 11, 2014, Nuo Therapeutics, Inc., a Delaware corporation (“Nuo Therapeutics”), Aldagen, Inc., a Delaware corporation (“Aldagen”, and together with “Nuo Therapeutics”, the “Company”) and Aldagen Holdings, LLC, a North Carolina limited liability company (“Aldagen Holdings”), executed that certain Second Amendment (the “Second Amendment”) to the February 8, 2012 Exchange and Purchase Agreement, as amended on February 8, 2013 (as amended to date, the “Exchange Agreement”). All disinterested members of the Board reviewed and approved the terms and provisions of the Second Amendment. Pursuant to the terms of the Second Amendment, the terms of the post-closing consideration originally contemplated under the Exchange Agreement and structured around the achievement of certain milestone events relating to the Company’s ALD-401 Phase 2 clinical trials were amended such that, in full satisfaction of all the post-closing issuance obligations of the Company to Aldagen Holdings, the Company agreed to a one-time issuance of 1,270,000 shares of Nuo Therapeutics common stock (the “Post-Closing Amended Shares”), out of the 20,309,723 shares of our common stock held in reserve, which were contingently issuable upon the achievement of certain milestones related to the current ALD-401 Phase 2 clinical trial. In addition, the parties to the Second Amendment agreed to terminate the originally contemplated registration requirements with respect to any post-closing share issuance. The Second Amendment provides Aldagen Holdings with “piggy-back” registration rights with respect to the Post-Closing Amended Shares for the duration of twelve months following the date of the Second Amendment such that the Company will use its reasonable best efforts to include the Post-Closing Amended Shares in its registration statements to register the resale of such shares by Aldagen Holdings. The Company issued the Post-Closing Amended Shares in reliance upon an exemption from registration contained in Section 4(2) and Rule 506 under the Securities Act; such shares may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

In November 2014, the Board of Directors of the Company determined, among other things, that following the Company's May 2014 determination that the RECOVER-Stroke Phase 2 clinical trial in patients treated with ALD-401 were not clinically or statistically significant and the Company's subsequent determination to discontinue further funding of the ALD-401 development program and close the R&D Facility in Durham, NC, approximately 20.3 million shares of the Company's common stock reserved under the terms of the Exchange and Purchase Agreement, as amended, are to be released from reserve into the Company's capital stock.

Nashville, Tennessee facility lease

The Company executed a lease beginning on October 1, 2014 for a facility located in Nashville, Tennessee, comprised of approximately 2,076 square feet, at approximately $4,000 per month expiring on April 30, 2018.

Amendment to 2013 Equity Incentive Plan

On November 12, 2014 at our 2014 Annual Meeting our shareholders voted to amend the 2013 Equity Incentive Plan to increase the maximum number of shares of common stock which may be (i) issued to key employees as stock options in any calendar year, (ii) used for stock awards and/or stock unit awards intended to qualify as “performance-based” to any key employee in any calendar year under Section 162(m) of the Internal Revenue Code, and (iii) used for stock awards and/or stock unit awards, all as described in more detail in the Proxy Statement.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 06, 2014
Document Information [Line Items]
Entity Registrant Name	NUO THERAPEUTICS, INC.
Entity Central Index Key	0001091596
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	CMXI
Entity Common Stock, Shares Outstanding		124,410,100
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014

XML

Business and Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Policy Text Block]

Description of Business

At our 2014 Annual Meeting, our shareholders voted to approve the name change amendment to our Certificate of Incorporation. The new name of our Company is “Nuo Therapeutics, Inc.” and the name change was effective upon filing of the Certificate of Amendment to our Certificate of Incorporation in the State of Delaware. Nuo Therapeutics, Inc., formerly Cytomedix, Inc., (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a biomedical company marketing products within the U.S. and internationally. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous from self-biological therapies for tissue repair and regeneration is part of a transformative clinical strategy designed to improve long term recovery in complex chronic conditions with significant unmet medical needs. Growth drivers in the U.S. include Medicare coverage for the treatment of chronic wounds under a National Coverage Determination when registry data is collected under Coverage with Evidence Development (“CED”), and a worldwide distribution and licensing agreement that allows our partner to promote the Angel System for all uses other than wound care.

Our current commercial offerings consist of point of care technologies for the safe and efficient separation of autologous blood and bone marrow to produce platelet based therapies or cell concentrates. We currently have two distinct platelet rich plasma (“PRP”) devices, the AutoloGel ^TM System (relaunched as Aurix ^™in October 2014) for wound care and the Angel^™ concentrated Platelet Rich Plasma (“cPRP”) System for orthopedics markets. Our sales are predominantly in the United States, where we sell our products through direct sales representatives and distributors. Since August 8, 2013, Arthrex, Inc. (“Arthrex”), as our exclusive distributor for Angel, accounted for 100% of our Angel sales.

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, licensing arrangements, royalties, and product revenues. We have incurred, and continue to incur, recurring losses and negative cash flows. On March 31, 2014, we entered into a $35,000,000 convertible debt facility, $9,000,000 of which was funded on March 31, 2014 and the remaining $26,000,000 was funded on June 25, 2014. In addition, on March 31, 2014 we raised $2.0 million of gross proceeds from the sale of our common stock and warrants to an accredited investor (See Note 2 - Recent Financing and Other Capital Transactions and Note 8 - Equity and Equity-Linked Securities for additional details.) We used approximately $5.9 million of the net proceeds from these transactions to retire outstanding debt and interest, approximately $0.34 million to repay a portion of previously outstanding convertible debt and interest, and we converted approximately $3.1 million previously outstanding convertible debt and interest into common stock (See Note 2 - Recent Financing and Other Capital Transactions and Note 7 - Debt for additional details.)

At September 30, 2014, we had approximately $20.0 million of cash on hand. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on significant customers, lack of operating history and uncertainty of future profitability and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due. We believe that our current resources will be sufficient to fund our operations through the next twelve months. Accordingly, management believes the going-concern basis is appropriate for the accompanying consolidated financial statements.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The condensed consolidated balance sheet at December 31, 2013, has been derived from audited financial statements of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our annual report on Form 10-K for the year ended December 31, 2013. Certain prior period information has been reclassified to conform to the current period presentation.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and controlled subsidiary. All significant inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, valuation of derivative liabilities, valuation and probability of contingent liabilities, fair value of long-lived assets, deferred taxes and associated valuation allowance, and the depreciable lives of fixed assets (including intangible assets and goodwill). Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

In connection with the Deerfield Facility Agreement (See Note 7 - Debt for additional details), the Company is required to maintain a compensating cash balance of $5,000,000 in deposit accounts subject to control agreements in favor of the lenders.

Receivables, Policy [Policy Text Block]

Accounts Receivable and Credit Concentration

We generate accounts receivable from the sale of our products. Our trade receivables balance at September 30, 2014 was primarily from Arthrex (41%).

We provide for a reserve against receivables for estimated losses that may result from a customer’s inability or unwillingness to pay. The allowance for doubtful accounts is estimated primarily based upon historical write-off percentages, known problem accounts, and current economic conditions. Accounts are written off against the allowance for doubtful accounts when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. At September 30, 2014 and December 31, 2013, we maintained an allowance for doubtful accounts of $58,000 and $16,000, respectively.

We use single suppliers for several components of the Angel and Aurix^™ product lines. We outsource the manufacturing of various products, including component parts for Angel, to contract manufacturers. While we believe these manufacturers to be of sufficient competency, quality, reliability, and stability, there is no assurance that one or more of them will not experience an interruption or inability to provide us with the products needed to satisfy customer demand. Additionally, while most of the components of Aurix^™ are generally readily available on the open market, a reagent, bovine thrombin, is available exclusively through Pfizer, with whom we have an established vendor relationship.

Inventory, Policy [Policy Text Block]

Inventory

Our inventory is produced by third party manufacturers and consists primarily of finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. At September 30, 2014 and December 31, 2013, we did not have a balance in our reserve for the lower of cost or market or excess and obsolete inventory. Our primary product is the Angel Processing set which has a shelf life of three years. We also maintain an inventory of kits, reagents, and other disposables that have shelf lives that generally range from ten months to five years. Expired products are segregated and used for demonstration purposes only; we write off expired inventory through cost of sales.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over its estimated useful life ranging from three to five years for all assets except for furniture, lab, and manufacturing equipment which is depreciated over seven and ten years, respectively. Leasehold improvements are stated at cost less accumulated depreciation and is depreciated, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from three to six years. Amortization of leasehold improvements is included in depreciation expense. Maintenance and repairs are charged to operations as incurred. When assets are disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expenses.

Centrifuges may be sold, leased, or placed at no charge with customers. Depreciation expense for centrifuges that are available for sale, leased, or placed at no charge with customers are charged to cost of sales. Depreciation expense for centrifuges used for sales and marketing and other internal purposes are charged to operations. When the centrifuges are sold the net book value is charged to cost of sales.

Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

Exit Activities [Policy Text Block]

Exit Activities

On May 5, 2014, we announced preliminary efficacy and safety results of our RECOVER-Stroke Phase 2 clinical trial in patients with neurological damage arising from ischemic stroke and treated with ALD-401. Observed improvements in the primary endpoint (mean modified Rankin Score or mRS) of the trial were not clinically or statistically significant. In light of this outcome, we discontinued further funding of the ALD-401 development program, decided to close our facilities in Durham, NC, and terminated certain employees.

The discontinuance of this development program is considered an exit activity. As such, we recognized the following expenses in the second and third quarters of 2014:

	Quarter ended
	June 30, 2014		September 30, 2014
Severance costs	$	320,000	$	-
Loss on abandonment of lease		-		243,000
Loss on disposal of assets		-		132,000
Total	$	320,000	$	375,000

 

Approximately $486,000 of the above costs remained accrued and unpaid as of September 30, 2014, of which $438,000 remained in accrued loss on abandonment of the lease. The accrued loss will be amortized over the life of the lease against future rental payments made and sublet income payments received. Severance expense is classified as “salaries and wages” and the loss on abandonment and loss on disposal of assets is classified as “general and administrative expenses” in the accompanying consolidate statements of operations. The severance accrual and accrued loss on abandonment are included in “accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheet. 

Goodwill and Intangible Assets, Policy [Policy Text Block]

Intangible Assets and Goodwill

Intangible assets were acquired as part of our acquisition of the Angel business and Aldagen, and consist of definite-lived and indefinite-lived intangible assets, including goodwill.

Definite-lived intangible assets

Our definite-lived intangible assets include trademarks, technology (including patents) and customer relationships, and are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any indicators were present, we test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), we would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. We periodically reevaluate the useful lives for these intangible assets to determine whether events and circumstances warrant a revision in their remaining useful lives. During the second quarter of 2014, as a result of recent events and changes in circumstances, the Company performed an assessment of our trademarks and concluded that the carrying value of the trademarks was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Indefinite-lived intangible assets

We evaluate our indefinite-lived intangible asset, consisting solely of in-process research and development (“IPR&D”) acquired in the Aldagen acquisition, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, and at least on an annual basis on October 1 of each year, by comparing the fair value of the asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we would recognize an impairment loss in the amount of that excess. During the second quarter of 2014 the Company performed an assessment of our IPR&D as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the carrying value of the IPR&D was impaired. (See Note 5 — Goodwill and Intangible Assets for additional details.)

Goodwill

Goodwill represents the purchase price of acquisitions in excess of the amounts assigned to acquired tangible or intangible assets and assumed liabilities. Amounts allocated to goodwill are tax deductible in all relevant jurisdictions. As a result of our acquisition of Aldagen in February 2012, we recorded goodwill of approximately $422,000. Prior to the acquisition of Aldagen, we had goodwill of approximately $707,000 as a result of the acquisition of the Angel business in April 2010.

We conduct an impairment test of goodwill on an annual basis as of October 1 of each year, and will also conduct tests if events occur or circumstances change that would, more likely than not, reduce the Company’s fair value below its net equity value impaired. The Company conducted an impairment test of our Goodwill as of June 30, 2014, as a result of recent events and changes in circumstances, and concluded that the fair value was not impaired (See Note 5 — Goodwill and Intangible Assets for additional details.)

Conditionally Redeemable Common Stock, Policy [Policy Text Block]

Conditionally Redeemable Common Stock

The Maryland Venture Fund (“MVF,” part of Maryland Department of Business and Economic Development) has an investment in our common stock, and can require us to repurchase the common stock, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. MVF’s common stock is are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheets.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

We recognize revenue when the four basic criteria for recognition are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

Sales of products

We provide for the sale of our products, including disposable processing sets and supplies to customers. Revenue from the sale of products is recognized upon shipment of products to the customers. We do not maintain a reserve for returned products as in the past those returns have not been material.

Usage or leasing of blood separation equipment

As a result of the acquisition of the Angel^™ business in 2010, we acquired various multiple element revenue arrangements that combine the (i) usage or leasing of blood separation processing equipment, (ii) maintenance of processing equipment, and (iii) purchase of disposable processing sets and supplies. We assigned these multiple element revenue arrangements to Arthrex on August 7, 2013. (See Note 3 — Distribution and License Agreement with Arthrex for additional details.) Under these arrangements, the total arrangement consideration was allocated to the various elements based on their relative estimated selling prices. The usage of the blood separation processing equipment was accounted for as an operating lease; since customer payments were contingent upon the customer ordering new products, rental income was recorded following the contingent rental method when rental income was earned and collectability was reasonably assured. The sale of disposable processing sets and supplies and maintenance were deemed a combined unit of accounting; since (a) any consideration for disposable processing sets and supplies and maintenance was contingent upon the customer ordering additional disposable processing sets and supplies and (b) both the disposable products and maintenance services were provided over the same term, we recognized revenue for this combined unit of accounting following the contingent revenue method at the time disposable products were delivered based on prices contained in the agreement.

Percentage-based fees on licensee sales of covered products are generally recorded as products are sold by licensees and are reflected as “Royalties” in the consolidated statements of operations. Direct costs associated with product sales and royalty revenues are recorded at the time that revenue is recognized.

Deferred revenue at September 30, 2014 consists of prepaid licensing revenue of approximately $1,542,000. Revenue of approximately $302,000 related to the prepaid license was recognized during the nine months ended September 30, 2014. On January 1, 2013 a medical device excise tax came into effect that required manufacturers to pay tax of 2.3% on the sale of certain medical devices. We report the medical device excise tax on a gross basis, recognizing the tax as both revenue and cost of sales.

Segment Reporting, Policy [Policy Text Block]

Segments and Geographic Information

We operate in one business segment. Approximately 50% and 30% of our product sales were generated outside of the United States for the three month and nine month periods ended September 30, 2014, respectively. Approximately 6% and 13% of our product sales were generated outside of the United States for the three and nine month periods ended September 30, 2013.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenses

Research and development costs are expensed as incurred and primarily consist of expenses relating to product development.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

We have a stock-based compensation plan that includes stock options and other equity awards, which are awarded in exchange for employee, non-employee director and other non-employee services.

Stock-based compensation cost for employee and non-employee director stock options is determined at the grant date using an option pricing model and stock-based compensation cost for restricted stock is based on the closing market price of the stock at the grant date. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the employee's requisite service period. Stock-based compensation for awards granted to non-employees is periodically remeasured as the underlying options and warrants vest. We recognize an expense for such awards throughout the performance period as the services are provided by the non-employees, based on the fair value of these options and warrants at each reporting period.

Valuation of stock awards requires management to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the future volatility of the Company’s stock price, dividend yields, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can affect the fair value estimate. We recognize the estimated fair value of stock-based awards and classify the expense where the underlying salaries or other related costs are classified.

Stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 was as follow:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Salaries and wages	$	362,046	$	121,929	$	834,240	$	434,790
Consulting		246		-		9,921		-
General and administrative		28,597		28,134		95,317		103,168
Total share-based compensation expense	$	390,889	$	150,063	$	939,478	$	537,958

Income Tax, Policy [Policy Text Block]

Income Taxes

We account for income taxes using the asset and liability approach, which requires the recognition of future tax benefits or liabilities on the temporary differences between the financial reporting and tax bases of our assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. We also recognize a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. Our policy is to recognize interest and penalties on uncertain tax positions as a component of income tax expense. 

Income tax expense was $4,645 and $4,890 during the three months ended September 30, 2014 and 2013 and $13,935 and $14,670 during the nine months ended September 30, 2014 and 2013, respectively. These relate exclusively to the generation of a deferred tax liability associated with the tax amortization of goodwill, which is included as a component of other long-term liabilities on our condensed consolidated balance sheets.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and convertible preferred stock and convertible debt using the if-converted method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive. The total number of anti-dilutive shares, common stock options, warrants exercisable for common stock, convertible preferred stock and convertible debt, which have been excluded from the computation of diluted earnings (loss) per share, were 224,287,504 and 28,207,642 for the nine months ended September 30, 2014 and 2013, respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The Financial Accounting Standards Board (FASB or Board) and the International Accounting Standards Board (IASB) (collectively, the Boards) jointly issued a long-awaited standard that will supersede virtually all of the revenue recognition guidance in U.S. GAAP. The FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB has set an effective date of fiscal years beginning after December 15, 2016. Early adoption is not permitted for public entities. FASB ASU No. 2014-09 will amend FASB Accounting Standards Codification™ (ASC) by creating Topic 606, Revenue from Contracts with Customers and Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. This document reorganizes the guidance contained in FASB ASC 606 (revenue recognition standard), to follow the five step revenue recognition model along with other guidance impacted by this standard. The potential effects of the adoption of ASU 2014-09, Topic 606 on our results of operations and the Company’s Condensed Consolidated Financials have not been determined at this time.

ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Previously, there was no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. FASB issued ASU 2014-15 to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact, if any, that the adoption will have on its financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues
Product sales	$ 1,200,719	$ 2,925,971	$ 4,474,970	$ 7,541,874
License fees	100,594	67,063	301,783	67,063
Royalties	390,714	244,350	1,087,307	369,646
Other revenue	0	128,835	0	128,835
Total revenues	1,692,027	3,366,219	5,864,060	8,107,418
Cost of revenues
Cost of sales	1,290,449	2,817,386	4,552,317	5,439,401
Cost of royalties	43,853	32,504	132,543	41,578
Total cost of revenues	1,334,302	2,849,890	4,684,860	5,480,979
Gross profit	357,725	516,329	1,179,200	2,626,439
Operating expenses
Salaries and wages	1,950,307	1,967,965	6,220,302	6,011,337
Consulting expenses	204,985	415,947	1,374,616	1,596,576
Professional fees	303,083	385,344	935,112	827,198
Research, development, trials and studies	636,239	922,999	2,547,559	3,050,038
General and administrative expenses	1,760,379	1,433,611	4,387,700	5,415,768
Impairment of IPR&D and trademarks	0	0	4,683,829	0
Total operating expenses	4,854,993	5,125,866	20,149,118	16,900,917
Loss from operations	(4,497,268)	(4,609,537)	(18,969,918)	(14,274,478)
Other income (expense)
Interest, net	(818,493)	(378,587)	(2,587,366)	(1,323,900)
Change in fair value of derivative liabilities	542,868	5,789	(158,631)	250,349
Other	(8,045)	12,076	(9,284)	12,331
Total other income (expense)	(283,670)	(360,722)	(2,755,281)	(1,061,220)
Loss before provision for income taxes	(4,780,938)	(4,970,259)	(21,725,199)	(15,335,698)
Income tax provision	4,645	4,890	13,935	14,670
Net loss	$ (4,785,583)	$ (4,975,149)	$ (21,739,134)	$ (15,350,368)
Loss per common share — Basic and diluted (in dollars per share)	$ (0.04)	$ (0.05)	$ (0.18)	$ (0.15)
Weighted average shares outstanding — Basic and diluted (in shares)	123,968,305	104,890,396	118,990,010	102,891,983

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Debt

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 7 — Debt

Outstanding Debt as of September 30, 2014

At September 30, 2014 we have outstanding debt consisting of the Deerfield 5.75% convertible debt due March 31, 2019.

(See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

On March 31, 2014, we executed agreements with Deerfield for the issuance of a five-year senior secured convertible credit facility. Under the terms of this agreement, Deerfield agreed to provide to us a convertible credit facility (the “Facility Agreement”) in an amount up to $35 million which was disbursed as follows: (i) the initial draw of $9 million of the Facility Agreement was disbursed on March 31, 2014 (the “First Draw”), and (ii) following the authorization by our shareholders to increase our authorized capital stock (the “Share Authorization Event”), which occurred on June 9, 2014, we were required to draw and Deerfield was required to fund, the remaining $26 million of the Facility Agreement (the “Second Draw”). In addition to the convertible notes, we issued stock purchase warrants to purchase up to 97,614,999 shares of our common stock at an initial exercise price of $0.52 per share (subject to adjustments). (See Note 8 — Equity and Equity-Linked Securities for additional details.)

Outstanding amounts under the Facility Agreement are due in full on March 31, 2019. The Facility Agreement is structured as a purchase of senior secured convertible notes (the “Notes”), which bear interest at a rate of 5.75% per annum, payable quarterly in arrears in cash or, at our election after the Second Draw, registered shares of common stock; provided, that during the first five quarters following the closing, we have the option of having all or any portion of accrued interest added to the principal balance of the Facility Agreement.

Following the Share Authorization Event, which occurred on June 9, 2014, Deerfield has the right to convert the principal amount of the Facility Agreement into shares of our common stock (“Conversion Shares”) at a per share price equal to $0.52. In addition, we granted to Deerfield the option to require the Company to redeem up to 33.33% of the total amount drawn under the Facility Agreement together with any accrued and unpaid interest thereon, on each of the second, third, and fourth anniversaries of the closing with the option right triggered upon the Company’s net revenues failing to be equal or exceed the quarterly milestone amounts set forth in the Facility Agreement. We also granted Deerfield the option to require us to apply 35% of the proceeds received by us in equity-raising transaction(s) to redeem outstanding principal and interest of the Notes, provided that the first $10 million so raised by us will be exempt from this put option. We entered into a security agreement which provides, among other things, that our obligations under the Notes will be secured by a first priority security interest, subject to customary permitted liens, on all our assets. We also entered into a Registration Rights Agreement dated as of the same date (the “Deerfield Registration Rights Agreement”) pursuant to which we agreed to file a registration statement to register the resale of the Conversion Shares and the Deerfield Warrant Shares of our common stock following the Share Authorization Event. Such Registration Rights Agreement was filed on July 10, 2014. ) (See Note 11 – Commitments and Contingencies for additional details.)

As a result of certain non-standard anti-dilution provisions and cash settlement features, we classified the detachable stock purchase warrants and the conversion option embedded in the convertible notes associated with the First Draw and Second Draw as derivative liabilities. The derivative liabilities associated with the First Draw were recorded initially at their estimated relative fair value of approximately $6.6 million and $3.0 million, respectively and those associated with the Second Draw, initially at their estimated relative fair value of approximately $21.5 million and $5.3 million respectively. As a result, we recognized a discount on the convertible notes of $9.0 million associated with the First Draw and $25.8 million associated with the Second Draw. We are amortizing the discount on both of the notes over the term of the notes using the effective interest method. In addition, we re-measure the warrants and the conversion option to fair value at each balance sheet date. The issuance costs, in the form of warrants and fees, related to the First Draw and Second Draw were valued at approximately $1.5 million and $2.6 million, respectively, were recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method). The issuance costs associated with the Second Draw included a yield enhancement fee, for which we issued 2,709,677 shares of the Company’s commons stock, with a fixed value of approximately $1.1 million which was also recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

Debt No Longer Outstanding at September 30, 2014

JP Nevada Trust 12% Note

On April 28, 2011, we borrowed $2.1 million pursuant to a secured promissory note that matures May 20, 2016. The note accrued interest at a rate of 12% per annum, and required interest-only payments each quarter commencing September 30, 2011, with the then outstanding principal due on the maturity date. The note was secured by our Angel assets. In connection with the issuance of the secured promissory note, we issued the lender a warrant to purchase up to 1,000,000 shares at an exercise price of $0.50 per share, with variable vesting provisions.

Of the $2,100,000 due under the note, our payment obligations with respect to $1,400,000 under the note were guaranteed by certain insiders, affiliates, and shareholders. In connection with this guarantee, we issued 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 with variable vesting provisions.

The warrants issued to the lender and the guarantors were valued at approximately $546,000, were recorded as deferred debt issuance costs, and were being amortized to interest expense on a straight-line basis over the guarantee period (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

On March 31, 2014 in connection with the Deerfield Facility, JP Nevada Trust agreed to subordinate its security interest in the note. In consideration, we issued to the holder a 5-year warrant to purchase 750,000 shares of our common stock at an exercise price of $0.52 per share. The warrants were valued at approximately $14,000 and are classified as derivative liabilities.

(See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

The $2.1 million note with JP Nevada Trust was retired in conjunction with the Second Draw under the Facility Agreement in June 2014 and the warrants expired pursuant to their terms upon repayment of the debt. The corresponding deferred debt issuance costs of $298,000 were charged to interest expense in the condensed consolidated statements of operations and we re-measured the corresponding warrants to fair value at June 30, 2014. (See Note 8 – Equity and Equity-Linked Securities for additional details.)

JMJ 4% Convertible Notes

On July 15, 2011, we issued $1.3 million of our 4% Convertible Notes (the “July 4% Convertible Notes”) to JMJ Financial. The July 4% Convertible Notes were scheduled to mature on May 23, 2016 and included a one-time interest charge of 4% due on maturity. The July 4% Convertible Notes (plus accrued interest) converted at the option of the holder, in whole or in part and from time to time, into shares of our common stock at a conversion rate equal to (i) the lesser of $0.80 per share or (ii) 80% of the average of the three lowest closing prices of our common stock for the previous 20 trading days prior to conversion (subject to a “floor” price of $0.25 per share). On April 28, 2014, the remaining balance of the face amount of the July 4% Convertible Notes and accrued interest were converted into approximately 347,000 shares of common stock at a conversion price of $0.41 per share.

Mid-Cap Financial Term Loan

On February 19, 2013, we entered into a Credit and Security Agreement (the “Credit Agreement”) with Mid-Cap Financial (“MidCap”) that provided for aggregate term loan commitments of $7.5 million, subsequently modified to $4.5 million. We received the first tranche of $4.5 million on February 27, 2013. On March 31, 2014, we repaid the term loan in its entirety along with approximately $330,000 in early payment penalties and fees. The balance of the unamortized debt discount of approximately $381,000 and deferred fees of approximately $142,000 were charged to interest expense in the condensed consolidated statements of operations.

In connection with term loan, we issued the lender a seven-year warrant to purchase 1,079,137 shares of the Company’s Common stock at the warrant exercise price of $0.70 per share. The exercise price and the number of shares issuable upon exercise of the warrant is subject to standard anti-dilution adjustments and contains a cashless exercise provision. The warrants issued to the lender were valued at approximately $568,000, were recorded as a debt discount, and were being amortized to interest expense over the term of the loan (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method). The warrants are classified in equity.

On December 10, 2013, we revised the exercise price of the warrants to $0.46 per share (“Amendment to the MidCap Warrant”). As a result of the Amendment to the MidCap Warrant, the fair value of the warrants were modified and the change was recognized as an increase to debt discount and amortized over the remaining life of the loan. The change in the fair value of the warrants was approximately $12,000.

December 2013 Convertible Bridge Note

On November 21, 2013, we executed agreements with certain investors for the subsequent issuance of 10% subordinated convertible notes (“10% Subordinated Convertible Notes”) and stock purchase warrants, for gross proceeds of up to $3 million. The eventual closing was contingent upon several factors; we received $2.25 million of the expected gross proceeds at the first closing, which occurred on December 10, 2013 after the Company received an acceptable Centers for Medicare and Medicaid Services (“CMS”) reimbursement determination for Aurix^™. We received $0.75 million of the gross proceeds in February 2014. (See Note 2 — Recent Financing and Other Capital Transactions for additional details.)

On March 31, 2014 the holders of the December 2013 convertible bridge notes (except for one holder), agreed to convert their outstanding notes pursuant to its terms, converting into 5,981,859 shares of common stock. The Company repaid, in its entirety, the portion of the debt excluded from the conversion (including interest and prepayment penalties) pursuant to its terms, for a total cash payment of approximately $339,000. The unamortized balance of the related debt discount, deferred fees, and derivative liability for the embedded conversion feature, were reclassified to additional paid-in capital.

The conversion option embedded in the 10% Subordinated Convertible Notes and related warrants issued to the investors was accounted for as a derivative liability and was recorded at full fair value relative to the total gross proceeds which totaled $2.25 million at December 10, 2013, resulting in a debt discount of $2.25 million. The debt discount was amortized as additional interest expense using the interest rate method through the maturity date. The embedded conversion option and the warrants were recorded at fair value and marked to market at each period, with the resulting change in fair value reflected as “change in fair value of derivative liabilities” in the accompanying condensed consolidated statements of operations.

In connection with the issuance of the Notes, we also agreed to issue to the investors in the Offering five-year warrants (the “Warrants”) to purchase shares of our Common stock in the amount equal to 75% of the number of shares into which the Notes may be converted at the Closing, at an exercise price equal to 125% of the Market Price (as defined). The Warrants also contain non-standard anti-dilution adjustments and contain certain net settlement features.

Warrants issued to the placement agent were value at approximately $69,000, were recorded as deferred debt issuance costs, and are being amortized to interest expense on a straight-line basis through the maturity date (we determined that the straight-line method of amortization did not yield a materially different amortization schedule from the effective interest method).

As a result of the scheduled expiration of non-standard anti-dilution clauses contained within the investors and placement agent warrants, the warrants were reclassified to equity at their fair value on June 9, 2014.

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Accrued Expenses

9 Months Ended

Sep. 30, 2014

Accrued Liabilities, Current [Abstract]

Accrued Liabilities [Text Block]

Note 6 — Accrued Expenses

	September 30,		December 31,
	2,014		2,013
Customer deposits	$	2,500,524	$	1,795,803
Accrued compensation and benefits		969,160		795,584
Other payables		729,043		242,993
Accrued interest		3,375		2,250
Due to Arthrex		322,794		1,630,564
Accrued professional fees		259,346		199,634
Accrued loss on abandonment of lease, current portion		103,176		--
	$	4,887,418	$	4,666,828

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Equity and Equity-Linked Securities (Tables)

9 Months Ended

Sep. 30, 2014

Schedule Of Proceeds From Issuance Of Common Stock [Table Text Block]

The following table lists the sources of and the net proceeds from those issuances:

Source	# of Shares		Total Net Proceeds
Sale of shares pursuant to private offering		3,846,154	$	1,911,695
Sale of shares pursuant to February 2013 equity purchase agreement		3,750,000	$	1,754,565
Issuance of shares in lieu of cash for fees incurred pursuant to February 2013 equity purchase agreement		43,865	$	—
Issuance of shares for conversion of 4% Convertible Notes		886,690	$	—
Issuance of shares for conversion of 10% Convertible Notes		5,981,859	$	—
Issuance of shares to Class 4A Equity shareholder pursuant to June 2002 Reorganization Plan		27,000	$	—
Issuance of shares in lieu of cash for the Deerfield facility yield enhancement		2,709,677	$	—
Totals		17,245,245	$	3,666,260

Schedule of Stock Options Granted [Table Text Block]

The following tables summarize the stock options granted by the Company during the three and nine months ended September 30, 2014. These options were granted to employees and board members under our 2002 LTIP and 2013 EIP.

Three Months Ended			Nine Months Ended
September 30, 2014			September 30, 2014
Options Granted	Exercise Price		Options Granted	Exercise Price
1,363,900		$0.39-$0.60	7,715,800		$0.39-$0.61

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following table summarizes information about stock options outstanding as of September 30, 2014:

		Options Outstanding						Options Exercisable
				Weighted		Weighted				Weighted
Range of		Number of		Average		Average				Average
Exercise		Outstanding		Remaining		Exercise		Number		Exercise
Prices		Shares		Contract Life		Price		Exercisable		Price
	$0.30 - $0.50		2,311,800		7.79	$	0.42		960,998	$	0.43
	$0.51 - $0.75		7,738,066		8.65	$	0.60		2,509,159	$	0.60
	$0.76 - $1.25		825,831		5.56	$	0.95		719,163	$	0.97
	$1.26 - $1.75		2,062,646		4.67	$	1.42		1,950,646	$	1.42
	$1.76 - $2.75		889,666		2.53	$	2.30		867,831	$	2.30
	$2.76 - $4.50		0		—		—		0		—
	$4.51 - $6.00		70,000		1.28	$	5.20		70,000	$	5.20

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

Warrant activity for the nine months ended September 30, 2014 was as follows:

Warrants outstanding at December 31, 2013 (i)	23,019,301
Warrants issued in connection with convertible bridge notes (February 2014)	232,964
Warrants issued in connection with March 2014 equity placement (Anson)	2,884,615
Warrants issued in connection with March 2014 Convertible Notes (Deerfield)	25,115,384
Warrants issued in connection with March 2014 Convertible Notes (agent)	1,474,615
Warrants issued in connection with JP Nevada Trust Note amendment	750,000
Warrants issued in connection with a consulting agreement	20,000
Warrants issued in connection with June 2014 Convertible Notes (Deerfield)	67,500,000
Warrants issued in connection with June 2014 Convertible Notes (agent)	3,525,000
February 2013 subordination warrants (June 2014) (ii)	(800,000)
JP Nevada Trust Note amendment March 2014 warrants (June 2014) (iii)	(750,000)
Other warrants expired in 2014	(200,000)
Warrants outstanding at September 30, 2014	122,771,879

(i) The December 31, 2013 warrants outstanding figure includes:

a) February 2012 Inducement warrants - 30% (354,156) which were immediately exercisable; 70% (826,391) would be exercisable upon successful ALD-401 Stroke trial.  (See Note 12 – Subsequent Events for additional details.)

b) February 2012 Aldagen warrants - 30% (634,672) which were immediately exercisable; 70% (1,480,924) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.)

(ii) The February 2013 Subordination warrants (800,000), which expire February 18, 2018, are included in the warrants outstanding at December 31, 2013. However, these warrants were only exercisable if the JPNT Note remained outstanding on or after April 28, 2015 (50% of the total) and April 15, 2016 (remainder). The JPNT Note was retired on June 25, 2014, therefore, these warrants cannot be exercised and therefore are not included in warrants outstanding at June 30, 2014.

(iii) The warrants issued in connection with March 2014 JP Nevada Trust Note amendment (750,000), which expire March 31, 2019, were exercisable only upon the occurrence of the “Warrant Exercise Event” as defined in the warrant. Since the “Warrant Exercise Event” cannot occur as defined, the warrants issued in connection with the March 2014 JP Nevada Trust Note (750,000) cannot be exercised. Therefore, these warrants are not included in the warrants outstanding at June 30, 2014.

Schedule Of Share Based Compensation Stock Warrants Activity [Table Text Block]

A summary of service provider warrant activity, excluding warrants issued to investors and bankers in connection with various financings, for the nine months ended September 30, 2014, and changes during the nine months ended September 30, 2014 is presented below:

Warrants to Service Providers	Shares		Weighted- Average Exercise  Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		1,661,364	$	1.24		1.9
Granted		20,000	$	0.40
Exercised		0		—
Forfeited or expired		(200,000)	$	1.50
Outstanding at September 30, 2014		1,481,364	$	1.20		1.5
Exercisable at September 30, 2014		1,466,364	$	1.20		1.5

Incentive Plan [Member]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of option activity under the LTIP and EIP for the nine months ended September 30, 2014 is presented below:

Stock Options	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		8,520,816	$	1.19
Granted		7,715,800	$	0.57
Exercised		0		—
Forfeited or expired		(2,338,607)	$	1.22
Outstanding at September 30, 2014		13,898,009	$	0.84		7.3
Exercisable at September 30, 2014		7,077,797	$	1.09		5.2

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Business and Presentation (Tables)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Exit Activities [Table Text Block]

The discontinuance of this development program is considered an exit activity. As such, we recognized the following expenses in the second and third quarters of 2014:

	Quarter ended
	June 30, 2014		September 30, 2014
Severance costs	$	320,000	$	-
Loss on abandonment of lease		-		243,000
Loss on disposal of assets		-		132,000
Total	$	320,000	$	375,000

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

Stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 was as follow:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Salaries and wages	$	362,046	$	121,929	$	834,240	$	434,790
Consulting		246		-		9,921		-
General and administrative		28,597		28,134		95,317		103,168
Total share-based compensation expense	$	390,889	$	150,063	$	939,478	$	537,958

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Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2014

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

Note 10 — Supplemental Cash Flow Information

Non-cash investing and financing transactions for the nine months ended September 30, 2014 include:

	2014
Conversion of convertible debt to common stock	$	3,067,423
Reclassification of the unamortized balance of debt discount and derivative liability, related to the extinguishment and conversion of the subordinated convertible debt, to additional paid-in capital		2,860,627
Derivative liability created from conversion option embedded in Deerfield convertible credit facility		8,825,935
Warrants issued in connection with convertible debt and equity facility		29,137,683
Reclassification of warrant derivative liability to additional paid-in capital as a result of the expiration of non-standard anti-dilution clause contained in warrants		1,331,776
Issuance of common stock in connection with convertible debt facility		1,050,000
Accrued property and equipment		114,494

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Equity and Equity-Linked Securities

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Stockholders Equity Note Disclosure [Text Block]

Note 8 — Equity and Equity-Linked Securities

We issued 17,245,245 shares of Common stock during the nine months ended September 30, 2014. The following table lists the sources of and the net proceeds from those issuances:

Source	# of Shares		Total Net Proceeds
Sale of shares pursuant to private offering		3,846,154	$	1,911,695
Sale of shares pursuant to February 2013 equity purchase agreement		3,750,000	$	1,754,565
Issuance of shares in lieu of cash for fees incurred pursuant to February 2013 equity purchase agreement		43,865	$	—
Issuance of shares for conversion of 4% Convertible Notes		886,690	$	—
Issuance of shares for conversion of 10% Convertible Notes		5,981,859	$	—
Issuance of shares to Class 4A Equity shareholder pursuant to June 2002 Reorganization Plan		27,000	$	—
Issuance of shares in lieu of cash for the Deerfield facility yield enhancement		2,709,677	$	—
Totals		17,245,245	$	3,666,260

Lincoln Park Transaction

On February 18, 2013, we entered into a purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the terms and subject to the conditions of the Purchase Agreement, we have the right to sell to and Lincoln Park is obligated to purchase up to $15 million in shares of our common stock, subject to certain limitations, from time to time, over the 30-month period commencing on July 17, 2013. We may direct Lincoln Park every other business day, at our sole discretion and subject to certain conditions, to purchase up to 150,000 shares of common stock in regular purchases, increasing to amounts of up to 200,000 shares depending upon the closing sale price of the common stock. In addition, we may direct Lincoln Park to purchase additional amounts as accelerated purchases if on the date of a regular purchase the closing sale price of the common stock is not below $1.00 per share. The purchase price of shares of common stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to 12 business days leading up to such time), but in no event will shares be sold to Lincoln Park on a day the common stock closing price is less than the floor price of $0.45 per share, subject to adjustment. Our sales of shares of common stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of the common stock.

In connection with the Purchase Agreement, we issued to Lincoln Park 375,000 shares of common stock and are required to issue up to 375,000 additional shares of common stock pro rata as we require Lincoln Park to purchase shares under the Purchase Agreement over the term of the agreement. To date, we have raised approximately $2.4 million under the terms of the purchase agreement.

Common Stock and Warrant Registered Offering

On February 19, 2013, we entered into securities purchase agreements with certain institutional accredited investors, including certain current shareholders of the Company, to raise gross proceeds of $5,000,000, before fees and other offering expenses, in a registered offering. We issued to the investors units consisting, in the aggregate, of 9,090,911 shares of our common stock and five-year warrants to purchase 6,363,638 shares of common stock. The purchase price paid by investors was $0.55 for each unit. Each warrant is immediately exercisable at $0.75 per share on or after February 22, 2013 and is subject to transfer restrictions, including among others, compliance with the state securities laws. The closing of the offering took place on February 22, 2013. Proceeds from the transaction will be used for general corporate and working capital purposes. The warrants are classified in equity. 

In connection with this offering, we paid cash fees to the agent in the amount of $350,000 and granted to the placement agent warrants to purchase 136,364 shares of our common stock. The warrants will have the same terms as the investor warrants in this offering, except that the exercise price will be 120% of the exercise price of the investor warrants and may also be exercised on a cashless basis. The warrants are classified in equity.

In connection with this offering, the Company and the Maryland Venture Fund (Maryland Department of Business and Economic Development), an investor in the above referenced offering (“MVF”), in compliance with MVF’s investment policies, agreed to execute a certain Stock Repurchase Agreement which requires us to repurchase the MVF’s investment, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. The common shares issued to MVF are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheet. The value of the warrants and offering expenses allocable to the contingently redeemable common shares was not material.

Release of the Worden Security Interest in the Licensed Patents

On February 19, 2013, Charles E. Worden Sr., an individual holder of security interest in patents pursuant to the Substitute Royalty Agreement, dated November 4, 2001 (the “SRA”), executed an amendment to the SRA (the “SRA Amendment”) for the purposes of terminating and releasing the security interest and the reversionary interest under the terms of the SRA in exchange for the following consideration: (i) a one-time cash payment of $500,000 (to replace all future minimum monthly royalty payments), (ii) issuance of 250,000 shares of our common stock (the “Worden Shares”), and (iii) grant of the right to acquire up to 250,000 shares of our common stock pursuant to a seven-year warrant with the exercise price of $0.70 per share (the “Worden Warrant”). In addition, under the terms of the Amendment, Mr. Worden’s future annual royalty stream limitation was increased from $600,000 to $625,000. The exercise price and the number of shares issuable upon exercise of the Worden Warrant is subject to standard anti-dilution provisions. The Worden Warrants contain provisions that are customary for the instruments of this nature, including, among others, a cashless exercise provision. The warrants are classified as equity.

March 2014 Equity Offering

On March 31, 2014 we raised $2.0 million from the private placement of 3,846,154 shares of common stock (at a price of $0.52 per share) and five-year stock purchase warrants to purchase 2,884,615 shares of common stock at $0.52 per shares. As a result of certain non-standard anti-dilution provisions and cash settlement features contained in the warrants, we classified the detachable stock purchase warrants as derivative liabilities, initially at their estimated relative fair value of approximately $1.1 million. We re-measure the warrants to fair value at each balance sheet date. Issuance costs, in the form of warrants and fees, were valued at approximately $136,000 and were recorded to additional paid-in-capital.

Stock-Based Awards

The Company, from time to time, may issue stock options or stock awards to employees, directors, consultants, and other service providers under its 2002 Long-Term Plan (“LTIP”) or 2013 Equity Incentive Plan (“EIP”). At the special meeting of shareholder held on June 9, 2014, the Company’s shareholders approved a proposed amendment to the 2013 EIP to increase the number of shares of common stock authorized to be issued under the Plan from 3.0 million shares to 18.0 million shares. All equity-based compensation, consisting primarily of stock option awards, is estimated on the date of grant using the Black-Scholes-Merton option-pricing formula. For stock options, expected volatilities are based on historical volatility of our stock price. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using company historical information. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. A summary of option activity under the LTIP and EIP for the nine months ended September 30, 2014 is presented below:

Stock Options	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		8,520,816	$	1.19
Granted		7,715,800	$	0.57
Exercised		0		—
Forfeited or expired		(2,338,607)	$	1.22
Outstanding at September 30, 2014		13,898,009	$	0.84		7.3
Exercisable at September 30, 2014		7,077,797	$	1.09		5.2

The weighted-average grant-date fair value of stock options granted under the 2002 LTIP and the 2013 EIP for the nine months ended September 30, 2014 was $0.57. No stock options were exercised during the nine month period ended September 30, 2014.

The following tables summarize the stock options granted by the Company during the three and nine months ended September 30, 2014. These options were granted to employees and board members under our 2002 LTIP and 2013 EIP.

Three Months Ended			Nine Months Ended
September 30, 2014			September 30, 2014
Options Granted	Exercise Price		Options Granted	Exercise Price
1,363,900		$0.39-$0.60	7,715,800		$0.39-$0.61

During the three and nine months ended September 30, 2014, 148,916 and 2,338,607 stock options were forfeited by contract due to the termination of the underlying service arrangement or expiration of the awards, respectively.

The following table summarizes information about stock options outstanding as of September 30, 2014:

		Options Outstanding						Options Exercisable
				Weighted		Weighted				Weighted
Range of		Number of		Average		Average				Average
Exercise		Outstanding		Remaining		Exercise		Number		Exercise
Prices		Shares		Contract Life		Price		Exercisable		Price
	$0.30 - $0.50		2,311,800		7.79	$	0.42		960,998	$	0.43
	$0.51 - $0.75		7,738,066		8.65	$	0.60		2,509,159	$	0.60
	$0.76 - $1.25		825,831		5.56	$	0.95		719,163	$	0.97
	$1.26 - $1.75		2,062,646		4.67	$	1.42		1,950,646	$	1.42
	$1.76 - $2.75		889,666		2.53	$	2.30		867,831	$	2.30
	$2.76 - $4.50		0		—		—		0		—
	$4.51 - $6.00		70,000		1.28	$	5.20		70,000	$	5.20

As of September 30, 2014, there was approximately $2.5 million of total unrecognized compensation cost related to non-vested stock options granted under the LTIP and EIP. That cost is expected to be recognized over a weighted-average period of 2.9 years.

The Company has issued certain warrants outside of the LTIP and EIP, in exchange for the performance of services. A summary of service provider warrant activity, excluding warrants issued to investors and bankers in connection with various financings, for the nine months ended September 30, 2014, and changes during the nine months ended September 30, 2014 is presented below:

Warrants to Service Providers	Shares		Weighted- Average Exercise  Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2014		1,661,364	$	1.24		1.9
Granted		20,000	$	0.40
Exercised		0		—
Forfeited or expired		(200,000)	$	1.50
Outstanding at September 30, 2014		1,481,364	$	1.20		1.5
Exercisable at September 30, 2014		1,466,364	$	1.20		1.5

As of September 30, 2014, there was approximately $1,800 of total unrecognized compensation cost related to these warrants. That cost is expected to be recognized over a weighted-average period of 0.7 years. These warrant are included in the Stock Purchase Warrant table outstanding shown below.

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

Stock Purchase Warrants

Warrant activity for the nine months ended September 30, 2014 was as follows:

Warrants outstanding at December 31, 2013 (i)	23,019,301
Warrants issued in connection with convertible bridge notes (February 2014)	232,964
Warrants issued in connection with March 2014 equity placement (Anson)	2,884,615
Warrants issued in connection with March 2014 Convertible Notes (Deerfield)	25,115,384
Warrants issued in connection with March 2014 Convertible Notes (agent)	1,474,615
Warrants issued in connection with JP Nevada Trust Note amendment	750,000
Warrants issued in connection with a consulting agreement	20,000
Warrants issued in connection with June 2014 Convertible Notes (Deerfield)	67,500,000
Warrants issued in connection with June 2014 Convertible Notes (agent)	3,525,000
February 2013 subordination warrants (June 2014) (ii)	(800,000)
JP Nevada Trust Note amendment March 2014 warrants (June 2014) (iii)	(750,000)
Other warrants expired in 2014	(200,000)
Warrants outstanding at September 30, 2014	122,771,879

(i) The December 31, 2013 warrants outstanding figure includes:

a) February 2012 Inducement warrants - 30% (354,156) which were immediately exercisable; 70% (826,391) would be exercisable upon successful ALD-401 Stroke trial.  (See Note 12 – Subsequent Events for additional details.)

b) February 2012 Aldagen warrants - 30% (634,672) which were immediately exercisable; 70% (1,480,924) would be exercisable upon successful ALD-401 Stroke trial. (See Note 12 – Subsequent Events for additional details.)

(ii) The February 2013 Subordination warrants (800,000), which expire February 18, 2018, are included in the warrants outstanding at December 31, 2013. However, these warrants were only exercisable if the JPNT Note remained outstanding on or after April 28, 2015 (50% of the total) and April 15, 2016 (remainder). The JPNT Note was retired on June 25, 2014, therefore, these warrants cannot be exercised and therefore are not included in warrants outstanding at June 30, 2014.

(iii) The warrants issued in connection with March 2014 JP Nevada Trust Note amendment (750,000), which expire March 31, 2019, were exercisable only upon the occurrence of the “Warrant Exercise Event” as defined in the warrant. Since the “Warrant Exercise Event” cannot occur as defined, the warrants issued in connection with the March 2014 JP Nevada Trust Note (750,000) cannot be exercised. Therefore, these warrants are not included in the warrants outstanding at June 30, 2014.

2014 Convertible Debt Financing – March 2014 & June 2014

In connection with the Deerfield Facility Agreement and at the time of the First Draw, we issued to Deerfield and the placement agent warrants to purchase 25,115,384 and 1,474,615 shares of our common stock, respectively, at the exercise price of $0.52 per share. These warrants contain certain non-standard anti-dilution provisions and cash settlement features. At the time of the Second Draw, we issued to Deerfield and the placement agent additional warrants to purchase 67,500,000 and 3,525,000 shares of our common stock, respectively, at the exercise price of $0.52. These warrants are substantially identical to the warrants issued in the connection with the First Draw and contain, among other things, limitations that prevent the holder of any warrants from acquiring shares upon exercise of a warrant that would result in the number of shares beneficially owned by it and its affiliates to exceed 9.98% of the total number of shares of our common stock then issued and outstanding.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 9 — Fair Value Measurements

Our balance sheets include various financial instruments that are carried at fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

 

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than Level I prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

Financial Instruments

We have segregated our financial assets and liabilities that are measured at fair value into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The inputs used in measuring the fair value of cash and short-term investments are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of other short-term financial instruments (primarily accounts receivable and accounts payable and accrued expenses) approximate their carrying values because of their short-term nature. The carrying value of our debt approximates its fair value at September 30, 2014.

We account for our derivative financial instruments, consisting solely of certain stock purchase warrants that contain non-standard anti-dilutions provisions and/or cash settlement features, and certain conversion options embedded in our convertible instruments, at fair value using level 3 inputs. We determine the fair value of these derivative liabilities using the Black-Scholes option pricing model when appropriate, and in certain circumstances using binomial lattice models or other accepted valuation practices.

When determining the fair value of our financial instruments using the Black-Scholes option pricing model, we are required to use various estimates and unobservable inputs, including, among other things, contractual terms of the instruments, expected volatility of our stock price, expected dividends, and the risk-free interest rate. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the instrument. Increases in expected term, anticipated volatility and expected dividends generally result in increases in fair value, while decreases in the unobservable inputs generally result in decreases in fair value.

When determining the fair value of our financial instruments using binomial lattice models or other accepted valuation practices, we also are required to use various estimates and unobservable inputs, including in addition to those listed above, the probability of certain events.

The following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013:

	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Total investment in money market funds	$	2,303,556	$	—	$	—	$	2,303,556
Liabilities
Embedded conversion options	$	—	$	—	$	1,515,540	$	1,515,540
Stock purchase warrants		-		-		1,733,055		1,733,055
Total derivative liabilities	$	—	$	—	$	3,248,595	$	3,248,595

	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Total investment in money market funds	$	19,518,766	$	—	$	—	$	19,518,766
Liabilities
Embedded conversion options	$	—	$	—	$	7,524,851	$	7,524,851
Stock purchase warrants		-		-		30,581,524		30,581,524
Total derivative liabilities	$	—	$	—	$	38,106,375	$	38,106,375

The Level 1 assets measured at fair value in the above table are classified as “cash and cash equivalents” in the accompanying condensed consolidated balance sheets.

The Level 3 liabilities measured at fair value in the above table are classified as “derivative liabilities” in the accompanying condensed consolidated balance sheets. Gains and losses in the fair value of the contingent consideration are classified as the “change in fair value of contingent consideration” in the accompanying consolidated statements of operations. All other gains and losses in the fair value of derivative instruments are classified as the “change in the fair value of derivative instruments” in the accompanying condensed consolidated statements of operations. 

The following tables set forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2014:

Description	Balance at  December 31,  2013		Established in 2014		Effect of  Conversion to  Common Stock		Reclassed to  Additional  Paid-In Capital (1)		Change in Fair Value		Balance at  September 30, 2014
Derivative liabilities:
Embedded conversion options	$	1,515,540	$	8,825,935	$	(1,932,693)	$	—	$	(883,931)	$	7,524,851
Stock purchase warrants	$	1,733,055	$	29,137,683	$	—	$	(1,331,776)	$	1,042,562	$	30,581,524
	$	3,248,595	$	37,963,618	$	(1,932,693)	$	(1,331,776)	$	158,631	$	38,106,375

(1) Various warrants were reclassified to additional paid-in capital as a result of the expiration of non-standard anti-dilution clauses contained within the warrants.

In February 2014, we purchased a Certificate of Deposit (“CD”) from a commercial bank in the amount of $53,000. The CD bears interest at an annual rate of 0.10% and matures on June 24, 2015. The $53,000 carrying value of the CD approximates its fair value. This CD collateralizes a letter of credit. (See Note 11 – Commitments and Contingencies for additional details.)

Non-Financial Assets and Liabilities

We have no non-financial assets and liabilities that are measured at fair value on a recurring basis. Property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis (upon impairment). The intangible assets in the table below are measured at fair value on a non-recurring basis and are presented at fair value as of the date of impairment.

(See Note 5 — Goodwill and Intangible Assets for additional details.)

We determined the fair value for IPR&D by using the royalty savings method of the income approach. In applying this method, we used the existing royalty income that was being generated by the Company and expected future royalty revenues to get to the expected net cash flows. We then applied an asset-specific discount rate to the forecasted net cash flows to arrive at a net present value amount. Significant estimates and assumptions used in this approach were the (i) amount and timing of the projected revenues; (ii) royalty rate based on comparable IPR&D; (iii) discount rate, which reflects the various risks involved in future cash flows; and (iv) tax rate.

We determined the fair value for the Trademark by using the royalty savings method of the income approach. In applying this method, we used the expected future royalty revenues, generated by the Trademark, to get to the expected net cash flows. We then applied an asset-specific discount rate to the forecasted net cash flows to arrive at a net present value amount. Significant estimates and assumptions used in this approach were the (i) amount and timing of the projected revenues; (ii) royalty rate based on comparable trademarks; (iii) estimated useful life; and (iv) discount rate, which reflects the various risks involved in future cash flows; and (v) tax rate.

The following table represents the fair value hierarchy for our non-financial assets measured on a non-recurring basis during the first nine months of 2014:

	Level 1		Level 2		Level 3		Total
Intangible assets
Intangible assets - IPR&D	$	—	$	—	$	25,926,000	$	25,926,000
Intangible assets - Trademarks		-		-		716,614		716,614
Total	$	—	$	—	$	26,642,614	$	26,642,614

The carrying fair value of our Aldagen related trademarks and in-process research and development in the table above is presented as of the date of impairment, since they are not measured at fair value on a recurring basis. These assets are included in "intangible assets, net" in the accompanying condensed consolidated balance sheets.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 11 — Commitments and Contingencies

Series A Preferred stock contingency

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 were 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 was contingent on the Company’s attaining aggregate gross revenues for four consecutive quarters of at least $10,000,000 and if met would result in the issuance of 325,000 shares of the Company’s Common stock. The Company reached such aggregate revenue levels as of the end of the quarter ended June 30, 2012. This Common stock issuable is classified as equity.

Aldagen Contingent Consideration

Aldagen’s former investors have the right to receive up to 20,309,723 shares of our common stock, contingent upon the achievement of certain milestones related to the current ALD-401 Phase 2 clinical trial. Under the terms of the February 2013 amendment to the Exchange and Purchase Agreement by and among Nuo Therapeutics, Inc., Aldagen, Inc. and Aldagen Holdings, LLC, the parties to the agreement modified the terms of the post-closing contingent consideration under the terms of the original agreement. Following and as a result of the amendment, Nuo Therapeutics recognized approximately $1,006,000 as operating expense with the offset to equity.

Deerfield Registration Rights Agreement

On March 31, 2014, we entered into a Registration Rights Agreement (the “RRA”) with Deerfield investors pursuant to the terms and provisions of the March 31, 2014 Facility Agreement and agreed to register, among others, shares of our common stock issuable upon conversion and exercise of convertible notes and related common stock warrants sold in the March 31 and June 30 Deerfield financings. At the time of the closing of the March 31st draw, we issued to Deerfield warrants to purchase 25,115,384 shares of the Company’s common stock at an exercise price of $0.52 per share; at the time of the June 25th draw - warrants to purchase 67,500,000 shares of the Company’s common stock at an exercise price of $0.52 per share. The maximum number of shares of our common stock that can be issued pursuant to the conversion of the Deerfield facility is 67,307,692 shares; the maximum number of shares of our common stock that can be issued pursuant to the terms of the Deerfield warrants is 92,615,385 shares. In accordance with the RRA, we are obligated to file and maintain an effective registration statement, all in accordance with the terms of the RRA until the date when all shares underlying the convertible notes and related warrants (and any other securities issued or issuable with respect to in exchange for such shares) have been sold or at any time following the six month anniversary of the date of issuance, all warrant shares issuable upon exercise of the warrants should be eligible for immediate resale pursuant to Rule 144 under the Securities Act. 

FDA clearance

In conjunction with its FDA clearance, we agreed to conduct a post-market surveillance study to further analyze the safety profile of bovine thrombin as used in the Aurix^™ System. This study was 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 September 30, 2014, approximately $383,000 had been incurred. Since the inception of this study, we have enrolled 120 patients, noting no adverse events. Based on the additional positive safety data, we suspended further enrollment in this study pending further discussion with the FDA.

Letter of Credit

In July 2009, in satisfaction of a Maryland law pertaining to Wholesale Distributor Permits, we 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 us of its obligations under applicable Maryland law regarding this permit and is collateralized by a Certificate of Deposit (“CD”) purchased from our commercial bank. This CD bears interest at an annual rate of 0.10% and matures on June 24, 2015. 

MVF Stock Repurchase Agreement

The Company and the MVF, in compliance with MVF’s investment policies, agreed to execute a certain Stock Repurchase Agreement which requires us to repurchase the MVF’s investment, at MVF’s option, upon certain events outside of our control; provided, however, that in the event that, at the time of either such event our securities are listed on a national securities exchange, the foregoing repurchase will not be triggered. The common shares issued to MVF are classified as “contingently redeemable common shares” in the accompanying condensed consolidated balance sheet. The value of the warrants and offering expenses allocable to the contingently redeemable common shares was not material. Upon the termination of the stock repurchase agreement or the sale of the stock by MVF, the temporary equity will be re-classed to permanent equity.

Facility Leases

Our primary office and warehouse facilities are located in Gaithersburg, Maryland, and comprise approximately 12,000 square feet. This facility falls under two leases with monthly rent, including our share of certain annual operating costs and taxes, at approximately $9,000 and $3,000 per month with the leases expiring August 2019 and September 2019, respectively. We lease a 16,300 square foot facility located in Durham, North Carolina. This facility falls under one lease with monthly rent, including our share of certain annual operating costs and taxes, at approximately $20,000 per month with the lease expiring December 31, 2018. As a result of our discontinuance of the ALD-401 clinical trial, the Company ceased use of the facility in Durham, North Carolina on July 31, 2014 and sublet the facility beginning August 1, 2014. The sublease expires December 31, 2018. The Company executed a lease beginning October 1, 2014 for a facility located in Nashville, TN, comprised of approximately 2,076 square feet, at approximately $4,000 per month expiring on April 30, 2018.

Purchase commitments

The Company has a purchase commitment with a certain vendor to purchase $573,000 of Aurix^™ centrifuges in 2014.

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Goodwill and Intangible Assets (Details Textual) (USD $)	3 Months Ended		3 Months Ended	9 Months Ended		9 Months Ended				9 Months Ended
	Jun. 30, 2014	Sep. 30, 2014	Jun. 30, 2014 Intellectual Property [Member]	Sep. 30, 2014 Trademarks [Member]	Jun. 30, 2014 Trademarks [Member]	Sep. 30, 2014 General and Administrative Expense [Member]	Sep. 30, 2014 In Process Research and Development [Member]	Jun. 30, 2014 In Process Research and Development [Member]	Dec. 31, 2013 In Process Research and Development [Member]	Sep. 30, 2014 Royalty Expense [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Trademarks, Gross					$ 1,800,000
Impairment of Intangible Assets, Finite-lived	1,000,000		3,700,000	800,000
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year		77,100
Indefinite-Lived Intangible Assets (Excluding Goodwill)							25,926,000	29,600,000	29,585,000
Amortization of Intangible Assets						$ 142,511				$ 117,750

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

The carrying value of our intangible assets, and the associated amortization, were as follows:

	September 30,		December 31,
	2014		2013
Trademarks	$	1,047,000	$	2,310,000
Technology		2,355,000		2,355,000
Customer relationships		708,000		708,000
In-process research and development		25,926,000		29,585,000
Total	$	30,036,000	$	34,958,000
Less accumulated amortization		(1,211,136)		(1,189,046)
	$	28,824,864	$	33,768,954

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Annual amortization expense based on our existing intangible assets and their estimated useful lives is expected to be approximately:

2015	308,300
2016	308,300
2017	308,300
2018	242,000
2019	219,800
Thereafter	1,434,800

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Business and Presentation (Details) (USD $)	6 Months Ended	9 Months Ended
	Jun. 30, 2014	Sep. 30, 2014
Severance costs	$ 320,000	$ 0
Loss on abandonment of lease	0	243,000
Loss on disposal of assets	0	132,000
Total	$ 320,000	$ 375,000

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Commitments and Contingencies (Details Textual) (USD $)	1 Months Ended	9 Months Ended		9 Months Ended	1 Months Ended	9 Months Ended			0 Months Ended	9 Months Ended		9 Months Ended			9 Months Ended		0 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2014 Series A Preferred Stock Contingency [Member]	Feb. 28, 2013 Aldagen Contingent Consideration [Member]	Sep. 30, 2014 Aldagen Contingent Consideration [Member]	Sep. 30, 2014 Deerfield Registration Rights Agreement [Member] March Warrant [Member]	Sep. 30, 2014 Deerfield Registration Rights Agreement [Member] June Warrant [Member]	Nov. 11, 2014 Subsequent Event [Member] Aldagen Contingent Consideration [Member]	Sep. 30, 2014 Maryland [Member]	Jul. 31, 2009 Maryland [Member] Letter of Credit [Member]	Sep. 30, 2014 Gaithersburg, Maryland [Member] sqft	Sep. 30, 2014 Gaithersburg, Maryland [Member] August 2019 [Member]	Sep. 30, 2014 Gaithersburg, Maryland [Member] September 2019 [Member]	Sep. 30, 2014 Durham, North Carolina [Member] sqft	Sep. 30, 2014 Durham, North Carolina [Member] December 31, 2018 [Member]	Oct. 01, 2014 Nashville, Tennessee facility lease [Member] Subsequent Event [Member] acre	Sep. 30, 2008 Minimum [Member]	Sep. 30, 2008 Maximum [Member]	Sep. 30, 2014 Maximum [Member] Deerfield Warrants [Member]	Sep. 30, 2014 Maximum [Member] Deerfield facility [Member]
Commitments and Contingencies [Line Items]
Estimated Research Development Cost																		$ 500,000	$ 700,000
Research And Development		383,000
Debt Instrument, Face Amount											50,000
Deposit Interest Rate										0.10%
Operating Leases, Future Minimum Payments Due													9,000	3,000		20,000	4,000
Operating Leases, Area												12,000			16,300		2,076
Business Acquisitions Contingent Consideration Shares Issuable						20,309,723			20,309,723
Operating Expense Recognized Value					1,006,000
Purchase Commitment, Remaining Minimum Amount Committed		573,000
Shares Issuable Contingent Condition Description		This exchange was contingent on the Company’s attaining aggregate gross revenues for four consecutive quarters of at least $10,000,000 and if met would result in the issuance of 325,000 shares of the Company’s Common stock.
Warrants to Purchase of Common Stock							25,115,384	67,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.52	$ 0.52				$ 0.52	$ 0.52
Revenues, Total				$ 10,000,000
Common Stock, Shares to be Issued		325,000
Time Deposits Maturity Date	Jun. 24, 2015	Jun. 24, 2015
Lease Expiration Date																	Apr. 30, 2018
Shares Issuable Limit																				92,615,385	67,307,692

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Equity and Equity-Linked Securities (Details 4) (Warrant [Member], USD $)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013
Warrant [Member]
Shares, Outstanding, Beginning Balance		1,661,364
Shares, Granted	0	20,000
Shares, Exercised		0
Shares, Forfeited or expired		(200,000)
Shares, Outstanding, Ending Balance	1,481,364	1,481,364	1,661,364
Shares, Exercisable	1,466,364	1,466,364
Weighted-Average Exercise Price, Outstanding, Beginning		$ 1.24
Weighted-Average Exercise Price, Granted		$ 0.40
Weighted-Average Exercise Price, Exercised		$ 0
Weighted-Average Exercise Price, Forfeited or expired		$ 1.50
Weighted-Average Exercise Price, Outstanding, Ending	$ 1.20	$ 1.20	$ 1.24
Weighted-Average Exercise Price, Exercisable	$ 1.20	$ 1.20
Weighted-Average Remaining Contractual Term, Outstanding		1 year 6 months	1 year 10 months 24 days
Weighted-Average Remaining Contractual Term, Exercisable		1 year 6 months

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (21,739,134)	$ (15,350,368)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense	57,633	42,775
Depreciation and amortization	481,114	875,084
Stock-based compensation	939,478	537,958
Change in fair value of derivative liabilities	158,631	(250,349)
Non-cash interest expense:
Amortization of deferred costs	840,043	186,931
Amortization of debt discount	515,739	222,282
Deferred income tax provision	13,935	14,670
Loss (Gain) on disposal of assets	131,575	(594,173)
Loss on abandonment of lease	242,466	0
Impairment of IPR&D and trademarks	4,683,829	0
Effect of amendment to contingent consideration	0	1,006,159
Loss on early extinguishment of debt	0	19,867
Effect of issuance of warrants for term loan modification	0	303,517
Change in operating assets and liabilities, net of those acquired:
Accounts and other receivable, net	2,083,906	(441,436)
Inventory	566,766	(631,812)
Prepaid expenses and other current assets	(958,489)	(561,095)
Accounts payable	(1,678,442)	1,609,084
Accrued expenses	106,096	755,318
Deferred revenues	(640,509)	4,044,700
Other liabilities	588,268	124,212
Net cash used in operating activities	(13,607,095)	(8,086,676)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment acquisitions	(209,462)	(600,373)
Proceeds from sale of equipment	133,767	2,139,672
Net cash (used in) provided by investing activities	(75,695)	1,539,299
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt, net	32,967,060	4,235,797
Proceeds from issuance of common stock, net	3,666,260	4,910,237
Repayment of notes payable	(6,201,143)	(570,000)
Net cash provided by financing activities	30,432,177	8,576,034
Net increase in cash and cash equivalents	16,749,387	2,028,657
Cash and cash equivalents, beginning of period	3,286,713	2,615,805
Cash and cash equivalents, end of period	$ 20,036,100	$ 4,644,462

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5 — Goodwill and Intangible Assets

Our intangible assets consist of trademarks, technology (including patents), customer relationships, and the IPR&D. These assets are a result of the Angel Business and Aldagen acquisitions. The carrying value of our intangible assets, and the associated amortization, were as follows:

	September 30,		December 31,
	2014		2013
Trademarks	$	1,047,000	$	2,310,000
Technology		2,355,000		2,355,000
Customer relationships		708,000		708,000
In-process research and development		25,926,000		29,585,000
Total	$	30,036,000	$	34,958,000
Less accumulated amortization		(1,211,136)		(1,189,046)
	$	28,824,864	$	33,768,954

As a result of our discontinuance of ALD-401 in the second quarter of 2014, we performed an assessment of our Aldagen related trademarks and IPR&D as of June 30, 2014 and determined these assets were impaired. At September 30, 2014 the carrying value reflects the impairment charge made to these assets. There was no impairment recognized in the three month period ending September 30, 2014.

The Company performed a quantitative assessment of our Aldagen related trademarks, and assessed changes to driving factors used in valuing that intangible asset, including the projected revenue stream, discount factor, and remaining useful life, and considered the impact of such changes to the discounted future cash flows used to value the trademarks.  We concluded that the initial fair value of the Aldagen related trademarks of approximately $1.8 million was impaired as of June 30, 2014. An impairment charge of approximately $1.0 million was taken in the three month period ending June 30, 2014 to reflect the current fair value of approximately $0.8 million.

The Company also performed a quantitative assessment of our IPR&D, and assessed changes to driving factors used in valuing that intangible asset, including the projected diagnostic revenue and expenses as well as the discount factor, and considered the impact of such changes to the discounted future cash flows used to value the IPR&D. We concluded that the initial fair value of the IPR&D of approximately $29.6 million was impaired as of June 30, 2014. An impairment charge of approximately $3.7 million was taken in the three month period ending June 30, 2014 to reflect the current fair value of approximately $25.9 million. (See Note 9 — Fair Value Measurements for additional details.)

We are currently conducting (i) a Phase 1/2 clinical trial in critical limb ischemia (PACE) that is being funded by the National Institutes of Health, and (ii) a Phase 1 clinical trial in grade IV malignant glioma following surgery that is funded by Duke University, both using the intellectual property and know-how encompassed by the IPR&D and trademarks. We have no current plans to change our approach with respect to these programs.

Amortization expense associated with our definite-lived intangible assets of $117,750 was recorded to cost of royalties and $142,511 was recorded to general and administrative expense for the nine months ended September 30, 2014. Amortization expense for the remainder of 2014 is expected to be $77,100. Annual amortization expense based on our existing intangible assets and their estimated useful lives is expected to be approximately:

2015	308,300
2016	308,300
2017	308,300
2018	242,000
2019	219,800
Thereafter	1,434,800

The Company also performed an impairment test of goodwill as of June 30, 2014. U.S. GAAP provides for a two-step process for measuring for impairment of goodwill. Step 1 of the impairment process is to determine if the fair value of the reporting unit exceeds its carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is unnecessary. The Company’s goodwill is contained in its sole operating segment and reporting unit. Based on our assessment, the fair value of the reporting unit, determined with reference to its quoted market cap, exceeded its carrying value at June 30, 2014 and the Company determined goodwill was not impaired. Accordingly, the Step Two analysis was not performed.

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Business and Presentation (Details 1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Allocated Share-based Compensation Expense	$ 390,889	$ 150,063	$ 939,478	$ 537,958
Salaries and wages [Member]
Allocated Share-based Compensation Expense	362,046	121,929	834,240	434,790
Consulting [Member]
Allocated Share-based Compensation Expense	246	0	9,921	0
General and administrative [Member]
Allocated Share-based Compensation Expense	$ 28,597	$ 28,134	$ 95,317	$ 103,168

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Equity and Equity-Linked Securities (Details 1) (Long Term and Equity Incentive Plan [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Long Term and Equity Incentive Plan [Member]
Outstanding Opening Balance - Shares	8,520,816
Granted - Shares	7,715,800
Exercised - Shares	0
Forfeited or expired - Shares	(2,338,607)
Outstanding Ending Balance - Shares	13,898,009
Exercisable - Shares	7,077,797
Outstanding Opening Balance - Weighted-Average Exercise Price	$ 1.19
Granted - Weighted-Average Exercise Price	$ 0.57
Exercised - Weighted-Average Exercise Price	$ 0
Forfeited or expired - Weighted-Average Exercise Price	$ 1.22
Outstanding Ending Balance - Weighted-Average Exercise Price	$ 0.84
Exercisable - Weighted-Average Exercise Price	$ 1.09
Outstanding - Weighted-Average Remaining Contractual Term	7 years 3 months 18 days
Exercisable - Weighted-Average Remaining Contractual Term	5 years 2 months 12 days

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Receivables (Tables)

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Accounts and royalties receivables, net consisted of the following:

	September 30,		December 31,
	2014		2013
Trade receivables	$	295,667	$	2,449,199
Other receivables		1,547,804		1,493,979
		1,843,471		3,943,178
Less allowance for doubtful accounts		(58,329)		(16,497)
	$	1,785,142	$	3,926,681