10-Q

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

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended March 31, 2022

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 000-28443

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.)

8285 El Rio, Suite 190
Houston, TX 77054

(Address of Principal Executive Offices) (Zip Code)

(346) 396-4770

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:  None

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-accelerated Filer ☒	Smaller Reporting Company ☒   Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 6, 2022, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 40,674,205.

NUO THERAPEUTICS, INC.
 
TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	20
Item 4. Controls and Procedures	21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	22
Signatures	23

PART I

FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

NUO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2022 (unaudited)			December 31, 2021 (audited)
ASSETS
Current assets
Cash and cash equivalents	$	665,391		$	1,414,569
Other receivables		64,000			-
Inventory, net		94,642			-
Prepaid expenses and other current assets		138,296			51,349
Total current assets		962,329			1,465,918
Property and equipment, net		11,848			-
Operating lease right of use assets		84,023			-
Total assets	$	1,058,200		$	1,465,918
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	423,793		$	526,557
Accrued liabilities		31,128			146,522
Current portion of operating lease liabilities		20,826			-
Total current liabilities		475,747			673,079
Non-current portion of operating lease liabilities		55,230			-
Total liabilities		530,978			673,079
Commitments and contingencies (Note 7)
Stockholders' equity
Common stock; $0.0001 par value, 100,000,000 shares authorized, 37,124,205 shares issued and outstanding		3,713			3,713
Additional paid-in capital		24,491,958			24,382,195
Accumulated deficit		(23,968,449	)		(23,593,069	)
Total stockholders' equity		527,222			792,839
Total liabilities and stockholders' equity	$	1,058,200		$	1,465,918

See accompanying notes to unaudited condensed consolidated financial statements.

1

NUO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months ended March 31, 2022			Three Months ended March 31, 2021
Revenue
Product sales	$	-		$	-
Total revenue		-			-
Costs of sales		-			-
Gross profit (loss)		-			-
Operating expenses
Selling, general and administrative		521,818			5,721
Total operating expenses		521,818			5,721
Loss from operations		(521,818	)		(5,721	)
Other income (expense)
Interest expense, net		-			-
Other income		146,438			-
Total other income		146,438			-
Net loss	$	(375,380	)	$	(5,721	)
Loss per common share
Basic and diluted	$	(0.01	)	$	(0.00	)
Weighted average common shares outstanding
Basic and diluted		37,124,205			30,258,744

See accompanying notes to unaudited condensed consolidated financial statements.

2

NUO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

For the Three Months Ended March 31, 2022 and 2021

	Common Stock
	Shares		Amount (par $0.0001)		Additional Paid-In Capital		Accumulated Deficit			Stockholders' Equity
Balance, January 1, 2022		37,124,205	$	3,713	$	24,382,195	$	(23,593,069	)	$	792,839
Issuance of options to settle related party compensation liabilities		-		-		103,333		-			103,333
Stock compensation expense						6,430					6,430
Net loss		-		-		-		(375,380	)		(375,380	)
Balance, March 31, 2022		37,124,205	$	3,713	$	24,491,958	$	(23,968,449	)	$	527,222

	Common Stock
	Shares		Amount (par $0.0001)		Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Equity (Deficit)
Balance, January 1, 2021		30,258,744	$	3,026	$	22,995,854	$	(23,502,399	)	$	(503,519	)
Net loss		-		-		-		(5,721	)		(5,721	)
Balance, March 31, 2021		30,258,744	$	3,026	$	22,995,854	$	(23,508,120	)	$	(509,240	)

See accompanying notes to unaudited condensed consolidated financial statements.

3

NUO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(375,380	)	$	(5,721	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		6,430			-
Gain on settlement of accounts payable		(146,438	)		-
Amortization of operating lease right of use assets		5,289			-
Changes in operating assets and liabilities:
Other receivables		(64,000	)		-
Inventory, net		(94,642	)		-
Prepaid expenses and other current assets		(86,947	)		-
Accounts payable		43,674			1,553
Accrued liabilities		(12,061	)		-
Operating lease liabilities		(13,255	)		-
Net cash used in operating activities		(737,330	)		(4,168	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(11,848	)		-
Net cash used in investing activities		(11,848	)		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activities		-			-
Net decrease in cash and cash equivalents		(749,178	)		(4,168	)
Cash and cash equivalents, beginning of period		1,414,569			161,432
Cash and cash equivalents, end of period	$	665,391		$	157,264
Supplemental information
Cash paid during the period for:
Interest expense	$	-		$	-
Income taxes	$	-		$	-
Non-cash investing and financing transactions
Issuance of options to settle accrued compensation liabilities	$	103,333		$	-
ROU assets and lease liabilities established at inception of lease	$	89,312		$	-

See accompanying notes to unaudited condensed consolidated financial statements.

4

NUO THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Description of Business

Description of Business

Nuo Therapeutics, Inc. (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a Delaware corporation organized in 1998 under the name Informatix Holdings, Inc. In 1999, Autologous Wound Therapy, Inc., an Arkansas Corporation, merged with and into Informatix Holdings, Inc. and the name of the surviving corporation was changed to Autologous Wound Therapy, Inc. In 2000, Autologous Wound Therapy, Inc. changed its name to Cytomedix, Inc. (“Cytomedix”). In 2001, Cytomedix, filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code, after which Cytomedix was authorized to continue to conduct its business as a debtor and debtor-in-possession. Cytomedix emerged from bankruptcy in 2002 under a Plan of Reorganization. In September 2007, Cytomedix received 510(k) clearance for the Aurix System (“Aurix”), formerly known as the AutoloGel™ System, from the U. S. Food and Drug Administration (“FDA”). In April 2010, Cytomedix acquired the Angel Whole Blood Separation System (“Angel”) and the Angel Business, from Sorin Group USA, Inc. In February 2012, Cytomedix, acquired Aldagen, Inc. (“Aldagen”), a privately held developmental cell-therapy company located in Durham, NC. In 2014, Cytomedix changed its name to Nuo Therapeutics, Inc. In 2016, Nuo filed for and emerged from bankruptcy under Chapter 11.  Effective May 1, 2019, we furloughed our remaining employees and ceased standard operational activities as we awaited developments concerning our reconsideration request with the Centers for Medicare & Medicaid Services (“CMS”) regarding Medicare coverage for Aurix.  Based on a favorable National Coverage Determination issued in April 2021, we initiated restart activities for the business beginning in October 2021 with an expectation that the Aurix product will be available for commercial sale by May 2022.  Aldagen is a non-operational, wholly owned subsidiary of Nuo.

Impact of COVID-19 Pandemic on Financial Statements

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a “pandemic”, or a worldwide spread of a new disease. Many countries imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus and have closed non-essential businesses.

The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the pandemic. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has not experienced any significant negative impact on its March 31, 2022 unaudited consolidated financial statements related to COVID-19. 

Note 2 –Recapitalization

In anticipation of returning to operational status, the Company undertook several financing transactions during 2019 - 2021 to stabilize its financial condition, as follows:

2018 Convertible Notes

In September 2018, the Company issued two separate convertible notes (the “2018 Convertible Notes”) with detachable stock purchase warrants (the “Warrants”) to two separate investors (the “Investors”). Pursuant to separate securities purchase agreements, the Company issued and sold to the Investors 12% convertible promissory notes, each in the principal amount of $175,000, for an aggregate purchase price of $315,800 (reflecting a combined $34,200 in original issue discount and transaction fees). Pursuant to the purchase agreements, the Company also issued to each Investor a warrant exercisable to purchase 233,333 shares of the Company’s common stock, for an aggregate of 466,666 shares of common stock, subject to adjustment.

The notes had an original maturity date nine months from the date of issuance ( June 17, 2019). Under the original terms of the 2018 Convertible Notes, after six months from the date of issuance, the Investors could convert the notes, at any time, in whole or in part, into shares of the Company’s common stock, at a conversion price corresponding to a 40% discount to the average of the two lowest trading prices of the common stock during the 25 trading days prior to the conversion, subject to certain adjustments and price-protection provisions contained in the notes, including full-ratchet anti-dilution protection in the case of dilutive issuances of securities that did not meet the requirements of “exempt issuances” as defined in the notes.

Throughout the first three quarters of 2019, the Company entered into various amendments to the 2018 Convertible Notes. The amendments extended the date when the Company could prepay the notes and deferred the date upon which the Investors could initiate conversion of the notes into common shares of the Company pursuant to the notes’ terms until September 17, 2019. The Company paid the Investors amendment fees totaling $69,000 representing approximately 20% of the face value of the 2018 Convertible Notes and agreed to an increase in the principal balance of each note by $30,000 to $205,000. The maturity date of the Auctus note was also extended until July 31, 2019.

In December 2019, the Company further amended the 2018 Convertible Notes to provide for the settlement and extinguishment of all obligations under the 2018 Convertible Notes upon the (i) payment of an aggregate $220,000 to the Investors and (ii) issuance of an aggregate 350,000 shares of common stock to the Investors on or before February 10, 2020. The Company paid $220,000 to the Investors on December 10, 2019 and issued 350,000 shares of common stock on February 5, 2020 in full settlement of all obligations including accrued interest, and recognized a gain on debt extinguishment of approximately $246,000 in 2020 upon issuance of the common shares.

5

 

2019 Senior Secured Notes

In November and December 2019, the Company entered into note purchase agreements with certain investors providing for the issuance of $305,000 principal amount of 12% senior secured promissory notes (the “2019 Senior Secured Notes”) and warrants to acquire 457,500 shares of the Company’s common stock. The $220,000 of the proceeds were used primarily to partially repay the Company’s obligations under the 2018 Convertible Notes as discussed above.

On September 1, 2020, the Noteholders notified the Company of its default under the 2019 Senior Secured Notes and submitted a forbearance and recapitalization proposal to the Company. The 2019 Senior Secured Notes were settled in full in October 2020 (see 2020 Recapitalization below).

2020 Recapitalization

In October 2020 and in response to the declared default under the 2019 Senior Secured Notes, the Company entered into a Recapitalization Agreement (the “Recapitalization”) with its existing Deerfield Investors (“Deerfield”) and holders of its 2019 Senior Secured Notes (“Noteholders”) pursuant to which:

● Deerfield exchanged its Series A Preferred Stock for 2.7 million shares of Common Stock – note that the Series A Preferred Stock did not originally contain a conversion option or redemption feature and was perpetual preferred stock.

● The Noteholders converted $305,000 of principal and $30,400 of accrued and unpaid interest of their Senior Secured Notes (the Company was in default at the time of the conversion) into 838,487 shares of Common Stock.

● The Noteholders agreed to purchase 487,500 shares of Common Stock for gross proceeds of $195,000 in cash.

● The Noteholders received warrants to purchase 3,977,961 shares of Common Stock at $0.40 per share.

● The Noteholders agreed to cancel the warrants originally issued with the 2019 Senior Secured Notes.

The settlement of the Series A Preferred Stock was accounted for at fair value. The Company recognized a deemed dividend (contribution) resulting from the gain on the cancellation of its equity classified preferred stock, calculated as the difference between the fair value of the consideration transferred and the carrying value of the preferred stock. In addition, Lawrence S. Atinsky, the Deerfield Investors’ representative on the Company’s board, resigned and the number of Company directors was reduced to four. Outstanding options to purchase common stock held by Mr. Atinsky as of the Effective Date were forfeited.

The settlement of the 2019 Senior Secured Notes resulted in the conversion of the $305,000 principal balance of the Notes plus accrued interest of approximately $30,400 into an aggregate 838,487 shares of common stock (the “Conversion Shares”) of the Company at a conversion price of $0.40 per share, plus the purchase by the Noteholders, for cash, of 487,500 shares of common stock (the “Purchase Shares”) at $0.40 per share, or $195,000 in total. The settlement of the 2019 Senior Secured Notes was accounted for at fair value. The Company recognized a gain on extinguishment of the 2019 Senior Secured Notes of $89,776 calculated as the excess of the carrying amount of the debt (including the accrued interest) over the fair value of the reacquisition price (consisting of the fair value of the common stock and warrants issued net of the fair value of the warrants forfeited and cash received).

As part of the Recapitalization, the Company granted to each of three (3) individuals an aggregate of (i) 962,500 shares of common stock (the “Compensation Shares”) and (ii) fully vested warrants to purchase 2,887,500 shares of common stock of the Company (the “Compensation Warrants”) in consideration of past performance and service provided to the Company. The fair value of the Compensatory Shares and Compensatory Warrants was $333,628 which was recognized as stock-based compensation expense upon issuance.

2021 Warrant Modification

In December 2021, the Company entered into a Warrant Modification Agreement (the “Agreement”) with the employee holders and Investor holders of 6,865,461 Warrants whereby the Warrants were modified to decrease the exercise price from $0.40 to $0.20 per share provided the holders exercised the Warrant prior to January 31, 2022 (the “Modification”). All Warrants were exercised as of December 30, 2021. The Modification was accounted for at fair value; as such, additional stock-based compensation expense of $13,936 was recognized with respect to the employee warrants and a deemed dividend of $795,592 was recognized for the Investor warrants.

See Notes 5 and 6 for further discussion.

Note 3 – Liquidity and Summary of Significant Accounting Principles

Liquidity

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, and executing licensing arrangements, and to a lesser extent by generating royalties and product revenues.  In mid-2019, we ceased ongoing operational activities as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. In April 2021 CMS issued an NCD establishing national reimbursement coverage for Aurix when used in chronic non-healing wounds where a diabetes clinical diagnosis exists for the patient. During 2021, 2020 and 2019, the Company raised net cash proceeds of approximately $1.9 million from the issuance of senior secured debt, common stock and from the exercise of stock purchase warrants. In conjunction with warrant exercises in December 2021, the Company initiated efforts to return to operational status as a commercial business. Subsequent to March 31, 2022, the Company raised proceeds of $3,550,000 from the sale of common stock to certain accredited investors in an equity private placement which closed on April 29, 2022.

6

 

We have incurred, and continue to incur, recurring losses and negative cash flows.  As of March 31, 2022, we have an accumulated deficit of $24.0 million and cash and cash equivalents on hand of approximately $0.7 million. As of May 6, 2022, we have cash and cash equivalents on hand of approximately $3.8 million.

The accompanying condensed 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.

As a result of the closing of the private placement for proceeds of $3,500,000 on April 29, 2022, we have reevaluated our liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date these condensed consolidated financial statements are available to be issued and therefore substantial doubt has been alleviated.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The consolidated balance sheet at December 31, 2021, has been derived from audited financial statements of the Company as of that date. The interim unaudited consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen, Inc. (“Aldagen”). All significant inter-company accounts and transactions are eliminated in consolidation

Use of Estimates

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

Credit Concentration

We had no customer concentrations given our April 2019 decision to cease operational activities and the absence of any revenues in the three months ended March 31, 2022 and 2021 prior to the expected re-initiation of commercial sales activities by  May 2022.

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

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. We maintain our cash and cash equivalents in the form of money market deposit accounts and qualifying money market funds and checking accounts with financial institutions that we believe are credit worthy.

7

 

Accounts Receivables, net

We expect to generate accounts receivables from the sale of our products. We will provide for an allowance 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. We had no trade accounts receivable as of March 31, 2022 and 2021 due to no commercial sales activities during those periods.

Other Receivables

The other receivable at March 31, 2022 represented the amount due from the landlord of our new warehouse/distribution facility as reimbursement for agreed tenant improvements per the lease agreement.  The balance was collected subsequent to March 31, 2022.

Inventory, net

Our inventory is produced by third-party manufacturers and consists of raw materials and finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. We will maintain an inventory of kits, reagents, and other disposables having shelf-lives that generally range from 18 months to two years.

As of March 31, 2022, our inventory consisted entirely of raw materials acquired to facilitate the manufacturing of finished goods at our contract manufacturer and our warehouse/distribution facility.

We will provide for an allowance against inventory for estimated losses that may result in excess and obsolete inventory (i.e., from the expiration of products). Our allowance for expired inventory will be estimated based upon the inventory’s remaining shelf-life and our anticipated ability to sell such inventory, which is estimated using past experience and future forecasts, within its remaining shelf life. Expired products are segregated and used for demonstration purposes only; we will record the associated expense for this reserve to cost of sales in the consolidated statements of operations.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.  Assets are depreciated, using the straight-line method, over their estimated useful life ranging from one to six years.  Leasehold improvements are amortized, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from one to three years. Amortization of leasehold improvements is included in depreciation expense and will begin in April 2022. Maintenance and repairs are charged to operations as incurred. Our medical equipment was fully depreciated as of March 31, 2022, while property and equipment acquired in March 2022 will begin being depreciated at the beginning of the month following its placed in-service date.

Leases

At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.  Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  Rent expense is recognized on a straight-line basis over the lease term.

The Company has made certain accounting policy elections whereby the Company (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease elements of its operating leases. 

Revenue Recognition

The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers; (ii) identification of distinct performance obligations in the contract; (iii) determination of contract transaction price; (iv) allocation of contract transaction price to the performance obligations; and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation. The Company recognizes revenues upon the satisfaction of its performance obligations (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.

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 and are not expected to be material in the future. 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.

As more fully described above, we had no revenues in the three months ended March 31, 2022 or 2021.

Stock-Based Compensation

The fair value of employee stock options is measured at the date of grant. Expected volatilities are based on the equally weighted average historical volatility from five comparable public companies with an expected term consistent with ours. Expected years until exercise represents the period of time that options are expected to be outstanding using the "simplified method." 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. The Company estimated that the dividend rate on its common stock will be zero. The assumptions for the three months ended March 31, 2022 and 2021 are summarized in the following table:

	2022			2021
Risk free rate		1.65	%		0.33	%
Weighted average expected years until exercise		5-6			5
Expected stock volatility		100	%		100	%
Dividend yield		-			-

8

 

The Company elected to account for forfeitures of stock-based awards as they occur.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. Tax rate changes are reflected in income during the period such changes are enacted. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid.

A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. All of our tax years remain subject to examination by the tax authorities.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no such items in 2022 and 2021.

Basic and Diluted Earnings (Loss) per Share

In periods of net loss, basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.

For periods of net income, diluted earnings per share is computed using the more dilutive of the “treasury method” or “two class method.” Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to common stockholders by the weighted- average number of shares outstanding plus the dilutive impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and convertible notes using the if-converted method. Because none of the Company’s equity-linked financial instruments contain non-forfeitable rights to dividends, the “two class” method results in the same diluted earnings per share as the “treasury method.”

All of the Company’s outstanding stock options and warrants were considered anti-dilutive for the three months ended March 31, 2022 and 2021. The following table sets forth the potential dilutive securities excluded from the calculation of diluted loss per share for the periods presented.

	Three months ended March 31, 2022		Three months ended March 31, 2021
Shares underlying:
Common stock options	2,536,667			1,355,001
Stock purchase warrants		233,333		13,278,794
		2,770,000		14,633,795

Recently Adopted Accounting Standards

In August 2020, the FASB issued new accounting guidance (ASU 2020-06) with respect to the accounting for convertible debt instruments and contracts in an entity’s own equity. The guidance simplifies the accounting for convertible instruments by reducing the various accounting models that can require the instrument to be separated into a debt component and equity component or derivative component. Additionally, the guidance eliminated certain settlement conditions previously required to be able to classify a derivative in equity. The new guidance is effective on a modified or full retrospective basis for fiscal years beginning after December 15, 2023, including interim periods with those fiscal years. The Company will evaluate the impact on the consolidated financial statements.

We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. 

9

Note 4 – Property and Equipment

Property and equipment, net consisted of the following:

	March 31, 2022			December 31, 2021
Medical equipment	$	387,665		$	387,665
Office equipment		3,243			-
Warehouse/production equipment		8,605			-
		399,513			387,665
Less accumulated depreciation and amortization		(387,665	)		(387,665	)
Property and equipment, net	$	11,848		$	-

There was no depreciation expense of property and equipment for the three months ended March 31, 2022 and 2021.  None of the Company's long-lived assets were deemed to be impaired during the three months ended March 31, 2022 and 2021.

Note 5 – Stock Purchase Warrants

The following schedule reflects outstanding stock purchase warrants activities as of March 31, 2022 and 2021:

Description	March 31, 2022		March 31, 2021
May 2016 warrants		-		6,180,000
2018 Convertible Notes warrants		233,333		233,333
2020 Replacement warrants		-		3,977,961
2020 Compensatory warrants		-		2,887,500
Total		233,333		13,278,794

As part of the May 2016 Plan of Reorganization, the Company issued warrants to purchase 6,180,000 shares of unregistered common stock to certain investors participating in the recapitalization of the Company. The warrants terminated on May 5, 2021 and were exercisable at exercise prices ranging from $0.50 per share to $0.75 per share.

The 2018 Convertible Notes warrants have a $0.15 strike price, approximately 1.5 years of remaining contractual term, and zero intrinsic value as of March 31, 2022 and are equity classified.

In connection with the Recapitalization and the conversion of the 2019 Senior Secured Notes, the Company issued to the noteholders stock purchase warrants to acquire 3,977,971 shares of the Company’s common stock. The warrants had an exercise price of $0.40, a term of five years, and were equity classified.

In connection with the Recapitalization and to compensate certain individuals for services performed in maintaining the Company’s viability, the Company issued stock purchase warrants to acquire 2,887,500 shares of the Company’s common stock. The warrants had an exercise price of $0.40, a term of five years, and were equity classified.

In connection with the Modification, the Company induced the exercise of existing stock purchase warrants to acquire 6,865,461 shares of the Company’s common stock by reducing the exercise price from $0.40 to $0.20 and requiring exercise by a certain date. All warrants were exercised by December 31, 2021 for gross proceeds of $1,373,092.

Note 6 – Equity and Stock-Based Compensation

Under the Second Amended and Restated Certificate of Incorporation, the Company has the authority to issue a total of 101,000,000 shares of capital stock, consisting of 100,000,000 shares of common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, which will have such rights, powers and preferences as the Board of Directors shall determine.

10

 

Stock-Based Compensation

In July 2016, the Board of Directors approved the Company’s 2016 Omnibus Incentive Plan (the “2016 Omnibus Plan”), and on August 4, 2016, the Board amended such plan to include an evergreen provision, intended to increase the maximum number of shares issuable under the Omnibus Plan on the first day of each fiscal year (starting on January 1, 2017) by an amount equal to six percent (6%) of the shares reserved as of the last day of the preceding fiscal year, provided that the aggregate number of all such increases may not exceed 1,000,000 shares. As of November 21, 2016, holders of a majority of our capital stock executed a written consent adopting and approving the 2016 Omnibus Plan, as amended and restated, which provides for the Company to grant equity and cash incentive awards to officers, directors and employees of, and consultants to, the Company and its subsidiaries. Further, on March 4, 2022, the Board approved an amendment to the 2016 Omnibus Plan to increase the shares available under to Plan to 4,250,000 and remove the annual evergreen provision. Effective as of April 21, 2022, holders of a majority of our common stock outstanding executed a written consent approving the March 2022 amendment to the 2016 Omnibus Plan which is expected to become effective on or around June 6, 2022. 

A summary of stock option activity under the 2016 Omnibus Plan during the three months ended March 31, 2022 is presented below: 

Stock Options – 2016 Omnibus Plan	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at January 1, 2022		1,355,001	$	0.52		3.90
Granted	1,181,666		$	0.69		10.00
Exercised		-	$	-		-
Forfeited or expired		-	$	-		-
Outstanding at March 31, 2022		2,536,667	$	0.60		6.58
Exercisable at March 31, 2022		2,103,334	$	0.57	5.89

There were 1,181,666 stock options granted under the 2016 Omnibus Plan during the three months ended March 31, 2022 of which (i) 206,666 options were granted to settle prior accrued compensation liabilities with senior management and Board of Directors, (ii) 450,000 of immediately vested options were granted to management, the Board of Directors, and a third-party service provider, and (iii) 525,000 incentive stock options vesting over 3 years were granted to employees. The fair value of the stock options granted in settlement of accrued liabilities was approximately $3,000. As the options issued were to related parties, the $103,333 of settled liabilities was credited to additional paid-in-capital. No stock options were exercised during the three months ended March 31, 2022. As of March 31, 2022, there was approximately $6,200 of unrecognized compensation cost related to the 525,000 non-vested stock options granted during the quarter.

For the three months ended March 31, 2022, the Company recorded stock-based compensation expense of $6,430. There was no stock based compensation expense for the three months ended March 31, 2021.

Note 7 – Commitments and Contingencies

Lease Agreements

In January 2022, the Company entered into a commercial operating lease agreement for its office space in Florida, expiring on December 31, 2024. The lease requires the Company to pay for its insurance, taxes, and its share of common operating expenses. The lease resulted in an increase in its right of use assets and lease liabilities of $89,312, using a discount rate of 10%.

Operating lease ROU assets are included in right of use assets in the Company's consolidated balance sheet as of March 31, 2022. Operating lease liabilities are classified as other current and non-current liabilities in the Company’s consolidated balance sheet.

The lease was cancelable by the landlord at any time prior to December 31, 2022 based on certain capital raising contingencies which the Company met in April 2022.

Total lease costs were approximately $7,000 for the three months ended March 31, 2022, consisting solely of operating lease costs.

Future undiscounted cash flows under this lease are:

2022		19,240
2023		33,974
2024		34,993
Total		88,207
Discount factor		(12,151	)
Lease liability		76,056
Current lease liability		(20,826	)
Non-current lease liability	$	55,230

In February 2022 the Company entered into an additional commercial operating lease for its primary office and warehouse/distribution space in Texas. This lease expires in March 2027. The space remained under buildout and Landlord control as of March 31, 2022 with the Company acquiring control of the lease space effective April 1, 2022; as a result, the right of use asset and lease liability has not been recognized as of March 31, 2022. The future lease payments of $423,000 are not included in the above table.     

Note 8 – Subsequent Events

Effective April 29, 2022, the Company closed on an equity private placement for the sale of 3,550,000 shares of common stock for proceeds of $3,550,000 to certain accredited investors under a Securities Purchase Agreement dated April 11, 2022 providing for the issuance of up to 4,000,000 shares of common stock.

On April 22, 2022, 775,000 incentive stock options were granted to non-executive employees at exercise prices of $0.75 or $1.00 with terms of ten years and subject to full vesting over three years.

The other receivable in the amount of $64,000 was received subsequent to March 31, 2022.

As of May 15, 2022, the Company received and accepted commitments for the sale of an additional 407,757 shares of common stock for proceeds of $407,757 to certain unaffiliated accredited investors under a Securities Purchase Agreement dated May 13, 2022.  Closing of the transaction is expected to occur on May 18, 2022.

11

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

The following discussion and analysis of the financial condition and results of operations of Nuo Therapeutics, Inc. ("Nuo Therapeutics," the "Company," "we," "us," or "our") should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the years ended December 31, 2019, 2020, and 2021 (the “Annual Report”), filed with the U.S. Securities and Exchange Commission, or the Commission on April 15, 2022. 

Special Note Regarding Forward Looking Statements

Certain statements, other than purely historical information in this Quarterly Report (including this section) constitute “forward-looking statements”. Forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “will be,” “will continue,” “will likely result,” “could,” “may” and words of similar import. These statements reflect the Company’s current view of future events and are subject to certain risks and uncertainties as noted in this Quarterly Report and in other reports filed by us with the Securities and Exchange Commission, including Forms 8-K, 10-Q, and 10-K. These risks and uncertainties include, among others, the following:

● our limited revenue base and sources of working capital;

● our limited operating experience;

● the dilutive impact of raising additional equity or debt;

● our ability to timely and accurately report our financial results and prevent fraud if we are unable to maintain effective disclosure and internal controls;

● acceptance of our product by the medical community and patients;

● our ability to obtain adequate reimbursement from third-party payors;

● our ability to contract with healthcare providers;

● our reliance on several single source suppliers and our ability to source raw materials at affordable costs;

● our ability to protect our intellectual property;

● our compliance with governmental regulations;

● our ability to successfully sell and market the Aurix System;

● our ability to attract and retain key personnel, including our Chief Executive and Financial Officer;

● our ability to successfully pursue strategic collaborations to help develop, support, or commercialize our current and future products; and

● whether the OTC Markets Group will enable shares of our common stock to be quoted on a retail trading market and, if so, whether an active trading market will develop.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements.

In addition to the risks identified under the heading “Risk Factors” in our Annual Report and the other filings referenced above, other sections of this report may include additional factors which could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business, or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The Company undertakes no obligation and does not intend to update, revise or otherwise publicly release any revisions to its forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events.

12

Business Overview

We are a regenerative therapies company focused on developing and marketing products for chronic wound care primarily within the U.S. We commercialize innovative cell-based technologies that harness the regenerative capacity of the human body to trigger natural healing. The use of autologous (i.e., from self, the patient’s own) biological therapies for tissue repair and regeneration is part of a clinical strategy designed to improve long-term recovery in inherently complex chronic conditions with significant unmet medical needs.

Our current commercial offering consists of a point of care technology for the safe and effective separation of autologous blood to produce a platelet-based therapy for the chronic wound care market. This offering is known as “Aurix” or the “Aurix System”. The FDA cleared the Aurix System for marketing in 2007 as a device under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Aurix is one of two platelet derived products cleared by the FDA for chronic wound care use and is indicated for most exuding wounds. The advanced wound care market, within which Aurix competes, is composed of advanced wound care dressings, wound care devices, and wound care biologics, and is estimated to be an approximate $10.8 billion global market in 2021 with the North American market estimated at approximately $4.15 billion in 2020. Estimates remain that 1-2% of population in the developed countries will suffer from a chronic wound at least once in their lifetime. According to the National Institute of Health, treatment of diabetic foot ulcers cost an estimated $9-$13 billion annually in the U.S. alone. An aging population and the still increasing prevalence of diabetes suggests a continued increase in the patient population at risk of developing chronic, non-healing wounds.

The Aurix System produces a platelet rich plasma (“PRP”) gel at the point of care using the patient’s own platelets and plasma sourced from a small draw of peripheral blood. Aurix comprises a natural, endogenous complement of protein and non-protein signal molecules that contribute to effective healing. During treatment, the patient’s platelets are activated and release hundreds of growth factor proteins and other signaling molecules that form a biologically active hematogel. Aurix delivers concentrations of the natural complement of cytokines, growth factors and chemokines that are known to regulate angiogenesis (i.e., the development of new blood vessels), cell growth, and the formation of new tissue. Once applied to the prepared wound bed, the biologically active Aurix hematogel can restore the balance in the wound environment to transform a non-healing wound to a wound that heals naturally.

In 2012, a Medicare National Coverage Determination (“NCD”) from CMS reversed a twenty-year old non-coverage decision for autologous blood derived products used in wound care. This NCD allowed for Medicare coverage under the Coverage with Evidence Development (“CED”) program.  CED programs have been employed for a selected number variety of other therapies, including transcatheter aortic valve repair and cochlear implantation.  Under the CED program, CMS provides reimbursement for items or services on the condition that they be furnished in approved clinical protocols or in the collection of additional clinical data.  Under the CED program, a facility treating a patient with Aurix was reimbursed by Medicare when health outcomes data were collected to inform future coverage decisions. The intent of the CED program is to evaluate the outcomes of Aurix therapy for the broader Medicare population when it is used in a “real world” continuum of care.  

In May 2019, we transmitted a letter memorandum to CMS’ Coverage and Analysis Group (“CAG”) in support of our complete formal request for reconsideration of the then existing national coverage determination based on clinical data collected and published under the CED program. The complete formal public request for reconsideration was made on May 8, 2019 in accordance with the applicable requirements.

On April 13, 2021, CMS issued a final coverage decision memo indicating that Medicare would nationally cover autologous PRP for the treatment of chronic non-healing diabetic wounds for a duration of 20 weeks under Section 1862(a)(1)(A) of the Social Security Act. This coverage applies when using devices whose FDA-cleared indications include the management of exuding cutaneous wounds, such as diabetic ulcers. Coverage of autologous PRP beyond 20 weeks for diabetic foot ulcers and for the treatment of all other chronic, non-diabetic, non-healing wounds will be determined by local Medicare Administrative Contractors.

Although FDA cleared the Aurix System for marketing in 2007 under Section 510(k) of the FDCA, CMS only established economically viable reimbursement for the product beginning in 2016. For 2022, the Medicare national average reimbursement rate for the Aurix System is $1,749 per treatment, which we believe provides appropriate payment to facilities for product usage. We will market the Aurix System at an approximate cost of $800 per treatment to wound care providers.

Our Strategy

Upon the expected re-initiation of commercial sales activities in May 2022, our immediate focus will be on engagement with providers treating chronic non-healing wounds to describe the clinical benefits we believe result from the use of Aurix in the treatment of complex wounds. Increasing physician awareness of the differentiating attributes of Aurix will be key to establishing a base of product revenues upon which to grow.

Over the period from the cessation of normal operational activities in May 2019 through the final NCD in April 2021 leading to the decision to reinitiate business activities, the Company was focused on engaging with CMS as appropriate, monitoring the developments concerning our reconsideration request, advancing our positions during various public comment periods and maintaining overall yet limited corporate viability in the event that a sufficiently favorable coverage and reimbursement setting developed for Aurix.

13

In addition, the Company took actions during this period to address its capital structure by eliminating both its debt and exchanging the Series A Preferred Stock issued at the time of the May 2016 recapitalization for common stock.

The Science Underlying Aurix/Platelet Rich Plasma

Normal Wound Healing

The science underlying wound healing is well-established. An immediate early event critical for wound healing is the influx of platelets to the wound site. Platelets bind to elements within damaged tissue such as collagen fragments and endogenous thrombin molecules and are activated to release a diversity of growth factors and other biomolecules from their alpha and dense granules (Reed 2000, Nieswandt, 2003). These biomolecules provide signals essential for biological responses regulating hemostasis and effective tissue regeneration.

Chronic Wounds

Dysregulation of numerous cellular and biological responses contribute to the chronic wound phenotype. Chronic wounds have reduced levels of growth factors and concomitant decreases in cellular proliferation (Mast 1996). There is increased cellular senescence (Telgenhoff 2005), and there generally is a lack of perfusion that can inhibit the delivery of nutrients and cells required for regeneration (Guo 2010). As the body attempts to stave off infection, elevated concentrations of free radicals accumulate in the chronic wound and further damage surrounding tissue (Moseley 2004, James 2003).

Aurix Therapy

Aurix has been cleared by FDA as safe and effective with an indication for chronic wounds such as leg ulcers, pressure ulcers, and diabetic ulcers and other exuding wounds such as mechanically or surgically debrided wounds. The Aurix therapeutic is formed by mixing a sample of a patient’s platelets and plasma with pharmaceutical grade thrombin and ascorbic acid. The thrombin activates platelets while ascorbic acid drives the synthesis of high tensile strength collagen, clears damaging free radicals and controls gel consistency. The topical dermal application of Aurix gel bypasses the lack of local perfusion to provide immediate signals for new tissue formation and ultimately healing.

The Efficacy of Aurix Relates to Biological Activity Released by Platelets

Regenerative Capacity

More than 300 proteins are released by human platelets in response to thrombin activation (Coppinger 2004). Important examples include vascular endothelial cell growth factor (“VEGF”), platelet derived growth factor (“PDGF”), epidermal growth factor (“EGF”), fibroblast growth factor (“FGF”) and transforming growth factor-beta (“TGF-B”) (Eppley 2004, Everts 2006). These proteins are critical for organized wound healing, regulating responses such as vascularization, cell proliferation, cell differentiation, and deposition of new extracellular matrix (Goldman 2004). Platelets also release chemokines such as Interleukin-8 (“IL-8”), stromal cell derived factor-1 (“SDF-1”), and platelet factor-4 (“PF-4”) (Chatterjee 2011, Gear 2003) that control the mobilization and migration of stem cells and fibroblasts (Werner 2003 and Gillitzer 2001), which contribute to tissue regeneration.

Anti-infective Activity

Populations of bioburden in chronic wounds vary over time and wounds invariably retain or become re-infected with some level of bacteria that is detrimental to healing (Howell-Jones 2005). In addition to regenerative capacity, platelets release anti-microbial peptides effective against a broad range of pathogens including Methicillin Resistant Staphylococcus Aureus (“MRSA”) (Moojen 2007, Jia 2010, Tang 2002, Bielecki 2007).

Clinical Efficacy

Multiple efficacy and effectiveness studies have been published in peer reviewed journals documenting the impact of using Aurix to treat chronic wounds. Key data include:

● In the published study of the clinical data collected during the CED program for diabetic foot ulcers, Aurix demonstrated a significant time to heal advantage compared to wounds treated with usual and customary care (including any available advanced therapy). A higher percentage of healing was observed across all wound severities (Wagner Grade 1-4) and in a patient population with significant comorbidities. (Gude W, Hagan D, Abood F, Clausen P:   Aurix Gel is an Effective Intervention for Chronic Diabetic Foot Ulcers: A Pragmatic Randomized Controlled Trial. Advances in Skin and Wound Care, 2019; 32(9): 416-426.)

14

● In a double blinded randomized controlled trial, 81% of the most common-sized diabetic foot ulcers healed with Aurix compared with 42% of control wounds. Mean time to healing was six weeks. (Driver V, Hanft J, Fylling, C et al.:  A Prospective, Randomized, Controlled Trial of Autologous Platelet-Rich Plasma Gel for the Treatment of Diabetic Foot Ulcers. Ostomy Wound Management, 2006; 52(6): 68-87.) 

● In 285 chronic wounds in 200 patients, 96.5% of the wounds had a positive response within an average of 2.2 weeks with an average of 2.8 Aurix treatments (de Leon J, Driver VR, Fylling CP, Carter MJ, Anderson C, Wilson J, et al.:  The Clinical Relevance of Treating Chronic Wounds with an Enhanced Near-physiological Concentration of Platelet-Rich Plasma (PRP) Gel.  Advances in Skin and Wound Care, 2011; 24(8), 357-368.) 

● In a retrospective, longitudinal study of 40 Wagner grade II through IV diabetic foot ulcers, most with critical limb ischemia, wounds increased in size in the approximate 100 days prior to the initiation of comprehensive wound care treatment. Upon treatment with debridement, revascularization, antibiotics and off-loading, the wounds continued to increase in size over a subsequent 75-day period. Once they were then treated with Aurix, the wounds immediately changed healing trajectory and 83% of the wounds healed with an average of 6.1 Aurix treatments per wound (Sakata, J., Sasaki, S., Handa, K., et al.  A Retrospective, Longitudinal Study to Evaluate Healing Lower Extremity Wounds in Patients with Diabetes Mellitus and Ischemia Using Standard Protocols of Care and Platelet-Rich Plasma Gel in a Japanese Wound Care Program. Ostomy Wound Management, 2012; 58(4):36-49.)

Results of Operations

Comparison of Three Months Ended March 31, 2022 and 2021

The amounts presented in this comparison section are rounded to the nearest thousand.

Revenue and Gross Profit 

There were no revenues in the three months ended March 31, 2022 and 2021 as the Company ceased ongoing operational activities effective May 1, 2019 and no longer treated subjects under the previous CED program while selling its remaining Aurix inventory over the balance of 2019. Re-initiation of commercial Aurix sales is expected by May 2022.

Operating Expenses

Total operating expenses increased approximately $516,000 to approximately $522,000 comparing the three months ended March 31, 2022 to the three months ended March 31, 2021. The increase from the nominal expense level in the prior year was due to expenses associated with continued company restart activities first initiated in fall 2021 in anticipation of renewed commercial sales activities by May 2022.   Expenses for the three months ended March 31, 2022 were primarily composed of (i) approximately $164,000 of compensation and benefits expense, (ii) approximately $209,000 of professional fees including accounting and audit and legal fees associated with our efforts to return to current reporting status as a public company and (iii) approximately $149,000 of various other operating expenses including IT services and sales infrastructure costs.

Other Income (Expense)

Other income for the three months ended March 31, 2022 represents gains from the negotiated settlement of legacy accounts payable including the full release of any ongoing payment liability.

Liquidity and Capital Resources

Overview 

As of March 31, 2022, we had cash and cash equivalents of approximately $0.7 million, total current assets of approximately $1.0 million and total current liabilities of approximately $0.5 million. As of May 6, 2022, we had cash and cash equivalents of approximately $3.8 million as a result of the closing of the equity private placement of $3.55 million as of April 29, 2022. As an operational business, we have a history of losses and are not currently profitable. For the years ended December 31, 2021, 2020, and 2019, we incurred net losses of approximately $0.1 million, $0.1 million, and $1.2 million, respectively. As of March 31, 2022, our accumulated deficit was approximately $24.0 million and our stockholders’ equity was approximately $0.5 million.

Based on our current operating forecast, we believe that our existing cash and cash equivalents, including the proceeds from the private placement which closed April 29, 2022 will be sufficient to fund our operations through at least the next 12 months.

15

Financing and Related Developments During the Years 2019 through 2021

Spring 2019 Cessation of Normal Operating Activities

In April 2019, the Company made the decision to cease normal operational activities and we furloughed the Company’s remaining employees effective May 1, 2019. This decision was necessitated by the depletion of the Company’s resources during the conduct of the CED studies being undertaken to pursue Medicare reimbursement coverage for the Aurix System. In the spring of 2019, we had collected clinical outcomes and analyzed the data from the subjects involved in the CED studies and were engaged in discussions with CMS concerning the adequacy of the results and a NCD reconsideration request.

16

On December 10, 2019, the Company entered into fifth and final amendments to the 2018 Convertible Notes pursuant to which the Company’s obligations under such notes were to be extinguished in their entirety upon receipt by each Convertible Note Investor of (i) a cash payment of $110,000 and (ii) 175,000 unrestricted shares of the Company’s common stock no later than February 10, 2020. The Company made the required cash payments totaling $220,000 on December 10, 2019 and issued the common shares as of February 5, 2020 in final settlement of the 2018 Convertible Notes.

Senior Secured Note Issuance

On November 15, 2019 and December 6, 2019, the Company entered into note purchase agreements with certain individual accredited investors (the “Senior Note Investors”) for the issuance and sale to the Investors of 12% senior secured promissory notes (the “Senor Notes”), in the aggregate principal amount of $305,000 with an overall $500,000 cap under the note purchase agreements. Pursuant to the purchase agreements, the Company also issued to the Senior Note Investors warrants exercisable to purchase an aggregate 457,500 shares of the Company’s common stock, subject to adjustment as referenced below.

In conjunction with the note issuance, the Company granted a first-priority security interest in all the assets of the Company but fundamentally consisting of the Aurix System asset including all regulatory files and approvals and relevant intellectual property. The purchase agreements contained certain representations, warranties and covenants by, among and for the benefit of the respective parties. The purchase agreements also provided for customary indemnification of the Senior Note Investors by the Company.

The notes had a maturity date of June 30, 2020 and accrued interest at a rate of 12% per year. The Company could prepay the Senior Notes, in whole or in part, at any time. The warrants were exercisable at any time, at an exercise price per share equal to $0.40, subject to certain adjustments and price protection provisions (including full ratchet anti-dilution protection) contained in the warrants. The warrants had five-year terms.

The use of proceeds from the Notes beyond the initial $50,000 and up to an estimated aggregate amount of $270,000 was specifically dedicated to payment to the 2018 Convertible Note Investors, in a final amount to be agreed between the Company and the Convertible Note Investors such that the 2018 Convertible Notes were considered retired and no longer in effect.

Series A Preferred Stock Exchange Agreement

On October 5, 2020, the Company entered into a Recapitalization Agreement (the “Recap Agreement) with Deerfield Private Design Fund II, L.P. (“DPDF”) and Deerfield PDI Financing II, L.P. (“DPF” and, together with DPDF, the “Deerfield Investors”) and the Noteholders, whereby the shares of Series A preferred stock held by the Deerfield Investors were exchanged for 2,700,000 shares of common stock of the Company. The Senior Note Investors agreed to the conversion of the $305,000 principal balance of the Notes plus accrued interest through September 30, 2020 of approximately $30,400 into an aggregate 838,487 shares of common stock of the Company at a conversion price of $0.40 per share, plus the purchase, for cash, of 487,500 shares of common stock at $0.40 per share, or $195,000 in total. As of October 5, 2020, all shares of Series A preferred stock and Senior Notes were cancelled in full.

17

Pursuant to the Recap Agreement, the Company also issued to the Senior Note Investors warrants to purchase an aggregate of 3,977,961 shares of the Company’s common stock, subject to adjustment as referenced below. The warrants were exercisable at any time, at an exercise price per share equal to $0.40, subject to certain adjustments and price protection provisions contained in the warrants. The warrants had five-year terms. The warrants to purchase 457,500 shares of common stock issued to the Noteholders upon the original 2019 issuance of the Notes were canceled.

Warrant Modification Agreement and Early Warrant Exercise

Effective as of December 1, 2021, the Company entered into a Warrant Modification Agreement (the “WMA”) with the holders of an aggregate 6,865,461 Warrants whereby the Warrants were modified to adjust the warrant exercise price from $0.40 per share to $0.20 per share provided the Investor exercised the warrant prior to January 31, 2022. All Warrants not exercised prior to January 31, 2022 were to be forfeited and deemed expired or otherwise cancelled.

As of December 31, 2021, all Warrants had been exercised for total consideration of $1,373,092 and the resulting issuance of 6,865,461 shares of common stock.

Cash Flows

Net cash provided by (used in) operating, investing, and financing activities for the periods presented were as follows:

	Three months ended March 31, 2022			Three months ended March 31, 2021
Cash flows used in operating activities	$	(737,330	)	$	(4,200	)
Cash flows used in investing activities	$	(11,848	)	$	-
Cash flow provided by financing activities	$	-		$	-

Operating Activities

Cash used in operating activities for the three months ended March 31, 2012 of approximately $737,000 primarily reflects our net loss of approximately $375,000 adjusted by i) a non-cash gain of approximately $146,000 from the negotiated settlement of legacy accounts payable obligations and ii) approximately $227,000 net change in operating assets and liabilities.

Cash used in operating activities for the three months ended March 31, 2021 was approximately $4,200 and primarily reflects our largely non-operational status as we awaited further developments concerning Medicare reimbursement coverage for the Aurix product.

18

Investing Activities Investing Activities

We did not have any material investing activities for the three months ended March 31, 2022 and 2021. 

Financing Activities

We did not have any financing activities for the three months ended March 31, 2022 and 2021. 

Inflation

The Company believes that the rates of inflation in recent years have not had a significant impact on its operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements. 

Critical Accounting Policies

Our consolidated financial statements included in Part I, Item 1 of this Quarterly Report are prepared in conformity with U.S. GAAP, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying notes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to our critical accounting policies or estimates since December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable. 

19

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management has carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2022. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective due to the un-remediated material weakness disclosed in our Annual Report on Form 10-K. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20

PART II
 
OTHER INFORMATION

Item 1. Legal Proceedings.

There are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition, or cash flows.

Item 1A. Risk Factors.

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

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

None. 

Item 3.    Defaults Upon Senior Securities.

None.

Item 4.    Mine Safety Disclosures.

Not applicable. 

Item 5.    Other Information.

On May 9, 2022, the Company entered into an employment agreement effective April 1, 2022 with David Jorden, the Company’s Chief Executive and Financial Officer. The employment agreement provides for a base salary to Mr. Jorden of Two Hundred Twenty-Five Thousand Dollars ($225,000) per year and, as determined by the Compensation Committee, an annual bonus of up to 50% of such base salary. The employment agreement also provides, upon certain circumstances, for a severance payment to Mr. Jorden of twelve months of his base salary as in effect at the time upon termination of services, including due to a change in control of the Company. The terms of the employment agreement with Mr. Jorden contain other customary provisions.

On May 9, 2022, the Company also entered into an employment agreement effective January 1, 2022 with Peter Clausen, the Company’s Chief Scientific Officer and Chief Operating Officer. The employment agreement provides for a base salary to Mr. Clausen as of May 1, 2022 of Two Hundred Twenty-Five Thousand Dollars ($225,000) per year and, as determined by the Compensation Committee, an annual bonus of up to 50% of such base salary. The employment agreement also provides, upon certain circumstances, for a severance payment to Mr. Clausen of twelve months of his base salary as in effect at the time upon termination of services, including due to a change in control of the Company. The terms of the employment agreement with Mr. Clausen contain other customary provisions.

The descriptions above of the employment agreements for Mr. Jorden and Mr. Clausen are qualified by reference to the actual employment agreements, copies of which are included as exhibits to this Quarterly Report.

On May 15, 2022, the Company entered into a Securities Purchase Agreement, dated as of May 13, 2022, with certain unaffiliated accredited investors for the sale of 450,000 shares of the Company’s common stock, par value $0.0001 per share at a price of $1.00 per share for proceeds of $450,000. The closing of the private placement is expected to occur on May 18, 2022.  The proceeds of the private placement will be used for working capital purposes. 

The description of the Securities Purchase Agreement is qualified in its entirety by reference to the full text of the agreement included as Exhibit 10.3 to this Quarterly Report.

Item 6.    Exhibits.

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.1 to the registrant’s Registration Statement on Form 8-A and incorporated by reference herein).
3.2	Certificate of Designation of Series A Preferred Stock of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.3 to the registrant’s Current Report on Form 8-K and incorporated by reference herein).
3.3	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Nuo Therapeutics, Inc. (previously filed on September 5, 2018 as Exhibit 3.1 to the registrant’s Current Report on Form 8-K and incorporated by reference herein).
3.4	Amended and Restated By-Laws of Nuo Therapeutics, Inc. (previously filed on May 10, 2016 as Exhibit 3.2 to the registrant’s Registration Statement on Form 8-A and incorporated by reference herein).
10.1	Employment Agreement between David Jorden and Nuo Therapeutics, Inc. dated May 9, 2022.
10.2	Employment Agreement between Peter Clausen and Nuo Therapeutics, Inc. dated May 9, 2022.
10.3	Securities Purchase Agreement dated May 13, 2022
31	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Nuo Therapeutics, Inc. Form 10-Q for the quarter ended March 31, 2022, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Balance Sheets at March 31, 2022 and December 31, 2021, (ii) Consolidated Statements of Operations for the three month periods ended March 31, 2022 and 2021, (iii) Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three month periods ended March 31, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2022 and 2021 and (v)  Notes to the Unaudited Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

21

SIGNATURES

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

	NUO THERAPEUTICS, INC.
Date: May 16, 2022
By:	/s/ David E. Jorden
	David E. Jorden Chief Executive Officer and Chief Financial Officer
	(Principal Executive Officer and Principal Financial Officer)

22

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) executed on May 9, 2022 retroactive to April 1, 2022 (the “Effective Date”), is by and between Nuo Therapeutics, Inc., a Delaware corporation (together with its affiliates and subsidiaries, the “Company”), and David E. Jorden (the “Employee”).

WITNESSETH: 

WHEREAS, the Company and the Employee desire the Employee to continue serving the Company as its Chief Executive Officer and Chief Financial Officer; and

WHEREAS, the parties desire to provide that the Employee be employed by the Company under the terms of this Agreement.

NOW THEREFORE in consideration of the mutual covenants contained herein as well as other good and valuable consideration, the Company and the Employee hereby agree as follows:

1. Term of Employment; Office and Duties.

(a)          Commencing on the Effective Date of this Agreement and continuing through March 31, 2023 (the “Initial Term”), the Company shall employ the Employee as a senior executive of the Company with the title of Chief Executive Officer and Chief Financial Officer, with the duties and responsibilities prescribed for such office in the Bylaws of the Company and such additional duties and responsibilities consistent with such positions as may from time to time be assigned to the Employee by the Board of Directors of the Company (the “Board”). Employee agrees to perform such duties and discharge such responsibilities in accordance with the terms of this Agreement in a diligent and professional manner and in the best interest of the Company. Unless this Agreement is earlier terminated as provided for elsewhere herein, upon the expiration of the Initial Term, this Agreement shall automatically renew for successive additional one (1) year terms, unless either the Company or the Employee (collectively the “Parties” or individually the “Party”) gives the other Party written advance notice of an intent not to renew the Agreement at least ninety (90) days prior to its expiration. The Initial Term and all renewal terms, if any, are hereafter collectively referred to as the “Term”.

(b)          Employee shall devote all of the necessary business time, attention, and energies, as well as Employee’s best talents and abilities to the business of the Company in accordance with the Company’s instructions and directions. other than during vacations of four (4) weeks per year and periods of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from: (i) delivering lectures or fulfilling speaking engagements; (ii) engaging in charitable and community activities, including sitting on any boards of directors and/or committees of such organizations related to such activities; and, (iii) being a passive investor in real estate; provided, however, that such activities do not interfere with the performance of his duties hereunder.

(c)         Employee may continue in his current role and business activities with Nanospectra Biosciences, Inc. during the Term, so long as such other business activities do not interfere with the terms and conditions of this Agreement. The Employee must obtain the Board’s consent prior to accepting any other board of directors or board committee memberships, which consent shall not be unreasonably withheld by the Board.

2. Compensation and Benefits.

For all services rendered by the Employee in any capacity during Employee’s employment hereunder, including without limitation, services as an executive officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the Effective Date the Employee shall be compensated as follows:

(a)          Base Salary. The Company shall pay the Employee a fixed salary (the “Base Salary”) in the gross amount of not less than Two Hundred Twenty-Five Thousand Dollars ($225,000) per year. The Base Salary is subject to applicable deductions as required by law or authorized in writing by the Employee. The Board may periodically review the Base Salary with a view to increasing such Base Salary if, in the judgment of the Board the Employee merits such an increase. The Base Salary will be paid to the Employee in accordance with the customary payroll practices of the Company.

(b)          Annual Bonus. Upon the conclusion of each Fiscal Year during the Term, provided that the applicable Evaluation Criteria, as defined herein, have been attained, the Employee shall be entitled to receive an annual bonus (the “Annual Bonus”) of up to 50% of the Base Salary. The “Fiscal Year” is the period beginning on each January 1 and ending on the following December 31. In order for the Employee to receive the Annual Bonus, the Evaluation Criteria as established by the Board based on the recommendation of the Compensation Committee of the Board (the "Compensation Committee") for each respective Fiscal Year must, in the sole and absolute determination of the Board, have been attained. As used herein, the term “Evaluation Criteria” refers to such corporate, financial and/or individual performance goals and objectives for each Fiscal Year as may be determined within the first sixty (60) days of such Fiscal Year by the Compensation Committee in consultation with the Employee.

(c)          The Annual Bonus, if any, shall be paid to the Employee in a lump sum, cash amount on or before March 15 following the end of the Fiscal Year to which the Annual Bonus relates. If, before the end of such Fiscal Year, the Employee’s employment with the Company is terminated by the Company due to the Employee’s death or “Disability” (as hereinafter defined) the Employee shall be entitled to receive at the time and in the manner set forth in the first sentence of this subparagraph, subject (in the case of termination, for Disability) to Employee’s execution and non-revocation (within the time periods described in Section 4(b) below) of the Release (described in Section 4(g) below) the Annual Bonus that would have been earned, if any, as if the Employee had remained employed until the last day of the Fiscal Year. If the Employee’s employment with the Company is terminated for any other reason before the end of a Fiscal Year, the Employee will not have any right to receive an Annual Bonus, or any portion thereof, for such Fiscal Year, except as provided in Section 4(b). 

(d)          Fringe Benefits, Option Grants and Miscellaneous Employment Matters.

(i)          The Employee shall be entitled to participate in such employee benefit plans or programs, including, without limitation, a Section 401(k) retirement plan, of the Company established and amended and/or terminated from time to time by the Board, if any, subject to the terms and conditions of such plans and programs. The Employee shall be eligible to participate (in accordance with its terms) in the group term life insurance plan (if any) maintained by the Company on behalf of its employees generally.

(ii)         Except as otherwise provided herein, the Employee may be granted in the sole and absolute discretion of the Board incentive stock options (the “Employment Options”) (provided the Employee is in the active employment of the Company on such day) to purchase shares of the Company’s common stock (the “Common Stock”) with an exercise price to be determined in the manner specified in the stock option or equity incentive plan under which the grant is issued (which shall be no less than the fair market value of the Common Stock on the date of grant). Any such Employment Options shall be evidenced by a separate agreement between the Company and the Employee, the terms of which will exclusively govern the Employment Options. Notwithstanding the foregoing, with respect to any Fiscal Year, the Company may grant in its sole and absolute discretion Employee a form of equity award other than Employment Options, provided that any such award shall have substantially similar vesting terms as the nonqualified stock options described herein. Employee shall continue to have such rights (if any) to any stock options granted previously by the Company, in accordance with the terms and conditions of any such options granted.

(e)          Withholding and Employment Tax. The Company will be entitled to deduct and/or withhold from any amounts owing to Employee any federal, state, city, local or foreign withholding taxes, excise taxes, or employment taxes imposed with respect to Employee’s compensation or other payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses, dividends, the receipt or exercise of options and/or other equity interest).

(f)          Death. In the event of the Employee’s death during active employment hereunder, and subject to a valid COBRA election by the Employee’s covered dependents, the Company shall pay the COBRA premiums under the Company’s group health and dental plans for the Employee’s covered dependents for as long as such dependents are entitled to COBRA coverage.

(g)          Vacation. Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation policy.  

(h)          Company Policies.         Employee agrees to comply to the extent not inconsistent with this Agreement with all personnel policies and procedures of the Company as the same now exist or may be hereafter implemented by the Company from time to time, including (without limitation) those policies contained in the Company’s employee manual or handbook which sets forth policies and procedures generally for employees of the Company.

3. Business Expenses.

The Company shall pay or reimburse all reasonable travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement, including reimbursement for attending out-of-town meetings of the Board in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s policy requirements with respect to reporting and documentation of such expenses. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee. In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is incurred by the Employee.

4. Termination of Employment.

Notwithstanding any other provision of this Agreement, Employee’s employment with the Company may be terminated during the Term upon written notice to the other Party as follows:

(a)          By the Company, in the event of the Employee’s death or Disability (as hereinafter defined) or for Cause (as hereinafter defined). For purposes of this Agreement, “Cause” shall mean: (i) the conviction of Employee of a crime involving an act or acts of dishonesty, fraud or moral turpitude, which act or acts constitute a felony; (ii) Employee’s failure, as reasonably determined by the Board, to substantially perform Employee’s duties hereunder, which failure is not cured within 30 days from receipt of written notice from the Board specifically setting forth such failure; or (iii) Employee having committed acts or omissions constituting a breach of Employee’s duty of loyalty or fiduciary duty to the Company or any act of dishonesty or fraud with respect to the Company. A determination that Cause exists shall be made by at least a majority of the members of the Board, excluding Employee. For purposes of this Agreement, “Disability” shall mean Employee is, by reason of any medically determinable physical or mental impairment that is expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or is determined to be totally disabled by the U.S. Social Security Administration. The Company shall by written notice to the Employee specify the event relied upon for termination pursuant to this Section 4(a), and Employee’s employment hereunder shall be deemed terminated as of the date set forth in such notice, except as otherwise set forth herein. In the event of the expiration of the Term or any termination under Section 4(a), 4(b), 4(c), 4(d) or 4(e), the Company shall pay, no later than fourteen (14) days following such termination, all amounts then due to the Employee by the Company under Section 2(a) of this Agreement for any portion of the payroll period worked and/or any amounts earned but for which payment had not yet been made up to the date of termination, and any unreimbursed business expenses. In such case, any amounts to which Employee is entitled under the Company’s benefit plans pursuant to Section 2(d)(i) hereof shall be paid in accordance with the applicable terms and conditions of such plans. If such termination was for Cause, the Company shall have no further obligations to Employee under this Agreement. The Company and Employee expressly agree that, to the extent Employee’s employment terminates because of death, any amounts payable shall be made to Employee’s estate, except to the extent otherwise provided under the terms of the instrument pursuant to which any such amount is paid. 

(b)          By the Company, in the absence of Cause, for any or no reason and in its sole and absolute discretion, provided that in such event the Company shall, subject to the Board determination that adequate cash reserves exist after paying all liabilities, as liquidated damages or severance pay, or both, pay to Employee (A) an amount equal to the Base Salary (at a monthly rate equal to the rate in effect immediately prior to the date of the termination of the Employee’s employment), on the same schedule and in the same manner as such payments would have been made in the absence of Employee’s termination, for a period of twelve (12) months, and (B) to the extent eligible for COBRA coverage, COBRA premiums for the Employee and his dependents under the Company’s group health plans for a period of twelve (12) months (such Base Salary and COBRA payments, called the “Termination Payments”) provided, however, that no Termination Payments shall be made unless the Release described in paragraph (g) below has been executed and any revocation period for such Release has expired before the sixtieth (60th) day after the date of the termination of the Employee’s employment (such 60^th day hereinafter called the “Release Date”). The first payment of the Base Salary and COBRA portions of the Termination Payments, if any, shall be made on the first regular Company pay date that occurs following the 30^th day after the Release Date.

(c)          By the Employee for “Good Reason,” which shall be deemed to exist: (i) if the Board of Directors fails to elect or reelect the Employee to, or removes the Employee from, any of the office(s) referred to in Section 1(a) absent “Cause” as defined elsewhere in this Agreement; (ii) if the scope of Employee’s duties, responsibilities, authority or position is materially reduced, provided that Employee shall act via written notice of his belief that such event has occurred within 30 days of any such diminution in the scope of his duties, responsibilities, authority or position; (iii) if the Company shall have continued to fail to comply with any material provision of this Agreement after a 30-day period to cure (if such failure is curable) following written notice to the Company of such non-compliance; or (iv) without Employee’s written consent, relocation of Employee’s office to an area outside of a 50-mile radius of Employee’s office location as of the Effective Date; provided that (A) the Employee provides written notice to the Company of the facts giving rise to “Good Reason” within 30 days of the initial existence of the event or events, and (B) the Company is provided not less than 30 days to cure, if curable, and fails so to cure, and (C) the Employee actually terminates employment within one year from the initial existence of the cause of Good Reason. 

In the event of any termination under Section 4(c), the Company shall, as liquidated damages or severance pay, or both, pay the Termination Payments to Employee, provided the Release described in paragraph (g) below has been executed and any revocation period for such Release has expired before the sixtieth (60^th) day after the date of the termination of the Employee’s employment. Such Termination Payments shall be made on the same basis and at the same times as described in Section 4(b) and 4(c) hereof.

(d)          Employee may terminate his employment under this Agreement for any other, or no reason upon ninety (90) days prior written notice to the Company.

(e)          If the Company gives notice of an intent not to renew this Agreement, as provided in Section 1(a) hereof, and as a result Employee’s employment by the Company terminates, then the Company shall pay to the Employee the Termination Payments in the same amounts, at the same times, in the same manner, and under the same conditions, as if the Employee had been terminated under Section 4(b) hereof.

(f)          Pursuant to Section 4(b) or Section 4(c) following a Change in Control (as defined below), in which event, in addition to the rights and obligations described in Section 4(b) or Section 4(c), as applicable, Employee shall also receive the following:

(i)          notwithstanding any provision to the contrary in any applicable equity compensation plan or any outstanding equity award agreement, the treatment of the Employee’s outstanding equity awards shall be governed solely by the following provisions: (A) all of the Employee’s then-outstanding and unexpired equity awards shall fully vest and all restrictions thereon shall lapse, and (B) to the extent vested, all of the Employee’s outstanding stock options shall remain exercisable until the first to occur of 12 months following the termination date and each such stock option’s original expiration date.

(ii)         As used herein, the term “Change in Control” shall mean the occurrence of any of the following circumstances after the date hereof: (i) any “person” (as such term is used in Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities; (ii) the Company is a party to a merger, consolidation, share exchange, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any 15-month period, individuals who at the beginning of such period constituted the Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(g)          Any other provision of this Agreement notwithstanding, the payments and benefits to the Employee set forth in Subsection (b), (c) and (e) of this Section 4 shall not be paid/provided unless the Employee (i) has timely executed and not revoked a usual and customary general release of all known and unknown claims that the Employee may then have against the Company or persons affiliated with the Company in the form acceptable to the Company (the “Release”) and (ii) has agreed not to prosecute any legal action or other proceeding based upon any of such claims.

5. Confidential Information

All data, literature and information in any form related to the business of the Company, including, but not limited to, customer lists, know-how, trade secrets, product specifications, methods and techniques, and process information, whether such information is written or oral, or which is developed, discovered or created by Employee or the Company during Employee’s employment by the Company will be considered confidential and proprietary data of the Company for the duration of such employment and thereafter, whether or not it is expressly designated proprietary or confidential (the "Confidential Information"). Employee will not disclose, reveal, transfer or use (except within the scope of his duties) the Confidential Information to or with any other person, third party, company or otherwise, without the prior written authorization of the Company. All Confidential Information shall remain the property of the Company and shall be promptly returned to the Company at its request, but in any event immediately upon termination of Employee's employment hereunder, with all copies or excerpts made therefrom. The term "Confidential Information" shall not include information which is or becomes publicly available without breach of (a) this Agreement, (b) any other agreement to which the Company is a party or beneficiary, or (c) any duty owed to the Company by Employee or any third party; provided that, if Employee desires to use any such information for any reason, Employee shall bear the burden of proving that such information has become publicly available without any such breach.

6. Restrictive Covenants

(a)          Noncompete. In order to protect the goodwill and business and professional relationships of the Company, Employee agrees that he will not during the term of his employment with the Company and for a period of twelve (12) months following termination of his employment with the Company, directly or indirectly, either as an individual for his own account or enterprise, or as a partner, owner, joint venturer, officer, director, employee, agent, salesman, independent contractor, supplier, principal, consultant, or 1% or more owner of any entity or third party:

(i)          Compete (as hereinafter defined) with the Company anywhere in the Restricted Area (as hereinafter defined). For purposes of this Section 6(a) "Compete" means to engage, participate or be involved in any respect in any business that is competitive with the Company, or furnishing any aid, assistance or service of any kind to any person or entity which competes with the business of the Company, and (ii) "Restricted Area" means the continental United States; 

(ii)         hire or solicit for employment or as an independent contractor, directly or indirectly, any of the Company's personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or prospective employee, consultant or independent contractor of the Company);

(iii)        attempt directly or indirectly to induce any of the Company's personnel to leave the employ of, or discontinue such person's consultant, contractor, or other business association with the Company;

(iv)        solicit business that competes with the Company directly or indirectly from any client of the Company. For purposes hereof, a person or entity is a "client of the Company" if the Company is performing, has performed during the previous twelve (12) months, or is contemplating performing at such time, services for such person or entity; or

(v)         interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company and any of its agents, clients, licensors, licensees, suppliers, employees or independent contractors, including, without limitation, by inducing any client to become a client of any company or entity whose business competes with the Company.

(b)          Reasonableness of Restraints. Employee acknowledges that:

(i)          The imposition of restrictions, restraints and limitations set forth in Section 6 hereof are necessary for the reasonable and adequate protection of the Company's business and do not prevent Employee from earning a living.

(ii)         Each and every restriction, restraint and limitation set forth in Section 6 hereof is reasonable in respect to geographic area, subject matter and length of time.

(c)          Remedies. If Employee were to breach the covenants contained in Section 5 or 6 hereof, monetary damages alone may not adequately compensate the Company. In addition to all remedies available at law or in equity, in the event that Employee breaches the covenants contained in Section 5 or 6 hereof, the Company shall be entitled to seek interim restraints and permanent injunctive relief for the enforcement thereof. The duration of Employee's covenants set forth in Section 6 also shall be extended by a period of time equal to the number of days, if any, during which Employee is in violation of the provisions contained in Section 6. All of the rights and remedies of the parties hereto shall be cumulative with, and in addition to, any other rights, remedies or causes of action allowed by law or equity and shall not exclude any other rights or remedies available to either of the parties hereto.

(d)          Binding Restrictions; Severability. Employee will continue to be bound by the restrictions of Section 5 or 6 until their expiration and shall not be entitled to any additional compensation from the Company with respect thereto. If at any time the provisions of this Section 5 or 6 shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, the same shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and Employee agrees that Section 5 or 6 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein. 

(e)          Other Obligations. The restrictive covenants set forth in Section 5 and 6 hereof shall be in addition to, and not in lieu of, the restrictions in Section 13.8(b) and Section 13.8(c) of the Nuo Therapeutics, Inc. Long-Term Incentive Plan (“LTIP”); provided, however, that the phrase “two (2) years” in Section 13.8(b) of the LTIP shall be replaced with the phrase “one (1) year”. In the event of any conflict between the provisions of Section 5 or 6 and any such other obligations, those that provide the Company with the broadest and most effective protection shall apply.

(f)          Non-Disparagement. Employee and the Company shall not, either during or after the Term, make any statements, whether oral or in writing, that would tend to disparage or defame the other, and in the case of the Company, defame its products, services, employees, officers, managers or members of the Board.

(g)          Property of the Company. Employee agrees that all records, files, memoranda, reports, client lists, programs, work product, or any other similar records or documents relating to the Company's business (including without limitation those which may have been used or prepared by Employee, whether or not part of the Confidential Information), remain the sole personal property of the Company and remain at all times, both during and after Employee's employment with the Company, in the control of the Company. Employee hereby waives and releases all claims of right of ownership thereto and Employee hereby agrees that upon the termination of his employment with the Company for any reason whatsoever, Employee shall immediately surrender all such records and documents, and all copies thereof, together with any other property of the Company in Employee's possession, to the Company at its principal business office or such other location as directed by the Company. Notwithstanding the foregoing, so long as at least one (1) copy of all such Company property and/or Confidential Information remains with the Company or has been delivered to the Company, a deletion of electronic files containing or constituting Company property and/or Confidential Information shall be considered to be the return, destruction and/or surrender of such files for purposes of compliance with the terms of this Agreement, provided that the deleted files must not be retrievable other than through extraordinary data salvage methods.

(h)          Notification to New Employer. In the event that Employee leaves the employ of the Company, Employee hereby gives his consent to notification by the Company to his new employer about Employee's obligations under this Agreement, including providing such new employer a copy of this Agreement. The Company shall provide Employee a copy of such written notification (if any) given to Employee's new employer pursuant to the immediately preceding sentence. Employee hereby agrees to provide (prior to his commencement of employment with such new employer) any such new employer a copy of this Agreement.

(i)          Survival of Restraints. The provisions of Section 5 and 6 shall survive the termination of Employee's employment with the Company, whether such termination is voluntary or involuntary, with or without cause, for any reason whatsoever.

7. Dispute Resolution.

All disputes between the Parties arising from the construction or performance of, or otherwise in connection with this Agreement, shall be finally settled in Texas, before one arbitrator pursuant to the rules of the American Arbitration Association. The arbitration procedure and all decisions made by the arbitrator shall be kept confidential, unless the Parties expressly consent to the publication thereof in whole or in part. Unless oral hearings are requested by a party, the arbitrator shall make his/her award on the basis of written submissions. In the event of any proceeding between the Company and the Employee with respect to the subject matter of this Agreement and the enforcement of the rights hereunder and such proceeding results in final judgment or order in favor of one of the Parties, which judgment or order is substantially inconsistent with the positions asserted by the other Party in such litigation or proceeding, the losing Party in such event shall reimburse the prevailing Party for all of its reasonable costs and expenses relating to such litigation or other proceeding, including, without limitation, its reasonable attorneys’ fees and expenses. Such payments shall be made no later than sixty (60) days after the final judgment or order is entered.

8. Consolidation; Merger; Sale of Assets; Change of Control.

Nothing in this Agreement shall preclude the Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of business combination provided that the entity resulting from or surviving such combination, consolidation or merger, or to which such assets are transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder. Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle the Employee and his heirs, beneficiaries and representatives to substantially the same compensation, benefits, payments and other rights as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership or joint venture not occurred; provided, however, that Employee shall have the rights provided to him as a result of a Change in Control as described in Section 4.

9. Survival of Obligations.

Sections 2(c), 2(e), 2(f), 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 shall survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the expiration of this Agreement, or otherwise). 

10. Employee’s Representations.

The Employee hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the Company and the Employee, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

11. Company’s Representations.

The Company hereby represents and warrants to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee and the Company, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.

12. Enforcement.

Because the Employee’s services are unique and because the Employee has access to confidential information concerning the Company, the parties hereto agree, that money damages alone may not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction in Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).

13. Severability.

In case any one or more of the provisions or part(s) of provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and enforceable in such jurisdiction to the maximum extent possible. If, in any judicial proceeding, a court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time, scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such court. 

14. Entire Agreement; Amendment.

Except as otherwise set forth in this Agreement, this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and thereof and supersedes and nullifies all previous agreements between the parties about the Company’s employment of the Employee. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

15. Notices.

All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered mail, return receipt requested, addressed as follows:

(a)	To the Company:	(b)	To the Employee:
	Nuo Therapeutics, Inc.		David E. Jorden
	8285 El Rio Street, Suite 190 Houston, TX 77054
	Attn: Compensation Committee Chairman,
	and to: Corporate Counsel of Record

and/or to such other persons and addresses as any party shall have specified in writing to the other.

16. Assignability.

This Agreement shall be assignable by the Company but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal representatives, successors and permitted assigns of the parties. In the event that all or substantially all of the business of the Company is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

17. Governing Law.

This Agreement shall be governed by and construed under the laws of the State of Texas.

18. Waiver and Further Agreement.

Any waiver of any breach of any terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other party may reasonably require in order to effectuate the terms and purposes of this Agreement.

19. Headings of No Effect.

The paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

20. Section 409A of the Internal Revenue Code.

Each payment under this Agreement is intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or in compliance with Code Section 409A, and the provisions of this Agreement will be administered, interpreted and construed accordingly. Without limiting the generality of the foregoing, the term “termination of employment” or any similar term under this Agreement will be interpreted to mean “separation from service” within the meaning of Code Section 409A to the extent necessary to comply with Code Section 409A. Furthermore, the right to a series of installment payments or in-kind benefits under this Agreement is to be treated as a right to a series of separate payments for purposes of Code Section 409A.

Notwithstanding anything in this Agreement to the contrary, for any year in which the stock of the Company is tradable on an established securities market, and the Employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder, but without regard to Code Section 416(i)(5)) at any time during the 12 month period ending on the last occurring December 31st (and is therefore a “Specified Employee”), then, to the extent required by Code Section 409A, and the final regulations thereunder, the Company shall pay any benefit which constitutes “deferred compensation” under this Agreement within the meaning of the Code Section 409A no earlier than the earliest of the following: 

(1) the expiration of the six-month period (the “Deferral Period”) measured from the date of the Employee’s ‘separation from service’ under Code Section 409A; or

(2) the date of the Employee’s death.

Upon the expiration of the Deferral Period, all payments that would have been made during the Deferral Period (whether in a single lump sum or in installments) shall be paid as a single lump sum to the Employee or, if applicable, his or her beneficiary. This Section shall not apply to any payment which constitutes “separation pay” as described in Treasury Regulation 1.409A-1(b)(9)(iii).

To the extent required by Code Section 409A, with regard to any provision that provides for the reimbursement of costs and expenses, or for the provision of in-kind benefits:

(1) The right to such reimbursement or in-kind benefit shall not be subject to liquidation or exchange for another benefit;

(2) The amount of expenses or in kind benefits available or paid in one year shall not affect the amount available or paid in any subsequent year; and

(3) Such payments shall be made on or before the last day of the Employee’s taxable year following the taxable year in which the expense occurred.

21. Code Section 280G

Notwithstanding anything contained in this Agreement to the contrary, to the extent that any of the payments and benefits provided for under this Agreement, together with any payments or benefits under any other agreement or arrangement between the Company or any of their subsidiaries or affiliates and Employee (collectively, the “Payments”) would constitute a “parachute payment” within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or the amount of such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written.

	COMPANY:
	NUO THERAPEUTICS, INC.
By:	/s/ Scott Pittman
	Scott M. Pittman
	Chairman of the Compensation
	Committee of the Board
	EMPLOYEE:
	/s/ David Jorden
	David E. Jorden

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) executed on May 9, 2022 retroactive to January 1, 2022 (the “Effective Date”), is by and between Nuo Therapeutics, Inc., a Delaware corporation (together with its affiliates and subsidiaries, the “Company”), and Peter A. Clausen (the “Employee”).

WITNESSETH:

WHEREAS, the Company and the Employee desire the Employee to continue serving the Company as its Chief Scientific Officer and Chief Operations Officer; and

WHEREAS, the parties desire to provide that the Employee be employed by the Company under the terms of this Agreement.

NOW THEREFORE in consideration of the mutual covenants contained herein as well as other good and valuable consideration, the Company and the Employee hereby agree as follows:

1. Term of Employment; Office and Duties.

(a)          Commencing on the Effective Date of this Agreement and continuing through March 31, 2023 (the “Initial Term”), the Company shall employ the Employee as a senior executive of the Company with the title of Chief Scientific Officer and Chief Operations Officer, with the duties and responsibilities prescribed for such office in the Bylaws of the Company and such additional duties and responsibilities consistent with such positions as may from time to time be assigned to the Employee by the Board of Directors of the Company (the “Board”). Employee agrees to perform such duties and discharge such responsibilities in accordance with the terms of this Agreement in a diligent and professional manner and in the best interest of the Company. Unless this Agreement is earlier terminated as provided for elsewhere herein, upon the expiration of the Initial Term, this Agreement shall automatically renew for successive additional one (1) year terms, unless either the Company or the Employee (collectively the “Parties” or individually the “Party”) gives the other Party written advance notice of an intent not to renew the Agreement at least ninety (90) days prior to its expiration. The Initial Term and all renewal terms, if any, are hereafter collectively referred to as the “Term”.

(b)          Employee shall devote all of the necessary business time, attention, and energies, as well as Employee’s best talents and abilities to the business of the Company in accordance with the Company’s instructions and directions. other than during vacations of four (4) weeks per year and periods of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from: (i) delivering lectures or fulfilling speaking engagements; (ii) engaging in charitable and community activities, including sitting on any boards of directors and/or committees of such organizations related to such activities; and, (iii) being a passive investor in real estate; provided, however, that such activities do not interfere with the performance of his duties hereunder.

2. Compensation and Benefits.

For all services rendered by the Employee in any capacity during Employee’s employment hereunder, including without limitation, services as an executive officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the Effective Date the Employee shall be compensated as follows:

(a)          Base Salary. The Company shall pay the Employee a fixed salary (the “Base Salary”) in the gross amount of not less than One Hundred Eighty Thousand Dollars ($180,000) per year for the period of January 1, 2022 through April 30, 2022, and effective May 1, 2022 the gross amount of not less than Two Hundred Twenty-Five Thousand Dollars ($225,000) per year. The Base Salary is subject to applicable deductions as required by law or authorized in writing by the Employee. The Board may periodically review the Base Salary with a view to increasing such Base Salary if, in the judgment of the Board the Employee merits such an increase. The Base Salary will be paid to the Employee in accordance with the customary payroll practices of the Company.

(b)          Annual Bonus. Upon the conclusion of each Fiscal Year during the Term, provided that the applicable Evaluation Criteria, as defined herein, have been attained, the Employee shall be entitled to receive an annual bonus (the “Annual Bonus”) of up to 50% of the Base Salary. The “Fiscal Year” is the period beginning on each January 1 and ending on the following December 31. In order for the Employee to receive the Annual Bonus, the Evaluation Criteria as established by the Board based on the recommendation of the Compensation Committee of the Board (the "Compensation Committee") for each respective Fiscal Year must, in the sole and absolute determination of the Board, have been attained. As used herein, the term “Evaluation Criteria” refers to such corporate, financial and/or individual performance goals and objectives for each Fiscal Year as may be determined within the first sixty (60) days of such Fiscal Year by the Compensation Committee in consultation with the Employee.

(c)          The Annual Bonus, if any, shall be paid to the Employee in a lump sum, cash amount on or before March 15 following the end of the Fiscal Year to which the Annual Bonus relates. If, before the end of such Fiscal Year, the Employee’s employment with the Company is terminated by the Company due to the Employee’s death or “Disability” (as hereinafter defined) the Employee shall be entitled to receive at the time and in the manner set forth in the first sentence of this subparagraph, subject (in the case of termination, for Disability) to Employee’s execution and non-revocation (within the time periods described in Section 4(b) below) of the Release (described in Section 4(g) below) the Annual Bonus that would have been earned, if any, as if the Employee had remained employed until the last day of the Fiscal Year. If the Employee’s employment with the Company is terminated for any other reason before the end of a Fiscal Year, the Employee will not have any right to receive an Annual Bonus, or any portion thereof, for such Fiscal Year, except as provided in Section 4(b). 

(d)          Fringe Benefits, Option Grants and Miscellaneous Employment Matters.

(i)          The Employee shall be entitled to participate in such employee benefit plans or programs, including, without limitation, a Section 401(k) retirement plan, of the Company established and amended and/or terminated from time to time by the Board, if any, subject to the terms and conditions of such plans and programs. The Employee shall be eligible to participate (in accordance with its terms) in the group term life insurance plan (if any) maintained by the Company on behalf of its employees generally.

(ii)         Except as otherwise provided herein, the Employee may be granted in the sole and absolute discretion of the Board incentive stock options (the “Employment Options”) (provided the Employee is in the active employment of the Company on such day) to purchase shares of the Company’s common stock (the “Common Stock”) with an exercise price to be determined in the manner specified in the stock option or equity incentive plan under which the grant is issued (which shall be no less than the fair market value of the Common Stock on the date of grant). Any such Employment Options shall be evidenced by a separate agreement between the Company and the Employee, the terms of which will exclusively govern the Employment Options. Notwithstanding the foregoing, with respect to any Fiscal Year, the Company may grant in its sole and absolute discretion Employee a form of equity award other than Employment Options, provided that any such award shall have substantially similar vesting terms as the nonqualified stock options described herein. Employee shall continue to have such rights (if any) to any stock options granted previously by the Company, in accordance with the terms and conditions of any such options granted.

(e)          Withholding and Employment Tax. The Company will be entitled to deduct and/or withhold from any amounts owing to Employee any federal, state, city, local or foreign withholding taxes, excise taxes, or employment taxes imposed with respect to Employee’s compensation or other payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses, dividends, the receipt or exercise of options and/or other equity interest).

(f)          Death. In the event of the Employee’s death during active employment hereunder, and subject to a valid COBRA election by the Employee’s covered dependents, the Company shall pay the COBRA premiums under the Company’s group health and dental plans for the Employee’s covered dependents for as long as such dependents are entitled to COBRA coverage.

(g)          Vacation. Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation policy.  

(h)          Company Policies.         Employee agrees to comply to the extent not inconsistent with this Agreement with all personnel policies and procedures of the Company as the same now exist or may be hereafter implemented by the Company from time to time, including (without limitation) those policies contained in the Company’s employee manual or handbook which sets forth policies and procedures generally for employees of the Company.

3. Business Expenses.

The Company shall pay or reimburse all reasonable travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement, including reimbursement for attending out-of-town meetings of the Board in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s policy requirements with respect to reporting and documentation of such expenses. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee. In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is incurred by the Employee.

4. Termination of Employment.

Notwithstanding any other provision of this Agreement, Employee’s employment with the Company may be terminated during the Term upon written notice to the other Party as follows:

(a)          By the Company, in the event of the Employee’s death or Disability (as hereinafter defined) or for Cause (as hereinafter defined). For purposes of this Agreement, “Cause” shall mean: (i) the conviction of Employee of a crime involving an act or acts of dishonesty, fraud or moral turpitude, which act or acts constitute a felony; (ii) Employee’s failure, as reasonably determined by the Board, to substantially perform Employee’s duties hereunder, which failure is not cured within 30 days from receipt of written notice from the Board specifically setting forth such failure; or (iii) Employee having committed acts or omissions constituting a breach of Employee’s duty of loyalty or fiduciary duty to the Company or any act of dishonesty or fraud with respect to the Company. A determination that Cause exists shall be made by at least a majority of the members of the Board, excluding Employee. For purposes of this Agreement, “Disability” shall mean Employee is, by reason of any medically determinable physical or mental impairment that is expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or is determined to be totally disabled by the U.S. Social Security Administration. The Company shall by written notice to the Employee specify the event relied upon for termination pursuant to this Section 4(a), and Employee’s employment hereunder shall be deemed terminated as of the date set forth in such notice, except as otherwise set forth herein. In the event of the expiration of the Term or any termination under Section 4(a), 4(b), 4(c), 4(d) or 4(e), the Company shall pay, no later than fourteen (14) days following such termination, all amounts then due to the Employee by the Company under Section 2(a) of this Agreement for any portion of the payroll period worked and/or any amounts earned but for which payment had not yet been made up to the date of termination, and any unreimbursed business expenses. In such case, any amounts to which Employee is entitled under the Company’s benefit plans pursuant to Section 2(d)(i) hereof shall be paid in accordance with the applicable terms and conditions of such plans. If such termination was for Cause, the Company shall have no further obligations to Employee under this Agreement. The Company and Employee expressly agree that, to the extent Employee’s employment terminates because of death, any amounts payable shall be made to Employee’s estate, except to the extent otherwise provided under the terms of the instrument pursuant to which any such amount is paid. 

(b)          By the Company, in the absence of Cause, for any or no reason and in its sole and absolute discretion, provided that in such event the Company shall, subject to the Board determination that adequate cash reserves exist after paying all liabilities, as liquidated damages or severance pay, or both, pay to Employee (A) an amount equal to the Base Salary (at a monthly rate equal to the rate in effect immediately prior to the date of the termination of the Employee’s employment), on the same schedule and in the same manner as such payments would have been made in the absence of Employee’s termination, for a period of twelve (12) months, and (B) to the extent eligible for COBRA coverage, COBRA premiums for the Employee and his dependents under the Company’s group health plans for a period of twelve (12) months (such Base Salary and COBRA payments, called the “Termination Payments”) provided, however, that no Termination Payments shall be made unless the Release described in paragraph (g) below has been executed and any revocation period for such Release has expired before the sixtieth (60th) day after the date of the termination of the Employee’s employment (such 60^th day hereinafter called the “Release Date”). The first payment of the Base Salary and COBRA portions of the Termination Payments, if any, shall be made on the first regular Company pay date that occurs following the 30^th day after the Release Date.

(c)          By the Employee for “Good Reason,” which shall be deemed to exist: (i) if the Board of Directors fails to elect or reelect the Employee to, or removes the Employee from, any of the office(s) referred to in Section 1(a) absent “Cause” as defined elsewhere in this Agreement; (ii) if the scope of Employee’s duties, responsibilities, authority or position is materially reduced, provided that Employee shall act via written notice of his belief that such event has occurred within 30 days of any such diminution in the scope of his duties, responsibilities, authority or position; (iii) if the Company shall have continued to fail to comply with any material provision of this Agreement after a 30-day period to cure (if such failure is curable) following written notice to the Company of such non-compliance; or (iv) without Employee’s written consent, relocation of Employee’s office to an area outside of a 50-mile radius of Employee’s office location as of the Effective Date; provided that (A) the Employee provides written notice to the Company of the facts giving rise to “Good Reason” within 30 days of the initial existence of the event or events, and (B) the Company is provided not less than 30 days to cure, if curable, and fails so to cure, and (C) the Employee actually terminates employment within one year from the initial existence of the cause of Good Reason. 

In the event of any termination under Section 4(c), the Company shall, as liquidated damages or severance pay, or both, pay the Termination Payments to Employee, provided the Release described in paragraph (g) below has been executed and any revocation period for such Release has expired before the sixtieth (60^th) day after the date of the termination of the Employee’s employment. Such Termination Payments shall be made on the same basis and at the same times as described in Section 4(b) and 4(c) hereof.

(d)          Employee may terminate his employment under this Agreement for any other, or no reason upon ninety (90) days prior written notice to the Company.

(e)          If the Company gives notice of an intent not to renew this Agreement, as provided in Section 1(a) hereof, and as a result Employee’s employment by the Company terminates, then the Company shall pay to the Employee the Termination Payments in the same amounts, at the same times, in the same manner, and under the same conditions, as if the Employee had been terminated under Section 4(b) hereof.

(f)          Pursuant to Section 4(b) or Section 4(c) following a Change in Control (as defined below), in which event, in addition to the rights and obligations described in Section 4(b) or Section 4(c), as applicable, Employee shall also receive the following:

(i)          notwithstanding any provision to the contrary in any applicable equity compensation plan or any outstanding equity award agreement, the treatment of the Employee’s outstanding equity awards shall be governed solely by the following provisions: (A) all of the Employee’s then-outstanding and unexpired equity awards shall fully vest and all restrictions thereon shall lapse, and (B) to the extent vested, all of the Employee’s outstanding stock options shall remain exercisable until the first to occur of 12 months following the termination date and each such stock option’s original expiration date.

(ii)         As used herein, the term “Change in Control” shall mean the occurrence of any of the following circumstances after the date hereof: (i) any “person” (as such term is used in Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities; (ii) the Company is a party to a merger, consolidation, share exchange, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any 15-month period, individuals who at the beginning of such period constituted the Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(g)          Any other provision of this Agreement notwithstanding, the payments and benefits to the Employee set forth in Subsection (b), (c) and (e) of this Section 4 shall not be paid/provided unless the Employee (i) has timely executed and not revoked a usual and customary general release of all known and unknown claims that the Employee may then have against the Company or persons affiliated with the Company in the form acceptable to the Company (the “Release”) and (ii) has agreed not to prosecute any legal action or other proceeding based upon any of such claims.

5. Confidential Information

All data, literature and information in any form related to the business of the Company, including, but not limited to, customer lists, know-how, trade secrets, product specifications, methods and techniques, and process information, whether such information is written or oral, or which is developed, discovered or created by Employee or the Company during Employee’s employment by the Company will be considered confidential and proprietary data of the Company for the duration of such employment and thereafter, whether or not it is expressly designated proprietary or confidential (the "Confidential Information"). Employee will not disclose, reveal, transfer or use (except within the scope of his duties) the Confidential Information to or with any other person, third party, company or otherwise, without the prior written authorization of the Company. All Confidential Information shall remain the property of the Company and shall be promptly returned to the Company at its request, but in any event immediately upon termination of Employee's employment hereunder, with all copies or excerpts made therefrom. The term "Confidential Information" shall not include information which is or becomes publicly available without breach of (a) this Agreement, (b) any other agreement to which the Company is a party or beneficiary, or (c) any duty owed to the Company by Employee or any third party; provided that, if Employee desires to use any such information for any reason, Employee shall bear the burden of proving that such information has become publicly available without any such breach.

6. Restrictive Covenants

(a)          Noncompete. In order to protect the goodwill and business and professional relationships of the Company, Employee agrees that he will not during the term of his employment with the Company and for a period of twelve (12) months following termination of his employment with the Company, directly or indirectly, either as an individual for his own account or enterprise, or as a partner, owner, joint venturer, officer, director, employee, agent, salesman, independent contractor, supplier, principal, consultant, or 1% or more owner of any entity or third party:

(i)          Compete (as hereinafter defined) with the Company anywhere in the Restricted Area (as hereinafter defined). For purposes of this Section 6(a) "Compete" means to engage, participate or be involved in any respect in any business that is competitive with the Company, or furnishing any aid, assistance or service of any kind to any person or entity which competes with the business of the Company, and (ii) "Restricted Area" means the continental United States; 

(ii)         hire or solicit for employment or as an independent contractor, directly or indirectly, any of the Company's personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or prospective employee, consultant or independent contractor of the Company);

(iii)        attempt directly or indirectly to induce any of the Company's personnel to leave the employ of, or discontinue such person's consultant, contractor, or other business association with the Company;

(iv)        solicit business that competes with the Company directly or indirectly from any client of the Company. For purposes hereof, a person or entity is a "client of the Company" if the Company is performing, has performed during the previous twelve (12) months, or is contemplating performing at such time, services for such person or entity; or

(v)         interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company and any of its agents, clients, licensors, licensees, suppliers, employees or independent contractors, including, without limitation, by inducing any client to become a client of any company or entity whose business competes with the Company.

(b)          Reasonableness of Restraints. Employee acknowledges that:

(i)          The imposition of restrictions, restraints and limitations set forth in Section 6 hereof are necessary for the reasonable and adequate protection of the Company's business and do not prevent Employee from earning a living.

(ii)         Each and every restriction, restraint and limitation set forth in Section 6 hereof is reasonable in respect to geographic area, subject matter and length of time.

(c)          Remedies. If Employee were to breach the covenants contained in Section 5 or 6 hereof, monetary damages alone may not adequately compensate the Company. In addition to all remedies available at law or in equity, in the event that Employee breaches the covenants contained in Section 5 or 6 hereof, the Company shall be entitled to seek interim restraints and permanent injunctive relief for the enforcement thereof. The duration of Employee's covenants set forth in Section 6 also shall be extended by a period of time equal to the number of days, if any, during which Employee is in violation of the provisions contained in Section 6. All of the rights and remedies of the parties hereto shall be cumulative with, and in addition to, any other rights, remedies or causes of action allowed by law or equity and shall not exclude any other rights or remedies available to either of the parties hereto.

(d)          Binding Restrictions; Severability. Employee will continue to be bound by the restrictions of Section 5 or 6 until their expiration and shall not be entitled to any additional compensation from the Company with respect thereto. If at any time the provisions of this Section 5 or 6 shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, the same shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and Employee agrees that Section 5 or 6 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein. 

(e)          Other Obligations. The restrictive covenants set forth in Section 5 and 6 hereof shall be in addition to, and not in lieu of, the restrictions in Section 13.8(b) and Section 13.8(c) of the Nuo Therapeutics, Inc. Long-Term Incentive Plan (“LTIP”); provided, however, that the phrase “two (2) years” in Section 13.8(b) of the LTIP shall be replaced with the phrase “one (1) year”. In the event of any conflict between the provisions of Section 5 or 6 and any such other obligations, those that provide the Company with the broadest and most effective protection shall apply.

(f)          Non-Disparagement. Employee and the Company shall not, either during or after the Term, make any statements, whether oral or in writing, that would tend to disparage or defame the other, and in the case of the Company, defame its products, services, employees, officers, managers or members of the Board.

(g)          Property of the Company. Employee agrees that all records, files, memoranda, reports, client lists, programs, work product, or any other similar records or documents relating to the Company's business (including without limitation those which may have been used or prepared by Employee, whether or not part of the Confidential Information), remain the sole personal property of the Company and remain at all times, both during and after Employee's employment with the Company, in the control of the Company. Employee hereby waives and releases all claims of right of ownership thereto and Employee hereby agrees that upon the termination of his employment with the Company for any reason whatsoever, Employee shall immediately surrender all such records and documents, and all copies thereof, together with any other property of the Company in Employee's possession, to the Company at its principal business office or such other location as directed by the Company. Notwithstanding the foregoing, so long as at least one (1) copy of all such Company property and/or Confidential Information remains with the Company or has been delivered to the Company, a deletion of electronic files containing or constituting Company property and/or Confidential Information shall be considered to be the return, destruction and/or surrender of such files for purposes of compliance with the terms of this Agreement, provided that the deleted files must not be retrievable other than through extraordinary data salvage methods.

(h)          Notification to New Employer. In the event that Employee leaves the employ of the Company, Employee hereby gives his consent to notification by the Company to his new employer about Employee's obligations under this Agreement, including providing such new employer a copy of this Agreement. The Company shall provide Employee a copy of such written notification (if any) given to Employee's new employer pursuant to the immediately preceding sentence. Employee hereby agrees to provide (prior to his commencement of employment with such new employer) any such new employer a copy of this Agreement.

(i)          Survival of Restraints. The provisions of Section 5 and 6 shall survive the termination of Employee's employment with the Company, whether such termination is voluntary or involuntary, with or without cause, for any reason whatsoever.

7. Dispute Resolution.

All disputes between the Parties arising from the construction or performance of, or otherwise in connection with this Agreement, shall be finally settled in Texas, before one arbitrator pursuant to the rules of the American Arbitration Association. The arbitration procedure and all decisions made by the arbitrator shall be kept confidential, unless the Parties expressly consent to the publication thereof in whole or in part. Unless oral hearings are requested by a party, the arbitrator shall make his/her award on the basis of written submissions. In the event of any proceeding between the Company and the Employee with respect to the subject matter of this Agreement and the enforcement of the rights hereunder and such proceeding results in final judgment or order in favor of one of the Parties, which judgment or order is substantially inconsistent with the positions asserted by the other Party in such litigation or proceeding, the losing Party in such event shall reimburse the prevailing Party for all of its reasonable costs and expenses relating to such litigation or other proceeding, including, without limitation, its reasonable attorneys’ fees and expenses. Such payments shall be made no later than sixty (60) days after the final judgment or order is entered.

8. Consolidation; Merger; Sale of Assets; Change of Control.

Nothing in this Agreement shall preclude the Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of business combination provided that the entity resulting from or surviving such combination, consolidation or merger, or to which such assets are transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder. Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle the Employee and his heirs, beneficiaries and representatives to substantially the same compensation, benefits, payments and other rights as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership or joint venture not occurred; provided, however, that Employee shall have the rights provided to him as a result of a Change in Control as described in Section 4.

9. Survival of Obligations.

Sections 2(c), 2(e), 2(f), 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 shall survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the expiration of this Agreement, or otherwise). 

10. Employee’s Representations.

The Employee hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the Company and the Employee, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

11. Company’s Representations.

The Company hereby represents and warrants to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee and the Company, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.

12. Enforcement.

Because the Employee’s services are unique and because the Employee has access to confidential information concerning the Company, the parties hereto agree, that money damages alone may not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction in Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).

13. Severability.

In case any one or more of the provisions or part(s) of provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and enforceable in such jurisdiction to the maximum extent possible. If, in any judicial proceeding, a court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time, scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such court. 

14. Entire Agreement; Amendment.

Except as otherwise set forth in this Agreement, this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and thereof and supersedes and nullifies all previous agreements between the parties about the Company’s employment of the Employee. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

15. Notices.

All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered mail, return receipt requested, addressed as follows:

(a)	To the Company:	(b)	To the Employee:
	Nuo Therapeutics, Inc.		Peter A. Clausen
	8285 El Rio Street, Suite 190 Houston, TX 77054
	Attn: Compensation Committee Chairman,
	and to: Corporate Counsel of Record

and/or to such other persons and addresses as any party shall have specified in writing to the other.

16. Assignability.

This Agreement shall be assignable by the Company but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal representatives, successors and permitted assigns of the parties. In the event that all or substantially all of the business of the Company is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

17. Governing Law.

This Agreement shall be governed by and construed under the laws of the State of Texas.

18. Waiver and Further Agreement.

Any waiver of any breach of any terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other party may reasonably require in order to effectuate the terms and purposes of this Agreement.

19. Headings of No Effect.

The paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

20. Section 409A of the Internal Revenue Code.

Each payment under this Agreement is intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or in compliance with Code Section 409A, and the provisions of this Agreement will be administered, interpreted and construed accordingly. Without limiting the generality of the foregoing, the term “termination of employment” or any similar term under this Agreement will be interpreted to mean “separation from service” within the meaning of Code Section 409A to the extent necessary to comply with Code Section 409A. Furthermore, the right to a series of installment payments or in-kind benefits under this Agreement is to be treated as a right to a series of separate payments for purposes of Code Section 409A.

Notwithstanding anything in this Agreement to the contrary, for any year in which the stock of the Company is tradable on an established securities market, and the Employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder, but without regard to Code Section 416(i)(5)) at any time during the 12 month period ending on the last occurring December 31st (and is therefore a “Specified Employee”), then, to the extent required by Code Section 409A, and the final regulations thereunder, the Company shall pay any benefit which constitutes “deferred compensation” under this Agreement within the meaning of the Code Section 409A no earlier than the earliest of the following: 

(1) the expiration of the six-month period (the “Deferral Period”) measured from the date of the Employee’s ‘separation from service’ under Code Section 409A; or

(2) the date of the Employee’s death.

Upon the expiration of the Deferral Period, all payments that would have been made during the Deferral Period (whether in a single lump sum or in installments) shall be paid as a single lump sum to the Employee or, if applicable, his or her beneficiary. This Section shall not apply to any payment which constitutes “separation pay” as described in Treasury Regulation 1.409A-1(b)(9)(iii).

To the extent required by Code Section 409A, with regard to any provision that provides for the reimbursement of costs and expenses, or for the provision of in-kind benefits:

(1) The right to such reimbursement or in-kind benefit shall not be subject to liquidation or exchange for another benefit;

(2) The amount of expenses or in kind benefits available or paid in one year shall not affect the amount available or paid in any subsequent year; and

(3) Such payments shall be made on or before the last day of the Employee’s taxable year following the taxable year in which the expense occurred.

21. Code Section 280G

Notwithstanding anything contained in this Agreement to the contrary, to the extent that any of the payments and benefits provided for under this Agreement, together with any payments or benefits under any other agreement or arrangement between the Company or any of their subsidiaries or affiliates and Employee (collectively, the “Payments”) would constitute a “parachute payment” within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or the amount of such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written.

	COMPANY:
	NUO THERAPEUTICS, INC.
By:	/s/ Scott Pittman
	Scott M. Pittman
	Chairman of the Compensation
	Committee of the Board
	EMPLOYEE:
	/s/ Pete Clausen
	Peter A. Clausen

EX-10.3

Exhibit 10.3

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement, dated on and as of May 13, 2022 (this “Agreement”), is made by and among Nuo Therapeutics, Inc., a Delaware corporation (the “Company”), and the undersigned purchasers (each a “Purchaser” and collectively, the “Purchasers”) and each assignee of a Purchaser who becomes a party hereto. 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder, the Company desires to offer, issue and sell to the Purchasers (the “Offering”), and the Purchasers desire to purchase from the Company, up to 450,000 shares (the “Shares”) of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”). The Shares are sometimes referred to herein as the “Securities”.

WHEREAS, the net proceeds of the Offering are intended to be used by the Company to for working capital and other general corporate purposes of the Company and its subsidiaries.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the Company and Purchaser agree as follows:

1 SUBSCRIPTION

(a)    Subject to the conditions to closing set forth herein, each Purchaser hereby irrevocably subscribes for and agrees to purchase Securities for the purchase price indicated on the subscription form (the “Subscription Amount”). The Securities to be issued to Purchaser hereunder shall consist of Shares in an amount equal to, rounded down to the nearest whole number, the quotient of (x) the Subscription Amount, divided by (y) the Share Purchase Price.

(b)    For the purposes of this Agreement, the purchase price for each Share shall be $1.00 (the “Share Purchase Price”).

(c)    The Company shall use its reasonable best efforts to hold the closing of the Offering (the “Closing”, and the date of the Closing, the “Closing Date”) no later than May 16, 2022. Prior to the Closing, Purchaser shall deliver the Subscription Amount by wire transfer to a bank account in accordance with the wire transfer instructions set forth on Schedule A.

(d)    Upon receipt by the Company of the requisite payment for all Securities to be purchased whose subscriptions are accepted, the Company shall, at the Closing: (i) deliver to Purchaser a copy of the irrevocable instructions to the Company’s transfer agent instructing the transfer agent to deliver, on an expedited basis, a book-entry statement evidencing a number of Shares, rounded down to the nearest whole number, equal to such Purchaser’s Subscription Amount divided by the Share Purchase Price, as held in direct registration system advices by the Company’s transfer agent evidencing the electronic registration and ownership by such Purchaser of the Shares to be purchased by such Purchaser and registered in the name of such Purchaser, and (ii) deliver to Purchaser a certificate stating that the representations and warranties made by the Company in Section 3 of this Agreement are true and correct in all material respects on the date of such Closing relating to the Securities subscribed for pursuant to this Agreement as though made on and as of such Closing Date (provided, however, that representations and warranties that speak as of a specific date shall continue to be true and correct as of the Closing with respect to such date).

(e)    Each Purchaser acknowledges and agrees, solely with respect to itself, that (i) the purchase of the Securities by Purchaser pursuant to the Offering is subject to all the terms and conditions set forth in this Agreement, and (ii) this Agreement shall be binding upon Purchaser upon the execution and delivery to the Company of Purchaser’s signed counterpart signature page to this Agreement.

2 REPRESENTATIONS AND WARRANTIES OF PURCHASER

Each Purchaser hereby represents and warrants to the Company, and agrees with the Company as follows:

(a)    Purchaser understands and acknowledges that (i) the Common Stock is presently only eligible to be quoted on the “Expert Market” of the OTC Markets Group, on which quotations in for the Common Stock are restricted from public viewing, (ii) the Common Stock is not presently quoted or listed for trading on any publicly viewable retail tier of the OTC Markets Group or national securities exchange, (iii) there can be no assurance as to whether the OTC Markets Group will enable the Securities or the Common Stock to be quoted on a retail tier or whether the Securities or the Common Stock will be traded on a national securities exchange or other trading platform, (iv) even if the Securities and Common Stock become eligible for quotations or trading on a retail tier of the OTC Markets Group, a national securities exchange or other trading platform, the amount and volume of such quotations or trading may be limited and subject to higher risk of wider spreads, increased volatility, and price dislocations, and (v) as a result, Purchaser may be required to hold the Securities for an indefinite period of time and may not be able to resell the Securities at or above the price paid for such Securities, and, notwithstanding the circumstances described in the preceding clauses (i) and (v), (and without limiting any of the other representations and warranties or agreements of Purchaser herein), Purchaser has made its own investment decision to subscribe for and purchase Securities issued in the Offering.

(b)    Purchaser understands and acknowledges that, until the filing on April 15, 2022 of the Company’s comprehensive Annual Report on 10-K for the fiscal years ended December 31, 2019, 2020 and 2021, (i) there had been a lack of financial and other information with respect to Company since and including the fiscal year ended December 31, 2019, (ii) as a result, the Company was not current in its SEC Reports (as defined below), and (iii) the Company received a letter dated November 26, 2021 from the Staff of the Division of Corporation Finance of the Securities and Exchange Commission (“SEC”) indicating that because the Company was not in compliance with the reporting requirements under Section 13(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), the Company may be subject, without further notice, to an administrative proceeding by the SEC pursuant to Section 12(j) of the Exchange Act to revoke the Company’s Exchange Act registration. For purposes of this Agreement, “SEC Reports” means reports, schedules, forms, statements, and other documents required to be filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act.

(c)    Purchaser has carefully read this Agreement (the “Offering Document”) and is familiar with and understands the terms of the Offering. Purchaser has relied only on the information contained in (i) the Offering Document and (ii) the SEC Reports through the date hereof and has not relied on any representation made by any other person, other than as set forth in Section 3 of this Agreement. Purchaser has carefully considered and has discussed with such Purchaser’s professional legal, tax, accounting, and financial advisors, to the extent deemed necessary, the suitability of an investment in the Securities for Purchaser’s particular tax and financial situation and has determined that the Securities being subscribed for by Purchaser are a suitable investment. PURCHASER UNDERSTANDS AND ACKNOWLEDGES THAT AN INVESTMENT IN THE SECURITIES INVOLVES SUBSTANTIAL RISKS, INCLUDING THE POSSIBLE LOSS OF THE ENTIRE AMOUNT OF SUCH INVESTMENT. Purchaser further understands and acknowledges that the Company has broad discretion concerning the use and application of the proceeds from the Offering.

2

(d)    Purchaser acknowledges that (i) the Company has provided such Purchaser with the opportunity to request copies of any documents, records, and books pertaining to this investment and (ii) any such documents, records and books so requested have been made available for inspection.

(e)    Purchaser, and any advisor to such Purchaser, have had a reasonable opportunity to ask questions of and receive answers from representatives of the Company or persons acting on behalf of the Company concerning the Offering and all such questions have been answered to the full satisfaction of Purchaser. Purchaser understands that it is not relying on any communication or representation (written or oral) of any kind made by the Company regarding the Company, the Securities, or any other matter other than as set forth herein.

(f)    Purchaser is not subscribing for Securities as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar, meeting or conference whose attendees have been invited by any general solicitation or general advertising.

(g)    Purchaser has sufficient knowledge and experience in financial, tax and business matters to enable utilization of the information made available to Purchaser in connection with the Offering, to evaluate the merits and risks of an investment in the Securities and to make an informed investment decision with respect to an investment in the Securities on the terms described in the Offering Document.

(h)    Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act and has delivered to the Company a questionnaire in substantially the form attached hereto as Appendix A (the “Accredited Investor Questionnaire”), which such Purchaser represents, and warrants is true, correct, and complete.

(i)    Purchaser will furnish any additional information reasonably requested by the Company to assure compliance with applicable U.S. federal and state securities laws, or upon the request of the Company’s transfer agent, in connection with the purchase and sale of the Securities.

(j)    Purchaser will not sell or otherwise transfer the Securities without registration under the Securities Act and applicable state securities laws or an applicable exemption therefrom. Purchaser acknowledges that neither the offer nor sale of the Securities has been registered under the Securities Act or under the securities laws of any state. Purchaser represents and warrants that Purchaser is acquiring the Securities for Purchaser’s own account and not with a current view toward resale or distribution within the meaning of the Securities Act. Purchaser has not offered or sold the Securities being acquired nor does Purchaser have any present intention of selling, distributing or otherwise disposing of such Securities either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstances in violation of the Securities Act. Purchaser is aware that (i) the Securities are not currently eligible for sale in reliance upon Rule 144 promulgated under the Securities Act and (ii) the Company has no obligation to register the Securities subscribed for hereunder. By making these representations herein, Purchaser is not making any representation or agreement to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an available exemption to the registration requirements of the Securities Act.

3

(k)    Purchaser acknowledges that instruments, whether certificated or uncertificated, representing the Shares shall be stamped or otherwise imprinted with a legend substantially in the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF LEGAL COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR SUCH OTHER APPLICABLE LAWS.

Instruments, whether certificated or uncertificated, representing the Shares shall not be required to contain such legend or any other legend (i) following any sale of such Shares pursuant to Rule 144, or (ii) if such Shares are eligible for sale under Rule 144(b), or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the SEC), in each such case (i) through (iii) to the extent reasonably determined by the Company’s legal counsel. Subject to the foregoing, at such time and to the extent a legend is no longer required for the Shares, the Company will use its reasonable best efforts to, no later than five (5) trading days following the delivery by Purchaser to the Company or to the Company and the Company’s transfer agent of instructions (and, if previously issued, a legended certificate representing such Shares) together with such accompanying documentation or representations as reasonably required by counsel to the Company, deliver or cause to be delivered an instrument, whether certificated or uncertificated, representing such Shares that is free from the foregoing legend.

(l)    Purchaser is a resident of and domiciled in the state and/or country set forth on the signature page hereto.

(m)    Purchaser is either, (i) if a natural person, a citizen of and domiciled in the country set forth on the signature page hereto or (ii) if an entity, organized and located in the country set forth on the signature page hereto.

(n)    Purchaser is not acquiring the Securities as a nominee or agent or otherwise for any other person.

4

(o)    Purchaser will comply with all applicable laws and regulations in effect in any jurisdiction in which Purchaser purchases or sells the Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which Purchaser is subject or in which Purchaser makes such purchases or sales, and the Company shall have no responsibility therefor.

(p)    If this Agreement is executed and delivered on behalf of a partnership, corporation, limited liability company, trust, estate or other entity: (i) such partnership, corporation, limited liability company, trust, estate or other entity has the full legal right and power and all authority and approval required (a) to execute and deliver this Agreement and all other instruments executed and delivered by or on behalf of such partnership, corporation, limited liability company, trust, estate or other entity in connection with the purchase of its Securities, and (b) to purchase and hold such Securities, (ii) the signature of the party signing on behalf of such partnership, corporation, limited liability company, trust, estate or other entity is binding upon such partnership, corporation, limited liability company, trust, estate or other entity, and (iii) such partnership, corporation, limited liability company, trust or other entity has not been formed for the specific purpose of acquiring such Securities, unless each beneficial owner of such entity is qualified as an accredited investor within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act.

(q)    Purchaser acknowledges that the Company may issue shares of Common Stock in excess of those being issued in connection with the Offering from time to time. The issuance of additional shares of Common Stock may cause dilution of the existing shares of Common Stock and a decrease in the market price of such existing shares. Purchaser acknowledges and agrees that it shall have no preemptive rights, right of first refusal, or other rights to subscribe for or purchase any shares of Common Stock the Company may issue in the future as a result of Purchaser’s purchase of Securities pursuant to this Agreement.

(r)     Purchaser acknowledges that the Company entered into a Securities Purchase Agreement, dated as of April 11, 2022, with certain accredited investors, including affiliates of the Company, on substantially similar terms as this Agreement and pursuant to which the Company issued and sold 3,550,000 shares of Common Stock at a price of $1.00 per share for proceeds of $3,550,000 to the Company.

(s)    Purchaser understands that, unless Purchaser notifies the Company in writing to the contrary at or before the Closing, each of Purchaser’s representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing Date.

3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby makes the following representations and warranties to Purchaser:

(a)    Organization, Good Standing and Qualification. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware with the exception of its wholly owned and operationally inactive subsidiary, Aldagen, Inc. and, except as disclosed in the SEC Reports, the Company has full corporate power and authority to conduct its business as currently conducted. The Company is qualified to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the property owned or leased or the nature of the business transacted by it makes qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”).

5

(b)    Capitalization. (i) The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) 40,674,205 shares of Common Stock are issued and outstanding, (iii) 0 shares of preferred stock are issued and outstanding, (iv) warrants to purchase 233,333 shares of Common Stock are issued and outstanding, (v) 2,086,667 shares of Common Stock are issuable upon the exercise of outstanding stock options under the Company’s 2016 Omnibus Incentive Compensation Plan, as amended (the “Omnibus Plan”), and (vi) 1,225,000shares of Common Stock issuable upon the exercise of stock options approved by the Board of Directors but subject to approval of an increase in the shares reserved under the Omnibus Plan. Other than as set forth above or as contemplated in this Agreement, there are no other options, warrants, calls, rights, commitments or agreements of any character to which the Company is a party or by which either the Company is bound or obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement.

(c)    Issuance; Reservation of Shares. The issuance of the Shares has been authorized by all necessary corporate action, and the Shares, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and non-assessable shares of Common Stock of the Company.

(d)    Authorization; Enforceability. The Company has all corporate right, power, and authority to enter into this Agreement, and to consummate the transactions contemplated hereby and thereby. All corporate action on the part of the Company, its directors, and stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance, and delivery of the Securities contemplated herein, and the performance of the Company’s obligations hereunder and thereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms and subject to laws of general application relating to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The issuance and sale of the Securities contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person, except for those that which have been complied with or waived.

(e)    No Conflict; Governmental and Other Consents.

(i)    The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of, (i) any provision of the Second Amended and Restated Certificate of Incorporation, as amended, or By-Laws of the Company or any of its subsidiaries, or (ii) any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company or any of its subsidiaries is bound, and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company except to the extent that any such violation, conflict or breach would not be reasonably likely to have a Material Adverse Effect.

6

(ii)    No consent, approval, authorization or other order of any governmental authority or other third party is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issuance and sale of the Securities, except such post-Closing filings as may be required to be made with the SEC, the Financial Industry Regulatory Authority, Inc., and with any state or foreign blue sky or securities regulatory authority.

(f)    Litigation. There are no pending or, to the Company’s knowledge, threatened legal or governmental proceedings against the Company or any of its subsidiaries, which, if adversely determined, would be reasonably likely to have a Material Adverse Effect. Except as set forth in Section 2(b)(iii) to this Agreement, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body (including, without limitation, the SEC) pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its subsidiaries wherein an unfavorable decision, ruling or finding could adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under this Agreement. Except as disclosed in the SEC Reports, neither the Company nor any of its subsidiaries are subject to any order, judgment, or decree, which would be reasonably likely to have a Material Adverse Effect.

(g)    Investment Company. The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

(h)    Subsidiaries. The Company’s subsidiaries are set forth on Schedule B hereof (collectively referred to herein as the Company’s “subsidiaries”). Each of the Company’s subsidiaries is validly existing and is in good standing under the law of the jurisdiction of its formation, has the requisite power and authority to own its property and to conduct its business and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

(i)    Indebtedness. The SEC Reports reflect, as of the date thereof, all outstanding secured and unsecured Indebtedness (as defined below) of the Company or any subsidiary, or for which the Company or any subsidiary has commitments. Neither the Company nor any of its subsidiaries has incurred any material Indebtedness or commitments for Indebtedness since the date of the filing of the most recent SEC Report. For purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP. Except as disclosed in the SEC Reports, as of the Closing Date, (i) the Company is not in default with respect to any Indebtedness, and (ii) the Company will not be insolvent after giving effect to the transactions contemplated herein. For purposes of this Section 3(i), “insolvent” shall mean an inability to pay debts when due.

7

(j)    Certain Fees. Except as is set forth on Schedule C, no brokers’, finders’ or financial advisory fees or commissions will be payable by the Company with respect to the transactions contemplated by this Agreement.

(k)    Material Agreements. Except as disclosed in the SEC Reports, the Company is not in default under any material agreement now in effect to which the Company is a party, the result of which would be reasonably likely to have a Material Adverse Effect.

(l)    Transactions with Affiliates. Except as disclosed in the SEC Reports, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions between (a) the Company, its subsidiaries or any of their respective customers or suppliers on the one hand, and (b) on the other hand, any person who would be covered by Item 404(a) of Regulation S-K or any company or other entity controlled by such person.

(m)    Taxes. The Company and its subsidiaries have prepared and filed all federal, state, local, foreign, and other tax returns for income, gross receipts, sales, use and other taxes and custom duties (“Taxes”) required by law to be filed by them, except for tax returns, the failure to file which, individually or in the aggregate, do not and would not have a Material Adverse Effect. Such filed tax returns are complete and accurate, except for such omissions and inaccuracies, which individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries have paid or made provisions for the payment of all Taxes shown to be due on such tax returns and all additional assessments, and adequate provisions have been and are reflected in the financial statements of the Company and the subsidiaries for all current Taxes to which the Company or any subsidiary is subject and which are not currently due and payable, except for such Taxes which, if unpaid, individually or in the aggregate, do not and would not have a Material Adverse Effect. None of the federal income tax returns of the Company or any of its subsidiaries for the past five years has been audited by the Internal Revenue Service. Neither the Company nor any of its subsidiaries has received written notice of any assessments, adjustments, or contingent liability (whether federal, state, local or foreign) in respect of any Taxes pending or threatened against the Company or any subsidiary for any period which, if unpaid, would have a Material Adverse Effect.

(n)    Insurance. The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes are prudent and customary in the businesses in which the Company and its subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its and its subsidiaries’ businesses without an increase in cost significantly greater than general increases in cost experienced for similar companies in similar industries with respect to similar coverage.

8

(o)    Environmental Matters. To the Company’s knowledge, all real property owned, leased or otherwise operated by the Company and its subsidiaries is free of contamination from any substance, waste or material currently identified to be toxic or hazardous pursuant to, within the definition of a substance which is toxic or hazardous under, or which may result in liability under, any Environmental Law (as defined below), including, without limitation, any asbestos, polychlorinated biphenyls, radioactive substance, methane, volatile hydrocarbons, industrial solvents, oil or petroleum or chemical liquids or solids, liquid or gaseous products, or any other material or substance (“Hazardous Substance”) which has caused or would reasonably be expected to cause or constitute a threat to human health or safety, or an environmental hazard in violation of Environmental Law or to result in any environmental liabilities that would be reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has caused or suffered to occur any release, spill, migration, leakage, discharge, disposal, uncontrolled loss, seepage, or filtration of Hazardous Substances that would reasonably be expected to result in environmental liabilities that would be reasonably likely to have a Material Adverse Effect. The Company and its subsidiaries have generated, treated, stored, and disposed of any Hazardous Substances in compliance with applicable Environmental Laws, except for such non-compliances that would not be reasonably likely to have a Material Adverse Effect. The Company and its subsidiaries have obtained, or has applied for, and is in compliance with and in good standing under all permits required under Environmental Laws (except for such failures that would not be reasonably likely to have a Material Adverse Effect) and neither the Company nor any of its subsidiaries has knowledge of any proceedings to substantially modify or to revoke any such permit. There are no investigations, proceedings or litigation pending or, to the Company’s knowledge, threatened against the Company, its subsidiaries or any of their respective facilities relating to Environmental Laws or Hazardous Substances. For purposes of this Agreement, “Environmental Laws” shall mean all federal, national, state, regional and local laws, statutes, ordinances, and regulations, in each case as amended or supplemented from time to time, and any judicial or administrative interpretation thereof, including orders, consent decrees or judgments relating to the regulation and protection of human health, safety, the environment and natural resources.

(p)    Intellectual Property Rights and Licenses. Except as disclosed in the SEC Reports, (a) the Company and its subsidiaries own or have the right to use any and all information, know-how, trade secrets, patents, copyrights, trademarks, trade names, software, formulae, methods, processes and other intangible properties that are of a such nature and significance to the business that the failure to own or have the right to use such items would have a Material Adverse Effect (“Intangible Rights”), (b) neither the Company nor any of its subsidiaries has received any notice that it is in conflict with or infringing upon the asserted intellectual property rights of others in connection with the Intangible Rights, and, to the Company’s knowledge, neither the use of the Intangible Rights nor the operation of the Company’s and its subsidiaries’ businesses is infringing or has infringed upon any intellectual property rights of others in a manner that would be reasonably expected to have a Material Adverse Effect, (c) all payments have been duly made that are necessary to maintain the Intangible Rights in force, (d) no claims have been made, and to the Company’s knowledge, no claims are threatened, that challenge the validity or scope of any material Intangible Right of the Company or any of its subsidiaries, (e) the Company and its subsidiaries have taken reasonable steps to obtain and maintain in force all licenses and other permissions under Intangible Rights of third parties necessary to conduct their businesses as heretofore conducted by them, and now being conducted by them, and as expected to be conducted, and neither the Company nor its subsidiaries is or has been in material breach of any such license or other permission in a manner that would be reasonably expected to have a Material Adverse Effect.

9

(q)    Labor, Employment and Benefit Matters.

(i)    There are no existing, or to the Company’s knowledge, threatened strikes or other labor disputes against the Company or any of its subsidiaries that would be reasonably likely to have a Material Adverse Effect. There is no organizing activity involving employees of the Company or its subsidiaries pending or, to the Company’s knowledge, threatened by any labor union or group of employees. There are no representation proceedings pending or, to the Company’s knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of the Company or its subsidiaries has made a pending demand for recognition.

(ii)    Neither the Company nor any of its subsidiaries is, or during the five years preceding the date of this Agreement was, a party to any labor or collective bargaining agreement and there are no labor or collective bargaining agreements which pertain to employees of the Company or any of its subsidiaries.

(iii)    Each employee benefit plan is in compliance with all applicable law, except for such noncompliance that would not be reasonably likely to have a Material Adverse Effect.

(iv)    Neither the Company nor any of its subsidiaries have any liabilities, contingent or otherwise, including, without limitation, liabilities for retiree health, retiree life, severance, or retirement benefits, which are not fully reflected, to the extent required by GAAP, on the Company’s financial statements or fully funded. The term “liabilities” used in the preceding sentence shall be calculated in accordance with reasonable actuarial assumptions.

(v)    Neither the Company nor any of its subsidiaries has (i) terminated any “employee pension benefit plan” as defined in Section 3(2) of ERISA (as defined below) under circumstances that present a material risk of the Company or any of its subsidiaries incurring any liability or obligation that would be reasonably likely to have a Material Adverse Effect, or (ii) incurred or expects to incur any outstanding liability under Title IV of the Employee Retirement Income Security Act of 1974, as amended and all rules and regulations promulgated thereunder (“ERISA”).

(r)    Compliance with Law. Except as disclosed in the SEC Reports, the Company and its subsidiaries are in compliance in all material respects with all applicable laws, including, to the extent applicable, U.S. anti-money laundering laws and U.S. Treasury Department’s Office of Foreign Assets Control regulations, except for such noncompliance that would not reasonably be likely to have a Material Adverse Effect. Neither the Company or its subsidiaries has received any notice of, nor does the Company have any knowledge of, any violation (or of any investigation, inspection, audit or other proceeding by any governmental entity involving allegations of any violation) of any applicable law involving or related to the Company or any of its subsidiaries which has not been dismissed or otherwise disposed of that would be reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received notice or otherwise has any knowledge that the Company or any of its subsidiaries is charged with, threatened with or under investigation with respect to, any violation of any applicable law that would reasonably be likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any subsidiary has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law. The Company, its subsidiaries and, to the Company’s knowledge, their respective directors, officers, employees, and agents have complied in all material respects with the Foreign Corrupt Practices Act of 1977, as amended, and any related rules and regulations.

10

(s)    Ownership of Property. Except as disclosed in the SEC Reports, the Company and its subsidiaries has (i) good and marketable fee simple title to its owned real property, if any, free and clear of all liens, except for liens which do not individually or in the aggregate have a Material Adverse Effect, (ii) a valid leasehold interest in all leased real property, and each of such leases is valid and enforceable in accordance with its terms (subject to laws of general application relating to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy) and is in full force and effect, and (iii) good title to, or valid leasehold interests in, all of its other properties and assets free and clear of all liens, except for liens which do not individually or in the aggregate have a Material Adverse Effect.

(t)    No Integrated Offering. Assuming the accuracy of Purchaser’s representations and warranties set forth in Section 2 of this Agreement, neither the Company, nor any of its affiliates or other person acting on the Company’s behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act, when integration would cause the Offering not to be exempt from the requirements of Section 5 of the Securities Act.

(u)    General Solicitation. Neither the Company nor, to its knowledge, any person acting on behalf of the Company, has offered, or sold any of the Securities by any form of “general solicitation” within the meaning of Rule 502 under the Securities Act.

(v)    No Manipulation of Stock. The Company has not taken and will not take, in violation of applicable law, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities.

(w)    No Registration. Assuming the accuracy of the representations and warranties made by, and compliance with the covenants of, Purchaser, no registration of the Securities under the Securities Act is required in connection with the offer and sale of the Securities by the Company to Purchaser as contemplated by this Agreement.

(x)    Disclosure. The Company understands and acknowledges that Purchaser will rely on the foregoing representations in purchasing the Securities of the Company hereunder. Commencing with the filing on April 15, 2022 of the Company’s comprehensive Annual Report on 10-K for the fiscal years ended December 31, 2019, 2020 and 2021, all disclosure made available by the Company to Purchaser in the Company’s SEC Reports regarding the Company, its business and the transactions contemplated hereby furnished by or on the behalf of the Company are, taken as a whole, true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. To the Company’s knowledge, as of the date of filing of the Company’s comprehensive Annual Report on 10-K for the fiscal years ended December 31, 2019, 2020 and 2021, no material event or circumstance has occurred or information exists with respect to the Company or its business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

11

4 UNDERSTANDINGS

Purchaser understands, acknowledges, and agrees with the Company as follows:

(a)    The execution of this Agreement by Purchaser or solicitation of the investment contemplated hereby shall create no obligation on the part of the Company to accept any subscription or complete the Offering. If the Company accepts the subscription for Securities made by Purchaser, it shall countersign this Agreement. Purchaser hereby acknowledges and agrees that the subscription hereunder, once accepted by the Company, is irrevocable by Purchaser, and that, except as required by law, Purchaser is not entitled to cancel, terminate, or revoke this Agreement or any agreements of Purchaser hereunder.

(b)    No federal or state agency or authority has made any finding or determination as to the accuracy or adequacy of the Offering Document or as to the fairness of the terms of the Offering nor any recommendation or endorsement of the Securities. Any representation to the contrary is a criminal offense. In making an investment decision, Purchaser must rely on such Purchasers’ own examination of the Company and the terms of the Offering, including the merits and risks involved.

(c)    The Offering is intended to be exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder, which is in part dependent upon the truth, completeness and accuracy of the statements made by Purchaser herein.

(d)    Notwithstanding the registration obligations provided herein, there can be no assurance that Purchaser will be able to sell or dispose of the Securities. It is understood that in order not to jeopardize the Offering’s exempt status under Section 4(a)(2) of the Securities Act and Regulation D, any transferee may, at a minimum, be required to fulfill the investor suitability requirements thereunder.

(e)    Purchaser acknowledges that the Offering is confidential and non-public and agrees that all information about the Offering shall be kept in confidence by Purchaser until the public announcement of the Offering by the Company. Purchaser acknowledges that the foregoing restrictions on Purchaser’s use and disclosure of any such confidential, non-public information contained in the above-described documents restricts Purchaser from trading in the Company’s securities to the extent such trading is on the basis of material, non-public information of which Purchaser is aware. Except for the terms of the transaction documents and the fact that the Company is considering consummating the transactions contemplated therein (which information the Company has agreed to disclose in accordance with this Agreement), the Company confirms that neither the Company nor, to its knowledge, any other person acting on its behalf, has provided Purchaser or such Purchaser’s agents or counsel with any information that constitutes material, non-public information as of the Closing Date.

12

5 COVENANTS OF THE COMPANY

(a)    The Company shall make a public announcement of the execution of this Agreement and the terms of the transaction documents by filing with the SEC, if necessary, a Current Report on Form 8-K not later than 8:30 a.m. New York City time on the fourth business day following the date of this Agreement. As a result of the forgoing issuance and filing, all material, non-public information previously provided to Purchaser or such Purchaser’s agents, or counsel shall have been publicly announced and disclosed. Notwithstanding anything in this Agreement to the contrary, following the foregoing issuance and filing the Company shall have no obligation to, and will not, disclose or provide any material, non-public information to Purchaser or such Purchaser’s agents or counsel.

(b)    The Company shall use its reasonable best efforts to file in a timely manner all required reports under the Exchange Act.

(c)    The Company agrees to file one or more Forms D with respect to the Securities on a timely basis as required under Regulation D under the Securities Act to claim the exemption provided by Rule 506 of Regulation D.

(d)    The Company will not sell, offer to sell, solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities Act) that is or could be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Securities Act.

(e)    The Company intends that the net proceeds from the Offering will be used for working capital and other general corporate purposes of the Company.

6 MISCELLANEOUS

(a)    Notices. Any notice or other document required or permitted to be given or delivered to Purchaser shall be in writing and sent (x) by fax if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid) or (y) by an internationally recognized overnight delivery service (with charges prepaid):

(i)    if to the Company, at

Nuo Therapeutics, Inc.

8285 El Rio, Suite 190

Houston, TX 77054

Attention: Chief Executive Officer

Phone: (346) 396-4770

email: djorden@nuot.com

13

or such other address as it shall have specified to Purchaser in writing

and

(ii)    if to Purchaser, at its address set forth on the signature page to this Agreement, or such other address as it shall have specified to the Company in writing.

(b)    Section Headings. The article and section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. References in this Agreement to a designated “Section” refer to a Section of this Agreement unless otherwise specifically indicated.

(c)    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

(d)    Consent to Jurisdiction and Service of Process. The parties to this Agreement hereby agree to submit to the jurisdiction of the courts of the State of Delaware and the courts of the United States of America located in the District of Delaware, and appellate courts from any thereof in any action or proceeding arising out of or relating to this Agreement.

(e)    Waiver of Jury Trial. Each of the parties to this Agreement hereby unconditionally agrees to waive, to the fullest extent permitted by applicable law, its respective rights to a jury trial of any claim or cause of action (whether based on contract, tort or otherwise) based upon, arising out of or relating to this Agreement or the transactions contemplated hereby. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto: (i) acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings, (ii) acknowledges that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not in the event of any action or proceeding, seek to enforce the foregoing waiver and (iii) warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 6(E) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

14

(f)    Amendment. Neither this Agreement nor any provisions hereof shall be amended, waived, modified, changed, discharged, or terminated except by an instrument in writing executed by the Company and Purchaser.

(g)    Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and thereby.

(h)    Severability. The invalidity or unenforceability of any specific provision of this Agreement shall not invalidate or render unenforceable any of its other provisions. Any provision of this Agreement held invalid or unenforceable shall be deemed reformed, if practicable, to the extent necessary to render it valid and enforceable and to the extent permitted by law and consistent with the intent of the parties to this Agreement.

(i)    Survivability. All representations, warranties and covenants contained in this Agreement shall survive (i) the acceptance of the subscription by the Company and the Closing, (ii) the death or disability of Purchaser.

(j)    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign (other than by merger) this Agreement or any rights or obligations hereunder without the prior written consent of a majority of the Purchasers. Purchaser may assign any or all of its rights under this Agreement to any person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of this Agreement.

(k)    No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except as set forth herein.

(l)    Fees and Expenses. Each party shall pay the fees and expenses of its counsel, advisors, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all of the Company’s transfer agent fees in connection with the Closing.

(m)    Arms Length Negotiations. The Company acknowledges and Purchaser confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.

(n)    Counterparts. This Agreement may be executed in multiple counterparts, including by means of facsimile, each of which shall be deemed an original, but all of which together shall constitute the same instrument.

(SIGNATURE PAGE FOLLOWS)

15

Purchaser hereby subscribes for such number of Shares as shall equal the Subscription Amount as set forth below divided by the Share Purchase Price, rounded down to the nearest whole number, and agrees to be bound by the terms and conditions of this Agreement.

PURCHASER

Dated
Number of Shares:
Subscription Amount:	$
Name (please print as name will appear on stock certificate or book-entry record):
Signature of Purchaser:
Name and Title of Officer (if applicable)
Number and Street:
City:
State:
Zip Code (or other postal code):
Country:
Social Security Number, or Taxpayer Identification Number (if applicable):
Signature of Joint Purchaser (if any):
Social Security Number of Joint Purchaser (if any):
	ACCEPTED BY:
	NUO THERAPEUTICS, INC.
	By: ______________________________________ Name: Title: Dated:

APPENDIX A

ACCREDITED INVESTOR QUESTIONNAIRE

In order for the Company to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained regarding your investor status. Please initial each category applicable to you as Purchaser.

___ (1) A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 (exclusive of the value of that person’s primary residence);

___ (2) A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;

___ (3) An executive officer or director of the Company;

___ (4) A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;

___ (5) A partnership not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

___ (6) A corporation not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

___ (7) A Massachusetts or similar business trust not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

___ (8) An organization described in Section 501(c)(3) of the Internal Revenue Code not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

___ (9) A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

___ (10) A broker or dealer registered pursuant to Section 15 of the Exchange Act;

___ (11) An insurance company as defined in Section 2(a)(13) of the Securities Act;

___ (12) An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act;

___ (13) A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

___ (14) A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

___ (15) An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

___ (16) A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

___ (17) An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies:

SCHEDULE A

WIRE TRANSFER INFORMATION

Branch Name:	Houston
Bank Name:	Chase Bank
Bank Address:	7007 Fannin St.
	Houston, TX 77030
Swift Code:	CHASUS33
Routing Number:	XXXXXXX For ACH
Routing Number:	XXXXXXX For Wires
Account Number:	XXXXXXXX

SCHEDULE B

SUBSIDIARIES

Aldagen, Inc. (Delaware)

SCHEDULE C

CERTAIN FEES AND COMMISSIONS

None.

EX-31

Exhibit 31

Certification of Principal Executive and Principal Financial Officer Pursuant to Exchange Act Rule

13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David E. Jorden, certify that:

1. I have reviewed this Quarterly Report on 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. I am 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. 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 the registrant’s board of directors (or persons performing the equivalent functions):

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

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

Date: May 16, 2022

/s/ David Jorden
David E. Jorden
Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial 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

Exhibit 32

Certification of Principal Executive and Principal Financial Officer Pursuant to

18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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 period ended March 31, 2022 (the “Report”), I, David E. Jorden, Chief Executive Officer and Chief Financial Officer of the Company, hereby certify that to my knowledge:

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.

Date: May 16, 2022

/s/ David E. Jorden

David E. Jorden

Chief Executive and Chief Financial Officer

(Principal Executive and Principal Financial 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

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 06, 2022
Document Information [Line Items]
Entity Central Index Key	0001091596
Entity Registrant Name	Nuo Therapeutics, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	000-28443
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-3011702
Entity Address, Address Line One	8285 El Rio, Suite 190
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77054
City Area Code	346
Local Phone Number	396-4770
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,674,205

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 665,391	$ 1,414,569
Other receivables	64,000	0
Inventory, net	94,642	0
Prepaid expenses and other current assets	138,296	51,349
Total current assets	962,329	1,465,918
Property and equipment, net	11,848	0
Operating lease right of use assets	84,023	0
Total assets	1,058,200	1,465,918
LIABILITIES AND STOCKHOLDERS' EQUITY
Common stock; $0.0001 par value, 100,000,000 shares authorized, 37,124,205 shares issued and outstanding	3,713	3,713
Additional paid-in capital	24,491,958	24,382,195
Accumulated deficit	(23,968,449)	(23,593,069)
Total stockholders' equity	527,222	792,839
Total liabilities and stockholders' equity	1,058,200	1,465,918
Current liabilities
Accounts payable	423,793	526,557
Accrued liabilities	31,128	146,522
Current portion of operating lease liabilities	20,826	0
Total current liabilities	475,747	673,079
Non-current portion of operating lease liabilities	55,230	0
Total liabilities	530,978	673,079
Commitments and contingencies (Note 7)

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	37,124,205	37,124,205
Common stock, shares outstanding (in shares)	37,124,205	37,124,205

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue:
Revenue	$ 0	$ 0
Costs of sales	0	0
Gross profit (loss)	0	0
Operating expenses
Selling, general and administrative	521,818	5,721
Total operating expenses	521,818	5,721
Loss from operations	(521,818)	(5,721)
Other income (expense)
Interest expense, net	0	0
Other income	146,438	0
Total other income	146,438	0
Net loss	$ (375,380)	$ (5,721)
Basic and diluted (in dollars per share)	$ (0.01)	$ (0.00)
Basic and diluted (in shares)	37,124,205	30,258,744
Product [Member]
Revenue:
Revenue	$ 0	$ 0

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2020	30,258,744
Balance at Dec. 31, 2020	$ 3,026	$ 22,995,854	$ (23,502,399)	$ (503,519)
Net loss	$ 0		(5,721)	(5,721)
Balance (in shares) at Mar. 31, 2021	30,258,744
Balance at Mar. 31, 2021	$ 3,026	22,995,854	(23,508,120)	(509,240)
Balance (in shares) at Dec. 31, 2021	37,124,205
Balance at Dec. 31, 2021	$ 3,713	24,382,195	(23,593,069)	792,839
Issuance of options to settle related party compensation liabilities		103,333		103,333
Stock compensation expense		6,430		6,430
Net loss			(375,380)	(375,380)
Balance (in shares) at Mar. 31, 2022	37,124,205
Balance at Mar. 31, 2022	$ 3,713	$ 24,491,958	$ (23,968,449)	$ 527,222

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		36 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (375,380)	$ (5,721)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	6,430	0
Gain on settlement of accounts payable	(146,438)	0
Amortization of operating lease right of use assets	5,289	0
Changes in operating assets and liabilities:
Other receivables	(64,000)	0
Inventory, net	(94,642)	0
Prepaid expenses and other current assets	(86,947)	0
Accounts payable	43,674	1,553
Accrued liabilities	(12,061)	0
Operating lease liabilities	(13,255)	0
Net cash used in operating activities	737,330	4,168
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(11,848)	0
Net cash used in investing activities	(11,848)	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activities	0	0	$ 1,900,000
Net decrease in cash and cash equivalents	(749,178)	(4,168)
Cash and cash equivalents, beginning of period	1,414,569	161,432
Cash and cash equivalents, end of period	665,391	157,264	$ 1,414,569
Supplemental information
Interest expense	0	0
Income taxes	0	0
Non-cash investing and financing transactions
Issuance of options to settle accrued compensation liabilities	103,333	0
ROU assets and lease liabilities established at inception of lease	$ 89,312	$ 0

XML

Note 1 - Description of Business

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Nature of Operations [Text Block]

Note 1 – Description of Business

Description of Business

Nuo Therapeutics, Inc. (“Nuo Therapeutics,” the “Company,” “we,” “us,” or “our”) is a Delaware corporation organized in 1998 under the name Informatix Holdings, Inc. In 1999, Autologous Wound Therapy, Inc., an Arkansas Corporation, merged with and into Informatix Holdings, Inc. and the name of the surviving corporation was changed to Autologous Wound Therapy, Inc. In 2000, Autologous Wound Therapy, Inc. changed its name to Cytomedix, Inc. (“Cytomedix”). In 2001, Cytomedix, filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code, after which Cytomedix was authorized to continue to conduct its business as a debtor and debtor-in-possession. Cytomedix emerged from bankruptcy in 2002 under a Plan of Reorganization. In September 2007, Cytomedix received 510(k) clearance for the Aurix System (“Aurix”), formerly known as the AutoloGel™ System, from the U. S. Food and Drug Administration (“FDA”). In April 2010, Cytomedix acquired the Angel Whole Blood Separation System (“Angel”) and the Angel Business, from Sorin Group USA, Inc. In February 2012, Cytomedix, acquired Aldagen, Inc. (“Aldagen”), a privately held developmental cell-therapy company located in Durham, NC. In 2014, Cytomedix changed its name to Nuo Therapeutics, Inc. In 2016, Nuo filed for and emerged from bankruptcy under Chapter 11.  Effective May 1, 2019, we furloughed our remaining employees and ceased standard operational activities as we awaited developments concerning our reconsideration request with the Centers for Medicare & Medicaid Services (“CMS”) regarding Medicare coverage for Aurix.  Based on a favorable National Coverage Determination issued in April 2021, we initiated restart activities for the business beginning in October 2021 with an expectation that the Aurix product will be available for commercial sale by May 2022.  Aldagen is a non-operational, wholly owned subsidiary of Nuo.

Impact of COVID-19 Pandemic on Financial Statements

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a “pandemic”, or a worldwide spread of a new disease. Many countries imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus and have closed non-essential businesses.

The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the pandemic. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has not experienced any significant negative impact on its March 31, 2022 unaudited consolidated financial statements related to COVID-19. 

XML

Note 2 - Recapitalization

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Recapitalization [Text Block]

Note 2 –Recapitalization

In anticipation of returning to operational status, the Company undertook several financing transactions during 2019 - 2021 to stabilize its financial condition, as follows:

2018 Convertible Notes

In September 2018, the Company issued two separate convertible notes (the “2018 Convertible Notes”) with detachable stock purchase warrants (the “Warrants”) to two separate investors (the “Investors”). Pursuant to separate securities purchase agreements, the Company issued and sold to the Investors 12% convertible promissory notes, each in the principal amount of $175,000, for an aggregate purchase price of $315,800 (reflecting a combined $34,200 in original issue discount and transaction fees). Pursuant to the purchase agreements, the Company also issued to each Investor a warrant exercisable to purchase 233,333 shares of the Company’s common stock, for an aggregate of 466,666 shares of common stock, subject to adjustment.

The notes had an original maturity date nine months from the date of issuance ( June 17, 2019). Under the original terms of the 2018 Convertible Notes, after six months from the date of issuance, the Investors could convert the notes, at any time, in whole or in part, into shares of the Company’s common stock, at a conversion price corresponding to a 40% discount to the average of the two lowest trading prices of the common stock during the 25 trading days prior to the conversion, subject to certain adjustments and price-protection provisions contained in the notes, including full-ratchet anti-dilution protection in the case of dilutive issuances of securities that did not meet the requirements of “exempt issuances” as defined in the notes.

Throughout the first three quarters of 2019, the Company entered into various amendments to the 2018 Convertible Notes. The amendments extended the date when the Company could prepay the notes and deferred the date upon which the Investors could initiate conversion of the notes into common shares of the Company pursuant to the notes’ terms until September 17, 2019. The Company paid the Investors amendment fees totaling $69,000 representing approximately 20% of the face value of the 2018 Convertible Notes and agreed to an increase in the principal balance of each note by $30,000 to $205,000. The maturity date of the Auctus note was also extended until July 31, 2019.

In December 2019, the Company further amended the 2018 Convertible Notes to provide for the settlement and extinguishment of all obligations under the 2018 Convertible Notes upon the (i) payment of an aggregate $220,000 to the Investors and (ii) issuance of an aggregate 350,000 shares of common stock to the Investors on or before February 10, 2020. The Company paid $220,000 to the Investors on December 10, 2019 and issued 350,000 shares of common stock on February 5, 2020 in full settlement of all obligations including accrued interest, and recognized a gain on debt extinguishment of approximately $246,000 in 2020 upon issuance of the common shares.

2019 Senior Secured Notes

In November and December 2019, the Company entered into note purchase agreements with certain investors providing for the issuance of $305,000 principal amount of 12% senior secured promissory notes (the “2019 Senior Secured Notes”) and warrants to acquire 457,500 shares of the Company’s common stock. The $220,000 of the proceeds were used primarily to partially repay the Company’s obligations under the 2018 Convertible Notes as discussed above.

On September 1, 2020, the Noteholders notified the Company of its default under the 2019 Senior Secured Notes and submitted a forbearance and recapitalization proposal to the Company. The 2019 Senior Secured Notes were settled in full in October 2020 (see 2020 Recapitalization below).

2020 Recapitalization

In October 2020 and in response to the declared default under the 2019 Senior Secured Notes, the Company entered into a Recapitalization Agreement (the “Recapitalization”) with its existing Deerfield Investors (“Deerfield”) and holders of its 2019 Senior Secured Notes (“Noteholders”) pursuant to which:

● Deerfield exchanged its Series A Preferred Stock for 2.7 million shares of Common Stock – note that the Series A Preferred Stock did not originally contain a conversion option or redemption feature and was perpetual preferred stock.

● The Noteholders converted $305,000 of principal and $30,400 of accrued and unpaid interest of their Senior Secured Notes (the Company was in default at the time of the conversion) into 838,487 shares of Common Stock.

● The Noteholders agreed to purchase 487,500 shares of Common Stock for gross proceeds of $195,000 in cash.

● The Noteholders received warrants to purchase 3,977,961 shares of Common Stock at $0.40 per share.

● The Noteholders agreed to cancel the warrants originally issued with the 2019 Senior Secured Notes.

The settlement of the Series A Preferred Stock was accounted for at fair value. The Company recognized a deemed dividend (contribution) resulting from the gain on the cancellation of its equity classified preferred stock, calculated as the difference between the fair value of the consideration transferred and the carrying value of the preferred stock. In addition, Lawrence S. Atinsky, the Deerfield Investors’ representative on the Company’s board, resigned and the number of Company directors was reduced to four. Outstanding options to purchase common stock held by Mr. Atinsky as of the Effective Date were forfeited.

The settlement of the 2019 Senior Secured Notes resulted in the conversion of the $305,000 principal balance of the Notes plus accrued interest of approximately $30,400 into an aggregate 838,487 shares of common stock (the “Conversion Shares”) of the Company at a conversion price of $0.40 per share, plus the purchase by the Noteholders, for cash, of 487,500 shares of common stock (the “Purchase Shares”) at $0.40 per share, or $195,000 in total. The settlement of the 2019 Senior Secured Notes was accounted for at fair value. The Company recognized a gain on extinguishment of the 2019 Senior Secured Notes of $89,776 calculated as the excess of the carrying amount of the debt (including the accrued interest) over the fair value of the reacquisition price (consisting of the fair value of the common stock and warrants issued net of the fair value of the warrants forfeited and cash received).

As part of the Recapitalization, the Company granted to each of three (3) individuals an aggregate of (i) 962,500 shares of common stock (the “Compensation Shares”) and (ii) fully vested warrants to purchase 2,887,500 shares of common stock of the Company (the “Compensation Warrants”) in consideration of past performance and service provided to the Company. The fair value of the Compensatory Shares and Compensatory Warrants was $333,628 which was recognized as stock-based compensation expense upon issuance.

2021 Warrant Modification

In December 2021, the Company entered into a Warrant Modification Agreement (the “Agreement”) with the employee holders and Investor holders of 6,865,461 Warrants whereby the Warrants were modified to decrease the exercise price from $0.40 to $0.20 per share provided the holders exercised the Warrant prior to January 31, 2022 (the “Modification”). All Warrants were exercised as of December 30, 2021. The Modification was accounted for at fair value; as such, additional stock-based compensation expense of $13,936 was recognized with respect to the employee warrants and a deemed dividend of $795,592 was recognized for the Investor warrants.

See Notes 5 and 6 for further discussion.

XML

Note 3 - Liquidity and Summary of Significant Accounting Principles

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Note 3 – Liquidity and Summary of Significant Accounting Principles

Liquidity

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, and executing licensing arrangements, and to a lesser extent by generating royalties and product revenues.  In mid-2019, we ceased ongoing operational activities as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. In April 2021 CMS issued an NCD establishing national reimbursement coverage for Aurix when used in chronic non-healing wounds where a diabetes clinical diagnosis exists for the patient. During 2021, 2020 and 2019, the Company raised net cash proceeds of approximately $1.9 million from the issuance of senior secured debt, common stock and from the exercise of stock purchase warrants. In conjunction with warrant exercises in December 2021, the Company initiated efforts to return to operational status as a commercial business. Subsequent to March 31, 2022, the Company raised proceeds of $3,550,000 from the sale of common stock to certain accredited investors in an equity private placement which closed on April 29, 2022.

We have incurred, and continue to incur, recurring losses and negative cash flows.  As of March 31, 2022, we have an accumulated deficit of $24.0 million and cash and cash equivalents on hand of approximately $0.7 million. As of May 6, 2022, we have cash and cash equivalents on hand of approximately $3.8 million.

The accompanying condensed 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.

As a result of the closing of the private placement for proceeds of $3,500,000 on April 29, 2022, we have reevaluated our liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date these condensed consolidated financial statements are available to be issued and therefore substantial doubt has been alleviated.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The consolidated balance sheet at December 31, 2021, has been derived from audited financial statements of the Company as of that date. The interim unaudited consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen, Inc. (“Aldagen”). All significant inter-company accounts and transactions are eliminated in consolidation

Use of Estimates

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

Credit Concentration

We had no customer concentrations given our April 2019 decision to cease operational activities and the absence of any revenues in the three months ended March 31, 2022 and 2021 prior to the expected re-initiation of commercial sales activities by  May 2022.

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

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. We maintain our cash and cash equivalents in the form of money market deposit accounts and qualifying money market funds and checking accounts with financial institutions that we believe are credit worthy.

Accounts Receivables, net

We expect to generate accounts receivables from the sale of our products. We will provide for an allowance 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. We had no trade accounts receivable as of March 31, 2022 and 2021 due to no commercial sales activities during those periods.

Other Receivables

The other receivable at March 31, 2022 represented the amount due from the landlord of our new warehouse/distribution facility as reimbursement for agreed tenant improvements per the lease agreement.  The balance was collected subsequent to March 31, 2022.

Inventory, net

Our inventory is produced by third-party manufacturers and consists of raw materials and finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. We will maintain an inventory of kits, reagents, and other disposables having shelf-lives that generally range from 18 months to two years.

As of March 31, 2022, our inventory consisted entirely of raw materials acquired to facilitate the manufacturing of finished goods at our contract manufacturer and our warehouse/distribution facility.

We will provide for an allowance against inventory for estimated losses that may result in excess and obsolete inventory (i.e., from the expiration of products). Our allowance for expired inventory will be estimated based upon the inventory’s remaining shelf-life and our anticipated ability to sell such inventory, which is estimated using past experience and future forecasts, within its remaining shelf life. Expired products are segregated and used for demonstration purposes only; we will record the associated expense for this reserve to cost of sales in the consolidated statements of operations.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.  Assets are depreciated, using the straight-line method, over their estimated useful life ranging from one to six years.  Leasehold improvements are amortized, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from one to three years. Amortization of leasehold improvements is included in depreciation expense and will begin in April 2022. Maintenance and repairs are charged to operations as incurred. Our medical equipment was fully depreciated as of March 31, 2022, while property and equipment acquired in March 2022 will begin being depreciated at the beginning of the month following its placed in-service date.

Leases

At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.  Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  Rent expense is recognized on a straight-line basis over the lease term.

The Company has made certain accounting policy elections whereby the Company (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease elements of its operating leases. 

Revenue Recognition

The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers; (ii) identification of distinct performance obligations in the contract; (iii) determination of contract transaction price; (iv) allocation of contract transaction price to the performance obligations; and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation. The Company recognizes revenues upon the satisfaction of its performance obligations (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.

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 and are not expected to be material in the future. 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.

As more fully described above, we had no revenues in the three months ended March 31, 2022 or 2021.

Stock-Based Compensation

The fair value of employee stock options is measured at the date of grant. Expected volatilities are based on the equally weighted average historical volatility from five comparable public companies with an expected term consistent with ours. Expected years until exercise represents the period of time that options are expected to be outstanding using the "simplified method." 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. The Company estimated that the dividend rate on its common stock will be zero. The assumptions for the three months ended March 31, 2022 and 2021 are summarized in the following table:

	2022			2021
Risk free rate		1.65	%		0.33	%
Weighted average expected years until exercise		5-6			5
Expected stock volatility		100	%		100	%
Dividend yield		-			-

The Company elected to account for forfeitures of stock-based awards as they occur.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. Tax rate changes are reflected in income during the period such changes are enacted. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid.

A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. All of our tax years remain subject to examination by the tax authorities.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no such items in 2022 and 2021.

Basic and Diluted Earnings (Loss) per Share

In periods of net loss, basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.

For periods of net income, diluted earnings per share is computed using the more dilutive of the “treasury method” or “two class method.” Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to common stockholders by the weighted- average number of shares outstanding plus the dilutive impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and convertible notes using the if-converted method. Because none of the Company’s equity-linked financial instruments contain non-forfeitable rights to dividends, the “two class” method results in the same diluted earnings per share as the “treasury method.”

All of the Company’s outstanding stock options and warrants were considered anti-dilutive for the three months ended March 31, 2022 and 2021. The following table sets forth the potential dilutive securities excluded from the calculation of diluted loss per share for the periods presented.

	Three months ended March 31, 2022		Three months ended March 31, 2021
Shares underlying:
Common stock options	2,536,667			1,355,001
Stock purchase warrants		233,333		13,278,794
		2,770,000		14,633,795

Recently Adopted Accounting Standards

In August 2020, the FASB issued new accounting guidance (ASU 2020-06) with respect to the accounting for convertible debt instruments and contracts in an entity’s own equity. The guidance simplifies the accounting for convertible instruments by reducing the various accounting models that can require the instrument to be separated into a debt component and equity component or derivative component. Additionally, the guidance eliminated certain settlement conditions previously required to be able to classify a derivative in equity. The new guidance is effective on a modified or full retrospective basis for fiscal years beginning after December 15, 2023, including interim periods with those fiscal years. The Company will evaluate the impact on the consolidated financial statements.

We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. 

XML

Note 4 - Property and Equipment

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note 4 – Property and Equipment

Property and equipment, net consisted of the following:

	March 31, 2022			December 31, 2021
Medical equipment	$	387,665		$	387,665
Office equipment		3,243			-
Warehouse/production equipment		8,605			-
		399,513			387,665
Less accumulated depreciation and amortization		(387,665	)		(387,665	)
Property and equipment, net	$	11,848		$	-

There was no depreciation expense of property and equipment for the three months ended March 31, 2022 and 2021.  None of the Company's long-lived assets were deemed to be impaired during the three months ended March 31, 2022 and 2021.

XML

Note 5 - Stock Purchase Warrants

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stock Purchase Warrants [Text Block]

Note 5 – Stock Purchase Warrants

The following schedule reflects outstanding stock purchase warrants activities as of March 31, 2022 and 2021:

Description	March 31, 2022		March 31, 2021
May 2016 warrants		-		6,180,000
2018 Convertible Notes warrants		233,333		233,333
2020 Replacement warrants		-		3,977,961
2020 Compensatory warrants		-		2,887,500
Total		233,333		13,278,794

As part of the May 2016 Plan of Reorganization, the Company issued warrants to purchase 6,180,000 shares of unregistered common stock to certain investors participating in the recapitalization of the Company. The warrants terminated on May 5, 2021 and were exercisable at exercise prices ranging from $0.50 per share to $0.75 per share.

The 2018 Convertible Notes warrants have a $0.15 strike price, approximately 1.5 years of remaining contractual term, and zero intrinsic value as of March 31, 2022 and are equity classified.

In connection with the Recapitalization and the conversion of the 2019 Senior Secured Notes, the Company issued to the noteholders stock purchase warrants to acquire 3,977,971 shares of the Company’s common stock. The warrants had an exercise price of $0.40, a term of five years, and were equity classified.

In connection with the Recapitalization and to compensate certain individuals for services performed in maintaining the Company’s viability, the Company issued stock purchase warrants to acquire 2,887,500 shares of the Company’s common stock. The warrants had an exercise price of $0.40, a term of five years, and were equity classified.

In connection with the Modification, the Company induced the exercise of existing stock purchase warrants to acquire 6,865,461 shares of the Company’s common stock by reducing the exercise price from $0.40 to $0.20 and requiring exercise by a certain date. All warrants were exercised by December 31, 2021 for gross proceeds of $1,373,092.

XML

Note 6 - Equity and Stock-based Compensation

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 6 – Equity and Stock-Based Compensation

Under the Second Amended and Restated Certificate of Incorporation, the Company has the authority to issue a total of 101,000,000 shares of capital stock, consisting of 100,000,000 shares of common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, which will have such rights, powers and preferences as the Board of Directors shall determine.

Stock-Based Compensation

In July 2016, the Board of Directors approved the Company’s 2016 Omnibus Incentive Plan (the “2016 Omnibus Plan”), and on August 4, 2016, the Board amended such plan to include an evergreen provision, intended to increase the maximum number of shares issuable under the Omnibus Plan on the first day of each fiscal year (starting on January 1, 2017) by an amount equal to six percent (6%) of the shares reserved as of the last day of the preceding fiscal year, provided that the aggregate number of all such increases may not exceed 1,000,000 shares. As of November 21, 2016, holders of a majority of our capital stock executed a written consent adopting and approving the 2016 Omnibus Plan, as amended and restated, which provides for the Company to grant equity and cash incentive awards to officers, directors and employees of, and consultants to, the Company and its subsidiaries. Further, on March 4, 2022, the Board approved an amendment to the 2016 Omnibus Plan to increase the shares available under to Plan to 4,250,000 and remove the annual evergreen provision. Effective as of April 21, 2022, holders of a majority of our common stock outstanding executed a written consent approving the March 2022 amendment to the 2016 Omnibus Plan which is expected to become effective on or around June 6, 2022. 

A summary of stock option activity under the 2016 Omnibus Plan during the three months ended March 31, 2022 is presented below: 

Stock Options – 2016 Omnibus Plan	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at January 1, 2022		1,355,001	$	0.52		3.90
Granted	1,181,666		$	0.69		10.00
Exercised		-	$	-		-
Forfeited or expired		-	$	-		-
Outstanding at March 31, 2022		2,536,667	$	0.60		6.58
Exercisable at March 31, 2022		2,103,334	$	0.57	5.89

There were 1,181,666 stock options granted under the 2016 Omnibus Plan during the three months ended March 31, 2022 of which (i) 206,666 options were granted to settle prior accrued compensation liabilities with senior management and Board of Directors, (ii) 450,000 of immediately vested options were granted to management, the Board of Directors, and a third-party service provider, and (iii) 525,000 incentive stock options vesting over 3 years were granted to employees. The fair value of the stock options granted in settlement of accrued liabilities was approximately $3,000. As the options issued were to related parties, the $103,333 of settled liabilities was credited to additional paid-in-capital. No stock options were exercised during the three months ended March 31, 2022. As of March 31, 2022, there was approximately $6,200 of unrecognized compensation cost related to the 525,000 non-vested stock options granted during the quarter.

For the three months ended March 31, 2022, the Company recorded stock-based compensation expense of $6,430. There was no stock based compensation expense for the three months ended March 31, 2021.

XML

Note 7 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 7 – Commitments and Contingencies

Lease Agreements

In January 2022, the Company entered into a commercial operating lease agreement for its office space in Florida, expiring on December 31, 2024. The lease requires the Company to pay for its insurance, taxes, and its share of common operating expenses. The lease resulted in an increase in its right of use assets and lease liabilities of $89,312, using a discount rate of 10%.

Operating lease ROU assets are included in right of use assets in the Company's consolidated balance sheet as of March 31, 2022. Operating lease liabilities are classified as other current and non-current liabilities in the Company’s consolidated balance sheet.

The lease was cancelable by the landlord at any time prior to December 31, 2022 based on certain capital raising contingencies which the Company met in April 2022.

Total lease costs were approximately $7,000 for the three months ended March 31, 2022, consisting solely of operating lease costs.

Future undiscounted cash flows under this lease are:

2022		19,240
2023		33,974
2024		34,993
Total		88,207
Discount factor		(12,151	)
Lease liability		76,056
Current lease liability		(20,826	)
Non-current lease liability	$	55,230

In February 2022 the Company entered into an additional commercial operating lease for its primary office and warehouse/distribution space in Texas. This lease expires in March 2027. The space remained under buildout and Landlord control as of March 31, 2022 with the Company acquiring control of the lease space effective April 1, 2022; as a result, the right of use asset and lease liability has not been recognized as of March 31, 2022. The future lease payments of $423,000 are not included in the above table.     

XML

Note 8 - Subsequent Events

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

Note 8 – Subsequent Events

Effective April 29, 2022, the Company closed on an equity private placement for the sale of 3,550,000 shares of common stock for proceeds of $3,550,000 to certain accredited investors under a Securities Purchase Agreement dated April 11, 2022 providing for the issuance of up to 4,000,000 shares of common stock.

On April 22, 2022, 775,000 incentive stock options were granted to non-executive employees at exercise prices of $0.75 or $1.00 with terms of ten years and subject to full vesting over three years.

The other receivable in the amount of $64,000 was received subsequent to March 31, 2022.

As of May 15, 2022, the Company received and accepted commitments for the sale of an additional 407,757 shares of common stock for proceeds of $407,757 to certain unaffiliated accredited investors under a Securities Purchase Agreement dated May 13, 2022.  Closing of the transaction is expected to occur on May 18, 2022.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Liquidity, Policy [Policy Text Block]

Liquidity

Since our inception, we have financed our operations by raising debt, issuing equity and equity-linked instruments, and executing licensing arrangements, and to a lesser extent by generating royalties and product revenues.  In mid-2019, we ceased ongoing operational activities as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. In April 2021 CMS issued an NCD establishing national reimbursement coverage for Aurix when used in chronic non-healing wounds where a diabetes clinical diagnosis exists for the patient. During 2021, 2020 and 2019, the Company raised net cash proceeds of approximately $1.9 million from the issuance of senior secured debt, common stock and from the exercise of stock purchase warrants. In conjunction with warrant exercises in December 2021, the Company initiated efforts to return to operational status as a commercial business. Subsequent to March 31, 2022, the Company raised proceeds of $3,550,000 from the sale of common stock to certain accredited investors in an equity private placement which closed on April 29, 2022.

We have incurred, and continue to incur, recurring losses and negative cash flows.  As of March 31, 2022, we have an accumulated deficit of $24.0 million and cash and cash equivalents on hand of approximately $0.7 million. As of May 6, 2022, we have cash and cash equivalents on hand of approximately $3.8 million.

The accompanying condensed 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.

As a result of the closing of the private placement for proceeds of $3,500,000 on April 29, 2022, we have reevaluated our liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date these condensed consolidated financial statements are available to be issued and therefore substantial doubt has been alleviated.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The consolidated balance sheet at December 31, 2021, has been derived from audited financial statements of the Company as of that date. The interim unaudited consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen, Inc. (“Aldagen”). All significant inter-company accounts and transactions are eliminated in consolidation

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 consolidated financial statements, estimates are used for, but not limited to stock-based compensation, the fair value of common stock and equity-linked and derivative financial instruments, recoverability and depreciable lives of long-lived assets, deferred taxes and associated valuation allowance. Actual results could differ from those estimates.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Credit Concentration

We had no customer concentrations given our April 2019 decision to cease operational activities and the absence of any revenues in the three months ended March 31, 2022 and 2021 prior to the expected re-initiation of commercial sales activities by  May 2022.

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

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. We maintain our cash and cash equivalents in the form of money market deposit accounts and qualifying money market funds and checking accounts with financial institutions that we believe are credit worthy.

Receivable [Policy Text Block]

Accounts Receivables, net

We expect to generate accounts receivables from the sale of our products. We will provide for an allowance 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. We had no trade accounts receivable as of March 31, 2022 and 2021 due to no commercial sales activities during those periods.

Other Receivables [Policy Text Block]

Other Receivables

The other receivable at March 31, 2022 represented the amount due from the landlord of our new warehouse/distribution facility as reimbursement for agreed tenant improvements per the lease agreement.  The balance was collected subsequent to March 31, 2022.

Inventory, Policy [Policy Text Block]

Inventory, net

Our inventory is produced by third-party manufacturers and consists of raw materials and finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. We will maintain an inventory of kits, reagents, and other disposables having shelf-lives that generally range from 18 months to two years.

As of March 31, 2022, our inventory consisted entirely of raw materials acquired to facilitate the manufacturing of finished goods at our contract manufacturer and our warehouse/distribution facility.

We will provide for an allowance against inventory for estimated losses that may result in excess and obsolete inventory (i.e., from the expiration of products). Our allowance for expired inventory will be estimated based upon the inventory’s remaining shelf-life and our anticipated ability to sell such inventory, which is estimated using past experience and future forecasts, within its remaining shelf life. Expired products are segregated and used for demonstration purposes only; we will record the associated expense for this reserve to cost of sales in the consolidated statements of operations.

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

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.  Assets are depreciated, using the straight-line method, over their estimated useful life ranging from one to six years.  Leasehold improvements are amortized, using the straight-line method, over the lesser of the expected lease term or its estimated useful life ranging from one to three years. Amortization of leasehold improvements is included in depreciation expense and will begin in April 2022. Maintenance and repairs are charged to operations as incurred. Our medical equipment was fully depreciated as of March 31, 2022, while property and equipment acquired in March 2022 will begin being depreciated at the beginning of the month following its placed in-service date.

Lessee, Leases [Policy Text Block]

Leases

At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.  Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  Rent expense is recognized on a straight-line basis over the lease term.

The Company has made certain accounting policy elections whereby the Company (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease elements of its operating leases. 

Revenue [Policy Text Block]

Revenue Recognition

The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers; (ii) identification of distinct performance obligations in the contract; (iii) determination of contract transaction price; (iv) allocation of contract transaction price to the performance obligations; and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation. The Company recognizes revenues upon the satisfaction of its performance obligations (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.

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 and are not expected to be material in the future. 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.

As more fully described above, we had no revenues in the three months ended March 31, 2022 or 2021.

Share-Based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

The fair value of employee stock options is measured at the date of grant. Expected volatilities are based on the equally weighted average historical volatility from five comparable public companies with an expected term consistent with ours. Expected years until exercise represents the period of time that options are expected to be outstanding using the "simplified method." 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. The Company estimated that the dividend rate on its common stock will be zero. The assumptions for the three months ended March 31, 2022 and 2021 are summarized in the following table:

	2022			2021
Risk free rate		1.65	%		0.33	%
Weighted average expected years until exercise		5-6			5
Expected stock volatility		100	%		100	%
Dividend yield		-			-

The Company elected to account for forfeitures of stock-based awards as they occur.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. Tax rate changes are reflected in income during the period such changes are enacted. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid.

A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. All of our tax years remain subject to examination by the tax authorities.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no such items in 2022 and 2021.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings (Loss) per Share

In periods of net loss, basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive.

For periods of net income, diluted earnings per share is computed using the more dilutive of the “treasury method” or “two class method.” Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to common stockholders by the weighted- average number of shares outstanding plus the dilutive impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and convertible notes using the if-converted method. Because none of the Company’s equity-linked financial instruments contain non-forfeitable rights to dividends, the “two class” method results in the same diluted earnings per share as the “treasury method.”

All of the Company’s outstanding stock options and warrants were considered anti-dilutive for the three months ended March 31, 2022 and 2021. The following table sets forth the potential dilutive securities excluded from the calculation of diluted loss per share for the periods presented.

	Three months ended March 31, 2022		Three months ended March 31, 2021
Shares underlying:
Common stock options	2,536,667			1,355,001
Stock purchase warrants		233,333		13,278,794
		2,770,000		14,633,795

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards

In August 2020, the FASB issued new accounting guidance (ASU 2020-06) with respect to the accounting for convertible debt instruments and contracts in an entity’s own equity. The guidance simplifies the accounting for convertible instruments by reducing the various accounting models that can require the instrument to be separated into a debt component and equity component or derivative component. Additionally, the guidance eliminated certain settlement conditions previously required to be able to classify a derivative in equity. The new guidance is effective on a modified or full retrospective basis for fiscal years beginning after December 15, 2023, including interim periods with those fiscal years. The Company will evaluate the impact on the consolidated financial statements.

We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. 

XML

Note 3 - Liquidity and Summary of Significant Accounting Principles (Tables)

3 Months Ended

Mar. 31, 2022

Notes Tables

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2022			2021
Risk free rate		1.65	%		0.33	%
Weighted average expected years until exercise		5-6			5
Expected stock volatility		100	%		100	%
Dividend yield		-			-

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three months ended March 31, 2022		Three months ended March 31, 2021
Shares underlying:
Common stock options	2,536,667			1,355,001
Stock purchase warrants		233,333		13,278,794
		2,770,000		14,633,795

XML

Note 4 - Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2022

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 31, 2022			December 31, 2021
Medical equipment	$	387,665		$	387,665
Office equipment		3,243			-
Warehouse/production equipment		8,605			-
		399,513			387,665
Less accumulated depreciation and amortization		(387,665	)		(387,665	)
Property and equipment, net	$	11,848		$	-

XML

Note 5 - Stock Purchase Warrants (Tables)

3 Months Ended

Mar. 31, 2022

Notes Tables

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

Description	March 31, 2022		March 31, 2021
May 2016 warrants		-		6,180,000
2018 Convertible Notes warrants		233,333		233,333
2020 Replacement warrants		-		3,977,961
2020 Compensatory warrants		-		2,887,500
Total		233,333		13,278,794

XML

Note 6 - Equity and Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Notes Tables

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

Stock Options – 2016 Omnibus Plan	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at January 1, 2022		1,355,001	$	0.52		3.90
Granted	1,181,666		$	0.69		10.00
Exercised		-	$	-		-
Forfeited or expired		-	$	-		-
Outstanding at March 31, 2022		2,536,667	$	0.60		6.58
Exercisable at March 31, 2022		2,103,334	$	0.57	5.89

XML

Note 7 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2022

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2022		19,240
2023		33,974
2024		34,993
Total		88,207
Discount factor		(12,151	)
Lease liability		76,056
Current lease liability		(20,826	)
Non-current lease liability	$	55,230

XML

Note 2 - Recapitalization (Details Textual) - USD ($)				1 Months Ended		2 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Feb. 05, 2020	Dec. 10, 2019	Sep. 17, 2018	Dec. 31, 2021	Oct. 31, 2020	Dec. 31, 2019	Mar. 31, 2022	Mar. 31, 2021	Sep. 30, 2019	Dec. 31, 2020	Nov. 30, 2021	Nov. 30, 2020
Stock Issued During Period, Shares, New Issues (in shares)					487,500
Proceeds from Issuance of Common Stock					$ 195,000
Shares Issued, Price Per Share (in dollars per share)					$ 0.40
Share-based Payment Arrangement, Expense							$ 6,430	$ 0
Class of Warrant or Right, Outstanding (in shares)							233,333	13,278,794
Three Individuals [Member]
Shares Issued, Shares, Share-based Payment Arrangement, before Forfeiture (in shares)					962,500
Share-based Payment Arrangement, Expense					$ 333,628
Series A Preferred Stock Converted into Common Stock [Member]
Conversion of Stock, Shares Issued (in shares)					2,700,000
Conversion of the 2018 Convertible Notes into Common Stock [Member]
Repayments of Convertible Debt	$ 350,000
Stock Issued During Period, Shares, Conversion of Convertible Securities (in shares)	350,000
Conversion of the 2019 Senior Secured Notes into Common Stock [Member]
Debt Conversion, Original Debt, Amount					$ 305,000
Debt Conversion, Original Debt, Accrued Interest, Amount					$ 30,400
Debt Conversion, Converted Instrument, Shares Issued (in shares)					838,487
Debt Instrument, Convertible, Conversion Price (in dollars per share)					$ 0.40
Warrants Issued with the 2018 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			466,666
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)							$ 0.15
Class of Warrant or Right, Outstanding (in shares)							233,333	233,333
Warrants Issued with the 2018 Convertible Notes [Member] | Auctus Fund, LLC [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			233,333
Warrants Issued with the 2018 Convertible Notes [Member] | EMA Financial, LLC [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			233,333
Warrants Issued with 2019 Senior Secured Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)						457,500
Warrants Issued to Investors [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					3,977,961
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)					$ 0.40
Warrants Issued to Three Individuals [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					2,887,500
Modified Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)												6,865,461
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 0.20						$ 0.20	$ 0.40	$ 0.40
Share-based Payment Arrangement, Expense				$ 13,936
Class of Warrant or Right, Outstanding (in shares)				6,865,461
Warrant Modification, Amount				$ 795,592
The 2018 Convertible Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			12.00%
Debt Instrument, Face Amount									$ 205,000
Proceeds from Convertible Debt			$ 315,800
Payments of Debt Issuance Costs			$ 34,200
Debt Instrument, Term (Month)			9 months
Debt Instrument, Convertible, Period After Date of Issuance (Month)			6 months
Debt Instrument, Convertible, Conversion Price, Percentage Discount of Common Stock Trading Price			40.00%
Debt Instrument, Amendment Fee									$ 69,000
Debt Instrument, Amendment Fee, Percent of Face Value									20.00%
Debt Instrument, Increase (Decrease) in Principal of Each Note									$ 30,000
Repayments of Convertible Debt		$ 220,000
Gain (Loss) on Extinguishment of Debt, Total										$ 246,000
The 2018 Convertible Notes [Member] | Auctus Fund, LLC [Member]
Debt Instrument, Face Amount			$ 175,000
The 2018 Convertible Notes [Member] | EMA Financial, LLC [Member]
Debt Instrument, Face Amount			$ 175,000
The 2019 Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage						12.00%
Debt Instrument, Face Amount						$ 305,000
Gain (Loss) on Extinguishment of Debt, Total					$ 89,776
Proceeds from Issuance of Senior Long-term Debt						$ 220,000

XML

Note 3 - Liquidity and Summary of Significant Accounting Principles (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		36 Months Ended
	Apr. 29, 2022	May 11, 2022	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	May 06, 2022
Net Cash Provided by (Used in) Financing Activities, Total			$ 0	$ 0	$ 1,900,000
Retained Earnings (Accumulated Deficit), Total			(23,968,449)		(23,593,069)
Cash and Cash Equivalents, at Carrying Value, Total			665,391		$ 1,414,569
Accounts Receivable, after Allowance for Credit Loss, Total			0	0
Revenue from Contract with Customer, Including Assessed Tax			$ 0	$ 0
Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)			1 year
Minimum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life (Year)			1 year
Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)			6 years
Maximum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life (Year)			3 years
Subsequent Event [Member]
Proceeds from Issuance of Private Placement	$ 3,500,000	$ 3,550,000,000,000
Cash and Cash Equivalents, at Carrying Value, Total						$ 3,800,000

XML

Note 3 - Liquidity and Summary of Significant Accounting Principles - Summary Stock Option Valuation Assumptions (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Risk free rate	1.65%	0.33%
Weighted average expected years until exercise (Year)		5 years
Expected stock volatility	100.00%	100.00%
Dividend yield	0.00%	0.00%
Minimum [Member]
Weighted average expected years until exercise (Year)	5 years
Maximum [Member]
Weighted average expected years until exercise (Year)	6 years

XML

Note 3 - Liquidity and Summary of Significant Accounting Principles - Anti-dilutive Securities Excluded From the Computation of Diluted Earnings (Loss) Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Anti-dilutive securities (in shares)	2,770,000	14,633,795
Share-Based Payment Arrangement, Option [Member]
Anti-dilutive securities (in shares)	2,536,667	1,355,001
Warrant [Member]
Anti-dilutive securities (in shares)	233,333	13,278,794

XML

Note 4 - Property and Equipment (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Depreciation, Total	$ 0	$ 0
Asset Impairment Charges, Total	$ 0	$ 0

XML

Note 4 - Property and Equipment - Property and Equipment, Net (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Property, plant, and equipment, gross	$ 399,513	$ 387,665
Less accumulated depreciation and amortization	(387,665)	(387,665)
Property and equipment, net	11,848	0
Medical Equipment [Member]
Property, plant, and equipment, gross	387,665	387,665
Office Equipment [Member]
Property, plant, and equipment, gross	3,243	0
Warehouse and Production Equipment [Member]
Property, plant, and equipment, gross	$ 8,605	$ 0

XML

Note 5 - Stock Purchase Warrants (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Nov. 30, 2021	Dec. 31, 2020	Nov. 30, 2020	Oct. 31, 2020	Dec. 31, 2019	Sep. 17, 2018	May 31, 2016
May 2016 Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)									6,180,000
May 2016 Warrants [Member] | Minimum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)									$ 0.50
May 2016 Warrants [Member] | Maximum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)									$ 0.75
Warrants Issued with the 2018 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)								466,666
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 0.15
Class of Warrant or Right, Outstanding, Weighted Average Remaining Contractual Term (Year)	1 year 6 months
Class of Warrant or Right, Outstanding, Aggregate Intrinsic Value	$ 0
Warrants Issued with 2019 Senior Secured Notes Upon Conversion [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)							3,977,971
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)							$ 0.40
Warrants and Rights Outstanding, Term (Year)							5 years
Warrants Issued to Employees [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)						2,887,500
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)						$ 0.40
Warrants and Rights Outstanding, Term (Year)						5 years
Modified Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					6,865,461
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)		$ 0.20	$ 0.40	$ 0.20	$ 0.40
Proceeds from Warrant Exercises		$ 1,373,092

XML

Note 5 - Stock Purchase Warrants - Outstanding Stock Purchase Warrants (Details) - shares	Mar. 31, 2022	Mar. 31, 2021
Outstanding warrants (in shares)	233,333	13,278,794
May 2016 Warrants [Member]
Outstanding warrants (in shares)	0	6,180,000
Warrants Issued with the 2018 Convertible Notes [Member]
Outstanding warrants (in shares)	233,333	233,333
The 2020 Replacement Warrants [Member]
Outstanding warrants (in shares)	0	3,977,961
The 2020 Compensatory Warrants [Member]
Outstanding warrants (in shares)	0	2,887,500

XML

Note 6 - Equity and Stock-based Compensation (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 04, 2022	Dec. 31, 2021	Aug. 04, 2016
Authorized Shares, Common and Preferred (in shares)	101,000,000
Common Stock, Shares Authorized (in shares)	100,000,000			100,000,000
Preferred Stock, Shares Authorized (in shares)	1,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001
Issuance of Options to Settle Accrued Compensation Liabilities	$ 103,333	$ 0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested, Number of Shares, Ending Balance (in shares)	525,000
Share-based Payment Arrangement, Expense	$ 6,430	$ 0
The 2016 Omnibus Plan [Member]
Evergreen Provision, Increase in Number of Shares Authorized Calculation, Percentage Amount of Prior Year's Reserved Shares					6.00%
Evergreen Provision, Maximum Limit of Increase to Authorized Shares (in shares)					1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)			4,250,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	1,181,666
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)	(0)
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 6,200
The 2016 Omnibus Plan [Member] | Additional Paid-in Capital [Member]
Issuance of Options to Settle Accrued Compensation Liabilities	$ 103,333
The 2016 Omnibus Plan [Member] | Senior Management and Board of Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	206,666
Share-based Compensation Arrangement by Share-based Payment Award, Options, Granted in Period, Fair Value	$ 3,000
The 2016 Omnibus Plan [Member] | Management, Board of Directors, Service Provider [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	450,000
The 2016 Omnibus Plan [Member] | Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	525,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	3 years

XML

Note 6 - Equity and Stock-based Compensation - Stock Option Activity (Details) - The 2016 Omnibus Plan [Member] - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Shares outstanding (in shares)	1,355,001
Shares outstanding, weighted-average exercise price (in dollars per share)	$ 0.52
Shares outstanding, weighted-average remaining contractual term (Year)	6 years 6 months 29 days	3 years 10 months 24 days
Shares granted (in shares)	1,181,666
Shares granted, weighted-average exercise price (in dollars per share)	$ 0.69
Shares granted, weighted-average remaining contractual term (Year)	10 years
Shares exercised (in shares)	0
Shares exercised, weighted-average exercise price (in dollars per share)	$ 0
Shares forfeited or expired (in shares)	0
Shares forfeited or expired, weighted-average exercise price (in dollars per share)	$ 0
Shares outstanding (in shares)	2,536,667	1,355,001
Shares outstanding, weighted-average exercise price (in dollars per share)	$ 0.60	$ 0.52
Shares exercisable (in shares)	2,103,334
Shares exercisable, weighted-average exercise price (in dollars per share)	$ 0.57
Shares exercisable, weighted-average remaining contractual term (Year)	5 years 10 months 20 days

XML

Note 7 - Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2022	Apr. 01, 2022	Jan. 31, 2022	Dec. 31, 2021
Operating Lease, Right-of-Use Asset	$ 84,023		$ 89,312	$ 0
Operating Lease, Weighted Average Discount Rate, Percent	10.00%
Operating Lease, Expense	$ 7,000
Lessee, Operating Lease, Liability, to be Paid, Total	88,207
Operating Lease, Liability, Total	$ 76,056		$ 89,312
Additional Commercial Operating Lease [Member] | Subsequent Event [Member]
Lessee, Operating Lease, Liability, to be Paid, Total		$ 423,000

XML

Note 7 - Commitments and Contingencies - Future Undiscounted Cash Flows (Details) - USD ($)	Mar. 31, 2022	Jan. 31, 2022	Dec. 31, 2021
2022	$ 19,240
2023	33,974
2024	34,993
Total	88,207
Discount factor	(12,151)
Lease liability	76,056	$ 89,312
Current lease liability	(20,826)		$ 0
Non-current lease liability	$ 55,230		$ 0

XML

Note 8 - Subsequent Events (Details Textual) - USD ($)				1 Months Ended
	May 15, 2022	Apr. 29, 2022	Apr. 22, 2022	May 11, 2022	Oct. 31, 2020
Stock Issued During Period, Shares, New Issues (in shares)					487,500
Proceeds from Issuance of Common Stock					$ 195,000
Subsequent Event [Member]
Proceeds from Issuance of Private Placement		$ 3,500,000		$ 3,550,000,000,000
Increase (Decrease) in Other Receivables				$ 64,000
Subsequent Event [Member] | Non-executive Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)			775,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)			10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			3 years
Subsequent Event [Member] | Non-executive Employees [Member] | Minimum [Member]
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)			$ 0.75
Subsequent Event [Member] | Non-executive Employees [Member] | Maximum [Member]
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)			$ 1.00
Private Placement [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues (in shares)		3,550,000
Proceeds from Issuance of Private Placement		$ 3,550,000
Stock Issuance Agreement, Number of Shares (in shares)		4,000,000
Securities Purchase Agreement [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues (in shares)	407,757
Proceeds from Issuance of Common Stock	$ 407,757