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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, 2025

☐	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 April 28, 2025, the number of shares outstanding of the registrant’s common stock, $0.0001 par value, was 46,819,888.

Table of Contents

NUO THERAPEUTICS, INC.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION

Item 1. Unaudited 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	18

Item 4. Controls and Procedures	19

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	20

Item 1A. Risk Factors	20

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	20

Item 3. Defaults Upon Senior Securities	20

Item 4. Mine Safety Disclosures	20

Item 5. Other Information	20

Item 6. Exhibits	21

Signatures	22

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

NUO THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2025			December 31, 2024
ASSETS
Current assets
Cash	$	55,655		$	283,714
Accounts receivable, net		276,532			248,205
Inventory, net		99,173			150,442
Prepaid expenses and other current assets		170,146			159,185
Total current assets		601,506			841,546

Property and equipment, net		391,559			177,022
Operating lease right of use assets		153,689			170,940
Total assets	$	1,146,754		$	1,189,508

LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities
Accounts payable	$	662,093		$	219,190
Accrued expenses		349,625			292,400
Deferred revenue		200,000			-
Current portion of operating lease liabilities		69,160			66,861
Total current liabilities		1,280,878			578,451

Non-current portion of operating lease liabilities		78,949			97,345
Total liabilities		1,359,827			675,796

Commitments and contingencies (Note 8)

Stockholders' equity/(deficit)
Common stock; $0.0001 par value, 100,000,000 shares authorized, 46,816,114 shares issued and outstanding at March 31, 2025 and December 31, 2024		4,682			4,682
Additional paid-in capital		32,788,319			32,768,976
Accumulated deficit		(33,006,074	)		(32,259,946	)
Total stockholders' equity/(deficit)		(213,073	)		513,712

Total liabilities and stockholders' equity/(deficit)	$	1,146,754		$	1,189,508

See accompanying notes to unaudited consolidated financial statements.

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NUO THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months ended March 31, 2025			Three Months ended March 31, 2024
Revenue
Product sales	$	484,381		$	234,577
Total revenue		484,381			234,577

Costs of sales		121,021			50,591
Gross profit		363,360			183,986

Operating expenses
Selling, general and administrative		1,108,507			893,232
Total operating expenses		1,108,507			893,232

Loss from operations		(745,147	)		(709,246	)

Other income (expense)
Interest income (expense), net		(1,595	)		465
Other income		614			-
Total other income (expenses)		(981	)		465

Net loss	$	(746,128	)	$	(708,781	)

Loss per common share
Basic and diluted	$	(0.02	)	$	(0.02	)

Weighted average common shares outstanding
Basic and diluted		46,816,114			44,241,516

See accompanying notes to unaudited consolidated financial statements.

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NUO THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT)

(Unaudited)

For the Three Months Ended March 31, 2025 and 2024

	Common Stock
	Shares		Amount (par $0.0001)		Additional Paid-In Capital		Accumulated Deficit			Stockholders' Equity/(Deficit)
Balance, January 1, 2025		46,816,114	$	4,682	$	32,768,976	$	(32,259,946	)	$	513,712
Stock compensation expense						19,343					19,343
Net loss		-		-		-		(746,128	)		(746,128	)
Balance, March 31, 2025		46,816,114	$	4,682	$	32,788,319	$	(33,006,074	)	$	(213,073	)

	Common Stock
	Shares		Amount (par $0.0001)		Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Equity
Balance, January 1, 2024		44,241,516	$	4,424	$	30,970,965	$	(29,936,241	)	$	1,039,148
Stock compensation expense						3,081					3,081
Net loss		-		-		-		(708,781	)		(708,781	)
Balance, March 31, 2024		44,241,516	$	4,424	$	30,974,046	$	(30,645,022	)	$	333,448

See accompanying notes to unaudited consolidated financial statements.

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NUO THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(746,128	)	$	(708,781	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		15,347			3,767
Stock-based compensation		19,343			3,081
Provision for credit losses		12,525			17,500
Provision for inventory obsolescence		9,119			-
Amortization of operating lease right of use assets		17,251			23,757
Changes in operating assets and liabilities:
Accounts receivable, net		(40,852	)		3,434
Inventory, net		42,150			(1,784	)
Prepaid expenses and other current assets		(10,961	)		756
Accounts payable		442,903			91,808
Accrued expenses		57,225			26,029
Deferred revenue		200,000			-
Operating lease liabilities		(16,097	)		(22,016	)
Net cash provided by (used in) operating activities		1,825			(562,449	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(229,884	)		-
Net cash used in investing activities		(229,884	)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activities		-			-

NET DECREASE IN CASH		(228,059	)		(562,449	)
Cash, beginning of period		283,714			928,681
Cash, end of period	$	55,655		$	366,232


SUPPLEMENTAL INFORMATION
Cash paid during the period for:
Interest expense	$	1,716		$	1,213

See accompanying notes to unaudited consolidated financial statements.

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NUO THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Description of Business

Description of Business

Nuo Therapeutics, Inc. is a Delaware corporation organized in 1998 under the name Informatix Holdings, Inc. In 1999, Autologous Wound Therapy, Inc., an Arkansas Corporation, merged with and into Informatix Holdings, Inc. and the name of the surviving corporation was changed to Autologous Wound Therapy, Inc. In 2000, Autologous Wound Therapy, Inc. changed its name to Cytomedix, Inc. (“Cytomedix”). In 2001, Cytomedix, filed for bankruptcy, from which it emerged in 2002 under a Plan of Reorganization. In September 2007, Cytomedix received Section 510(k) clearance from the U. S. Food and Drug Administration (“FDA”) for the AutoloGel™ System, now known as the Aurix System (“Aurix”), for processing peripheral blood into an autologous platelet rich plasma ("PRP") for wound management. In 2010, Cytomedix acquired the Angel Whole Blood Separation System from Sorin Group USA, Inc. In 2012, Cytomedix, acquired Aldagen, Inc. (“Aldagen”), a privately held developmental cell-therapy company. Aldagen remains a non-operational, wholly owned subsidiary of the Company.

In 2014, Cytomedix changed its name to Nuo Therapeutics, Inc. In 2016, Nuo filed for and emerged from bankruptcy under a Chapter 11 Plan of Reorganization. Effective May 1, 2019, Nuo furloughed its remaining employees and ceased standard operational activities as it awaited developments concerning its reconsideration request with the Centers for Medicare & Medicaid Services (“CMS”) regarding Medicare coverage for Aurix. In April 2021, CMS issued a favorable National Coverage Determination (“NCD”) for autologous PRP products and Nuo restarted business activities in October 2021. Nuo's principal offices are located in Houston, Texas.

Note 2 – Liquidity and Summary of Significant Accounting 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 mandating national reimbursement coverage for Aurix when used in chronic non-healing wounds where a clinical diagnosis of diabetes exists for the patient. During the year ended December 31, 2024, we sold 2,000,000 shares of common stock to certain accredited investors pursuant to Securities Purchase Agreements in two private placements which closed in May and September 2024 for total proceeds of $1,500,000.

We have incurred, and continue to incur, recurring losses. As of March 31, 2025, we have an accumulated deficit of approximately $33.0 million and cash of approximately $0.1 million. Subsequent to March 31, 2025, we received $1.3 million from Smith+Nephew representing the balance of the upfront distribution fee under the private label distribution agreement. See Note 4 – Distribution Agreement with Smith+Nephew for additional information.

The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due.

We believe based on the operating cash requirements and capital expenditures expected for the next twelve months that our current resources and projected revenue from sales of Aurix products are insufficient to support our operations for the next 12 months from the date these financial statements are issued. As such, we believe that substantial doubt about our ability to continue as a going concern exists. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Even assuming we succeed in raising sufficient additional funds in the near future, we require additional capital and will seek to continue financing our operations with external capital for the foreseeable future. Any equity financing may cause further substantial dilution to our stockholders and could involve the issuance of securities with rights senior to the common stock. Any debt financing may require us to comply with additional onerous financial covenants and restrict our business operations. Our ability to complete additional financings is dependent on, among other things, market reception of the Company and perceived likelihood of success of our business model, the state of the capital markets at the time of any proposed equity or debt offering, state of the credit markets at the time of any proposed loan financing, and on the relevant transaction terms, among other things. We may not be able to obtain additional capital as required to finance our efforts, through equity or debt financing, other transactions, or any combination thereof, on satisfactory terms or at all. Additionally, any such financing, if at all obtained, may not be adequate to meet our capital needs and to support our operations.

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Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The consolidated balance sheet at December 31, 2024, has been derived from our audited financial statements as of that date. The interim unaudited consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed 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, 2024.

The unaudited consolidated financial statements include the accounts of the Company and its wholly owned, controlled, and inactive subsidiary Aldagen, Inc. (“Aldagen”). All significant inter-company accounts and transactions are eliminated in consolidation. The Company operates its business in one operating segment consisting of one reporting unit.

Use of Estimates

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

Credit Concentration

We generate accounts receivable from the sale of our products. Specific customer receivable balances in excess of 10% of total receivables at March 31, 2025 and December 31, 2024 is listed below.

	March 31, 2025			December 31, 2024

Customer A		16	%		*
Customer B		15	%		*
Customer C		10	%		14	%
Customer D		*			16	%
Customer E		*			11	%

* less than 10%

Revenue from significant customers exceeding 10% of total revenues for the three months ended March 31, 2025 and March 31, 2024 is listed below. All our revenue for both periods was generated within the U.S.

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024

Customer A		18	%		*
Customer B		18	%		-
Customer E		15	%		-
Customer C		*			14	%
Customer F		*			14	%

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

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Cash

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

Accounts Receivable, net

We generate accounts receivable from the sale of the Aurix products and accounts receivable as of March 31, 2025 and December 31, 2024 reflect customer receivables from commercial sales activities.

We provide for an allowance against receivables for estimated losses that may result from a customer’s inability or unwillingness to pay. We estimate credit losses expected over the life of our trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. Accounts are written off against the allowance for credit losses when we determine that amounts are not collectable. Recoveries of previously written-off accounts are recorded when collected. For the three month periods ending March 31, 2025 and 2024, we recorded provisions for credit losses of $12,525 and $17,500, respectively. As of March 31, 2025 and December 31, 2024, the allowance for credit losses was approximately $40,000 and $25,000, respectively.

Inventory, net

Our inventory is produced by third-party manufacturers and consists of raw materials and finished goods. Inventory cost is determined on a first-in, first-out basis and is stated at the lower of cost or net realizable value. We maintain an inventory of kits, reagents, and other disposables having shelf-lives that generally range from 12 months to two years.

As of March 31, 2025, our inventory consisted of approximately $70,000 of finished goods inventory and approximately $29,000 of raw materials acquired to facilitate the manufacturing of finished goods at our contract manufacturer and our warehouse/distribution facility. As of December 31, 2024, our inventory consisted of approximately $89,000 of finished goods inventory and approximately $61,000 of raw materials.

We provide for an allowance against inventory for estimated losses that may result in excess and obsolete inventory (i.e., from the expiration of products). Our allowance for expired inventory is estimated based upon the inventory’s remaining shelf-life and our anticipated ability to sell such inventory, which is estimated using past experience and future forecasts, within its remaining shelf life. Expired products are segregated and used for demonstration purposes only; we record the associated expense for this reserve to cost of sales in the consolidated statements of operations. For the three months ended we recorded a provision for inventory obsolescence of $9,119 and maintained a reserve for inventory obsolescence as of March 31, 2025 of $12,500. As of December 31, 2024, the reserve for inventory obsolescence was $18,675.

Property and Equipment, net

Property and equipment is stated at cost less accumulated depreciation. Assets are depreciated, using the straight-line method, over their estimated useful life ranging from one to six years. Maintenance and repairs are charged to operations as incurred.

Leases

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

We have made certain accounting policy elections whereby we (i) do not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combine lease and non-lease elements of any operating leases.

Revenue Recognition

We analyze our revenue arrangements to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers; (ii) identification of distinct performance obligations in the contract; (iii) determination of contract transaction price; (iv) allocation of contract transaction price to the performance obligations; and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation. We recognize revenues upon the satisfaction of the performance obligations (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. In certain instances where the revenue is variable and we cannot estimate the amount of consideration to which we expect to be entitled, we are constrained from initially recognizing revenue. In these cases, once the estimate is no longer constrained, we recognize revenue in the amount of consideration to which we expect to be entitled. The Smith+Nephew upfront distribution fee will be recognized ratably as revenue on a straight-line basis over the initial 5-year term of the Distribution Agreement.

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. Direct costs associated with product sales are recorded at the time that revenue is recognized.

Stock-Based Compensation

The fair value of employee stock options is measured at the date of grant. Expected volatilities for options are based on the equally weighted average historical volatility from comparable public companies with an expected term consistent with ours. Expected years until exercise represents the period of time that options are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. We assume that the dividend rate on our common stock will be zero. For the options granted during the three months ended March 31, 2025, we used a risk-free rate of 4.06%, an expected term of 5.5 years, and an expected stock volatility of 75%. There were no options granted during the three months ended March 31, 2024. We have elected to recognize forfeitures of stock-based awards as they occur.

Income Taxes

We account for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. Tax rate changes are reflected in income during the period such changes are enacted. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid. We expect that recent tax law changes contained in the Inflation Reduction Act and CHIPS Act will not have a material impact on the provision for income taxes.

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

Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. There were no such items in the three months ended March 31, 2025 and 2024.

Fair Value Measurements

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

●	Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;
●	Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
●	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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

Basic and Diluted Loss per Share

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

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

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All of our potential dilutive securities are considered anti-dilutive for the three months ended March 31, 2025 and 2024. 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, 2025		Three months ended March 31, 2024

Shares underlying:
Common stock options		3,334,958		3,189,167
Stock purchase warrants		-		450,000
Financing participation right and contingent warrant		-		500,000
Performance shares		300,000		300,000
		3,634,958		4,439,167

Segment Information

Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) for which discrete financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive and Financial Officer. The Company views its operations and manages its business as a single operating and reporting segment. All the Company’s long-lived assets are in the United States.

Recent Accounting Developments

In December 2023, the FASB issued final guidance in ASU No. 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures requiring entities to provide additional information in the rate reconciliation and disclosures about income taxes paid. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. We are currently evaluating the effect of the adoption of this guidance.

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

Note 3 – Property and Equipment

Property and equipment, net consisted of the following:

	March 31, 2025			December 31, 2024

Medical equipment	$	758,527		$	538,527
Office/warehouse equipment		48,019			48,019
Warehouse/production equipment		33,200			23,317
		839,746			609,863
Less accumulated depreciation		(448,187	)		(432,841	)
Property and equipment, net	$	391,559		$	177,022

Depreciation expense was $15,347 (of which $11,210 was charged to cost of goods sold) and $3,767 for the three months ended March 31, 2025 and 2024, respectively. None of our long-lived assets were deemed to be impaired during the three months ended March 31, 2025 and 2024.

Note 4 – Distribution Agreement with Smith+Nephew

On March 31, 2025, we entered into a Distribution Agreement (the “Distribution Agreement”) with Smith & Nephew, Inc (“Smith+Nephew”), a U.S. subsidiary of Smith & Nephew PLC, a global medical technology company. Under the Distribution Agreement, we will supply to Smith+Nephew its own private label of our Aurix product. Although Smith+Nephew will be the sole and exclusive distributor in the United States of a private label Aurix product (the “Private Label product”), we have the ability and will continue to market, distribute, and sell our own brand Aurix product.

Under the Distribution Agreement, Smith+Nephew will purchase Private Label product from us, from time to time at agreed upon transfer pricing and we will manufacture, package, and ship the Private Label product to Smith+Nephew’s customers in accordance with purchase orders and the Distribution Agreement. During the Initial Term of the Distribution Agreement commencing on the First Date of Sale by Smith+Nephew, minimum annual purchase commitments will apply to Smith+Nephew of an average of approximately $500,000 per year for Smith+Nephew to maintain exclusive distribution rights.

As consideration for entering into the Distribution Agreement, we have received an upfront fee of $1.5 million from Smith+Nephew and we are eligible for an additional $750,000 in milestone fees based on our establishment and maintenance of reimbursement in certain categories for the Aurix and the Private Label products. Such fees will be refundable to Smith+Nephew on a pro rata basis for the unexpired initial term of the Distribution Agreement if we do not comply with certain terms and conditions. In February 2025, we received $200,000 of the upfront distribution fee as an exclusivity payment which is reflected as deferred revenue as of March 31, 2025.

The Distribution Agreement is for an initial term of five years and is renewable for additional two-year terms subject to earlier termination in accordance with the terms and conditions of the agreement. Although the Distribution Agreement is exclusive to Smith+Nephew in the United States, we are entitled to maintain our existing distributors and sales agents for the Aurix product. The Distribution Agreement also contains other standard and negotiated terms and conditions including non-solicitation of each parties’ customers based on identified customer lists, and liability and indemnity clauses.

In connection with entering into the Distribution Agreement, Smith+Nephew obtained certain additional information rights related to Nuo’s business and corporate matters. In particular, we provided Smith+Nephew a right of notification and a right of first negotiation over a defined period, in the event we receive from another party a proposal for (a) the license, assignment, transfer, or disposal of our Aurix product or related products, or (b) a business combination that we submit or recommend to our stockholders. These rights continue for a limited period of the initial term of the Distribution Agreement.

Note 5 – Stock Purchase Warrants

The following schedule reflects outstanding stock purchase warrants as of March 31, 2025 and December 31, 2024:

Description	March 31, 2025		March 31, 2024

2022 Sales incentive warrants	450,000			450,000
2024 Financing Participation warrant	-			500,000
Total		450,000		950,000

During the year ended December 31, 2022, we issued two warrants to purchase (i) 250,000 shares of common stock at an exercise price of $1.00 per share and expiring December 31, 2027 and (ii) 200,000 shares of common stock at an exercise price of $1.50 per share and expiring December 31, 2028 to a distribution partner under an agreement whereby the warrants were exercisable subject to the distributor attaining certain performance goals based upon exceeding sales quota revenues for calendar years 2023 through potentially 2025. According to the warrants' vesting provisions, they will not be exercisable throughout the remainder of their term. The warrants are equity classified. Additionally, we agreed to issue certain additional warrants to acquire up to 500,000 shares of common stock to the same distribution partner where the issuance of the warrant was contingent upon future financing events. This warrant was issued as of January 1, 2024 and exercised in its entirety by the holder during the year ended December 31, 2024. See Note 6 – Equity and Stock Based Compensation for further information.

Note 6 – Equity and Stock-Based Compensation

Under the Second Amended and Restated Certificate of Incorporation, we have the authority to issue a total of 101,000,000 shares of capital stock, consisting of 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.

Pacific Medical Common Stock and Warrant Purchase Agreement

On August 24, 2022, we entered into a Common Stock and Warrant Purchase Agreement (the “Agreement”) with Pacific Medical, Inc. (“Pacific Med”) for the sale and issuance of shares of common stock and warrants to purchase shares of common stock. Pacific Med is the exclusive distributor for the Aurix products within a territory that covers the states of Washington, Oregon, Idaho, Montana, Wyoming, most of California, the northern half of Nevada, plus Alaska.

Pursuant to the Agreement, Pacific Med purchased 500,000 shares of common stock for $500,000. As part of the purchase of common stock, we agreed to grant to Pacific Med the right to participate in any future financing by Nuo through December 31, 2023 (the “Participation Rights”) in connection with a listing of our common stock on a national securities exchange. The Participation Rights entitled Pacific Med to purchase up to 500,000 shares of common stock upon substantially the same terms, conditions, and price provided for in such financing. If such a financing did not occur by December 31, 2023, we agreed to issue Pacific Med a warrant with a January 1, 2024 issuance date and exercisable until June 30, 2024, to purchase up to 500,000 shares of common stock at a price equal to the lower of $2.00 per share or the 20-day volume weighted average closing price per share ending December 31, 2023 (the “2024 Financing Participation warrant”). We issued the 2024 Financing Participation warrant to Pacific Med on January 1, 2024 with an exercise price of $0.56 per share. Pacific Med exercised (i) 270,000 of the warrants for cash proceeds of $151,200 and (ii) the remaining 230,000 warrants cashlessly in exchange for the issuance of 86,889 shares of common stock during the year ended December 31, 2024. The common stock and Participation Rights are equity classified.

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As part of the Agreement and as additional incentive compensation with respect to Pacific Med’s performance under the sales and distribution arrangement, we also provided to Pacific Med two compensatory performance-based stock purchase warrants and certain contingently issuable performance shares. The first warrant entitled Pacific Med to purchase up to 250,000 shares of common stock at a price of $1.00 per share upon Pacific Med attaining certain performance goals based upon exceeding sales quota revenue for calendar years 2023 and/or 2024. The second warrant entitles Pacific Med to purchase up to 200,000 shares of Common Stock at a price of $1.50 per share upon Pacific Med attaining certain performance goals based upon exceeding sales quota revenue for calendar years 2024 and/or 2025. The warrants will expire December 31, 2027 and December 31, 2028, respectively. However, the performance goals providing for exercisability of the warrants were not achieved and the warrants will not be exercisable throughout the remainder of their term. We also agreed to issue up to 300,000 shares of common stock to Pacific Med subject to and upon the achievement of certain milestones set forth in the Agreement based upon sales of our products over defined 12-month periods of between $4.5 million by June 30, 2024 through at least $12.5 million in calendar year 2025 (the Performance Shares”). The fair value of the Performance Shares at the date of issuance was approximately $615,000 based on the closing stock price on the closing of the Agreement. As the issuance of the shares is not considered probable as of March 31, 2025, there was no expense recognition for the three months ended March 31, 2025. When issuance is determined to be probable, the issuance date fair value of the shares through such date will be recognized with the balance of the fair value recognized ratably over the remaining period of performance.

Stock-Based Compensation

In July 2016, the Board of Directors approved the 2016 Omnibus Incentive Plan (the “Plan”), and in November 2016, holders of a majority of our capital stock approved the Plan, as amended and restated, which provides for the grant of equity and cash incentive awards to officers, directors and employees of, and consultants to, Nuo Therapeutics and its subsidiaries. Further, in March 2022, the Board approved an amendment to the Plan to increase the shares available to 4,250,000 and remove an annual evergreen provision, which was approved by the holders of a majority of our outstanding common stock and which became effective in June 2022.

A summary of stock option activity under the Plan during the three months ended March 31, 2025 is presented below:

Stock Options – 2016 Omnibus Plan	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at January 1, 2025		3,258,958	$	0.61		5.30
Granted		76,000		1.19		10.0
Exercised		-		-		-
Forfeited or expired		-		-		-
Outstanding at March 31, 2025		3,334,958	$	0.62		5.17
Exercisable at March 31, 2025		2,805,375	$	0.65		4.38

There were 76,000 stock options granted to an employee and a third-party consultant during the three months ended March 31, 2025. The fair value of the options to vest over three years was approximately $59,800. The aggregate intrinsic value for outstanding and exercisable options as of March 31, 2025 was approximately $1,927,000 and $1,552,000 respectively. There were no options granted during the three months ended March 31, 2024.

For the three months ended March 31, 2025 and 2024, we recorded stock-based compensation expense of $19,343 and $3,081, respectively. As of March 31, 2025, there was approximately $143,700 of unrecognized compensation cost related to the non-vested stock options which is expected to be recognized prior to year-end 2028.

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Note 7 – Segment Information

We manage our business activities on a consolidated basis and operate as a single operating segment dedicated to developing and marketing products for chronic wound care that harness the regenerative capacity of the human body to trigger natural healing. We derive our revenue from product sales of the Aurix product line. The accounting policies of the segment are the same as those described in Note 2 – Liquidity and Summary of Significant Accounting Policies.

Our CODM is Nuo's Chief Executive and Financial Officer, David E. Jorden. The CODM uses net loss, as reported in our consolidated statements of operations, in evaluating the performance of the segment and determining how to allocate our resources of as a whole. The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented.

The following table presents the operating results of the segment:

	Three Months Ended March 31,			Three Months Ended March 31,
	2025			2024
Total revenues	$	484,381		$	234,577
Less significant segment expenses:
Cost of sales (excluding provision for inventory obsolescence and applicable depreciation expense)		100,692			50,591
Total compensation and benefit costs (including third party commission expense)		562,907			483,992
Provisions for credit losses and inventory obsolescence		21,644			17,500
All other operating expenses (excluding depreciation and credit loss provision)^(a)		492,344			361,135
Other segment items:
Depreciation, amortization of right of use assets, and stock-based compensation		51,941			30,605
Interest expense (income), net		1,595			(465	)
Other expense (income), net		(614	)		-
Consolidated net loss	$	(746,128	)	$	(708,781	)

(a) All other operating expenses included in consolidated net loss includes professional fees, lease expenses, insurance costs, travel and entertainment expenses, and all other selling, general and administrative expenses.

Note 8 – Commitments and Contingencies

Lease Agreements

In January 2022, we entered into a commercial operating lease agreement for office space in Florida, expiring on December 31, 2024. The lease required us to pay for insurance, taxes, and our share of common operating expenses. The lease resulted in an increase in right of use assets and lease liabilities of $89,312, using a discount rate of 10%. Effective March 24, 2024, Nuo and the landlord agreed to terminate the lease effective immediately. We incurred no costs related to the lease termination and the remaining right of use asset and operating lease liability were written off with the resulting immaterial difference recorded as a gain in other income.

In February 2022, we entered into an additional commercial operating lease for our primary office and warehouse/distribution space in Texas. The lease requires us to pay for insurance, taxes, and our share of common operating expenses. This lease expires in March 2027. This lease is classified as an operating lease and we established a right of use asset and lease liability using a 10% discount rate.

Total operating lease costs were approximately $29,000 and $36,500 for the three months ended March 31, 2025 and 2024, respectively, consisting solely of base rental and common area maintenance costs. We have no financing leases.

Future undiscounted cash flows under this lease are:

2025		60,205
2026		82,705
2027		21,284
Total operating lease payments		164,194

Discount factor		(16,085	)
Present value of operating lease liabilities		148,109
Current portion of operating lease liabilities		(69,160	)
Non-current portion of operating lease liabilities	$	78,949

Note 9 – Subsequent Events

The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued. No material events requiring disclosure were identified.

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

The following discussion and analysis of the financial condition and results of operations of Nuo Therapeutics, Inc. ("Nuo," the "Company," "we," "us," or "our") should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”), filed with the U.S. Securities and Exchange Commission (the "SEC") on April 1, 2025.

The Company owns or has rights to various copyrights, trademarks and trade names used in its business, including, but not limited to, Aurix®. This Quarterly Report also includes discussions of or references to other trademarks, service marks, and trade names of other companies, including, but not limited to, the Angel Whole Blood Separation System®. Other trademarks and trade names appearing in this Quarterly Report are the property of the holder of such trademarks and trade names.

Special Note Regarding Forward Looking Statements

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

	●	our limited revenue base and sources of working capital;
	●	our limited operating experience;
	●	our ability to continue as a going concern
	●	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 perform under and realize sales and related benefits from our distribution agreement with Smith+Nephew as well as its ability to market and sell its private label Aurix product;
	●	the fees, minimum purchase commitments, and expenses and costs associated with our distribution agreement with Smith+Nephew;
	●	the impact of and our ability to undertake any license of our Aurix product, or receive and negotiate a business combination offer, due to the binding notification and negotiation rights we have provided to Smith+Nephew; and
	●	our ability to successfully pursue strategic collaborations to help develop, support, or commercialize our current and future products.

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

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

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

Our Business and Product

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

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

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

In 2012, a Medicare National Coverage Determination (“NCD”) from CMS reversed a twenty-year old non-coverage decision for autologous blood derived products used in wound care. This NCD allowed for Medicare coverage under the Coverage with Evidence Development (“CED”) program. CED programs have been employed for a selected 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 was to evaluate the outcomes of Aurix therapy for the broader Medicare population when it is used in a “real world” continuum of care.

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

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

Although FDA cleared the Aurix System for marketing for wound care management in 2007 under Section 510(k) of the FDCA, CMS only established economically viable reimbursement for the product beginning in 2016. For 2025, the CMS national average reimbursement rate for the Aurix System is $1,829 per treatment in place of service ("POS") 22 (hospital outpatient departments), which we believe provides appropriate payment to facilities for product usage. The Company also submitted public comments to CMS as part of its annual rule-making procedures under the Physician Fee Schedule ("PFS") for payments to clinicians in primarily POS 11 (physician offices). In November 2024, CMS issued its final PFS for calendar 2025 and established a national average payment of $890. In response to this final rule which removed the payment amount discretion from the MACs within POS 11, the Aurix System became economically viable within the physician office care setting effective January 1, 2025.

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Our Strategy and Market

Our current commercial focus is to continue engaging and establishing relationships with providers treating chronic non-healing wounds to demonstrate the clinical benefits we believe result from the use of Aurix in the treatment of complex wounds. Increasing physician awareness of the differentiating attributes of Aurix will be key to establishing a base of product revenues upon which to grow. We anticipate developing these relationships with clinical providers and treatment facilities primarily by establishing a variety of distributor and sales agent arrangements throughout the United States and internationally. Our commercial team consists of five senior employees who are leveraging their current and historical relationships to establish additional third-party sales arrangements.

Following the restart of our business activities in October 2021, commercially available Aurix product was first available in May 2022 for demonstration and evaluation purposes. Through a growing sales agent network, Aurix is presently being evaluated by various hospital Value Analysis Committees (VACs) as part of the process of approving its clinical use. While limited initial commercial revenues were recorded during the second half of 2022, revenues increased to approximately $609,000 in 2023 and further increased to approximately $1,365,000 in 2024, and we expect revenues will continue growing in the future.

As of March 31, 2025, we had established contractual relationships with more than 200 third-party entity and individual representatives including a multi-state agreement with Pacific Medical, Inc. covering multiple large markets in the western United States. The number of sales agent representatives may continue to expand modestly in the months ahead, but the current focus is establishing commercial customer relationships with wound care providers in primarily hospital outpatient wound care clinics and ensuring that the reimbursement mechanisms are appropriately administered by the local Medicare Administrative Contractors in support of the April 2021 NCD.

Distribution Agreement with Smith+Nephew

On March 31, 2025, we entered into a Distribution Agreement (the “Distribution Agreement”) with a U.S. affiliate of Smith & Nephew PLC (“Smith+Nephew”), a global medical technology company. Under the Distribution Agreement, we will supply to Smith+Nephew its own private label of our Aurix product. Although Smith+Nephew will be the sole and exclusive distributor in the United States of a private label Aurix product (the “Private Label product”), we have the ability and will continue to market, distribute, and sell our own Aurix branded product.

Under the Distribution Agreement, Smith+Nephew will purchase Private Label product from us from time to time at agreed upon transfer pricing and we shall manufacture, package, and ship the Private Label product to Smith+Nephew’s customers in accordance with purchase orders and the Distribution Agreement. During the initial term of the Distribution Agreement commencing on the date of first sale by Smith+Nephew, minimum annual purchase commitments will apply to Smith+Nephew of an average of approximately $500,000 per year for Smith+Nephew to maintain exclusive distribution rights.

As consideration for entering into the Distribution Agreement, Smith+Nephew paid us an upfront distribution fee of $1,500,000 for distribution rights and we are also eligible to be paid by Smith+Nephew an additional $750,000 in fees based on our establishment and maintenance of reimbursement in certain categories for the Aurix and the Private Label products. These fees will be refundable to Smith+Nephew on a pro rata basis for the unexpired initial term of the Distribution Agreement if we do not comply with certain terms and conditions.

The Distribution Agreement is for an initial term of five years and is renewable for additional two-year terms subject to earlier termination in accordance with the terms and conditions of the agreement. Although the Distribution Agreement is exclusive to Smith+Nephew in the United States, we are entitled to maintain our existing distributors and increase our sales agent network for the Aurix product. The Distribution Agreement also contains other standard and negotiated terms and conditions including non-solicitation of each party’s customers based on identified customer lists, and liability and indemnity clauses.

We believe that Smith+Nephew will need time to establish and begin commercial sales of its Private Label product. As a result, we anticipate limited sales under the Distribution Agreement during the next 12 months. While the Distribution Agreement will provide us with revenues, we also will incur expenses at the outset of the Distribution Agreement to enable us to comply with its provisions as well as packaging, shipping, and related costs associated with delivering the Private Label product for Smith+Nephew. The amount of these expenses and costs will vary depending on the amount of purchase orders that we receive from Smith+Nephew.

The description above of the Distribution Agreement is qualified by reference to the full text of such agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report and incorporated herein.

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.

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Chronic Wounds

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

Aurix Therapy

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

The Efficacy of Aurix Relates to Biological Activity Released by Platelets

Regenerative Capacity

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

Anti-infective Activity

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

Clinical Efficacy

Multiple efficacy and effectiveness studies have been published in peer reviewed journals documenting the impact of using Aurix to treat chronic wounds, available as part of the reconsideration review by CMS in establishing the NCD, including the following:

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

	●	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.)

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Results of Operations

Comparison of Three Months Ended March 31, 2025 and 2024

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

Revenue and Gross Profit

Product revenues for the three months ended March 31, 2025 totaled approximately $484,000 in comparison to product revenues of approximately $235,000 in the three months ended March 31, 2024 representing an increase of approximately $249,000. Associated gross profit was approximately $363,000 in the three months ended March 31, 2025 in comparison to approximately $184,000 of gross profit in the three months ended March 31, 2024. The increase in revenues and gross profit was due to an expanding customer base over the past year as hospital wound care facilities and providers become incrementally aware of the Aurix product and the 2021 Medicare NCD.

Operating Expenses

Total operating expenses increased approximately $215,000 to approximately $1,109,000 comparing the three months ended March 31, 2025 to the three months ended March 31, 2024. The increase from the prior year was due primarily to increases in (i) professional fees of approximately $123,000 due largely to increased legal fees associated with the negotiation and finalization of the distribution agreement with Smith+Nephew and (ii) third party commission expense of approximately $67,000 for independent sales representatives and distributors resulting from increased Aurix product revenues.

Other Income (Expense)

Interest income (expense), net for the three months ended March 31, 2025 represents interest expense associated with the financing of insurance premiums in excess of nominal interest income on reduced cash balances while other income for the period March 31, 2025 was nominal.

Liquidity and Capital Resources

Overview

As of March 31, 2025, we had cash balances of approximately $0.1 million, total current assets of approximately $0.6 million and total current liabilities of approximately $1.3 million. As an operational business, we have a history of losses and are not currently profitable. For the years ended December 31, 2024, and 2023, we incurred net losses of approximately $2.3 million and $3.2 million, respectively. As of March 31, 2025, our accumulated deficit was approximately $33.0 million and our stockholders’ deficit was approximately $0.2 million.

Effective January 1, 2024, pursuant to the provisions of the August 2022 Common Stock and Warrant Purchase Agreement with Pacific Medical, Inc. ("Pacific Med"), we issued to Pacific Med a warrant to purchase up to 500,000 shares of common stock at a price equal to $0.56, the 20-day volume weighted average closing price per share of our common stock ending December 31, 2023. A portion of the warrant was exercised on June 27, 2024 and we received proceeds of $151,200.

During the year ended December 31, 2024, we sold 2,000,000 shares of common stock to certain accredited investors pursuant to Securities Purchase Agreements in two private placements which closed in May and September 2024 for total proceeds of $1,500,000.

Subsequent to March 31, 2025, we received $1.3 million from Smith+Nephew representing the balance of the upfront distribution fee under the Distribution Agreement.

Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise additional funds in order to continue to conduct our business. If we are unable to secure sufficient capital to fund our operating activities, we may be forced to delay further the completion of, or significantly reduce the scope of, our current business plan. It is uncertain whether we will be able to obtain such financing on satisfactory terms or at all. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We may not be able to obtain additional capital as required to finance our efforts, through equity or debt financing or any combination thereof, on satisfactory terms or at all. Additionally, any such financing, if obtained, may not be adequate to meet our capital needs and to support our operations.

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We maintain our cash deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). We have not experienced any losses related to amounts in excess of FDIC limits.

Cash Flows

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

	Three months ended March 31, 2025			Three months ended March 31, 2024
Cash flows provided by/(used in) operating activities	$	1,825		$	(562,449	)
Cash flows used in investing activities	$	(229,884	)	$	-
Cash flow provided by financing activities	$	-		$	-

Operating Activities

Cash provided by operating activities for the three months ended March 31, 2025 of approximately $2,000 primarily reflects our net loss of approximately $746,000 adjusted by (i) approximately $474,000 net change in operating assets and liabilities (excluding deferred revenue), (ii) approximately $52,000 in total for amortization of right of use assets, depreciation of property and equipment, and stock-based compensation, and (iii) $200,000 in deferred revenue. The deferred revenue is due to the receipt in February 2025 of a $200,000 exclusivity payment from Smith+Nephew in conjunction with the private label distribution agreement which was executed as of March 31, 2025.

Cash used in operating activities for the three months ended March 31, 2024 of approximately $562,000 primarily reflects our net loss of approximately $708,000 adjusted by (i) approximately $98,000 net change in operating assets and liabilities, (ii) approximately $31,000 in total for amortization of right of use assets, depreciation of property and equipment, and stock-based compensation, and (iii) a provision for credit losses of $17,500.

Investing Activities

Cash used in investing activities for the three months ended March 31, 2025 primarily represents $220,000 in expenditures for the purchase of centrifuge devices.

We had no investing activities for the three months ended March 31, 2024.

Financing Activities

We did not have any financing activities for the three months ended March 31, 2025 and 2024.

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 unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report are prepared in conformity with U.S. GAAP, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying notes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the unaudited condensed consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report. There were no accounting policies identified as critical. There have been no material changes to our critical accounting policies or estimates since December 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our management, including our Chief Executive and Financial Officer, who is our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report, we concluded that, as of such date, our disclosure controls and procedures were not effective due to the existence of the material weaknesses previously disclosed in our Annual Report as described below under “Material Weaknesses” and “Remediation Plan.”

Notwithstanding the conclusion that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report were not effective, management believes that the consolidated financial statements and related financial information included in this Quarterly Report fairly present in all material respects our financial condition, results of operations and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with GAAP.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our Annual Report and the consolidated financial statements and related disclosures therein, management identified the following material weaknesses.

Beginning in mid-2019, we ceased ongoing operational activities and terminated all our financial accounting and reporting resources as we worked to reach a favorable outcome to Medicare reimbursement coverage for the Aurix System. When we re-started commercial operations in 2022 and as disclosed since our Annual Report for the year ended December 31, 2021, the Company had not hired and did not maintain a sufficient complement of accounting and financial reporting resources. The lack of sufficient accounting and financial reporting resources also prevented the Company from maintaining appropriately designed, and monitoring the effectiveness of, internal control over financial reporting.

Remediation Plan

Beginning in 2022, the Company engaged outside consultants to assist with various accounting and financial reporting matters and will continue assessing the need for hiring additional internal accounting and third-party financial reporting resources. As additional financial resources are obtained and we increase our operating activity, management, under the oversight of the Audit Committee of the Board of Directors, will continue to implement measures designed to improve our internal control over financial reporting to remediate the identified material weaknesses, namely, to identify and engage, through internal hiring and the use of external third parties, a sufficient complement of accounting and financial reporting resources and to periodically assess the design and operating effectiveness of our internal controls.

While we believe that these efforts will improve our internal control over financial reporting, the implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We cannot assure you that the measures we have taken to date, or that we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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, 2024.

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.

During the quarter ended March 31, 2025, none of our directors or executive officers adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as such terms are defined under Item 408 of Regulation S-K.

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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		Distribution Agreement between Smith & Nephew, Inc. and Nuo Therapeutics, Inc. dated March 31, 2025 (previously filed on April 1, 2025 as Exhibit 10.1 to the registrant’s Annual Report on Form 10-K and incorporated by reference herein).#

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, 2025, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Balance Sheets at March 31, 2025 and December 31, 2024, (ii) Consolidated Statements of Operations for the three month periods ended March 31, 2025 and 2024, (iii) Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three month periods ended March 31, 2025 and 2024, (iv) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2025 and 2024 and (v) Notes to the Unaudited Condensed Consolidated Financial Statements.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

# Certain portions have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K by means of marking such portions with brackets (“[****]”) because the identified confidential portions are not material and are the type of information that the registrant treats as private or confidential.

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SIGNATURES

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

		NUO THERAPEUTICS, INC.

Date: April 30, 2025
	By:	/s/ David E. Jorden
		David E. Jorden Chief Executive and Financial Officer
		(Principal Executive and Financial Officer)

Nuo Therapeutics, Inc. 10-Q