Nuo Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
AURXStored price and day change unavailable
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001437749-24-017125
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001437749-24-025952
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 72 current paragraphs.
51 unchanged; 12 reworded; 5 added; 2 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Comparison of Six Months Ended June 30, 2024 and 2023
Current report
Revenue and Gross Profit
Current report
Operating Expenses
Current report
Other Income (Expense)
Current report
During the six months ended June 30, 2024, we sold 867,833 shares of common stock to certain accredited investors pursuant to a Securities Purchase Agreement in a private placement which closed in May 2024 for total proceeds of $650,875. Additionally, during the six months ended June 30, 2024, we received proceeds of $151,200 from the exercise of warrants by Pacific Med.
Removed paragraphs (2)
Previous report
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.
Previous report
Additionally, 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 the lower of $2.00 per share or $0.56, the 20-day volume weighted average closing price per share of our common stock ending December 31, 2023. The warrant is exercisable until June 30, 2024.
Reworded paragraphs (12)
Previous wording
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 in conjunction with the CED program and its requirements and limitations. For 2024, the Medicare national average reimbursement rate for the Aurix System is $1,739 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 in the hospital outpatient setting.
Current wording
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 in conjunction with the CED program and its requirements and limitations. For 2024, the Medicare national average reimbursement rate for the Aurix System is $1,739 per treatment, which we believe provides adequate payment to facilities for product usage. Under the proposed rule for Hospital Outpatient Prospective Payment System (OPPS) released in July 2024, the national average reimbursement rate will increase to $1,822 per treatment effective January 1, 2025. We market the Aurix System at an approximate cost of $800 per treatment to wound care providers in the hospital outpatient setting.
Previous wording
Commercially available Aurix product was first available in late May 2022 for demonstration and evaluation purposes. Through a growing distributor network, Aurix is presently being evaluated by various hospital/facility Value Analysis Committees (VACs) as part of the process of approving its clinical use. While limited commercial revenues were recorded during the second half of 2022 and revenues increased to approximately $610,000 in 2023, we reasonably expect revenues to exhibit continued growth in future periods.
Current wording
Commercially available Aurix product was first available in late May 2022 for demonstration and evaluation purposes. Through a growing distributor network, Aurix is presently being evaluated by various hospital/facility Value Analysis Committees (VACs) as part of the process of approving its clinical use. While limited commercial revenues were recorded during the second half of 2022 and revenues increased to approximately $610,000 in 2023 and approximately $599,000 for the six months ended June 30, 2024, we reasonably expect revenues to exhibit continued growth in future periods.
Previous wording
Product revenues for the three months ended March 31, 2024 totaled approximately $235,000 in comparison to product revenues of approximately $61,000 in the three months ended March 31, 2023. Associated gross profit was approximately $184,000 in the three months ended March 31, 2024 in comparison to approximately $51,000 of gross profit in the three months ended March 31, 2023. 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.
Current wording
Product revenues for the three months ended June 30, 2024 totaled approximately $365,000 in comparison to product revenues of approximately $118,000 in the three months ended June 30, 2023. Associated gross profit was approximately $299,000 in the three months ended June 30, 2024 in comparison to approximately $98,000 of gross profit in the three months ended June 30, 2023. 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.
Previous wording
Total operating expenses decreased approximately $13,000 to approximately $893,000 comparing the three months ended March 31, 2024 to the three months ended March 31, 2023. The decrease from the prior year was due primarily to a decrease in compensation and benefits expense of approximately $88,000 which was partially offset by increases in (i) external consulting and professional fees of approximately $33,000, (ii) sales infrastructure costs including distributor commissions of approximately $24,000 and (iii) a provision for credit losses of $17,500.
Current wording
Total operating expenses decreased approximately $128,000 to approximately $841,000 comparing the three months ended June 30, 2024 to the three months ended June 30, 2023. The decrease from the prior year was due primarily to a decrease in (i) compensation and benefits expense of approximately $101,000 and (ii) external consulting and professional fees of approximately $73,000 which was partially offset by an increase in sales infrastructure costs including distributor commissions of approximately $48,000.
Previous wording
Other income net for the three months ended March 31, 2024 represents interest income on cash balances in excess of interest expense associated with the financing of insurance premiums while other expense, net for the period March 31, 2023 primarily represents the same interest expense type charges in excess of nominal interest income.
Current wording
Other income net for the three months ended June 30, 2024 represents interest income on cash balances in excess of interest expense associated with the financing of insurance premiums and a nominal other income gain. Other expense, net for the three months ending June 30, 2023 primarily represents the same interest expense type charges in excess of nominal interest income.
Previous wording
As of March 31, 2024, we had cash, cash equivalents, and restricted cash of approximately $0.4 million, total current assets of approximately $1.0 million and total current liabilities of approximately $0.8 million. As an operational business, we have a history of losses and are not currently profitable. For the years ended December 31, 2023, and 2022, we incurred net losses of approximately $3.2 million in each year. As of March 31, 2024, our accumulated deficit was approximately $30.6 million and our stockholders’ equity was approximately $0.3 million.
Current wording
As of June 30, 2024, we had cash, cash equivalents, and restricted cash of approximately $0.5 million, total current assets of approximately $1.2 million and total current liabilities of approximately $0.7 million. As an operational business, we have a history of losses and are not currently profitable. For the years ended December 31, 2023, and 2022, we incurred net losses of approximately $3.2 million in each year. As of June 30, 2024, our accumulated deficit was approximately $31.2 million and our stockholders’ equity was approximately $0.6 million.
Previous wording
Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise substantial additional funds in order to continue to conduct our business. If we are unable to secure sufficient capital to fund our operating activities, we may be forced to delay further the completion of, or significantly reduce the scope of, our current business plan. It is uncertain whether we will be able to obtain such financing on satisfactory terms or at all. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Current wording
Our continuing losses and limited cash resources raise substantial doubt about our ability to continue as a going concern, and we need to raise substantial additional funds 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.
Previous wording
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 $28,000 total depreciation and amortization expense and (iii) a provision for credit losses of $17,500.
Current wording
Cash used in operating activities for the six months ended June 30, 2024 of approximately $1,254,000 primarily reflects our net loss of approximately $1,249,000 adjusted by (i) approximately $76,000 net change in operating assets and liabilities, (ii) approximately $53,600 total depreciation and amortization expense and stock-based compensation expense and (iii) a provision for credit losses of $17,500.
Previous wording
Cash used in operating activities for the three months ended March 31, 2023 of approximately $796,000 primarily reflects our net loss of approximately $856,000 adjusted by (i) approximately $32,000 net change in operating assets and liabilities and (ii) approximately $26,000 total depreciation and amortization expense.
Current wording
Cash used in operating activities for the six months ended June 30, 2023 of approximately $1.7 million primarily reflects our net loss of approximately $1,728,000 adjusted by (i) approximately $33,000 net change in operating assets and liabilities and (ii) approximately $59,000 total depreciation and amortization expense and stock-based compensation expense.
Previous wording
We had no investing activities for the three months ended March 31, 2024 and limited investing activities for the three months ended March 31, 2023.
Current wording
We had limited investing activities for the six months ended June 30, 2024 and 2023.
Previous wording
We did not have any financing activities for the three months ended March 31, 2024 and 2023.
Current wording
Cash flows from financing activities for the six months ended June 30, 2024 reflects proceeds of (i) $650,875 from the sale of 867,833 shares of common stock in a private placement closed in May 2024 and (ii) $151,200 from the exercise of 270,000 warrants in June 2024. We did not have any financing activities for the six months ended June 30, 2023.
Previous wording
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 on Form 10-K for the year ended December 31, 2023. There have been no material changes to our critical accounting policies or estimates since December 31, 2023.
Current wording
Our unaudited 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 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, 2023. There have been no material changes to our critical accounting policies or estimates since December 31, 2023.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The amounts presented in this comparison section are rounded to the nearest thousand.
Current report — wording carried from elsewhere
Product revenues for the six months ended June 30, 2024 totaled approximately $599,000 in comparison to product revenues of approximately $179,000 in the six months ended June 30, 2023. Associated gross profit was approximately $483,000 in the six months ended June 30, 2024 in comparison to approximately $148,000 of gross profit in the six months ended June 30, 2023. In line with the three-month comparison above, the increase in revenues and gross profit was due to an expanding customer base as hospital wound care facilities and providers become incrementally aware of the Aurix product and the 2021 Medicare NCD.
Current report — wording carried from elsewhere
Total operating expenses decreased approximately $140,000 to approximately $1,735,000 comparing the six months ended June 30, 2024 to the six months ended June 30, 2023. The decrease from the prior year was due primarily to decreases in (i) compensation and benefits expense of approximately $189,000 and (ii) external consulting and professional fees of approximately $40,000 which was partially offset by an increase in sales infrastructure costs including distributor commissions of approximately $71,000.
Current report — wording carried from elsewhere
Other income, net for the six months ended June 30, 2024 represents interest income on cash balances in excess of interest expense associated with the financing of insurance premiums and a nominal other income gain. Other expense, net for the six months ending June 30, 2023 primarily represents the same interest expense type charges in excess of nominal interest income.