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8-K - 8-K - Nuo Therapeutics, Inc.v406150_8k.htm

 

Exhibit 99.1

 

 

 

NUO THERAPEUTICS REPORTS FULL-YEAR 2014 FINANCIAL RESULTS

 

Conference Call Scheduled for April 1 at 8:00 am Eastern Time

 

GAITHERSBURG, Maryland – March 31, 2015 – Nuo Therapeutics, Inc. (OTCQX: NUOT) a pioneer in biodynamic therapies, today reported financial results for the year ended December 31, 2014.

 

2014 and Recent Corporate Highlights

 

·Implemented a series of strategic initiatives to reposition Nuo as a pure-play chronic wound care company

·Completed corporate name change to Nuo Therapeutics; re-launched chronic wound care system under Aurix™ brand

·Completed $35 million convertible debt financing with Deerfield Management Company to support implementation of commercial strategy

·Discontinued ALD-401 Bright Cell development program and closed research & development facility in Durham, NC

·Signed exclusive licensing and distribution agreement with Rohto Pharmaceutical Co. to develop and commercialize Aurix in Japan

·Initiated post-market study (the “Au Study”) of Aurix under Centers for Medicare and Medicaid Services (CMS) Coverage with Evidence Development (CED) Program

 

Full-year 2014 Financial Summary

 

·Total revenues were $7.8 million, compared with $11.6 million in 2013

·Net loss was $18.9 million, or $0.16 per share, compared with $20.2 million, or $0.20 per share in 2013

·Cash and cash equivalents totaled approximately $15.9 million as of December 31, 2014

 

Fourth Quarter 2014 Financial Summary

 

·Total revenues were $1.9 million, compared with $3.5 million in the fourth quarter of 2013

·Net income of $2.9 million, compared with a net loss of $4.9 million in the fourth quarter of 2013. Fourth quarter 2014 net income included an unrealized non-cash gain related to change in fair value of derivative liabilities totaling $8.3 million, compared with an unrealized non-cash charge of $0.7 million in the same period of 2013.

 

“2014 was a year in which we made significant progress toward implementing our commercial strategy and established the necessary foundation for sustainable long-term growth.” said Martin Rosendale, Chief Executive Officer of Nuo Therapeutics.

 

 
 

 

“Our results for the year reflect several key initiatives aimed at establishing Nuo as an emerging leader in individualized wound care. These include building a world-class commercial organization, the discontinuation of the ALD-401 R&D program and an ongoing transition of the Angel® system to Arthrex following our 2013 licensing agreement, which allow us to focus on maximizing our commercial efforts around launching Aurix as a best-in-class wound care system. We are aware however of the need for scale in optimizing sales force efficiency in the wound care space, and we have, from time to time in the past, actively explored strategic and product-related opportunities. We continue to investigate opportunities that we believe could optimize our commercial infrastructure, broaden our business and increase shareholder value while positioning the Company for long-term success in the changing wound care environment.

 

Thus far in 2015, we have continued to steadily advance the Aurix commercial program through CMS approval of our amended CED protocols and initiation of our Au Study. These recent milestones give us confidence in our ability to take advantage of the large chronic wound care market opportunity, and we anticipate that the substantial efforts we have put forth have the potential to generate meaningful returns over time.”

 

Since initiating the Au Study in February 2015, the Company has implemented the revised CED data collection protocols at several outpatient facilities and begun enrolling patients into the registry. Nuo is also collaborating with spinal cord injury units and wound care centers at Veterans Administration (VA) hospitals who are evaluating the product on a sample basis. Three such sites are currently in the final stages of product evaluation, while a number of other facilities have initiated the review process and are expected to advance to product evaluation in the coming months.

 

Dean Tozer, Chief Commercial Officer of Nuo Therapeutics, added: “In the five months since we launched the newly-branded Aurix at the Symposium on Advanced Wound Care (SAWC) Fall Meeting, our commercial team has been aggressively pursuing a variety of sales opportunities with customer targets, focusing on those responsible for making purchasing decisions at Veterans Administration hospitals and outpatient wound care centers. We have made excellent progress and have overcome a number of challenges to reach this point. I am proud of what our team has accomplished and their work to get us to where we are today, and I remain confident that our greatest success is yet to come.”

 

Financial Results for the Year Ended December 31, 2014

 

Total revenues for the year were $7.8 million, compared to $11.6 million in 2013. The year-over-year decline in total revenues was primarily related to decreases in product sales and service revenue, partially offset by increased royalties and license fee revenue. Full-year gross margin was 13%, compared with 27% in 2013. The gross margin decrease was attributable to Angel disposable products, which were sold to Arthrex at a lower average selling price in 2014 as compared to the prior year. In addition we recognized increased costs related to actual and expected Angel centrifuge refurbishment costs and an inventory reserve established for excess and obsolete inventory. This was partially offset by an increase in gross profit and margin from Angel related license fees and royalty revenue.

 

Total operating expenses for the year were $24.4 million, compared to $21.2 million in 2013. The increase in operating expenses was attributable to the expansion of Nuo’s commercial, marketing, and clinical organization, as well as a non-cash impairment charge for in process research and development. This was partially offset by reduced expenses following the closure of the Company’s research and development facility in North Carolina.

 

 
 

 

The Company reported a net loss for the year of $18.9 million, or $(0.16) per share, compared with $20.2 million or $(0.20) per share a year ago.

 

Cash and cash equivalents as of December 31, 2014 totaled approximately $15.9 million, compared with approximately $3.3 million as of December 31, 2013.

 

Financial Results for the Fourth Quarter Ended December 31, 2014

 

Total revenues were $1.9 million in the fourth quarter, compared to $3.5 million in the same period of 2013. The decrease was primarily due to a reduction in Angel disposable product sales to Arthrex, partially offset by an increase in royalty revenue as a result of increased sales by Arthrex. Gross margin in the fourth quarter of 2014 was (10%), compared with 14% in the fourth quarter of 2013. The negative gross margin in the fourth quarter of 2014 was attributable primarily to increased costs related to actual and expected Angel centrifuge refurbishment costs and an inventory reserve established for excess and obsolete inventory. This was partially offset by an increase in gross profit and margin from Angel related license fees and royalty revenue. Total operating expenses in the fourth quarter were $4.2 million, compared to $4.3 million in the same period of 2013.

 

Net income in the fourth quarter was $2.9 million, compared to a net loss of $4.9 million in the fourth quarter of 2013. Fourth quarter 2014 net income included an unrealized non-cash gain related to the change in fair value of derivative liabilities totaling $8.3 million. This compares to an unrealized non-cash charge of $0.7 million in the fourth quarter of 2013.

 

Conference Call and Webcast:

 

Wednesday, April 1, 2015 @ 8am Eastern/5am Pacific   Replays – Available through April 8, 2015
Domestic: 877-407-4018   Domestic: 877-870-5176
International: 201-689-8471   International: 858-384-5517
Passcode: 13604618   Passcode: 13604618
Webcast: www.nuot.com    

 

About Nuo Therapeutics

 

Nuo Therapeutics, Inc. (the "Company") is a biomedical company that pioneers leading-edge biodynamic therapies for wound care. The Company’s flagship product, Aurix is a biodynamic hematogel that harnesses a patient's innate regenerative abilities for the management of a variety of wounds. For additional information please visit www.nuot.com.

 

About Aurix

 

Aurix is the first platelet and plasma therapy system to be cleared by FDA for the management of a broad range of ulcers and exuding wounds, including:

 

·All types (diabetic foot ulcer, venous leg ulcer, pressure ulcer, etc.),

·All morphologies (partial thickness, full thickness and complex wounds),

·All severities (tunneling, sinus tract, bone, tendon and hardware exposure).

 

Unlike other cellular-based treatment options, Aurix is an autologous biodynamic hematogel that is derived from a patient’s own platelets and plasma. The product is used at the point-of-care to stimulate the natural wound healing process from deep within the wound bed. For additional information, please visit www.AurixSystem.com.

 

 
 

 

Safe Harbor StatementThis press release contains "forward-looking statements" pursuant to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. 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 "believes", "forecasted," "projects," "is expected," "remain confident," "will", "estimate," "target," "plan," "should", "would," "is likely," "may," and/or similar expressions. The information contained in the forward-looking statements, including without limitation those about the Company's estimated revenue, gross margin, operating expenses and other income or expenses, is inherently uncertain, and the Company's actual results may differ materially from these forward-looking statements. These forward-looking statements include, without limitation, statements concerning the Company's ability to successfully launch and rebrand its wound care system in the timeframe and to the extent anticipated, the Company’s ability to estimate the potential of the wound care market and to commercialize any of its rebranded products / therapies, successfully execute its Aurix (formerly AutoloGel) sales and commercialization strategies, the Company’s ability to launch Aurix as expected and derive financial and commercial benefits of such launch, to achieve Aurix expected reimbursement rates in 2015 and thereafter, the Company's ability to comply with the debt covenants and restrictions under its existing loan facilities, the Company’s ability to realize expected benefits from the Arthrex licensing arrangement, the Company's ability to collect the data necessary for the grant of the unconditional coverage, the Company's ability to continue in its efforts to expand in the wound care market, and its ability to successfully negotiate with physician offices as anticipated and to realize the anticipated sales growth from such treatment. Forward-looking statements are also subject to many risks and uncertainties that could cause our actual results and the timing of certain events to differ materially from any future results expressed or implied by the forward-looking statements, including, but not limited to, risks as to whether the Company may achieve a favorable CMS determination relating to the reimbursement rates for Aurix, the Company's ability to successfully realize sales of the Angel Technology resulting in the royalty stream to the Company, the Company's ability to expand patient populations as contemplated, its ability to provide Medicare patients with access as expected, the Company's ability to realize its expectations of favorable future dialogue with potential strategic partners, its ability to identify, proceed with and consummate strategic initiatives , its ability to successfully manage contemplated clinical trials, its ability to manage and address the capital needs, human resources, management, compliance and other challenges of a larger, more complex and integrated business enterprise, the viability and effectiveness of the Company's sales approach and overall marketing strategies, its ability to secure Medicare reimbursements at adequate levels; its ability to realize commercial success or acceptance by the medical community, the Company's ability to raise additional capital or issue additional securities and to continue as a going concern, and the Company's ability to execute on its strategy to market the Aurix System as contemplated, and other risks and uncertainties described in our filings with the U.S. Securities and Exchange Commission, including the most recent reports on Forms 10-K, 10-Q and 8-K, and any amendments thereto. Undue reliance should not be placed on forward-looking information. Nuo Therapeutics operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Except as is expressly required by the federal securities laws, Nuo Therapeutics undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason..

 

Contact: Investors:
Nuo Therapeutics, Inc. The Ruth Group
Martin Rosendale, CEO Lee Roth
Steven Shallcross, EVP/ CFO 646-536-7012
240-499-2680 lroth@theruthgroup.com

 

 
 

 

Nuo Therapeutics, Inc.

Consolidated Statements of Operations

 

   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2014   2013   2014   2013 
   (UNAUDITED)   (UNAUDITED)   (AUDITED)   (AUDITED) 
Revenues                    
Product sales  $1,374,360   $2,956,852   $5,849,330   $10,498,726 
License fees   100,481    100,594    402,264    167,657 
Royalties   423,033    334,098    1,510,340    703,744 
Other revenue       72,476        201,311 
Total revenues   1,897,874    3,464,020    7,761,934    11,571,438 
                     
Cost of revenues                    
Cost of sales   2,041,689    2,924,501    6,594,006    8,363,902 
Cost of royalties   44,194    47,712    176,737    89,290 
Total cost of revenues   2,085,883    2,972,213    6,770,743    8,453,192 
Gross profit   (188,009)   491,807    991,191    3,118,246 
                     
Operating expenses                    
Salaries and wages   2,253,125    1,308,070    8,473,427    7,319,407 
Consulting expenses   26,765    552,407    1,401,381    2,148,983 
Professional fees   286,350    329,670    1,221,462    1,156,868 
Research, development, trials and studies   75,982    748,360    2,623,541    3,798,398 
General and administrative expenses   1,590,729    1,373,892    5,978,429    6,789,660 
Impairment of trademarks and IPR&D           4,683,829     
Total operating expenses   4,232,951    4,312,399    24,382,069    21,213,316 
Loss from operations   (4,420,960)   (3,820,592)   (23,390,878)   (18,095,070)
                     
Other income (expense)                    
Interest, net   (847,417)   (356,123)   (3,434,783)   (1,680,023)
Change in fair value of derivative liabilities   8,259,553    (720,401)   8,100,922    (470,052)
Loss on disposal of fixed assets   (131,456)       (131,456)    
Other   1,791    3,043    (7,493)   15,374 
Total other income (expenses)   7,282,471    (1,073,481)   4,527,190    (2,134,701)
Loss before provision for income taxes   2,861,511    (4,894,073)   (18,863,688)   (20,229,771)
Income tax provision   5,649    3,919    19,584    18,589 
Net loss   2,855,862    (4,897,992)   (18,883,272)   (20,248,360)
                     
Loss per common share —                    
Basic and diluted            $(0.16)  $(0.20)
                     
Weighted average shares outstanding —                    
Basic and diluted             120,516,225    103,620,046 

 

 
 

 

Nuo Therapeutics, Inc.

Consolidated Balance Sheets

 

   December 31,   December 31, 
   2014   2013 
   (AUDITED)   (AUDITED) 
ASSETS          
           
Current assets          
Cash and cash equivalents  $15,946,425   $3,286,713 
Short-term investments, restricted   53,391    53,257 
Accounts and other receivable, net   1,889,327    3,926,681 
Inventory, net   556,620    1,111,507 
Prepaid expenses and other current assets   2,338,990    1,258,282 
Deferred costs, current portion   1,091,387    316,551 
Total current assets   21,876,140    9,952,991 
           
Property and equipment, net   925,171    919,469 
Deferred costs   3,547,007    482,349 
Intangible assets, net   28,747,770    33,768,954 
Goodwill   1,128,517    1,128,517 
Total assets  $56,224,605   $46,252,280 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Current liabilities          
Accounts payable  $1,877,736   $3,351,844 
Accrued expenses   6,218,224    4,666,828 
Deferred revenues, current portion   402,377    740,990 
Note payable, current portion       1,800,000 
Total current liabilities   8,498,337    10,559,662 
           
Notes payable       3,620,593 
Convertible debt, net of debt discount   325,553    202,658 
Deferred revenues   1,039,475    1,441,852 
Derivative liabilities   29,846,821    3,248,595 
Other liabilities   546,867    366,926 
Total liabilities   40,257,053    19,440,286 
           
Conditionally redeemable common stock (909,091 issued and outstanding)   500,000    500,000 
           
Stockholders' equity          
Common stock; $.0001 par value, authorized 425,000,000 shares;          
2014 issued and outstanding - 125,680,100 shares;          
2013 issued and outstanding - 107,164,855 shares   12,477    10,626 
Common stock issuable   392,950    432,100 
Additional paid-in capital   125,173,973    117,097,844 
Accumulated deficit   (110,111,848)   (91,228,576)
Total stockholders' equity   15,467,552    26,311,994 
Total liabilities and stockholders' equity  $56,224,605   $46,252,280