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

(Exact name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its Charter)~~its charter)

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

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

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 financing 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 ☒

As of ~~October 31, 2017,~~May 8, 2020, there were ~~35,119,410~~4,111,357 shares of the registrant’s common stock outstanding.

This report contains statements that may be deemed “forward-looking statements” within the meaning of U.S. securities laws. All statements in this report, other than statements of historical fact, are forward-looking statements. These forward-looking statements may be identified by terms such as “intend,” “expect,” “believe,” “anticipate,” “will,” “should,” “would,” “could,” “may,” “designed,”, “potential,” and similar expressions, or the negative of such expressions. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

These statements include, without limitation, statements regarding: our anticipated expenditures, including research and development, sales and marketing, and general and administrative expenses; the potential size of the market for our products; future development and/or expansion of our products and therapies in our markets; our ability to generate product or development revenues and the sources of such revenues; our ability to effectively manage our gross profit margins; our ability to obtain and maintain regulatory approvals; expectations as to our future performance; portions of the “Liquidity and Capital Resources” section of this report, including our potential need for additional financing and the availability thereof; our ability to continue as a going concern; our ability to remain listed on the Nasdaq Capital Market; our ability to repay or refinance some or all of our outstanding indebtedness and our ability to raise capital in the future; and the potential enhancement of our cash position through development, marketing, and licensing arrangements. Our actual results will likely differ, perhaps materially, from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to: the early stage of our product candidates and therapies, the results of our research and development activities, including uncertainties relating to the clinical trials of our product candidates and therapies; our need and ability to raise additional cash, the outcome of our partnering/licensing efforts, risks associated with laws or regulatory requirements applicable to us, market conditions, product performance, potential litigation, competition within the regenerative medicine field, and the ong COVID-19 pandemic. The forward-looking statements included in this report are also subject to a number of additional material risks and uncertainties, including but not limited to the risks described under “Part I - Item 1A - Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, and under “Part II, Item 1A - Risk Factors” in this Quarterly Report on Form 10-Q. These risks and uncertainties that could cause actual results to differ materially from expectations or those expressed in these forward-looking statements. We encourage you to read these risks carefully. We caution you not to place undue reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak only as of the date of this report (unless an earlier date is indicated) and we undertake no obligation to update or revise the statements except as required by law.

	As of September 30, 2017			As of December 31, 2016				As of March 31, 2020			As of December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	4,783		$	12,560			$	16,061		$	17,552
Accounts receivable, net of reserves of $167 in both 2017 and 2016, respectively		230			1,242
Accounts receivable									978			1,169
Restricted cash		429			350				—			40
Inventories, net		3,508			3,725				107			107
Other current assets		892			870				551			957
Total current assets		9,842			18,747				17,697			19,825

Property and equipment, net		3,308			1,157				2,096			2,179
Operating lease right-of-use assets									744			781
Other assets		1,854			2,336				58			72
Intangibles, net		7,520			8,447
Goodwill		3,922			3,922				372			372
Total assets	$	26,446		$	34,609			$	20,967		$	23,229
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	4,907		$	5,872			$	3,670		$	3,279
Current portion of long-term obligations, net of discount		13,497			6,629
Operating lease liability									136			147
Term loan obligations, net of discount									11,182			11,060
Total current liabilities		18,404			12,501				14,988			14,486
							��
Deferred revenues		103			97
Long-term deferred rent and other		120			17
Long-term obligations, net of discount, less current portion		—			11,008
Other noncurrent liabilities									8			8
Noncurrent operating lease liability									624			646
Warrant liability									5,262			6,929
Total liabilities		18,627			23,623				20,882			22,069

Commitments and contingencies (Note 9)
Commitments and contingencies (Notes 9)

Stockholders’ equity:
Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 13,500 shares issued; no shares outstanding in 2017 and 2016		—			—
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,716,318 and 21,707,890 shares issued and outstanding in 2017 and 2016, respectively		35			22
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 1,959 shares issued and outstanding at March 31, 2020 and December 31, 2019									—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 3,880,588 shares issued and outstanding at March 31, 2020 and December 31, 2019									4			4
Additional paid-in capital		404,047			388,769				426,438			426,426
Accumulated other comprehensive income		1,199			1,258
Accumulated deficit		(397,462	)		(379,063	)			(426,357	)		(425,270	)
Total stockholders’ equity		7,819			10,986				85			1,160
Total liabilities and stockholders’ equity	$	26,446		$	34,609			$	20,967		$	23,229

~~SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~See Accompanying Notes to these Consolidated Condensed Financial Statements

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2017			2016			2017			2016
Product revenues	$	467		$	731		$	2,027		$	3,190
Cost of product revenues		181			561			992			1,533
Amortization of intangible assets		306			57			919			237
Gross (loss) profit		(20	)		113			116			1,420
													2020			2019
Development revenues:
Government contracts and other		1,306			1,879			2,856			5,163		$	118		$	737
		1,306			1,879			2,856			5,163
Operating expenses:
Research and development		3,004			3,960			9,284			13,334			941			1,426
Sales and marketing		840			818			3,043			2,742			110			114
General and administrative		1,785			2,011			6,012			6,623			1,508			1,363
In process research and development acquired from Azaya Therapeutics		—			—			1,686			—
Total operating expenses		5,629			6,789			20,025			22,699			2,559			2,903
Operating loss		(4,343	)		(4,797	)		(17,053	)		(16,116	)		(2,441	)		(2,166	)

Other income (expense):
Interest income		5			4			24			8			36			7
Interest expense		(474	)		(645	)		(1,603	)		(1,947	)		(349	)		(515	)
Other income, net		5			54			233			928
Total other expense		(464	)		(587	)		(1,346	)		(1,011	)
Change in fair value of warrants														1,667			210
Total other income (expense)														1,354			(298	)
Loss from continuing operations														(1,087	)		(2,464	)
Loss from discontinued operations														—			(686	)
Net loss	$	(4,807	)	$	(5,384	)	$	(18,399	)	$	(17,127	)	$	(1,087	)	$	(3,150	)

Basic and diluted net loss per share	$	(0.14	)	$	(0.26	)	$	(0.62	)	$	(1.06	)
Basic and diluted weighted average shares used in calculating net loss per share		34,490,828			20,493,840			29,564,032			16,147,042
Basic and diluted net loss per share attributable to common stockholders - continuing operations													$	(0.28	)	$	(6.98	)
Basic and diluted net loss per share attributable to common stockholders - discontinued operations													$	—		$	(1.94	)
Net loss per share, basis and diluted													$	(0.28	)	$	(8.92	)
Basic and diluted weighted average shares used in calculating net loss per share attributable to common stockholders														3,880,588			353,142

Comprehensive loss:
Net loss	$	(4,807	)	$	(5,384	)	$	(18,399	)	$	(17,127	)	$	(1,087	)	$	(3,150	)
Other comprehensive loss – foreign currency translation adjustments		16			58			(59	)		(321	)		-			(140	)
Comprehensive loss	$	(4,791	)	$	(5,326	)	$	(18,458	)	$	(17,448	)	$	(1,087	)	$	(3,290	)

~~SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~See Accompanying Notes to these Consolidated Condensed Financial Statements

																Accumulated
	Convertible												Additional			other								Total
	preferred stock						Common stock						paid-in			comprehensive				Accumulated				stockholders’
	Shares				Amount		Shares			Amount			capital			income				deficit				equity
Balance at December 31, 2018		4,606		$		—		296,609	$		—	$		418,390	$		1,218		$		(414,383	)	$		5,225
Share-based compensation		—				—		—			—			49			—				—				49
Sale of common stock, net		—				—		139,855			—			1,873			—				—				1,873
Conversion of Series B Convertible Preferred Stock into common stock		(66	)			—		1,652			—			—			—				—	��			—
Foreign currency translation adjustment and accumulated other comprehensive income		—				—		—			—			—			(140	)			—				(140	)
Net loss		—				—		—			—			—			—				(3,150	)			(3,150	)
Balance at March 31, 2019		4,540		$		—		438,116	$		—	$		420,312	$		1,078		$		(417,533	)	$		3,857

Balance at December 31, 2019		1,959		$		—		3,880,588	$		4	$		426,426	$		—		$		(425,270	)	$		1,160
Share-based compensation		—				—		—			—			12			—				—				12
Net loss		—				—		—			—			—			—				(1,087	)			(1,087	)
Balance at March 31, 2020		1,959		$		—		3,880,588	$		4	$		426,438	$		—		$		(426,357	)	$		85

For the Nine Months Ended September 30,

2017

2016

Cash flows from operating activities:

Net loss

$
(18,399
)

$
(17,127
)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

1,618

794

Amortization of deferred financing costs and debt discount

580

714

In process research and development acquired from Azaya Therapeutics

1,686

—

Joint Venture acquisition obligation accretion

—

24

Provision for expired inventory

413

26

Stock-based compensation expense

588

925

Loss on asset disposal

9

2

Increases (decreases) in cash caused by changes in operating assets and liabilities:

Accounts receivable

991

91

Inventories

457

190

Other current assets

(284
)

205

Other assets

74

32

Accounts payable and accrued expenses

(1,746
)

(1,013
)
Deferred revenues

6

(8
)
Long-term deferred rent

103

(227
)
Net cash used in operating activities

(13,904
)

(15,372
)
Cash flows from investing activities:

Purchases of property and equipment

(271
)

(110
)
Proceeds from sale of assets

10

—

Purchase of long-lived assets part of Azaya Therapeutics' acquisition

(1,201
)

—

Change in restricted cash

(79
)

—

Net cash used in investing activities

(1,541
)

(110
)
Cash flows from financing activities:

Principal payments on long-term obligations

(4,720
)

—

Joint Venture purchase payments

—

(1,774
)
Proceeds from sale of common stock, net

12,377

17,702

Net cash provided by financing activities

7,657

15,928

Effect of exchange rate changes on cash and cash equivalents

11

140

Net (decrease) increase in cash and cash equivalents

(7,777
)

586

Cash and cash equivalents at beginning of period

12,560

14,338

Cash and cash equivalents at end of period

$
4,783

$
14,924

Supplemental disclosure of cash flows information:

Cash paid during period for:

Interest

$
1,059

$
1,213

Supplemental schedule of non-cash investing and financing activities:

Common stock issued in payment for the assets acquired from Azaya Therapeutics

$
2,311

$
-

	For the Three Months Ended March 31,
	2020			2019
Cash flows used in operating activities:
Net loss	$	(1,087	)	$	(3,150	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		94			443
Amortization of deferred financing costs and debt discount		122			168
Noncash lease expenses		4			—
Change in fair value of warrants		(1,667	)		(210	)
Share-based compensation expense		12			49
Increases (decreases) in cash caused by changes in operating assets and liabilities:
Accounts receivable		191			(212	)
Inventories		—			16
Other current assets		405			16
Other assets		14			1
Accounts payable and accrued expenses		410			(405	)
Deferred revenues		—			(25	)
Other long-term liabilities		—			39
Net cash used in operating activities		(1,502	)		(3,270	)
Cash flows used in investing activities:
Purchases of property and equipment		(11	)		(6	)
Net cash used in investing activities		(11	)		(6	)
Cash flows (used in) provided by financing activities:
Payment of financing lease liability		(18	)		(28	)
Proceeds from sale of common stock, net		—			1,919
Net cash (used in) provided by financing activities		(18	)		1,891
Effect of exchange rate changes on cash and cash equivalents		—			(4	)
Net decrease in cash and cash equivalents		(1,531	)		(1,389	)
Cash, cash equivalents, and restricted cash at beginning of period		17,592			5,301
Cash, cash equivalents, and restricted cash at end of period	$	16,061		$	3,912
Supplemental disclosure of cash flows information:
Cash paid during period for:
Interest	$	227		$	347

~~SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~See Accompanying Notes to these Consolidated Condensed Financial Statements

Our accompanying unaudited consolidated condensed financial statements as of ~~September 30, 2017~~March 31, 2020 and for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. Our consolidated condensed balance sheet at December 31, ~~2016~~2019 has been derived from the audited financial statements at December 31, ~~2016,~~2019, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of ~~Cytori~~Plus Therapeutics, Inc., and our subsidiaries (collectively, the “Company”) have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2020. These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2019, filed with the Securities and Exchange Commission on March ~~24, 2017.~~30, 2020.

On March 30, 2019, the Company entered into an Asset and Share Sale and Purchase Agreement (the “Lorem Purchase Agreement”) with Lorem Vascular Pte. Ltd. (“Lorem”), pursuant to which, among other things, Lorem agreed to purchase the Company’s UK subsidiary, Cytori Ltd. (the “UK Subsidiary”), and the Company’s cell therapy assets, excluding such assets used in Japan or relating to the Company’s contract with the U.S. Department of Health and Human Service’s Biomedical Advanced Research and Development Authority (“BARDA”). Both the Company and Lorem made customary representations, warranties and covenants in the Lorem Purchase Agreement. The transaction was completed on April 24, 2019 and the Company received $4.0 million of cash proceeds, of which $1.7 million was used to pay down principal, interest and fees under the Loan and Security Agreement, dated May ~~10, 2016,~~29, 2015 (the “Loan and Security Agreement”) (Note 5), with Oxford Finance, LLC (“Oxford”).

On April 19, 2019, the Company entered into an Asset and Share Sale and Purchase Agreement (the “Shirahama Purchase Agreement”) with Seijirō Shirahama, pursuant to which, among other things, Mr. Shirahama agreed to purchase the Company’s Japanese subsidiary, Cytori Therapeutics, K.K. (the “Japanese Subsidiary”), and substantially all of the Company’s cell therapy assets used in Japan. Both the Company and Mr. Shirahama made customary representations, warranties and covenants in the Shirahama Purchase Agreement. The transaction was completed on April 25, 2019 and the Company received $3.0 million of cash proceeds, of which $1.4 million was used to pay down principal, interest and fees under the Loan and Security Agreement.

On July 29, 2019, the Company amended its Certificate of Incorporation with the State of Delaware to change its corporate name from Cytori Therapeutics, Inc. to Plus Therapeutics, Inc. The Company also changed its trading symbol for its common stock on the Nasdaq Capital Market to “PSTV”.

On August 5, 2019, following stockholder and Board approval, ~~an amendment~~the Company filed a Certificate of Amendment (the ~~“Amendment”~~“August 2019 Amendment”) to ~~the Company’s amended~~its Amended and ~~restated certificate~~Restated Certificate of ~~incorporation,~~Incorporation (the Amendment), as amended, ~~was filed and declared effective, which Amendment effectuated~~with the Secretary of State of the State of Delaware to effectuate a ~~one-for-fifteen~~one-for-fifty (1:~~15)~~50) reverse stock split (the “August 2019 Reverse Stock Split”)) of its common stock, par value $0.001 per share, without any change to its par value. The August 2019 Amendment became effective on the filing date. The August 2019 Reverse Stock Split became effective for trading purposes as of the commencement of trading on the Nasdaq Capital Market on August 6, 2019. There was no change in the Company’s ~~(i)~~Nasdaq ticker symbol, “PSTV,” as a result of the August 2019 Reverse Stock Split. Upon effectiveness, each 50 shares of issued and outstanding common stock were converted into one newly issued and ~~(ii)~~outstanding share of common ~~stock reserved for issuance upon exercise~~stock. The Company’s 5,000,000 shares of ~~outstanding warrants and options (the “1:15~~authorized Preferred Stock were not affected by the August 2019 Reverse Stock ~~Split”). Upon effectiveness~~Split. No fractional shares were issued in connection with the August 2019 Reverse Stock Split. Any fractional shares of common Stock that would have otherwise resulted from the ~~1:15~~August 2019 Reverse Stock Split were rounded up to the ~~number of~~nearest whole share. Outstanding equity awards and the shares ofavailable for future grant under the Company’s ~~common stock (x) issued~~Amended and ~~outstanding decreased from approximately 200 million shares (as of May 10, 2016)~~Restated 2004 Equity Incentive Plan, 2011 Employee Stock Purchase Plan, 2014 Amended and Restated Equity Incentive Plan and 2015 New Employee Incentive Plan were proportionately reduced (rounded down to ~~approximately 13.3 million shares; (y) reserved for issuance upon~~the nearest whole share), and the exercise prices of outstanding ~~warrants and options decreased from approximately 16 million shares to approximately 1.1 million shares, and (z) reserved but unallocated under our current~~ equity ~~incentive plans (including the stockholder-approved share increase~~awards were proportionately increased (rounded up to the ~~Company’s 2014 Equity Incentive Plan) decreased from approximately 6.5 million common shares~~nearest whole cent) to ~~approximately 0.4 million common shares. In connection with~~give effect to the ~~1:15~~August 2019 Reverse Stock Split, the Company also decreased the total number of its authorized shares of common stock from 290 million to 75 million. The number of authorized shares of preferred stock remained unchanged. Following the 1:15 Reverse Stock Split, certain reclassifications have been made to the prior ~~periods’~~ ~~financial statements to conform to the current period's presentation. The Company adjusted~~ ~~stockholders’~~ ~~equity to reflect the 1:15~~ ~~Reverse Stock Split~~ by reclassifying an amount equal to the par value of the shares eliminated by the split from common stock to the Additional Paid-in Capital during the first quarter of fiscal 2016, resulting in no net impact to stockholders' equity on our consolidated balance sheets. ~~The Company’s shares of common stock commenced trading on a split-adjusted basis on May 12, 2016.~~ ~~Proportional adjustments for the reverse stock split were made to the Company's outstanding stock options, warrants and equity incentive plans for all periods presented.~~Split.

~~Certain immaterial reclassifications have been made to certain of the prior years’ consolidated financial statements to conform to the current year presentation.~~8

In ~~May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-12,~~ ~~Revenue from Contracts with Customers~~, the amendment of which addressed narrow-scope improvements to the guidance on collectability, noncash consideration, and completed contracts at transition as well as providing a practical expedient for contract modifications. In April 2016, March 2016 and DecemberJune 2016, the FASB issued ASU ~~No. 2016-10, ASU No. 2016-08~~2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and ~~ASU No. 2016-20, respectively, the amendments of which further clarified aspects of Topic 606: identifying performance obligations and the licensing and implementation guidance, improvements~~certain other instruments that aren’t measured at fair value through net income. For available-for-sale debt securities, entities will be required to ~~the operability and understandability~~recognize an allowance for credit losses rather than a reduction in carrying value of the ~~implementation~~asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance ~~on principal versus agent considerations and contract cost clarifications. The FASB issued~~is effective in the ~~initial release~~first quarter of ~~Topic 606 in ASU No. 2014-09, which requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount~~2023 for calendar-year SEC filers that ~~reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities may use a full retrospective approach or a modified retrospective approach~~are smaller reporting companies as of the date of adoption. We expect to use the modified retrospective approach. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after thatone-time determination date. Early adoption ~~of ASU 2016-10~~ is permitted ~~but~~beginning in 2019. The Company plans to adopt the new guidance on January 1, 2023, and it does not ~~before the original effective date (annual periods beginning after December 15, 2017).~~ ~~We performed a~~

~~preliminary assessment~~expect that adoption of the impact of ASU 2014-09 and related amendments on the consolidated financial statements, and considered all items outlined in the standard. In assessing the impact, we have outlined all revenue generating activities, mapped those activities to deliverables and traced those deliverables to the standard. We are currently assessing what impact the change inthis standard will have an impact on ~~those deliverables. We will continue to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on the~~its consolidated financial statements and related ~~disclosures throughout 2017. We believe the adoption will modify the way we analyze contracts. We will adopt the new standard beginning January 2018.~~disclosures.

In ~~February 2016,~~August 2018, the FASB issued ASU ~~2016-02,~~No. 2018-13 (ASU 2018-13), ~~Leases~~Changes to the Disclosure Requirements for Fair Value Measurement. Under this new guidance, at the commencement date, lessees will be required to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basisThis ASU eliminates, adds and ~~(ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use~~modifies certain disclosure requirements for fair value measurements as part of ~~a specified asset for the lease term. This guidance is not applicable for leases with a term of 12 months or less.~~its disclosure framework project. The ~~new~~ standard is effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of certain cash receipts and cash payments~~, which addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The new standard is effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. We do not anticipate that the adoption of ASU 2016-15 will have a material impact on our consolidated financial statements.

~~In November 2016, the FASB issued Accounting Standards Update No. 2016-18,~~ ~~Restricted Cash~~, which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this update should be applied using a retrospective transition method to each period presented. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The adoption of this standard will change the presentation of our statement of cash flows to include our restricted cash balance with the non-restricted cash balances. We do not anticipate that the adoption of ASU 2016-18 will have a material impact on our consolidated financial statements.

~~In February 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment, to simplify how~~ all entities ~~assess goodwill~~ for impairment by eliminating Step 2 from the goodwill impairment test. As amended, the goodwill impairment test will consist of one step comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment chargefinancial statements issued for ~~the amount by which the reporting unit's carrying amount exceeds its fair value. This update is effective for annual periods~~fiscal years beginning after December 15, 2019, and interim periods within those ~~periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after~~fiscal years. The Company adopted ASU 2018-13 as of January 1, ~~2017. We are currently evaluating the impact that this standard will have on our consolidated financial statements.~~

~~In May 2017, the FASB issued~~ ~~ASU 2017-09,~~ ~~Compensation-Stock Compensation~~, to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about2020, which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. ~~We do~~has not ~~anticipate that the adoption of ASU 2016-18 will have~~had a material impact on ~~our consolidated~~the Company's financial statements.

~~In July 2015, FASB issued ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~. This update applies to companies that measure inventory on a first in, first out, or FIFO, or average cost basis. Under this update, companies are to measure their inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion. The amendments in this update are effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2016 with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption, effective January 1, 2017, did not have a material impact on our consolidated financial statements.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting, which involves~~

several aspects of the accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This new guidance will require all income tax effects of awards to be recognized as income tax expense or benefit in the income statement when the awards vest or are settled, as opposed to additional paid-in-capital where it is currently recorded. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting. All tax-related cash flows resulting from stock-based payments are to be reported as operating activities on the statement of cash flows. The guidance also allows a Company to make a policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. This new standard is effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2016, with early adoption permitted. We have elected to keep our policy consistent for the application of a forfeiture rate and, as such, the adoption of this standard did not have a material impact on our consolidated financial statements.

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-01,~~ ~~Clarifying the Definition of a Business~~, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. We elected to early adopt the new guidance effective January 1, 2017 and this guidance was used in our assessment of the Azaya Therapeutics asset purchase agreement entered into in February 2017.

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Our most significant estimates and critical accounting policies involve recognizing revenue, reviewing ~~goodwill and intangible~~ assets for impairment, determining the assumptions used in measuring share-based compensation expense, ~~measuring expense related to our~~ ~~in process research and development~~ ~~acquisition,~~valuing warrants, and valuing allowances for doubtful ~~accounts and inventory reserves.~~accounts.

Actual results could differ from these estimates. Management’s estimates and assumptions are reviewed regularly, and the effects of revisions are reflected in the consolidated financial statements in the periods they are determined to be necessary.

We incurred net losses of ~~$4.8 million and $18.4~~$1.1 million for the three ~~and nine~~ months ended ~~September 30, 2017, and $5.4 million and $17.1 million for the three and nine months ended September 30, 2016.~~March 31, 2020. We have an accumulated deficit of ~~$397.5~~$426.4 million as of ~~September 30, 2017.~~March 31, 2020. Additionally, we ~~have~~ used net cash of ~~$13.9 million and $15.4~~$1.5 million to fund our operating activities for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively.~~March 31, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Further, the Loan and Security Agreement, with Oxford Finance, LCC (“Oxford”), as amended and further described in Note 5, requires us to maintain a minimum of $1.5 million in unrestricted cash and cash equivalents on hand to avoid an event of default under the Loan and Security Agreement. Based on our cash and cash equivalents on hand of approximately $4.8 million at September 30, 2017, we estimate that we must raise additional capital and/or obtain a waiver or restructure the Loan and Security Agreement to avoid defaulting under our $1.5 million minimum cash/cash equivalents covenant.

To date, these operating losses have been funded primarily from outside sources of invested capital ~~including our recently completed underwritten public offering, Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) and~~in the ~~2016 Rights Offering (each defined below), our at-the-market (“ATM”) equity facility,~~Company’s common stock, proceeds raised from the Loan and Security Agreement, and gross profits. We have had, and we will continue to have, an ongoing need to raise additional cash from outside sources to fund our future clinical development programs and other operations. Our inability to raise additional cash ~~will~~would have a material and adverse impact on operations and ~~will~~would cause us to default on our loan.

On ~~September 5, 2017, we~~August 19, 2019, the Company received a written notice from ~~The~~ Nasdaq ~~Stock Market LLC (“Nasdaq”)~~ indicating that, based ~~upon~~on the ~~closing bid price~~Company’s stockholders’ deficit of ~~our common stock~~$6.3 million as of June 30, 2019, as reported in the Company’s Quarterly Report on Form 10-Q for the ~~last~~quarter ended June 30, ~~consecutive business days, we~~2019, it is no longer ~~meet the requirement to maintain a minimum bid price of $1 per share, as set forth~~ in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a period of 180 calendar days, or until March 5, 2018, in which to regain compliance. In order to regain compliance with the minimum ~~bid price~~stockholders’ equity requirement ~~the closing bid price of our common stock must be at least $1 per share~~ for a minimum of ten consecutive business days during this 180-day period. In the event we do not regain compliance within this 180-day period, we may be eligible to seek an additional compliance period of 180 calendar days if we meet the continued listing ~~requirement for market value of publicly held shares and all other initial listing standards for~~on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain stockholders’ equity of at least $2.5 million.

Based on the Company’s stockholders’ equity of $85,000 as of March 31, 2020, the Company does not meet the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1). In April 2020, the Company entered into agreements (the “Warrant Amendments”) with ~~the exception~~certain holders of the ~~bid price requirement, if we provide written notice~~Series U Warrants (the “Amending Warrant Holders”) to ~~Nasdaq of our intent to~~

~~cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary.~~

On September 1, 2017, the Company announced a substantial corporate restructuring intended to significantly reduce expenses while maintaining its ability to execute on its U.S. BARDA-sponsored cell therapy program, Japanese cell therapy business and oncology drug program. The restructuring reduced Cytori’s workforce by approximately 50% and significantly reduced the Company’s operational cash burn.

On April 11, 2017, we entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC “Maxim”) relating to the issuance and sale of 8.6 million shares of our common stock, par value $0.001 per share. The price to the public in this offering was $1.10 per share. Maxim agreed to purchase the shares from us pursuant to the Underwriting Agreement at a price of $1.0395 per share. The net proceeds to us from the offering were approximately $8.7 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The offering closed ~~on April 17, 2017. In addition, under~~amend the terms of the ~~Underwriting Agreement, we granted Maxim a 45-day option~~Amending Warrant Holders’ Series U Warrants to, ~~purchase up~~ among other things, (i) limit the Company’s obligation to ~~944,000 additional shares of common stock.~~ On May 31, 2017, Maxim exercised their overallotment option and purchased 849,000 shares at $1.10 per share. The net proceeds to us were $0.8 million, after deducting underwriting costs and offering expenses payable by us.

~~On June 15, 2016,~~ ~~we closed a rights offering originally filed under Form S-1 registration statement in April 2016. Pursuant~~make cash payments to the ~~2016 Rights Offering (as defined in Note 12 below), we sold an aggregate of 6,704,852 units consisting of a total of 6,704,852 shares of common stock~~Amending Warrant Holders upon certain fundamental transactions and ~~3,352,306 warrants, with each warrant exercisable for one share of common stock at~~(ii) establish an exercise price of ~~$3.06 per share, resulting~~$2.25. Subsequent to the Warrant Amendments, the amended Series U warrants are expected to meet the criteria under authoritative guidance to be classified within stockholders’ equity. The Company expects that in ~~total gross proceeds~~April 2020, approximately $4.2 million of ~~$17.1 million. See Note 12~~warrant liability will be reclassed to the stockholders’ equity section of the balance sheet. In addition, approximately $0.7 million of other income representing change in the fair value of

amended warrants from April 1, 2020 to the amendment date will be recorded in the statement of operations and other comprehensive income (loss) for ~~further discussion on~~ the ~~2016 Rights Offering.~~three months ending June 30, 2020.

The Company continues to seek additional capital through strategic transactions and from other financing alternatives. Without additional capital, current working capital will not provide adequate funding to make debt repayments, for research, sales and marketing efforts and product development activities at their current levels. If sufficient capital is not raised, the Company will at a minimum need to significantly reduce or curtail its research and development and other operations, and this would negatively affect its ability to achieve corporate growth goals.

Should ~~we be unable~~the Company fail to raise additional cash from outside sources, this ~~will~~would have a material adverse impact on ~~our~~its operations.

The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

~~Under our Joint Venture Termination Agreement~~Fair value measurements are market-based measurements, not entity-specific measurements. Therefore, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. We follow a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below:

Warrants issued by the Company in connection with a rights offering originally filed under a Form S-1 registration statement in April 2018 (“~~Termination Agreement”~~Series T Warrants”)~~, dated May 8, 2013, with Olympus Corporation~~ and in an underwritten public offering in September 2019 (“~~Olympus”~~Series U Warrants”)~~, we were required to pay Olympus a total purchase price of $6.0 million within two years~~ are classified as liability instruments. Because some of the ~~date~~inputs to our valuation model are either not observable or are not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability is classified as Level 3 in the fair value hierarchy.

The estimated fair value of the Termination Agreement. Pursuant to amendments to the Joint Venture Termination Agreement, dated April 30, 2015 and January 8, 2016, the Company’s repayment obligations were extended through May 8, 2016. We made payments under the Termination Agreement totaling approximately $4.2 million through December 31, 2015, as well as separate payments of $0.5 million each in January 2016 and April 2016, and paid the remaining balance of $0.8 million before the May 8, 2016 due date. There were no outstanding obligations to OlympusSeries T Warrants as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019 was determined by using an option pricing model with the following assumptions:

The Company estimated the fair value of the Series U Warrants with the Black Scholes model. The Series U warrants will bemarked to market as of each balance sheet date until they are exercised or upon expiration, with the changes in fair value recorded as non-operating income or loss in the statements of operations and comprehensive loss.

The following tables summarizes the change in Level 3 warrant liability value (in thousands):

On May 29, 2015, wethe Company entered into the Loan and Security Agreement, dated May 29, 2015, with Oxford (the “Loan and Security Agreement”), pursuant to which it funded an aggregate principal amount of $17.7 million (“Term Loan”), subject to the terms and conditions set forth in the Loan and Security Agreement. The Term Loan accrues interest at a floating rate of at least 8.95% per annum, comprised of three-month LIBOR rate with a floor of 1.00% plus 7.95%. Pursuant to the Loan and Security Agreement, we were previously required to make interest only payments through June 1, 2016 and thereafter we were required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through June 1, 2019, the maturity date. On February 23, 2016, we received an acknowledgement and agreement from Oxford related to the positive data on our U.S. ACT-OA clinical trial. As a result, pursuant to the Loan and Security Agreement, the period for which we are required to make interest-only payments was extended from July 1, 2016 to January 1, 2017. All unpaid principal and interest with respect to the Term Loan is due and payable in full on June 1, 2019. At maturity of the Term Loan, or earlier repayment in full following voluntary prepayment or upon acceleration, we are required to make a final payment in an aggregate amount equal to approximately $1.1 million. In connection with the Term Loan, on May 29, 2015, we issued to Oxford warrants to purchase an aggregate of ~~94,441~~188 shares of our common stock at an exercise price of ~~$10.35~~$5,175 per share. These warrants became exercisable as of November 30, 2015 and will expire on May 29, 2025 and, following the authoritative accounting guidance, are equity classified and its respective fair value was recorded as a discount to the debt.

OnIn September ~~20,~~ 2017 weand June 2018, the Company entered into two amendments to the Term Loan which extended the interest-only period, and the Company agreed to pay Oxford an amendment fee of $250,000 at the earlier of maturity or acceleration of the loan.

On August 31, 2018, the Company entered into a third amendment (the “Third Amendment”) to the Term Loan with Oxford. The Third Amendment extends requires that the Company pay to Oxford, in accordance with its pro rata share of the loans, 75% of all proceeds received (i) from the issuance and sale of unsecured subordinated convertible debt, (ii) in connection with a joint venture, collaboration or other partnering transaction, (iii) in connection with any licenses, (iv) from dividends (other than non-cash dividends from wholly owned subsidiaries) and (v) from the sale of any assets (such requirement, the “Prepayment Requirement”). The Prepayment Requirement does not apply to proceeds from the sale and issuance of the Company’s equity securities, other than convertible debt. The Prepayment Requirement shall apply until an aggregate principle amount of $7.0 million has been paid pursuant to the Prepayment Requirement. However, if less than $7.0 million has been paid pursuant to the

Prepayment Requirement on December 31, 2018 then the Company is required to promptly make additional payments until an aggregate principal amount of $7.0 million has been paid.

On December 31, 2018, the Company entered into a fourth amendment (the “Fourth Amendment”) to the Term Loan with Oxford, which increased the minimum liquidity covenant level from $1.5 million to $2.0 million.

On February and March 2019, the Company entered into a fifth amendment and a sixth amendment to the Term Loan which primarily extended the interest only period to March 29, 2019. On April 29, 2019, the Company entered into a seventh amendment (the “Seventh Amendment”) to the Term Loan, pursuant to which, among other things, Oxford ~~and the Lenders~~ agreed to ~~reduce~~interest only payments starting May 1, 2019, with amortization payments resuming on May 1, 2020. In April 2019, the ~~minimum liquidity covenant level originally at $5~~Company repaid $3.1 million of total principal using the proceeds received from sale of the Company’s former UK and Japan subsidiaries as described in Note 1.

On March 29, 2020, the Company entered into the Ninth Amendment of the Loan and Security Agreement (“Ninth Amendment”), pursuant to ~~$1.5 million. The~~which Oxford agreed to defer the start date of principal repayment from May 1, 2020 to May 1, 2021. In addition, pursuant to the Ninth Amendment, ~~also extends~~on April 1, 2020, the ~~interest-only period~~Company made a $5.0 million paydown of principal upon execution of the Ninth Amendment. After giving effect to this payment, there is $4.3 million of principal outstanding under the Loan ~~Agreement~~Agreement. As a result of this Ninth Amendment, the term of the Term Loan has been extended from June 1, 2021 to ~~January~~June 1, ~~2018,~~2024. In addition, an amendment fee of $1.3 million will be payable in connection with the Amendment at the earlier of the maturity date, acceleration of the loans and the making of certain prepayments. All other major terms remained consistent.

Under authoritative guidance, the Ninth Amendment does not meet the criteria to be accounted for as a ~~further extension through August 1, 2018 if~~troubled debt restructuring. In addition, the Company ~~receives unrestricted net~~performed a quantitative analysis and determined that the terms of the new debt and original debt instrument are not substantially different. Accordingly, the Ninth Amendment is accounted for as debt modification. A new effective interest that equates the revised cash ~~proceeds~~flows to the carrying amount of ~~at least $5 million on or before December 29, 2017.~~the original debt is computed and applied prospectively.

The Term Loan, as amended, is collateralized by a security interest in substantially all of the Company’s existing and subsequently acquired assets, including its intellectual property assets, subject to certain exceptions set forth in the Loan and Security Agreement, as amended. The intellectual property asset collateral will be released upon the Company achieving certain liquidity level when the total principal outstanding under the Loan and Security Agreement is less than $3 million. As of ~~September 30, 2017,~~March 31, 2020, we were in compliance with all of the debt covenants under the Loan and Security Agreement.

~~Our~~The Company’s interest expense for the three ~~and nine~~ months ended ~~September 30, 2017~~ March 31, 2020 and 2019 was ~~$0.5~~$0.3 million and ~~$1.6 million and for the three and nine months ended September 30, 2016 was $0.6 million and $1.9~~$0.5 million, respectively. Interest expense is calculated using the effective interest method, therefore it is inclusive of non-cash amortization in the amount of ~~$0.2 million and $0.6~~$0.1 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~$0.2 million and $0.7~~$0.2 million for the three ~~and nine~~ months ended ~~September 30, 2016,~~ March 31, 2019, related to the amortization of the debt discount, capitalized loan costs, and accretion of final payment.

The ~~Term~~ Loan and Security Agreement, as amended, contains customary indemnification obligations and customary events of default, including, among other things, our failure to fulfill certain obligations under the Term Loan, as amended, and the occurrence of a material adverse change, which is defined as a material adverse change in our business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan. In the event of default by usthe Company or a declaration of material adverse change by ~~our~~its lender, under the Term Loan, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which we may be required to repay all amounts then outstanding under the Term Loan, which could materially harm ~~our~~the Company’s financial condition. As of ~~September 30, 2017, we were in compliance with all covenants under~~March 31, 2020, the ~~Term Loan and have~~Company has not received any notification or indication from ~~the Lenders~~Oxford to invoke the material adverse change clause. However, due to ~~our~~the Company’s current cash flow position and the substantial doubt about ~~our~~its ability to continue as a going concern, the entire principal amount of the Term Loan ~~has been reclassified to~~is presented as short-term. WeThe Company will continue to evaluate the debt classification on a quarterly basis and evaluate for reclassification in the future should ~~our~~its financial condition improve.

~~Six direct customers comprised 61% of our revenue recognized for the nine months ended~~ ~~September~~ ~~30, 2017. Four direct customers accounted for 78% of total outstanding accounts receivable (excluding receivables from~~ ~~the Biomedical Advanced Research Development Authority, a division of the U.S. Department of Health and Human Services~~ ~~(“BARDA”)) as of~~ ~~September~~ ~~30, 2017.~~

~~Three distributors and two direct customers comprised 80% of our revenue recognized for the nine months ended~~ ~~September~~ ~~30, 2016. Two distributors and one direct customer accounted for 28% of total outstanding accounts receivable as of~~ ~~September~~ ~~30, 2016.~~

~~Product revenues, classified by geographic location, are as follows (in thousands):~~

Three months ended

Nine months ended

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Product
Revenues

% of
Total

Product
Revenues

% of
Total

Product
Revenues

% of
Total

Product
Revenues

% of
Total

Americas

$
112

24
%

$
79

11
%

$
315

15
%

$
670

21
%
Japan

279

60
%

575

79
%

1,434

71
%

2,232

70
%
EMEA

18

4
%

76

10
%

204

10
%

281

9
%
Asia Pacific

58

12
%

1

0
%

74

4
%

7

0
%
Total product revenues

$
467

100
%

$
731

100
%

$
2,027

100
%

$
3,190

100
%

~~We earn~~The Company earns revenue for performing tasks under research and development agreements with governmental agencies like ~~BARDA.~~BARDA which is outside of the scope of the new revenue recognition guidance. Revenues derived from reimbursement of direct out-of-pocket expenses for research costs associated with government contracts are recorded as government contracts and other within development revenues. Government contract revenue is recorded at the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in our statements of operations. We

The BARDA contract was terminated by the U.S. Department of Health and Human Services effectively in December 2019. During the three months ended March 31, 2020, the Company recognized ~~$1.3 million and $2.9~~$0.1 million in ~~BARDA~~development revenue ~~for~~and related costs related to unreimbursed costs prior to termination of the ~~three and nine months ended September 30, 2017, as compared to $1.9 million and $5.2 million for the three and nine months ended September 30, 2016.~~contract.

As explained in Note 1, on April 24, 2019 and April 25, 2019, the ~~lower~~Company completed the sale of ~~cost or net realizable value, determined on~~its cell therapy business to Lorem and Mr. Shirahama. The following table summarizes the ~~first-in, first-out (FIFO) method.~~

~~Inventories consisted~~calculation of the ~~following~~loss on sale of the cell therapy business, which was finalized during the fourth quarter of 2019 (in thousands):

There were no assets or liabilities related to discontinued operations as of March 31, 2020 or December 31, 2019.

The following table summarizes the results of discontinued operations for the periods presented (in thousands.):

During the three months ended March 31, 2019, revenues from discontinued operations were related to the cell therapy business. Because of the sale of the cell therapy business to Lorem and Mr. Shirahama, all product revenues and costs of product revenues for these periods have been recorded in loss from discontinued operations in the consolidated statements of operations.

Included in the statement of cash flows are the following non-cash adjustments related to the discontinued operations (in thousands):

Basic per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period increased to include, if dilutive, the number of additional common shares that would have been outstanding as calculated using the treasury stock method. Potential common shares were related ~~entirely~~ to outstanding but unexercised options, multiple series of preferred stock, and warrants for all periods presented.

The following were excluded ~~all potentially dilutive securities, including unvested performance-based restricted stock,~~ from the ~~calculation of~~ diluted loss per share ~~attributable to common stockholders~~calculation for the ~~three and nine month~~ periods ~~ended September 30, 2017 and 2016, as~~presented because their ~~inclusion~~effect would be antidilutive. Potentially dilutive common shares excluded from the calculations of diluted loss per share were 4.8 million for both the three and nine months ended September 30, 2017, which includes 3.7 million outstanding warrants and 1.1 million options and restricted stock awards. ~~Potentially dilutive common shares excluded from the calculation of diluted loss per share were 4.3 million~~ ~~for both the three and nine months ended~~ ~~September~~ ~~30, 2016.~~anti-dilutive:

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on the rate implicit in the lease or an incremental borrowing rate commensurate with the term of the lease.

The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets as long-term assets. Right-of-use assets for financing leases are recorded within property and equipment, net in the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company leases laboratory, office and storage facilities in San Antonio, Texas, under operating lease agreements that expire in 2028. The Company also leases certain office space in Austin, Texas under a month-to-month operating lease agreement. In addition, the Company leases certain equipment under various operating and finance leases. The lease agreements generally provide for periodic rent increases, and renewal and termination options. The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants.

Certain leases require the Company to pay taxes, insurance, and maintenance. Payments for the transfer of goods or services such as common area maintenance and utilities represent non-lease components. The Company elected the package of practical expedients and therefore does not separate non-lease components from lease components.

The table below summarizes the Company’s lease liabilities and corresponding right-of-use assets (in thousands):

The table below summarizes the Company’s lease costs from its unaudited consolidated condensed statement of operations, and cash payments from its unaudited consolidated condensed statement of cash flows during the three months ended March 31, 2020 (in thousands, except years and rates):

Total rent expenses for the three months ended March 31, 2020 was $95,000, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.

The Company’s future minimum annual lease payments under operating and financing leases at March 31, 2020 are as follows in (thousands):

The Company has entered into agreements with various research organizations for pre-clinical and clinical development studies, which have provisions for cancellation. Under the terms of these agreements, the vendors provide a variety of services including conducting research, recruiting and enrolling patients, monitoring studies and data analysis. Payments under these agreements typically include fees for services and reimbursement of expenses. The timing of payments due under these agreements is estimated based on current study progress. As of March 31, 2020~~September~~ ~~30, 2017, we have~~, the Company had clinical research study obligations of ~~$0.8~~$0.9 million, all of which~~which~~ is expected to be paid within a year. Should the timing of the clinical trials change, the timing of the payment of these obligations would also change.

~~We are party to an agreement with Roche Diagnostics Corporation which requires us to make certain product purchase minimums. Pursuant to the agreement, as of September~~ ~~30, 2017, we have a minimum purchase obligation of $4.5 million, $0.5 million of which~~The Company is ~~expected to be completed within a year.~~

~~We are~~ subject to various claims and contingencies related to legal proceedings. Due to their nature, such legal proceedings involve inherent uncertainties including, but not limited to, court rulings, negotiations between affected parties and governmental actions. Management assesses the probability of loss for such contingencies and accrues a liability and/or discloses the relevant circumstances, as appropriate. Management believes that any liability to usthe Company that may arise as a result of currently pending legal proceedings will not have a material adverse effect on ~~our~~the Company’s financial condition, liquidity, or results of operations as a whole.

On February 27, 2017, we entered into a Lease Agreement of office space for our corporate headquarters in San Diego, California (the “Lease”). The initial term of the Lease is 63 months and may be extended upon mutual agreement. We are currently scheduled to take possession of the premises on January 1, 2018, unless they are earlier occupied by us or the commencement date is delayed to allow for substantial completion of tenant improvements. In connection with the Lease, we issued a letter of credit, or Letter of Credit, in favor of the Landlord in the initial principal amount of approximately $0.1 million, which Letter of Credit and corresponding restricted cash increased to $0.3 million on June 1, 2017, and will increase to $0.5 million on the commencement date. The Letter of Credit will remain in effect for the term of the Lease.

~~In addition to the base rent, we will also be obligated under the Lease to make certain payments for operating expenses, property taxes, insurance, insurance deductibles and other amounts.~~

On January 27, 2017, we entered into a Lease Agreement of office space for our office in Tokyo, Japan (the “Japan Lease”). The initial term of the Japan Lease is 61 months, and may be extended upon mutual agreement. The Lease commenced on April 15, 2017.

~~We lease facilities for our headquarters office location as well as international office locations. As of September~~ ~~30, 2017, we have remaining lease obligations of~~ ~~$7.3 million,~~ ~~$1.2 million of which are expected to be completed within a year.~~

~~Fair value measurements are market-based measurements, not entity-specific measurements. Therefore, fair value measurements are determined based on~~On March 29, 2020, the ~~assumptions that market participants would use~~Company and NanoTx, Corp. (“NanoTx”) entered into a Patent and Know-How License Agreement (the “NanoTx License Agreement”), pursuant to which NanoTx granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of radiolabeled nanoliposomes.

The transaction terms will require the Company to make an upfront payment of $400,000 in ~~pricing the asset or liability. We follow a three-level hierarchy to prioritize the inputs used~~cash and $300,000 in the ~~valuation techniques~~Company’s voting common stock (the “Equity Compensation”), subject to ~~derive fair values. The basis for fair value measurements for each level within the hierarchy is described below:~~certain substantive closing conditions. Furthermore,

~~As of September~~ ~~30, 2017,~~ ~~and as of December 31, 2016,~~ the Company ~~did not have any assets or liabilities measured at fair value presented~~may be required to pay up to $136.5 million in development and sales milestone payments and a tiered single-digit royalty on ~~the Company’s balance sheets.~~

We disclose fair value information about all financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. The disclosures of estimated fair value of financial instruments at September 30, 2017U.S. and December 31, 2016, were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

The carrying amounts for cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other liabilities approximate fair value due to the short-term nature of these instruments. ~~Further, based on the borrowing rates currently available for loans with similar terms, we believe the fair value of long-term debt approximates its carrying value.~~European sales.

On February 15, 2017 (the “Closing Date”), we completed the acquisition from Azaya Therapeutics, Inc. (“Azaya”) of certain tangible assets which consisted of a research lab, equipment and leasehold improvements and the assumption of certain of liabilities of Azaya, pursuant to an Asset Purchase Agreement (the “Agreement”). The book value of the tangible assets acquired was approximately $3.0 million at the acquisition date. The assets acquired are located in a facility rented in San Antonio, TX, by Cytori. In addition, pursuant to the Agreement, we acquired intangible assets comprised of two drug candidates in process research and development (IPR&D) stage (i) ATI-0918, a generic bioequivalent formulation of DOXIL/CAELYX, a chemotherapy drug that is a liposomal formulation of doxorubicin; and (ii) ATI-1123, a chemotherapy drug that is a liposomal formulation of docetaxel.

At the closing of the acquisition, we (i) issued 1,173,241 of shares of our common stock in Azaya’s name, (A) 879,931 of which were delivered to Azaya promptly after the Closing, and (B) 293,310 of which were deposited into a 15-month escrow pursuant to a standard escrow agreement; and (ii) assumed the obligation to pay approximately $1.8 million of Azaya’s existing payables, all of which were paid on or prior to ~~September~~ ~~30, 2017. At the Closing Date, Azaya had no employees and therefore no Azaya employees were transitioned to us.~~

In addition, as of the Closing Date, the Company committed to certain contingent considerations to: (i) pay Azaya fixed commercialization milestone payments based upon achievement of certain net sales milestones for ATI-0918; (ii) make certain earn-out payments to Azaya equal to a mid-single-digit percentage of net sales of ATI-0918; and (iii) make certain earn-out payments to Azaya equal to a low single-digit percentage of net sales of any product (ATI-0918 is the “Generic Product” and ATI-1123 is the “Patented Product”), including ATI-1123, that practices a claim in the related patent assigned by Azaya to the Company (the “ATI-1123 Patent”). Our aggregate earn-out payment obligations to Azaya from global net sales of both ATI-0918 and any Patented Product will not exceed $100.0 million (the “Earn-Out Cap”).

Further, the Agreement provides that if we enter into certain assignments, licenses or other transfers of rights to a Patented Product or the ATI-1123 Patent, we will pay Azaya a percentage in the low to mid-teens of the consideration received by us, provided, that our aggregate payment obligation to Azaya for any such assignment, license or other transfer of rights will not exceed $50.0 million.

If the Company or its successors, sublicenses or transferees sells a competing product to ATI-0918 at any time prior to satisfaction of the Earn-Out Cap, other than because ATI-0918 fails to receive marketing authorization from the European

Medicines Agency within a certain period of time or fails to generate a minimum threshold of net sales within a pre-determined amount of time, then 50% of the net sales of such competing product would be deemed to be net sales of ATI-0918 under the Agreement for purposes of calculating commercialization milestone payments and earn-out payments.

We accounted for the acquisition as an asset acquisition because the acquired set of assets did not meet the definition of a business. The total consideration of $4.3 million, which consists of $2.3 million related to the fair value of the common stock issued to Azaya at the acquisition date, $1.8 million in assumed liabilities and $0.2 million in acquisition costs, was allocated to the assets acquired based on their relative fair values at the time of acquisition. All other future payments were deemed contingent consideration which will be accounted for when the contingency is resolved and the consideration is paid or becomes payable.

When determining the fair value of tangible assets acquired, the Company estimated the cost to replace the tangible asset with a new asset, taking into consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of intangible assets acquired, the Company used a discounted cash flow model with key inputs being the applicable discount rate, market growth rates and the timing and amount of future cash flows. The acquired IPR&D is in the early stage of development. Additional research, pre-clinical studies, and regulatory approvals must be successfully completed prior to selling any product. Because there is no current alternative use for the IPR&D, following the authoritative accounting guidance, the Company has expensed it in full on the Closing Date. The Company measured the fair value of the shares issued as consideration in the acquisition of the assets based on the stock price at the acquisition date. Transaction costs directly related to the acquisition of the assets have been capitalized. The total consideration was allocated on a relative fair value basis to the assets acquired, as follows ~~(in thousands):~~

The Company has authorized 5,000,000 shares of preferred stock, par value $0.001 per share. The Company’s Board of Directors is authorized to designate the terms and conditions of any preferred stock we issue without further action by the common stockholders. There were no shares of Series A 3.6% Convertible Preferred Stock outstanding as of March 31, 2020 or December 31, 2019. There were 1,021 shares of Series B Convertible Preferred Stock outstanding as of each of March 31, 2020 and December 31, 2019. There were 938 shares of Series C Preferred Stock outstanding as of each of March 31, 2020 and December 31, 2019.

As of March 31, 2020, there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 291,920 shares of common stock, and 1,021 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 6,133 shares of common stock.

Pursuant to a registration statement on Form S-1 originally filed on April ~~6, 2016,~~27, 2018, as amended, ~~(the “Registration Statement”), and declared~~which became effective ~~by the U.S. Securities and Exchange Commission (“SEC”)~~ on ~~May 26, 2016,~~July 17, 2018, and related prospectus (as supplemented), the Company registered ~~offered~~ and ~~sold~~distributed to holders of its ~~participating stockholders of record as of the announced May 20, 2016 record date, one~~common stock and Series B Convertible Preferred Stock, at no charge, non-transferable subscription ~~right for each share of common stock held by each stockholder as of the record date (the “2016 Rights Offering”). Each right entitled the holder thereof~~rights to purchase ~~one unit at the subscription price~~up to an aggregate of ~~$2.55 per unit, composed~~20,000 units each consisting of one share of ~~common stock~~Series C Preferred Stock and ~~0.5 of a warrant, with each whole warrant exercisable to purchase one share of common stock at an exercise price of $3.06~~1,050 warrants for $1,000 per ~~share for 30 months from the date of issuance.~~unit (“Series T Warrants”). Pursuant to the ~~2016~~2018 Rights Offering, which closed on ~~June 15, 2016,~~July 25, 2018, the Company sold an aggregate of ~~6,704,852~~6,723 units, resulting in total net proceeds to the Company of ~~$15.3~~approximately $5.7 million. The exercise price of the Series T Warrants was further adjusted such that every 50 warrants can be exercised into one share of common stock for $3.2132, and the conversion price of the Series C Preferred Stock was reduced from $7.50 to $3.2132.

As of March 31, 2020, there were 3,788,400 outstanding Series T Warrants that can be exercised into an aggregate of 75,768 shares of common stock.

On September 25, 2019, the Company completed an underwritten public offering. The Company issued ~~pursuant~~289,000 shares of its common stock, along with pre-funded warrants to ~~the 2016 Rights Offering are currently listed on~~ ~~Nasdaq~~ ~~under the symbol “CYTXW.” Based on the relevant authoritative accounting guidance, the warrants were equity classified~~purchase 2,711,000 shares of its common stock and Series U Warrants to purchase 3,450,000 shares of its common stock at $5.00 per share. The Series U Warrants have a term of five years from the issuance date. ~~The warrants may be redeemed by~~In addition, the Company ~~at $0.01 per warrant prior~~issued warrants to ~~their expiration if~~ the ~~Company’s~~Representatives to purchase 75,000 shares of its common stock ~~closes above $7.65~~at $6.25 per share with a term of 5.0 years from the issuance date, in the form of Series U Warrants.

In accordance with authoritative guidance, the pre-funded warrants are classified as equity. The Series U Warrants and the Representative Warrants are classified as liabilities due to a contingent obligation for ~~10 consecutive trading days.~~the Company to settle the Series U Warrants with cash upon certain change in control events.

As of March 31, 2020, there were 3,525,000 outstanding Series U Warrants which can be exercised into an aggregate of 3,525,000 shares of common stock.

On ~~December 22, 2016, we~~September 21, 2018, the Company entered into athe Lincoln Park Purchase Agreement ~~(the “Lincoln Park Purchase Agreement”)~~ with Lincoln Park ~~Capital Fund, LLC (“Lincoln Park”)~~ pursuant to which ~~we have~~the Company has the right to sell to Lincoln Park and Lincoln Park is obligated to purchase up to ~~$20.0~~$5.0 million ~~in amounts~~ of shares, of ~~our~~the Company’s common stock, over the ~~30-month~~24-month period ~~commencing on~~following October 15, 2018. Through December 31, 2018, the ~~date that~~Company sold a ~~registration statement, which we filed with the SEC in December 2016. We may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000~~total of 12,802 shares for proceeds of ~~common stock on any business day but in no event will the amount of a single Regular Purchase (as defined in~~approximately $0.3 million through the Lincoln Park Purchase ~~Agreement) exceed $1.0~~Agreement. During the year ended December 31, 2019, the Company sold a total of 32,170 shares for proceeds of approximately $0.3 million. The ~~purchase price~~Company believes there is no amount remaining available under this financing facility as of March 31, 2020.

In February 2020, the Company amended the 2015 Plan to increase the total number of shares of common stock reserved for issuance under the plan by 250,000 shares. As of March 31, 2020, there are 53,799 and 210,030 shares common stock remaining and available for future issuances under the 2015 and 2014 Plans, respectively.

As of March 31, 2020, the total compensation cost related to non-vested stock options not yet recognized for all our plans is approximately $227,000, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.77 years.

A novel strain of coronavirus (COVID-19) was declared a global pandemic by the ~~Regular Purchases~~World Health Organization in March 2020. COVID-19 has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world. International and U.S. governmental authorities in impacted regions are taking action in an effort to slow the spread of COVID-19, including issuing varying forms of “stay-at-home” orders, and restricting business functions outside of one’s home. In response, the Company has put restrictions on employee travel and working from its executive offices with many employees continuing their work remotely. While the Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, the Company has not yet experienced a significant impact on its business and operations. However, the Company may experience disruptions that could adversely impact its business operations as well as its preclinical studies and clinical trials. The Company is currently continuing the clinical trials it has underway in sites across the U.S., and the Company expects that COVID-19 precautions may directly or indirectly impact the timeline for some of its clinical trials. Some of the Company’s clinical trial sites, including those located in areas severely impacted by the pandemic, have placed new patient enrollment into clinical trials on hold or, for patients traveling from out-of-state, have implemented a 14-day self-quarantine before appointments. The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its financial statements and determined that there were no material adverse impacts on the Company’s results of operations and financial position at March 31, 2020. The full extent to which the COVID-19 pandemic will directly or indirectly impact its business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets.

Between April 17 and April 21, 2020 and as disclosed in the Company’s 8-K filing on April 23, 2020, the Company entered in revised warrant agreements with the holders of 3,372,000 series U warrants. In return for reducing the strike price of the warrants to $2.25 per share, the warrant holders agreed to amend the settlement provisions upon fundamental transactions such that the warrants would meet the requirements to be classified within stockholders’ equity. The Company expects that in April 2020, approximately $4.2 million of warrant liability will be ~~based on~~reclassed to the prevailing market prices of such shares at the time of sales. Our sales of shares of common stock to Lincoln Park under the Lincoln Park Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99%stockholders’ equity section of the then outstanding shares of the common stock. There are no trading volume requirements or restrictions under the Lincoln Park Purchase Agreement. There is no upper limit on the price per share that Lincoln Park must pay for common stock under a Regular Purchase or an accelerated purchase and in no event will shares be sold to Lincoln Park on a day our closing price is less than the floor price of $0.50 per share as set forth in the Purchasebalance sheet. In

addition, approximately $0.7 million of ~~common stock with a market~~other income representing change in the fair value ~~on the date~~ of issuance of approximately $0.2 million as commitment shares in consideration for entering into the Lincoln Park Purchase Agreement. We will issue up to an additional 382,258 shares of common stock on a pro rata basis to Lincoln Park only as and when shares are sold under the Lincoln Park Purchase Agreement to Lincoln Park. Through September 30, 2017, we sold a total of 1,490,937 shares under the Lincoln Park Purchase Agreement, for proceeds of approximately $1.5 million.

During the nine months ended September 30, 2017, we sold 894,050 shares of our common stock under an ATM program, receiving total net proceeds of approximately $1.5 million. During 2016, we sold 1,840,982 shares of our common stock under an ATM program, receiving total net proceeds of approximately $4.4 million.

Onamended warrants from April ~~11, 2017, we entered into an underwriting agreement with Maxim relating~~1, 2020 to the ~~issuance and sale of 8.6 million shares of our common stock, par value $0.001 per share. The price to the public~~amendment date will be recorded in the ~~offering is $1.10 per share. Maxim agreed to purchase~~statement of operations and other comprehensive income (loss) for the ~~shares from us pursuant to~~three months ending June 30, 2020.

In connection with the ~~Underwriting Agreement at a price~~amendment of ~~$1.0395 per share. The net proceeds to us from~~ the ~~offering were approximately $8.7 million, after deducting underwriting discounts~~Company’s Series U warrants, and ~~commissions and estimated offering expenses payable by us. The offering closed~~ ~~on April 17, 2017. In addition, under~~in accordance with the terms of the ~~underwriting agreement, we granted Maxim a 45-day~~ ~~overallotment~~ ~~option to purchase up to 944,000 additional shares~~Series T warrants, the exercise price of ~~common stock.~~ ~~On May 31, 2017, Maxim~~the Company’s Series T warrants was adjusted such that every 50 Series T warrants can be exercised ~~their overallotment option and purchased 849,000 shares at $1.10 per share. The net proceeds to us were $0.8 million, after deducting underwriting costs and offering expenses payable by us.~~

In November 2017, we commenced a public offering in which we distributed to holders of our common stock, at no charge, non-transferable subscription rights to purchase up to 10,000 units, each consisting ofinto one share of ~~our Series B Convertible Preferred Stock and 1,250 warrants to purchase one share of our~~ common stock atfor $2.25.

On April 1, 2020, the Company made a ~~subscription price~~principal repayment of ~~$1,000 per unit (the “2017 Rights Offering”). Each share~~$5.0 million and associated final payment fee of ~~Series B Convertible Preferred Stock will be convertible into 2,500~~$308,000, in accordance with the Ninth Amendment.

On May 7, 2020, in accordance with the terms of the NanoTx License Agreement, the Company paid an upfront payment of $400,000 in cash and issued 230,769 shares of ~~our~~its common stock ~~subject~~ to ~~adjustment. Sales of the units in the 2017 Rights Offering, if any, will be made under our registration statement on Form S-1, filed on August 14, 2017.~~

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

The following discussion and analysis should be read in conjunction with the unaudited financial information and the notes thereto included herein, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31,2019, as filed on March 30, 2020. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the caption “Cautionary Note Regarding Forward-Looking Statements” in this report, as well as under "Part I – Item 1A - Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, in other subsequent filings with the SEC, and elsewhere in this Quarterly Report on Form 10-Q. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10-Q (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations, ~~(MD&A)~~or MD&A, includes the following sections:

Plus Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on the discovery, development, and manufacturing scale up of complex and innovative treatments for patients battling cancer and other life-threatening diseases.

Our proprietary nanotechnology platform is currently centered around the enhanced delivery of a variety of drugs using novel liposomal encapsulation technology. Liposomal encapsulation has been extensively explored and undergone significant technical and commercial advances since it was first developed. Our platform is designed to facilitate new delivery approaches and/or formulations of safe and effective, injectable drugs, potentially enhancing the safety, efficacy and convenience for patients and healthcare providers.

We plan to leverage our nanotechnology platform and expertise using a simple multi-step model that enables us to address unmet needs or underserved conditions while managing risks and minimizing development costs through: (1) mapping of the current and anticipated market landscape to clearly understand the clinical and commercial opportunities and defining nanotechnology options, (2) redesign of known, safe and effective active pharmaceutical ingredients with new nanotechnology, (3) manufacture-to-scale of the reformulated drug along with critical non-clinical (i.e. bench, animal) analyses, (4) evaluation of early-stage clinical utility with a focus on proving safety and defining efficacy over the current standard of care, and (5) partnering the innovative treatment for late-stage clinical trials, regulatory approval, and commercial launch.

In April 2020, we entered into agreements (the “Warrant Amendments”) with certain holders of the Series U Warrants (the “Amending Warrant Holders”) to amend the terms of the Amending Warrant Holders’ Series U Warrants to, among other things, (i) limit the Company’s obligation to make cash payments to the Amending Warrant Holders upon certain fundamental transactions and (ii) establish an exercise price of $2.25. Subsequent to the Warrant Amendments, the amended Series U warrants meet the criteria under authoritative guidance to be classified within stockholders’ equity. As a result of the Warrant Amendments, and in accordance with the terms of the Series T Warrants, the exercise price of our Series T warrants was adjusted such that every 50 Series T warrants can be exercised into one share of common stock for $2.25.

On March 29, 2020, we entered into a ninth amendment (the “Ninth Amendment”) to the Loan and Security Agreement, pursuant to which, among other things, Oxford agreed to defer the start date of principal repayment from May 1, 2020 to May 1, 2021. On April 1, 2020, we made a $5.0 million paydown of principal upon execution of the Ninth Amendment. As a result of this ~~MD&A~~Ninth Amendment, the term of the Term Loan has been extended from June 1, 2021 to June 1, 2024, with all other major terms remained consistent.

On March 29, 2020, we entered into an exclusive license agreement with NanoTx for global development and commercialization of its glioblastoma treatment. Pursuant to the terms of the NanoTx License Agreement, on May 7, 2020 we paid an upfront payment of $400,000 in ~~conjunction~~cash and issued 230,769 shares of its common stock to NanoTx. This license agreement commits us to certain milestone

payments to NanoTx upon successful completion of various milestones, together with royalty and sales payments based on the successful commercialization of the treatment.

A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization in March 2020. COVID-19 has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world. International and U.S. governmental authorities in impacted regions are taking action in an effort to slow the spread of COVID-19, including issuing varying forms of “stay-at-home” orders, and restricting business functions outside of one’s home. In response, the Company has put restrictions on employee travel and working from its executive offices with many employees continuing their work remotely. While the Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, the Company has not yet experienced a significant impact on its business and operations. However, the Company may experience disruptions that could adversely impact its business operations as well as its preclinical studies and clinical trials. The Company is currently continuing the clinical trials it has underway in sites across the U.S., and the Company expects that COVID-19 precautions may directly or indirectly impact the timeline for some of its clinical trials. Some of the Company’s clinical trial sites, including those located in areas severely impacted by the pandemic, have placed new patient enrollment into clinical trials on hold or, for patients traveling from out-of-state, have implemented a 14-day self-quarantine before appointments. The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its financial statements and ~~related notes in Item 1~~determined that there were no material adverse impacts on the Company’s results of operations and ~~our Annual Report on Form 10-K for the fiscal year ended December~~financial position at March 31, ~~2016.~~2020.

This report contains certain statements that may be deemed “forward-looking statements” within the meaning of U.S. securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate and similar expressions or future conditional verbs such as will, should, would, could or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

These statements include, without limitation, statements about our anticipated expenditures, including research and development, sales and marketing, and general and administrative expenses; the potential sizeThe full impact of the ~~market for our products; future development and/or expansion of our products and therapies in our markets, our ability~~COVID-19 outbreak continues to generate product or development revenues and the sources of such revenues; our ability to effectively manage our gross profit margins; our ability to obtain and maintain regulatory approvals; expectations as to our future performance; portions of the “Liquidity and Capital Resources” section of this report, including our potential need for additional financing and the availability thereof; our ability to continue as a going concern; our ability to remain listed on the Nasdaq Capital Market; our ability to repay or refinance some or all of our outstanding indebtedness and our ability to raise capital in the future; and the potential enhancement of our cash position through development, marketing, and licensing arrangements. Our actual results will likely differ, perhaps materially, from those anticipated in these forward-looking statements as a result of various factors, including: the early stage of our product candidates and therapies, the results of our research and development activities, including uncertainties relating to the clinical trials of our product candidates and therapies; our need and ability to raise additional cash, the outcome of our partnering/licensing efforts, risks associated with laws or regulatory requirements applicable to us, market conditions, product performance, potential litigation, and competition within the regenerative medicine field, to name a few. The forward-looking statements included in this report are subject to a number of additional material risks and uncertainties, including but not limited to the risks described under the “Risk Factors” in Item 1A of Part I below, which we encourage you to read carefully.

We encourage you to read the risks described under “Risk Factors” carefully. We caution you not to place undue reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak onlyevolve as of the date of this ~~report (unless an earlier date~~report. As such, it is ~~indicated) and we undertake no obligation to update or revise the statements except~~uncertain as required by law. Such forward-looking statements are not guarantees of future performance and actual results will likely differ, perhaps materially, from those suggested by such forward-looking statements.

~~This Quarterly report on Form 10-Q refers to trademarks such as Cytori Cell Therapy, Habeo Cell Therapy, Celution, StemSource, Celase, Intravase, and~~ ~~Cytori Nanomedicine~~. Solely for convenience, our trademarks and tradenames referred to in this Form 10-Q may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the ~~fullest extent under applicable law, our rights to these trademarks and tradenames.~~

Our strategy is to build a profitable and growing specialty therapeutics company focused on rare and niche opportunities frequently overlooked by larger companies but requiring breadth of scope, expertise and focus often not possessed by or available to smaller companies. To meet this objective, wefull magnitude that the pandemic will have thus far, identified two therapeutic development platforms, discussed below, and candidate therapeutics in our pipeline that hold promise for many patients and significant market potential. Our current corporate activities fall substantially into one of two key areas related to our two therapeutic development platforms: Cytori Cell Therapy and

~~Cytori Cell Therapy, or CCT, is based~~ on the ~~scientific discovery that~~Company’s operations, including its preclinical studies and clinical trials, financial condition, liquidity, and future results of operations. Management is actively monitoring the ~~human adipose~~global situation on its clinical program and timeline, financial condition, liquidity, operations, suppliers, industry, and workforce. The Company also continues to evaluate the extent to which these delays will impact its ability to manufacture its product candidates for its clinical trials and conduct other research and development operations and maintain applicable timelines. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or ~~fat tissue compartment is a source~~liquidity for fiscal year 2020.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of ~~a unique mixed population of stem, progenitor~~employer’s social security payments, net operating loss utilization and ~~regenerative cells that may hold substantial promise in~~carryback periods, modifications to the ~~treatment of numerous diseases~~net interest deduction limitations and ~~conditions. To bring this promise~~technical corrections to ~~health providers, we are developing novel therapies prepared and administered at~~tax depreciation methods for qualified improvement property (QIP). The CARES Act had no material impact on the patient’s bedside with proprietary technologies that include therapy-specific reusable, automated, standardized Celution devices and single-use procedure sets consisting of Celution consumables, Celase reagent, and Intravase reagent. ~~Our lead product candidate, Habeo Cell Therapy (formerly named ECCS-50), was evaluated in a Cytori-sponsored U.S. randomized, placebo-controlled, double-blind, multi-center clinical trial, STAR (~~S~~cleroderma~~ T~~reatment with Celution Processed~~ A~~dipose Derived~~ R~~egenerative Cells)~~,Company’s income tax provision for the ~~treatment of impaired hand function in patients with scleroderma. On July 24, 2017, we announced top-line, preliminary data.~~three months ended March 31, 2020. The ~~STAR trial enrolled and evaluated 88 patients with scleroderma, including 51 patients within~~Company continues to evaluate the diffuse cutaneous subset and 37 with limited cutaneous scleroderma. While the primary and secondary endpoints did not reach statistical significance for the population as a whole, the trial data reported clinically meaningful improvement in the primary and secondary endpoints of both hand function and scleroderma-associated functional disability, for Habeo-treated patients compared to placebo, in the pre-specified subgroup of patients with diffuse cutaneous scleroderma. Additional CCT treatments are in various stages of development in the areas of urology, wounds, and orthopedics. Further, our CCT platform is the subject of investigator-initiated trials conducted by our partners, licensees and other third parties, some of which are supported by us and/or funded by government agencies and other funding sources. Currently, we internally manufacture the Celution devices and consumables in the U.S. and the United Kingdom and source our Celase and Intravase reagents from a third-party supplier. We also have obtained regulatory approval to sell some of our CCT products, including our Celution devices and consumables and associated reagents, in certain markets outside the U.S. In those markets, we have been able to further develop and improve our core technologies, gain expanded clinical and product experience and data, and generate sales.

The Cytori Nanomedicine platform features a versatile protein-stabilized liposomal nanoparticle technology for drug encapsulation that has thus far provided the foundation to bring two promising drugs into early/late stage clinical trials. Nanoparticle encapsulation is promising because it can help improve the trafficking and metabolism of many drugs, thus potentially enhancing the therapeutic profile and patient benefits. Our lead drug candidate, ATI-0918, is a generic version of pegylated liposomal encapsulated doxorubicin. Pegylated liposomal encapsulated doxorubicin is a heavily relied upon chemotherapeutic used in many cancer types on a global basis. We believe that data from a 60-patient European study of ATI-0918 has met the statistical criteria for bioequivalence to CAELYX®, the current reference listed drug in Europe. We intend that these bioequivalence data will serve as a basis for our planned regulatory submission to the European Medicines Agency, or EMA, for ATI-0918. We are currently evaluating our strategic options to bring ATI-0918 to the U.S. market. Our second nanomedicine drug candidate is ATI-1123, a novel and new chemical entity which is a nanoparticle-encapsulated form of docetaxel, also a workhorse chemotherapeutic drug used for many cancers. A Phase I clinical trial of ATI-1123 has been completed and we are investigating possible expansion of this trial to Phase II, most likely in conjunction with a development partner. Finally, in connection with our acquisitionimpact of the ATI-0918 and ATI-1123 drug candidates, we have acquired know-how (including proprietary processes and techniques) and a scalable nanoparticle manufacturing plant in San Antonio, Texas from which we intend to test, validate and eventually manufacture commercial quantities of our nanoparticle drugs.

The primary near-term goal is for Habeo Cell Therapy to be the first cell therapy product approved for the treatment of impaired hand function in patients with scleroderma through Cytori-sponsored and supported clinical development efforts.

In the U.S., the STAR clinical trial evaluated the safety and efficacy of a single administration of Habeo Cell Therapy for impaired hand function in patients with scleroderma. The first sites for our STAR trial were initiated in July 2015 and final enrollment of 88 patients was completed in June 2016. As noted above, preliminary assessment of unblinded top-line data show that while the primary and secondary endpoints did not reach statistical significance at 24 or 48 weeks, the trial data reported potentially clinically meaningful improvement in the primary and secondary endpoints of both hand function and scleroderma-associated functional disability, for Habeo-treated patients compared to placebo, in the subgroup of patients with diffuse cutaneous scleroderma. Further analysis of this data is ongoing.

In Europe, the Investigator-initiated SCLERADEC-II (Subcutaneous Injection of Autologous Adipose Tissue-derived Stromal Vascular Fraction into the Fingers of Patients with Systemic Sclerosis) clinical trial is evaluating the safety and efficacy of a single administration of Habeo Cell Therapy for impaired hand function in patients with scleroderma. The first sites were initiated in October 2015; and 32 of 40 targeted patients were enrolled through September 2017.

In Japan, Cytori held an informal consultation meeting with PMDA in September 2017 to discuss the feasibility of potential Habeo development strategies and clinical trial designs for a single approval trial basedCARES Act on ~~the results from the U.S. STAR clinical trial. Cytori believes that a single arm 20 patient clinical trial of Habeo Cell Therapy for diffuse scleroderma will be required to obtain approval.~~

In addition to our targeted therapeutic development, we have continued to commercialize our CCT technology under select medical device approvals, clearances and registrations to customers in Europe, Japan and other regions. These customers are a mix of research customers evaluating new therapeutic applications of CCT and commercial customers, including our licensing partners, distributors, and end user hospitals, clinics and physicians, that use our Celution System mostly for treatment of patients in private pay procedures. In Japan, our largest commercial market, we gained increased utilization of our products in the private pay marketplace in 2016 due to several factors, including increased clarity around the November 2014 Regenerative Medicine Law (implemented in November 2015 as it relates to regenerative medicine products like CCT) and we project that our sales of consumable sets and market presence in Japan will continue to grow in 2017. The sale of Celution devices, procedure sets, and ancillary products contribute a margin that partially offsets our operating expenses and will continue to play a role in fostering familiarity within the medical community with our technology. It also provides us with valuable product and customer feedback.

Scleroderma is a rare and chronic connective tissue disease generally classified as an autoimmune rheumatic disorder. An estimated 300,000 Americans have scleroderma, about one-third of whom have the systemic form of the disease, known as systemic sclerosis, or SSc. SSc is further sub-classified as diffuse cutaneous and limited cutaneous SSc. Diffuse subset tends to produce more severe manifestations with significant hand dysfunction and internal organ involvement. Diffuse scleroderma accounts for between one third and one half of all cases of systemic sclerosis. Women are affected four times more frequently than men and the condition is typically detected between the ages of 30 and 50. More than 90% of scleroderma patients are afflicted with hand involvement that is typically progressive and can result in chronic pain, blood flow changes and severe dysfunction. A small number of treatments are occasionally used off-label for hand scleroderma, but they do little to modify disease progression or substantially improve symptoms with some challenging side-effects. Current treatment options are directed at protecting the hands from injury and detrimental environmental conditions as well as the use of vasodilators. When the disease is advanced, prostanoids, Endothelin-1 receptor antagonists, and immunosuppressants may be used but are often accompanied by side effects. If these medications are unsuccessful, health providers may perform a sympathectomy to remove nerves to increase blood flow and decrease long-term pain.

SCLERADEC-I is a completed, investigator-initiated, 12-patient, open-label, Phase I pilot trial sponsored by Assistance Publique-Hôpitaux de Marseille, or AP-HM, in Marseille, France. The SCLERADEC-I trial received partial support from Cytori. The six-month results were published in the Annals of the Rheumatic Diseases in May 2014 and demonstrated approximately a 50 percent improvement at six months across four important and validated endpoints used to assess the clinical status in patients with scleroderma with impaired hand function. Two-year follow up data in the SCLERADEC-I trial was presented at the Systemic Sclerosis World Congress in February 2016 and published in the journal ~~Current Research in Translational Medicine~~ ~~in November 2016 and demonstrated sustained improvement in the following four key endpoints: CHFS, SHAQ, RCS, and hand pain, as assessed by a standard visual analogue scale.~~

~~Further, on December 5, 2016, we released top-line results for three-year follow-up data showing sustained benefits materially consistent with those shown in two-year data.~~

~~In 2014, Drs. Guy Magalon and Brigitte Granel, under the sponsorship of AP-HM, submitted a study for review for a follow-up~~

randomized, double-blind, placebo-controlled trial in France using Cytori Cell Therapy, partially supported by Cytori. The trial, named SCLERADEC II, received approval from the French government in April 2015. Enrollment of this trial commenced in October 2015 and is ongoing. The trial is currently approaching 75% enrollment and we expect enrollment to be completed in 2017, approximately one year later than originally projected, due to delays in French regulatory approvals of participating sites. Patients will be followed at six-month post-treatment and compared with placebo treated patients. Pending the six-month results patients in the placebo group will be eligible for crossover using Habeo cells stored at the time of the initial procedure. This crossover arm will open after all patients have completed six-month follow up.

~~Based on the~~its financial position, results of the SCLERADEC-I trial, we initiated the US-based STAR trial. The STAR trial was a 48-week, 19 site, randomized, double blind, placebo-controlled pivotal clinical trial of 88 patients in the U.S. for the treatment of impaired hand function in scleroderma. The trial evaluates the safetyoperations and ~~efficacy of a single administration of~~ ~~Habeo Cell Therapy~~ in patients with scleroderma affecting the hands and fingers. The STAR trial uses the Cochin Hand Function Scale, or CHFS, a validated measure of hand function, as the primary endpoint measured at 24 weeks and 48 weeks (approximately 6 and 12 months) after a single administration of ~~Habeo Cell Therapy~~ ~~or placebo. Of the 88 patients enrolled in STAR, 51 had diffuse cutaneous scleroderma while 37 had the limited form of the disease.~~

On July 24, 2017, we announced top-line, preliminary data from the STAR trial. While the primary and secondary endpoints did not reach statistical significance at 24 or 48 weeks, the trial data reported clinically meaningful improvement in the primary and secondary endpoints of both hand function and scleroderma-associated functional disability for Habeo treated patients compared to placebo, in the subgroup of patients with diffuse cutaneous scleroderma. The Company plans to release a more detailed assessment of STAR trial data at the World Scleroderma Congress in February 2018.

In November 2016, the US FDA Office of Orphan Products Development granted Cytori an orphan drug designation for cryopreserved or centrally processed ECCS-50 (Habeo) for scleroderma. In April 2016, the European Commission, acting on the positive recommendation from the European Medicines Agency Committee for Orphan Medicinal Products, issued orphan drug designation to a broad range of Cytori Cell Therapy formulations when used for the treatment of systemic sclerosis under Community Register of Orphan Medicinal Products number EU/3/16/1643.

Osteoarthritis is a disease of the entire joint involving the cartilage, joint lining, ligaments and underlying bone. The breakdown of tissue leads to pain, joint stiffness and reduced function. It is the most common form of arthritis and affects an estimated 13.9% of US adults over the age of 25, and 33.6% of U.S. adults over the age of 65. Current treatments include physical therapy, non-steroidal anti-inflammatory medications, viscosupplement injections, and total knee replacement. A substantial medical need exists as present medications have limited efficacy and joint replacement is a relatively definitive treatment for those with the most advanced disease.

ACT-OA, was a 94-patient, randomized, double-blind, placebo controlled study involving two doses of Cytori Cell Therapy, a low dose and a high dose, and was conducted over 48 weeks. The randomization was 1:1:1 between the control, low and high dose groups. The trial was completed in June 2015. The goal of this proof-of-concept trial was to help determine: (1) safety and feasibility of the ECCO-50 therapeutic for osteoarthritis, (2) provide dosing guidance and (3) explore key trial endpoints useful for a Phase III trial.

We completed top-line analysis of the final 48-week data in July 2016. A total of 94 patients were randomized (33 placebo, 30 low dose ECCO-50, 31 high dose ECCO-50). In general, a clear difference between low and high dose ECCO-50 was not observed and therefore the data for both groups have been combined. We evaluated numerous endpoints that can be summarized as follows:

In summary, the ACT-OA Phase II trial demonstrated feasibility of same day fat harvesting, cell processing and intra-articular administration of autologous ADRCs (ECCO-50) with a potential for a beneficial effect of ECCO-50. The accumulated data and experienced gained will be critical in considering designs of further clinical trials in osteoarthritis and other potential indications. In

addition, we are actively pursuing partnering and commercialization opportunities for ECCO-50 to further develop our knee osteoarthritis program and also to support our growing commercial sales into the knee osteoarthritis market in Japan.

Another therapeutic target under evaluation by Cytori led by the University of Nagoya and three other sites and partially supported by the Japanese MHLW, is stress urinary incontinence in men following surgical removal of the prostate gland, which is based on positive data reported in a peer reviewed journal resulting from the use of ADRCs prepared by our Celution System. The ADRESU trial is a 45 patient, investigator-initiated, open-label, multi-center, single arm trial that was approved by the Japanese MHLW in July 2015 and is being led by both Momokazu Gotoh, MD, Ph.D., Professor and Chairman of the Department of Urology and Tokunori Yamamoto, MD, Ph.D., Associate Professor Department of Urology at University of Nagoya Graduate School of Medicine. Trial enrollment began in September 2015, and in October 2017, the trial is over 75% enrolled. Full enrollment is expected by the end of 2017 with top-line results available in late 2018. This clinical trial is primarily sponsored and funded by the Japanese government, including a grant provided by AMED.

We are also developing Cytori Cell Therapy, or DCCT-10, for the treatment of thermal burns. In the third quarter of 2012, we were awarded a contract by BARDA valued at up to $106 million to develop a medical countermeasure for thermal burns. The total award under the BARDA contract has been intended to support all clinical, preclinical, regulatory and technology development activities needed to complete the FDA approval process for use of DCCT-10 in thermal burn injury under a device-based pre-market authorization, or PMA, regulatory pathway and to provide preclinical data in burn complicated by radiation exposure.

Pursuant to this contract, BARDA initially awarded us approximately $4.7 million over the initial two-year base period to fund preclinical research and continued development of our Celution System to improve cell processing. In August 2014, BARDA determined that Cytori had completed the objectives of the initial phase of the contract, and exercised its first contract option in the amount of approximately $12 million. In December 2014 and September 2016, BARDA exercised additional contract options pursuant to which it provided us with $2.0 million and $2.5 million in supplemental funds, respectively. These additional funds supported continuation of our research, regulatory, clinical and other activities required for submission of an IDE request to the FDA for RELIEF, a pilot clinical trial using DCCT-10 for the treatment of thermal burns. In April 2017, we received approval of an IDE from the FDA to conduct a pilot clinical trial of CCT in patients with thermal burn injuries. This trial is referred to as the RELIEF clinical trial. In May 2017, we announced BARDA’s exercise of Option 2 of up to approximately $13.4 million to fund RELIEF.

In accordance with the terms of the Amendments, BARDA will provide us with reimbursement of costs incurred, plus payment of a fixed fee, in the aggregate amount of up to approximately $13.4 million, or the Funding Amount. We are responsible for further costs in excess of the Funding Amount, if any, to meet the objectives of the Pilot Trial. The Amendments also extend the term of the BARDA Agreement and the period of performance of Option 2 of the BARDA Agreement to November 30, 2020.

In February 2017, we completed our acquisition of the assets of Azaya Therapeutics, Inc., or Azaya, pursuant to the terms of an Asset Purchase Agreement, dated January 26, 2017. Pursuant to the terms of the agreement, we acquired equipment and certain intellectual property including a portfolio of investigational therapies and related assets, and assumed certain liabilities, from Azaya in exchange for the issuance of 1,173,241 of shares of our common stock in the amount of $2.3 million, assumption of approximately $1.8 million in Azaya’s payables, and the obligation to pay Azaya future milestones, earn-outs and licensing fees. The acquisition of Azaya brought two additional product candidates, ATI-0918 and ATI-1123, into the Cytori pipeline and we intend to develop and potentially commercialize both, most likely in conjunction with a commercial and or commercial partner.

ATI-0918 is a complex generic formulation of the market-leading oncology drug, DOXIL®/CAELYX®, which is a pegylated liposomal encapsulation of doxorubicin and approved in the U.S. for ovarian cancer, multiple myeloma, and Kaposi’s Sarcoma; and in the European Union for breast cancer, ovarian cancer, multiple myeloma, and Kaposi’s Sarcoma. The current approval pathway for ATI-0918 is to leverage existing bioequivalence data to CAELYX® for approval in the EU and to demonstrate bioequivalence to Lipodox® in the U.S. A study to demonstrate ATI-0918’s bioequivalence to CAELYX®, for purposes of EMA approval, has been completed and we intend for these data to serve as the basis for our submission of a marketing authorization application for ATI-0918 to the EMA. We are also making plans to perform a bioequivalence study of ATI-0918 to the U.S. Reference Standard, or RS, to serve as the basis for submission of an ANDA for U.S. FDA approval. We currently anticipate that any U.S. bioequivalence trial for ATI-0918 would be funded by a development partner or licensee.

~~ATI-1123 is a novel liposomal formulation of docetaxel. Generic forms of docetaxel are currently FDA approved and marketed for~~

non-small cell lung cancer, breast cancer, squamous cell carcinoma of the head and neck cancer, gastric adenocarcinoma, and hormone refractory prostate cancer. Its side effects include hair loss, bone marrow suppression, and allergic reactions. There is currently no form of liposomal docetaxel approved or commercially available. There is a protein (albumin) bound form of a similar chemotherapeutic drug, paclitaxel known as Abraxane®, which demonstrated some clinical advantages to paclitaxel. ATI-1123 has shown promising results in preclinical animal models that suggest it may have superior qualities to docetaxel, including actions against some tumor types that are not amenable to treatment by docetaxel. A Phase I study of ATI-1123 has been completed in late stage refractory patients and has shown some activity in several tumor types (mostly stable disease). We are currently evaluating clinical scenarios to bring into Phase II studies in several indications, including small cell lung cancer, and potential development partnerships.cash flows.

~~Product revenues consisted of revenues primarily from the sale of Cytori Cell Therapy-related products.~~

~~The following table summarizes the components for the three and nine months ended September 30, 2017 and 2016 (in thousands):~~

We experienced a decrease of $0.3 million and $1.2 million in product revenue during the three and nine months ended September 30, 2017 as compared to the same period in 2016. The decrease in the three-month period is due to lower sales in Japan of $0.3 million. The decrease in the nine-month period is primarily due to lower sales in the Americas of $0.4 million and Japan of $0.5 million. The lower sales in Japan for the three and nine months periods is primarily due to lack of Celution device sales, offset by an increase in Celution consumable utilization.

~~The future:~~ We expect to continue to generate a majority of product revenues from the sale of Cytori Cell Therapy-related products to researchers, clinicians, and distributors in all regions. In Japan and EMEA, researchers will use our technology in ongoing and new investigator-initiated and funded studies focused on, but not limited to, hand scleroderma, Crohn’s disease, peripheral artery disease, erectile dysfunction, and diabetic foot ulcers. Habeo Cell Therapy for hand scleroderma will continue to be accessible to patients and physicians through a managed access program, or MAP. We announced in mid-June of 2017 that we ended our MAP agreement with IDIS (initiated in 2016) and partnered with a new vendor, myTomorrows, with expanded geographical coverage for MAP, including Europe, Middle East and Latin America (excluding Chile). myTomorrows is an innovative and fully integrated organization dedicated to providing fully compliant early access to innovative therapeutics in advance of the products full marketing authorization in the countries that it serves.

Cost of product revenues relate primarily to Cytori Cell Therapy-related products and includes material, manufacturing labor, and overhead costs, as well as amortization of intangible assets. The following table summarizes the components of our cost of revenues for the three and nine months ended September 30, 2017 and 2016 (in thousands):

Cost of product revenues as a percentage of product revenues was 104.3% and 94.3% for the three and nine months ended September 30, 2017 and 84.5% and 55.5% for the three and nine months ended September 30, 2016. Fluctuation in this percentage is due to our product mix, distributor and direct sales mix, geographic mix, foreign exchange rates, idle capacity, allocation of overhead, and higher intangible amortization expense.

~~The future:~~ We expect to continue to see variation in our gross profit margin as the product mix, distributor and direct sales mix and geographic mix comprising revenues fluctuate. We are investigating various pricing options for our cellular therapeutics, which may help to increase our gross profit margins in 2017 and beyond.

Under our government contract with BARDA, we recognized a total of ~~$1.3 million and $2.9~~$0.1 million in revenues for the three ~~and nine~~ months ended ~~September 30, 2017 which included allowable fees as well as cost reimbursements. During the three~~March 31, 2020 and ~~nine months ended September 30, 2017, we incurred $1.2 million and $2.7~~$0.1 million in qualified expenditures. ~~During~~The BARDA contract was terminated in December 2019 and the Company expects the close out process will be completed in the three ~~and nine~~ months ~~ended September~~ending June 30, 2016, we recognized revenue of $1.9 million and $5.2 million and incurred $1.7 million and $4.8 million in qualified expenditures, respectively. The decrease in revenues for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 is primarily due to slight decreases in research and development activities related to BARDA.

~~The future:~~ ~~We entered into an amendment with BARDA in May 2017 for the initiation of the RELIEF pilot clinical trial of DCCT-10 in thermal burn injury.~~ ~~The amendment extends the term of the BARDA Agreement and the period of performance of Option 2 of the BARDA Agreement to November 30, 2020~~.2020.

Research and development expenses relate to the development of a technology platform that involves using adipose tissue as a source of autologous regenerative cells for therapeutic applications, oncology drug program expenses, as well as the continued development efforts related to our clinical trials.

Research and development expenses include costs associated with the design, development, testing and enhancement of our products, payment of regulatory fees, laboratory supplies, pre-clinical studies and clinical studies.

The following table summarizes the components of our research and development expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
General research and development	$	2,976	$	3,858	$	9,168	$	12,971
Research and development									$	937	$	1,415
Share-based compensation		28		102		116		363		4		11
Total research and development expenses	$	3,004	$	3,960	$	9,284	$	13,334	$	941	$	1,426

The decrease in research and development expenses ~~excluding share-based compensation,~~ for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 as compared to the same period in ~~2016~~2019 is due primarily to a decrease of approximately $0.7 million and $3.2 million for the three and nine months periods in clinical study expenses as well as a decrease of approximately $0.3 million and $0.7 million in salaries and benefitsdecreased professional services as a result of ~~completion~~discontinuing manufacturing subsequent to sale of ~~enrollment in our U.S. clinical trials enrolling in 2016.~~the Company’s former cell therapy business.

We expect aggregate research and development expenditures ~~remain consistent at current levels for~~to increase significantly during the ~~balance~~remainder of ~~2017, as we begin~~2020 due to our ~~clinical activities on the RELIEF clinical trial and our ongoing development efforts of the recently acquired ATI-0918 asset from Azaya.~~investment in NanoTx therapy treatment development.

Sales and marketing expenses include costs of sales and marketing personnel, events and tradeshows, customer and sales representative education and training, primary and secondary market research, and product and service promotion. The following table summarizes the components of our sales and marketing expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
Sales and marketing	$	812	$	779	$	2,952	$	2,611	$	109	$	112
Share-based compensation		28		39		91		131		1		2
Total sales and marketing expenses	$	840	$	818	$	3,043	$	2,742	$	110	$	114

Sales and marketing expenses ~~excluding share-based compensation~~ remained consistent ~~at $0.8 million during~~for the three months ended ~~September 30, 2017 and increased by approximately $0.3 million during the nine months ended September 30, 2017 as~~March 31, 2020 compared to

with the same period ~~in 2016 due to increases in professional services mostly related to our operations in Japan, commercial planning activities for Habeo in the U.S. and investments in the EMEA managed access program.~~of 2019.

We expect sales and marketing expenditures to ~~slightly decrease during~~remain consistent on a quarterly basis for the ~~balance~~remainder of ~~2017,~~2020 as ~~we delay efforts on commercial readiness activities for Habeo in~~compared with the ~~U.S.~~quarter ended March 31, 2020.

General and administrative expenses include costs for administrative personnel, legal and other professional expenses, and general corporate expenses. The following table summarizes the general and administrative expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
General and administrative	$	1,668	$	1,883	$	5,649	$	6,228	$	1,501	$	1,327
Share-based compensation		117		128		363		395		7		36
Total general and administrative expenses	$	1,785	$	2,011	$	6,012	$	6,623	$	1,508	$	1,363

General and administrative expenses ~~excluding share-based compensation decreased~~increased by ~~$0.2 million and $0.6~~$0.1 million during the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020, as compared to the same ~~periods~~period in ~~2016~~2019. The increase is primarily ~~due to decreases~~driven by an increase of $0.3 million of professional fees in ~~salary~~the three months ended March 31, 2020, and ~~related benefits expense consistent~~a reduction of personnel expenses of $0.2 million in three months ended March 31, 2020, compared with ~~our ongoing cost curtailment efforts.~~the same period of 2019.

We expect general and administrative expenditures to remain ~~materially~~ consistent ~~at current levels~~on a quarterly basis for the ~~balance~~remainder of ~~2017.~~2020 as compared with the quarter ended March 31, 2020.

Share-based compensation ~~expenses include~~expense includes charges related to options and restricted stock awards issued to employees, directors and ~~non-employees along with charges related to the employee stock purchases under the Employee Stock Purchase Plan, or ESPP.~~non-employees. We measure stock-based compensation expense based on the grant-date fair value of any awards granted to our employees. Such expense is recognized over the requisite service period.

The following table summarizes the components of our share-based compensation expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
Cost of product revenues	$	5	$	10	$	18	$	35
Research and development-related		28		102		116		363	$	4	$	11
Sales and marketing-related		28		39		91		131		1		2
General and administrative-related		117		128		363		395		7		36
Total share-based compensation	$	178	$	279	$	588	$	924	$	12	$	49

The decrease in share-based compensation ~~expenses~~expense for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 as compared to the same ~~periods~~period in ~~2016~~2019 is primarily related to a lower ~~annual~~ grant activity caused by reductions in headcount and ~~due to the~~ decline in the stock price during ~~2017~~2020 as compared to the same period in ~~2016,~~2019, and its corresponding impact on share-based compensation.

~~The future~~: We expect to continue to grant options ~~and stock awards~~ (which will result in an expense) to our employees, directors, and, as appropriate, to non-employee service providers. In addition, previously-granted options will continue to vest in accordance with their original terms. As of ~~September 30, 2017,~~March 31, 2020, the total compensation cost related to non-vested stock options and stock awards not yet recognized for all our plans is approximately ~~$1.3 million~~$227,000 which is expected to be recognized as a result of vesting under service conditions over a weighted average period of ~~1.58~~2.77 years.

In February 2017, we entered into an agreement to acquire assets, including in process research and development (“IPR&D”) related to two oncology drug product candidates, from Azaya Therapeutics. In connection with this agreement, we recorded an IPR&D charge

totaling $1.7 million. The acquired IPR&D is in the early stage of development and has no alternative use. Additional research, pre-clinical studies, and regulatory approvals must be successfully completed prior to commercialization of any product.

The following table summarizes interest income, interest expense, and other income and expense for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (in thousands):

	For the three months ended September 30,						For the nine months ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
Interest income	$	5		$	4		$	24		$	8		$	36		$	7
Interest expense		(474	)		(645	)		(1,603	)		(1,947	)		(349	)		(515	)
Other income, net		5			54			233			928
Change in fair value of warrants														1,667			210
Total	$	(464	)	$	(587	)	$	(1,346	)	$	(1,011	)	$	1,354		$	(298	)

~~The future:~~We expect interest expense in ~~2017~~2020 to decrease as compared with 2019 due to principal repayment of $5.0 million on April 1, 2020. Between April 17 and April 21, 2020, we entered in revised warrant agreements with the ~~decrease in~~holders of 3,372,000 series U warrants. In return for reducing the ~~principal balance~~strike price of the ~~Loan~~warrants, the warrant holders agreed to amend the settlement provisions upon fundamental transactions. We expect that the amended warrants would meet the requirements for equity classification under authoritative accounting guidance, and ~~Security Agreement, dated May 29, 2015, or the Loan and Security Agreement, with Oxford Finance LLC, or Oxford.~~

The following is a summary of our key liquidity measures at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 (in thousands):

	As of September 30,			As of December 31,		As of March 31,		As of December 31,
	2017			2016		2020		2019
Cash and cash equivalents	$	4,783		$	12,560	$	16,061	$	17,552

Current assets	$	9,842		$	18,747	$	17,697	$	19,825
Current liabilities		18,404			12,501		14,988		14,486
Working capital	$	(8,562	)	$	6,246	$	2,709	$	5,339

We incurred net losses of ~~$4.8 million and $18.4~~$1.1 million for the three ~~and nine~~ months ended ~~September 30, 2017, and $5.4 million and $17.1 million for the three and nine months ended September 30, 2016, respectively.~~March 31, 2020. We have an accumulated deficit of ~~$397.5~~$426.4 million as of ~~September 30, 2017.~~March 31, 2020. Additionally, we ~~have~~ used net cash of ~~$13.9 million and $15.4~~$1.5 million to fund our operating activities for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively.~~

Further, the Loan and Security Agreement, with Oxford Finance, LCC (“Oxford”), as amended and further described in Note 5, requires us to maintain a minimum of $1.5 million in unrestricted cash and cash equivalents on hand to avoid an event of default under the Loan and Security Agreement. Based onMarch 31, 2020. These factors raise substantial doubt about our cash and cash equivalents on hand of approximately $4.8 million at September 30, 2017, we estimate that we must raise additional capital and/or obtain a waiver or restructure the Loan and Security Agreement to avoid defaulting under our $1.5 million minimum cash/cash equivalents covenant.

~~On September 1, 2017, the Company announced a substantial corporate restructuring intended to significantly reduce expenses while maintaining its~~ ability to execute on its BARDA-sponsored cell therapy program, Japanese business and oncology program. The restructuring reduced Cytori’s workforce by approximately 50% and significantly reduced the Company’s operational cash burn.continue as a going concern.

To date, these operating losses have been funded primarily from outside sources of invested capital ~~including~~in our ~~recently completed underwritten public offering, our Lincoln Park Purchase Agreement (“Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) and~~common stock, proceeds raised from the ~~2016 Rights Offering (each defined below), our at-the-market (“ATM”) equity facility, the~~ Loan and Security Agreement, and gross profits. We have had, and we will ~~likely~~ continue to have, an ongoing need to raise additional cash from outside sources to fund our future clinical development programs and other operations. Our inability to raise additional cash would have a material and adverse impact on operations and would cause us to default on our loan.

On March 29, 2020, we entered into the Ninth Amendment, pursuant to which, among other things, Oxford agreed to defer the start date of principal repayment from May 1, 2020 to May 1, 2021. In ~~November 2017,~~addition, on April 1, 2020, we ~~commenced~~made a $5.0 million paydown of principal upon execution of the Ninth Amendment. As a result of this Ninth Amendment, the term of the Term Loan has been extended from June 1, 2021 to June 1, 2024, with all other major terms remained consistent.

In September 2019, we finalized the indirect cost rate under the BARDA Agreement for indirect costs incurred during the years 2012 through 2019, which resulted in approximately $4.6 million of revenue recognized during the year ended December 31, 2019.

In September 2019, we entered into an underwriting agreement with H.C. Wainwright & Co., LLC (the “Representative”), as representative of the underwriters (the “Underwriters”), pursuant to which we sold in an underwritten public offering ~~in which we distributed to holders~~an aggregate of ~~our common stock, at no charge, non-transferable subscription rights to purchase up to 10,000 units,~~(i) 289,000 Class A Units, each consisting of one share of ~~our~~common stock, par value $0.001 per share, of the Company and one Series ~~B Convertible Preferred Stock and 1,250 warrants~~U Warrant to purchase one share of ~~our~~ common stock, ~~at a subscription price of $1,000 per unit (the “2017 Rights Offering”). Each share of Series~~and (ii) 2,711,000 Class B Convertible Preferred Stock will be convertible into 2,500 shares of our common stock, subject to adjustment. Sales of the units in the 2017 Rights Offering, if any, will be made under our registration statement on Form S-1, filed on August 14, 2017. The 2017 Rights Offering is being conducted on a best-efforts basis and there is no minimum amount of proceeds necessary to be received in order for us to close the offering. However, we cannot provide any assurances that we will sell any of the units offered in the 2017 Rights Offering.

On June 15, 2016, the Company closed a rights offering originally filed under Form S-1 registration statement in April 2016 (“Rights Offering”). Pursuant to the Rights Offering, the Company sold an aggregate of 6,704,852 unitsUnits, each consisting of ~~a total of 6,704,852 shares~~one pre-funded Series V Warrant to purchase one share of common stock and ~~3,352,306 warrants, with each warrant exercisable for~~one Series U Warrant to purchase one share of common stock at ~~an exercise~~a public offering price of ~~$3.06~~$5.00 per ~~share, resulting in total gross proceeds~~Class A Unit and $4.9999 per Class B Unit (“September 2019 Offering”). In addition, we granted the Underwriters a 45-day option to ~~us of $17.1 million.~~

~~During the nine months ended September 30, 2017, we sold 894,050~~purchase up to an additional 450,000 shares of our common stock ~~under~~and/or Series U warrants at the public offering price, less the underwriting discounts and commissions. The Underwriters exercised their option to purchase an additional 450,000 Series U warrants. We also issued to the Representative warrants (in the form of the Series U warrants) to purchase 75,000 shares of common stock with an exercise price of $6.25 per share of common stock (“Representative Warrants”).

On April 24, 2019 we received $3.3 million of net cash proceeds related to the sale of the UK subsidiary and our ~~ATM offering program, receiving total~~cell therapy assets (excluding such assets used in Japan or relating to the our contract with BARDA), of which $1.7 million was used to pay down principal, interest and fees on the Loan and Security Agreement, and on April 25, 2019 we received $2.4 million of net cash proceeds related to the sale of ~~approximately $1.5 million. Although sales~~the Japanese Subsidiary, and substantially all of our ~~common~~cell therapy assets used in Japan, of which $1.4 million was used to pay down principal, interests and fees on the Loan and Security Agreement.

In August 2019, we consummated a 1-for-50 reverse stock ~~have taken place~~split pursuant to our ATM offering program, there can be no assurance that we will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that we deem appropriate. In addition, under current SEC regulations, at any time during which the aggregate market value of our common stock held by non-affiliates, or public float, is less than $75.0 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements, including sales under our ATM offering program, is limited to an aggregate of one-third of our public float. As of September 30, 2017, our public float was 34.5 million shares, the value of which was $12.6 million based upon the closingminimum bid price of our common stock ~~of $0.37 on such date. The value of one-third of our public float calculated on~~rose above $1.00 in order to regain compliance with the ~~same basis was approximately $4.2 million.~~

~~On December 22, 2016, we entered into~~Nasdaq Stock Market Listing Rule 5550(a)(2) concerning the Lincoln Park Purchase Agreement and a registration rights agreement, with Lincoln Park pursuant to which we have the right to sell to Lincoln Park and Lincoln Park is obligated to purchase up to $20.0 million in amounts of shares,minimum bid price per share of our common ~~stock, over~~stock.

Based on our stockholders’ equity of $85,000 as of March 31, 2020, we do not meet the ~~30-month period commencing~~minimum stockholders’ equity requirement for continued listing on the ~~date that a registration statement, that we filed~~Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1). Between April 17 and April 21, 2020 and as disclosed in the Company’s 8-K filing on April 23, 2020, the Company entered in revised warrant agreements with the ~~Securities and Exchange Commission (the “SEC”) in December 2016. We may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares~~holders of ~~common stock on any business day but in no event will~~3,372,000 series U warrants. In return for reducing the ~~amount of a single Regular Purchase exceed $1.0 million. The purchase~~strike price of ~~shares~~the warrants, the warrant holders agreed to amend the settlement provisions upon fundamental transactions such that the warrants would meet the requirements for equity classification under authoritative accounting guidance. If this transaction had occurred on March 31, 2020, the warrant liability would have been reduced by $4,952,000, resulting in a warrant liability of ~~common stock related to~~$222,000 and stockholders’ equity of $5,037,000. As a result, the ~~Regular Purchases will be based on~~Company would have met the ~~prevailing market prices of such shares at the time of sales. Our sales of shares of common stock to Lincoln Park~~Nasdaq minimum equity requirement under the Lincoln Park Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of the common stock. There are no trading volume requirements or restrictions under the Lincoln Park Purchase Agreement. There is no upper limit on the price per share that Lincoln Park must pay for common stock under a Regular Purchase or an accelerated purchase and in no event will shares be sold to Lincoln Park on a day our closing price is less than the floor price of $0.50 per share as set forth in the Lincoln Park Purchase Agreement. On December 22, 2016, we issued to Lincoln Park 127,419 shares of common stock as commitment shares in consideration for entering into the Lincoln Park Purchase Agreement. Through September 30, 2017, we sold a total of 1,490,937 shares under the Lincoln Park Purchase Agreement, for proceeds of approximately $1.5 million. We will issue up to an additional 279,258 shares of common stock on a pro rata basis to Lincoln Park only as and when shares are sold under the Lincoln Park Purchase Agreement to Lincoln Park. Nasdaq Listing Rule 5550(b)(1).

Pursuant to this securities transaction and related equity issuance, as well as anticipated gross profits and potential outside sources of capital, we believe we have sufficient cash to fund operations through at least the first quarter of 2018. We continue to seek additional capital through ~~product revenues,~~ strategic transactions ~~including extension opportunities under the awarded BARDA contract,~~ and ~~from~~ other financing alternatives. ~~However, there can be no assurance that~~Without additional capital, current working capital and cash generated from sales will not provide adequate funding for research, sales and marketing efforts and product development activities at their current levels. If sufficient capital is not raised, we will ~~be successful in securing additional resources when needed, on terms acceptable~~at a minimum need to ussignificantly reduce or ~~at all. Therefore, there exists substantial doubt about~~curtail our research and development and other operations, and this would negatively affect our ability to ~~continue as a going concern.~~

~~On April 11, 2017, we entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC (“Maxim”) relating~~achieve corporate growth goals. Our stock price has also been negatively impacted in part by the downturn in the financial markets due to the ~~issuance~~COVID-19 pandemic. This in turn will likely negatively impact our ability to raise funds through equity-related financings. Further, the global economic downturn may impair our ability to obtain additional financing through other means, such as strategic transactions or debt financing. The overall deterioration of the credit and ~~sale of 8.6 million shares of our common stock, par value $0.001 per share. The price~~financial markets due to the ~~public in this offering is $1.10 per share. Maxim agreed~~COVID-19 pandemic will likely generally reduce our ability to ~~purchase the shares from us pursuant~~obtain additional financing to the Underwriting Agreement at a price of $1.0395 per share. The net proceeds to us from the offering were approximately $8.7 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The offering closed on April 17, 2017. In addition, under the terms of the Underwriting Agreement,fund our operations.

Should we granted Maxim a 45-day option to purchase up to 944,000 additional shares of common stock. On May 31, 2017, Maxim exercised their overallotment option and purchased 849,000 shares at $1.10 per share. The net proceeds to us were $0.8 million, after deducting underwriting costs and offering expenses payable by us.

~~Our inability~~be unable to raise additional cash ~~will~~from outside sources, this would have a material adverse impact on ~~operations and will cause us to default on~~ our ~~loan.~~

As of September 30, 2017, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Cash (used in) provided by operating, investing, and financing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 is summarized as follows (in thousands):

	For the nine months ended September 30,						Three Months Ended March 31,
	2017			2016			2020			2019
Net cash used in operating activities	$	(13,904	)	$	(15,372	)	$	(1,502	)	$	(3,270	)
Net cash used in investing activities		(1,541	)		(110	)		(11	)		(6	)
Net cash provided by financing activities		7,657			15,928
Net cash (used in) provided by financing activities								(18	)		1,891
Effect of exchange rate changes on cash and cash equivalents		11			140			—			(4	)
Net decrease in cash and cash equivalents	$	(7,777	)	$	586		$	(1,531	)	$	(1,389	)

Net cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was ~~$13.9 million.~~$1.5 million compared to $3.3 million in the same period of 2019. Overall, our operational cash use decreased during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 as compared to the same period in ~~2016,~~2019, due primarily to ~~a decrease in losses from operations (when adjusted~~timing of cash payments made for ~~non-cash items) of $1.1 million~~operating assets and ~~an improvement of $0.3 million in working capital management.~~liabilities.

Net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2017 resulted primarily from cash outflows for payment for long-lived assets purchased as part of Azaya’s acquisition of $1.2 million~~March 31, 2020 and ~~purchase~~2019 were related to purchases of fixed ~~assets of $0.3 million.~~assets.

~~The net~~Net cash used for financing activities for the three months ended March 31, 2020 was related to cash payments for our finance leases. Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 was primarily related ~~primarily~~ to ~~sale~~sales of common stock of ~~$12.4~~$1.9 million, ~~offset by cash used in principal payments on~~net of costs from sale primarily through our ~~debt of $4.7 million.~~2018 Rights Offering and ATM program.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses, and that affect our recognition and disclosure of contingent assets and liabilities.

While our estimates are based on assumptions we consider reasonable at the time they were made, our actual results may differ from our estimates, perhaps significantly. If results differ materially from our estimates, we will make adjustments to our financial statements prospectively as we become aware of the necessity for an adjustment.

Goodwill is reviewed for impairment annually or more frequently if indicators of impairment exist. We perform our impairment test annually during the fourth quarter. The Company operates in a single operating segment and reporting unit. We monitor the fluctuations in our share price and have experienced significant volatility during the year.

We estimate the fair value of liability classified warrants using an option pricing model. Following the authoritative accounting guidance, warrants with variable exercise price features or with potential cash settlement outside control of the Company are accounted for as liabilities, with changes in the fair value included in operating expenses.

We believe it is important for you to understand our most critical accounting policies. Our critical accounting policies and estimates ~~remain consistent with those reported~~are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~ 2019 and there have been no material changes during the three months ended March 30, 2020.

As of September 30, 2017, there have been no material changes in our market risks from those described in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.Not applicable.

We maintain ~~disclosure~~“disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our reports ~~filed~~that we file or ~~furnished~~furnish pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer and principal accounting officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any

controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer and principal accounting officer), of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the ~~Securities~~ Exchange Act, ~~of 1934, as amended,~~ as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report.

There have been no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we have been involved in routine litigation incidental to the conduct of our business. As of ~~September 30, 2017,~~March 31, 2020, we were not a party to any material legal proceeding.

~~Our~~For a discussion of certain factors that could materially affect our business, ~~is subject~~financial condition, and operating results or that could cause actual results to ~~various risks, including those~~differ materially from the results described in or implied by the forward-looking statements in this Quarterly Report on Form 10-Q, in addition to the information in the section entitled “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully review and consider the information under “Part I, Item ~~1A “Risk~~1A- Risk Factors” ofin our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016 filed with~~2019, as well as the ~~SEC on March 24, 2017, which we strongly encourage you to review with all other information contained or incorporated by reference~~risk factors set forth below. The risk factors below are in ~~this report before you decide to invest in our common stock. In~~ addition to ~~those~~and supplement (and with respect to certain matters, update) the risk factors ~~we identified the following new risks or substantive changes from the risks described~~discussed in our Annual Report on Form 10-K. ~~If any of~~Other than as set forth below, there have been no material changes to the ~~risks described~~risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Risks Related to our ~~Quarterly Reports, or discussed below actually occurs,~~Business and Industry

The COVID-19 pandemic could adversely affect our business, ~~financial condition,~~ results of operations, and financial condition.

The effects of the COVID-19 pandemic on our business continue to evolve and are difficult to predict. To date, the COVID-19 pandemic has significantly and negatively impacted the global economy, and the magnitude, severity, and duration of this impact is unclear and difficult to assess. To combat the spread of COVID-19, the United States and other locations in which we operate have imposed measures such as quarantines and “shelter-in-place” orders that are restricting business operations and travel and requiring individuals to work from home (“WFH”), which has impacted all aspects of our business as well as those of the third-parties with which we collaborate or upon which we rely for certain supplies and services. The continuation of WFH and other restrictions for an extended period of time may negatively impact our productivity, research and development, operations, preclinical studies and clinical trials, business and financial results. Among other things, the COVID-19 pandemic may result in:

The continued disruption of the COVID-19 pandemic may negatively and materially impact our operating and financial operating results, including our cash flows. The resumption of normal business operations may be delayed and a resurgence of COVID-19 could occur resulting in continued disruption to us or third parties with whom we do business. As a result, the effects of the COVID-19 pandemic could have a material adverse impact on our business, results of operations and financial condition for the remainder of 2020 and beyond.

A significant or prolonged downturn in the worldwide economy may harm our business.

The COVID-19 pandemic has caused a significant downturn in the worldwide economy, the severity, magnitude, and duration of which is uncertain. In addition, the deterioration in credit markets and financial markets could limit our ability to obtain external financing to fund our operations and capital expenditures. The downturn in the worldwide economy could have a material adverse effect on our business, results of operations, or financial condition.

We will need substantial additional funding to develop our products and conduct our future ~~growth prospects~~operations, and the impact of the COVID-19 pandemic on the financial markets will likely negatively impact our ability to raise additional financing. If we are

unable to obtain the funds necessary to do so, we may be required to delay, scale back or eliminate our product development activities or may be unable to continue our business operations.

We do not currently believe that our cash resources will be sufficient to fund the development and marketing efforts required to reach profitability without raising additional capital in the near future. We will also continue to require substantial additional capital to continue our clinical development and potential commercialization activities. As a result, we have had, and we will continue to have, an ongoing need to raise additional capital from outside sources to continue funding our operations, including our continuing substantial research and development expenses. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts.

We have secured capital historically from grant revenues, collaboration proceeds, and debt and equity offerings. To obtain additional capital, we may pursue debt and/or equity financing arrangements, strategic corporate partnerships, state and federal development programs, licensing arrangements, and sales of assets or debt or equity securities. We cannot be certain that additional capital will be available on terms acceptable to us, or at all. If we are unsuccessful in our efforts to raise any such additional capital, we may be required to take actions that could be materially and adversely ~~affected.~~ harm our business, including a possible significant reduction in our research, development and administrative operations (including reduction of our employee base), the surrender of our rights to some technologies or product opportunities, delay of our clinical trials or regulatory and reimbursement efforts, or curtailment or cessation of operations.

Our stock price has been negatively impacted in part by the significant volatility and downturn in the financial markets due to the COVID-19 pandemic. This in turn will likely negatively impact our ability to raise funds through equity-related financings. Further, the global economic downturn and deterioration of the credit and financial markets may impair our ability to obtain additional financing through other means, such as strategic agreements or debt financing. Further any debt financing may contain restrictive covenants which limit our operating flexibility and any equity financing will likely result in additional and possibly significant dilution to existing stockholders. Failure to raise sufficient capital, as and when needed, would have a significant and negative impact on our financial condition and our ability to develop our product candidates.

The disruption and volatility in the global capital markets may impact our ability to obtain additional debt financings and may limit our ability to modify our existing debt facilities and increase the risk of non-compliance with covenants under our existing loan agreement.

Under the Loan and Security Agreement, Oxford made a term loan to us in an aggregate principal amount of $17.7 million (the “Term Loan”) subject to the terms and conditions set forth therein. The outstanding principal balance of the Term Loan was $4.3 million subsequent to a repayment of $5.0 million on April 1, 2020 pursuant to the Ninth Amendment to the Loan and Security Agreement.

The Term Loan accrues interest at a floating rate equal to the three-month LIBOR rate (with a floor of 1.00%) plus 7.95% per annum. On March 29, 2020, we and Oxford amended the Loan and Security Agreement to extend the interest-only period. Beginning May 1, 2021, we will be required to make payments of principal and accrued interest in equal monthly installments to amortize the Term Loan through June 1, 2024, the new maturity date.

As security for our obligations under the Loan and Security Agreement, we granted a security interest in substantially all of our existing and after-acquired assets, excluding our intellectual property assets, subject to certain exceptions set forth in the Loan and Security Agreement. If we are unable to discharge these ~~circumstances,~~obligations, Oxford could foreclose on these assets, which would, at a minimum, have a severe material adverse effect on our ability to operate our business.

Our indebtedness to Oxford could adversely affect our operations and liquidity, by, among other things:

The Loan and Security Agreement, as amended, requires us to maintain at least $2.0 million in unrestricted cash and/or cash equivalents and includes certain reporting and other covenants, that, among other things, restrict our ability to (i) dispose of assets, (ii) change the business we conduct, (iii) make acquisitions, (iv) engage in mergers or consolidations, (v) incur additional indebtedness, (vi) create liens on assets, (vii) maintain any collateral account, (viii) pay dividends, (ix) make investments, loans or advances, (x) engage in certain transactions with affiliates, and (xi) prepay certain other indebtedness or amend other financing arrangements. If we fail to comply with any of these covenants or restrictions, such failure may result in an event of default, which if not cured or waived, could result in Oxford causing the outstanding loan amount to become immediately due and payable. If the maturity of our indebtedness is accelerated, we may not have, or be able to timely procure, sufficient cash resources to satisfy our debt obligations, and such acceleration would adversely affect our business and financial condition.

The COVID-19 pandemic has severely impacted the global economic activity and caused significant volatility and negative pressure in the financial markets. This volatility and downturn may affect our business, liquidity position, and financial results. This in turn may negatively impact our ability to remain in compliance with the financial and operating covenants under the Loan and Security Agreement and may restrict our ability to obtain covenant waivers, restructure or amend the terms of our existing debt, or obtain additional debt financing. If the maturity of our indebtedness is accelerated or if we are unable to amend the terms of obtain any necessary waivers under our debt facilities or obtain additional debt or other financing, it would materially and adversely affect our liquidity position and ability to fund our operations. This in turn would materially harm our business and financial conditions.

Our prospects must be evaluated in light of the risks and difficulties frequently encountered by emerging companies and particularly by such companies in rapidly evolving and technologically advanced biotech, pharmaceutical and medical device fields. Our visibility as to our future operating results and our clinical development timeline may be further limited by the impact of the ongoing COVID-19 pandemic. From time to time, we have tried to update our investors’ expectations as to our operating results by periodically announcing financial guidance. However, we have in the past been forced to revise or withdraw such guidance due to lack of visibility and predictability of product demand. If we revise or withdraw guidance or any timelines we may give with respect to our clinical trials, it could materially harm our reputation and the market’s perception of us, and could cause our stock price to decline.

We rely on third parties to conduct our clinical trials, manufacture our product candidates, and perform other services. If these parties are not able to successfully perform due to the impact of the COVID-19 pandemic or otherwise, we may not be able to successfully complete clinical development, obtain regulatory approval or commercialize our product candidates and our business could be substantially harmed.

We rely on third parties in the performance of many of the clinical trial functions, including contract research organizations, that help execute our clinical trials, the hospitals and clinics at which our trials are conducted, the clinical investigators at the trial sites, and other third-party service providers. Failure of any third-party service provider to adhere to applicable trial protocols, laws and regulations in the conduct of one of our clinical trials could adversely affect the conduct and results of such trial (including possible data integrity issues), which could seriously harm our business. The COVID-19 pandemic has placed strain on hospitals and clinics, contract research organizations, and other providers of clinical and medical supplies and equipment. This in turn could impact the ability of third parties such as hospitals to support our clinical trials or perform other services in support of our clinical programs. In addition, third parties may not prioritize our clinical trials relative to those of other customers due to resource or other constraints as a result of the COVID-19 pandemic. We may experience enrollment at a slower pace at certain of our clinical trial sites than initially anticipated. Further, our clinical trial sites may be required to suspend enrollment due to travel restrictions, workplace safety concerns, quarantine, facility closures, and other governmental restrictions. As a result, results from our clinical trials may be delayed, which in turn would have a material adverse impact on our clinical trial plans and timelines and impair our ability to successfully complete clinical development, obtain regulatory approval, or commercialize our product candidates. This in turn would substantially harm our business and operations.

We rely on third-party suppliers for certain components and raw materials and our development and commercialization of any of our product candidates could be stopped, delayed or made less profitable if those third parties are unable to provide us with sufficient quantities of such components or raw materials or are unable to do so at acceptable quality levels or prices due to the COVID-19 pandemic or otherwise.

We acquire some of our components and other raw materials from sole source suppliers. If there is an interruption in supply of our raw materials from a sole source supplier, there can be no assurance that we will be able to obtain adequate quantities of the raw materials within a reasonable time or at commercially reasonable prices. Interruptions in supplies due to pricing, timing, availability, the COVID-19 pandemic, or other issues with our sole source suppliers could have a negative impact on our ability to manufacture products and product candidates, which in turn could adversely affect the development and commercialization of our Nanomedicine product candidates and cause us to potentially breach our supply or other obligations under our agreements with certain other counterparties.

The COVID-19 pandemic has placed a significant strain on the pharmaceutical and medical industries, manufacturers of clinical supplies, and healthcare-related supplies and resources in general. The impact of the COVID-19 pandemic has exacerbated the risks to which we are subject due to our reliance on third-party (and in some cases, sole source) suppliers. Additionally, our suppliers may experience operational difficulties and resource constraints due to the impact of the COVID-19 pandemic. If our third-party suppliers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidates to patients in clinical trials would be jeopardized. Any delay or interruption in the procurement of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.

Due to our limited number of employees, our operations could be significantly and disproportionately impacted if any of our personnel were to test positive for COVID-19.

We maintain a very small executive team and have a limited number of employees. The manufacturing of our oncology drug assets is a highly complex process that requires significant experience and know-how. We also depend on the personal efforts and abilities of the principal members of our senior management and scientific staff to provide strategic direction, manage our operations, and maintain a cohesive and stable environment. In particular, we are highly dependent on our executive officers, especially Marc Hedrick, M.D., our Chief Executive Officer. If any of our personnel were to test positive for COVID-19, it would likely significantly impair our operations. The loss of services of any of our personnel, including Dr. Hedrick, particularly for an extended period due to COVID-19 or otherwise, would likely result in product development delays or the failure of our collaborations with current and future collaborators, which, in turn, may impede or delay our ability to develop and commercialize products and generate revenues.

We may face business disruption and related risks resulting from the COVID-19 pandemic and President Trump's invocation of the Defense Production Act, either of which could have a material adverse effect on our business.

Our development programs could be disrupted and materially adversely affected by the COVID-19 pandemic. As a result of measures imposed by the governments in affected regions, many commercial activities, businesses and schools have been suspended as part of quarantines and other measures intended to contain this outbreak. The spread of COVID-19 worldwide has resulted in the International Health Regulations Emergency Committee of the World Health Organization declaring the outbreak of COVID-19 as a “public health emergency of international concern,” and the World Health Organization characterizing COVID-19 as a pandemic. International stock markets have also been significantly impacted and their downturn and volatility reflect the uncertainty associated with the potential economic impact of the outbreak. The significant declines and subsequent volatility in the Dow Industrial Average since the end of February 2020 has been largely attributed to the effects of the COVID-19 pandemic. In response to the COVID-19 pandemic, President Trump invoked the Defense Production Act, codified at 50 U.S.C. §§ 4501 et seq. (the “Defense Production Act”). Pursuant to the, Defense Production Act the federal government may, among other things, require domestic industries to provide essential goods and services needed for the national defense. While we have not experienced any significant impact on our business as a result of the COVID-19 pandemic, we continue to assess the potential impact COVID-19 and the invocation of the Defense Production Act may have on our ability to effectively conduct our commercialization efforts and development programs and otherwise conduct our business operations as planned. There can be no assurance that we will not be further impacted by the COVID-19 pandemic or by any action taken by the federal government under the Defense Production Act, including downturns in business sentiment generally or in our industry and business in particular.

The market price of our common stock is volatile and may continue to fluctuate significantly, which could ~~decline,~~result in substantial losses for stockholders.

The market price of our common stock has been, and ~~you~~ may ~~lose all~~continue to be, subject to significant fluctuations. Among the factors that may cause the market price of our common stock to fluctuate are the risks described in this “Risk Factors” section and other factors, including:

In addition, the financial markets may experience a loss of investor confidence or otherwise experience continued volatility and deterioration due to the COVID-19 pandemic. A loss of investor confidence may result in extreme price and volume fluctuations in our common stock that are unrelated or disproportionate to the operating performance of our business, our financial condition or results of operations, which may materially harm the market price of our common stock and result in substantial losses for stockholders.

We could be delisted from Nasdaq, which ~~could seriously~~would materially harm the liquidity of our stock and our ability to raise capital.

The Nasdaq Stock Market has experienced significant volatility and declines due to the COVID-19 pandemic, which has also impacted our stock price. In addition, we have a limited public float and our stock price has experienced a significant decline since our corporate restructuring in 2019. Between January 1, 2020 and April 30, 2020, our closing stock price has fluctuated from a high of $2.85 at January 10, 2020 to a low of $1.05 at March 23, 2020. In addition, Nasdaq requires listing issuers to comply with certain standards in order to remain listed on its exchange.

~~Following~~On August 19, 2019, we received a written notice from Nasdaq staff indicating that, based on our stockholders’ deficit of $6.3 million as of June 30, 2019, we no longer meet the alternative compliance standards of market value of listed securities or net income from continuing operations for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain stockholders’ equity of at least $2.5 million. Based on our stockholders’ equity of $85,000 as of March 31, 2020, we do not meet the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1). However, between April 17 and April 21, 2020 and as disclosed in ~~June 2015 and December 2015, we had a hearing~~the Company’s 8-K filing on April 23, 2020, the Company entered in ~~January 2016 relating to our noncompliance~~revised warrant agreements with the ~~$1.00~~holders of 3,372,000 series U warrants. In return for reducing the strike price of the warrants to $2.25, the warrant holders agreed to amend the settlement provisions upon fundamental transactions such that the warrants would meet the requirements for equity classification under authoritative accounting guidance. If this transaction had occurred on March 31, 2020, the warrant liability would have been reduced by $4,952,000, resulting in a warrant liability of $222,000 and stockholders’ equity of $5,037,000. As a result, the Company will have met the Nasdaq minimum ~~bid price per share requirement. The~~equity requirement under Nasdaq ~~Hearing Panel granted us until May 31, 2016~~Listing Rule 5550(b)(1). However, to ~~come into compliance with~~ the ~~minimum bid price requirement, including requirements relating~~extent that we are unable to ~~obtaining stockholders approval of~~resolve any listing deficiency, there is a ~~reverse~~risk that our common stock ~~split that~~may be delisted from Nasdaq, which would ~~bring our stock price above $1.00 per share for a minimum of 10 consecutive trading days. We transferred the listing~~adversely impact liquidity of our common stock and potentially result in even lower bid prices for our common stock.

If, for any reason, Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the ~~Nasdaq Global Market to~~ following may occur, each of which could materially adversely affect our stockholders:

If we are not in compliance by March 5, 2018, we may be afforded a second 180 calendar day compliance period. To qualify for this additional time, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq with the exception of the minimum bid price requirement. In addition, ~~we will be required to notify Nasdaq of our intention to cure the minimum bid price deficiency by effecting a reverse stock split,~~ if necessary. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq would notify us that our securities would be subject to delisting. In the event of such a notification, we may appeal the Nasdaq staff’s determination to delist our securities, but there can be no assurance the Nasdaq staff would grant our request for continued listing.

Our success depends in large part upon the successful development and commercialization of our cellular therapeutics, especially Habeo Cell Therapy for hand impairment in patients with scleroderma. The U.S. STAR clinical trial assessed the safety and efficacy of Habeo Cell Therapy and failed to achieve its primary and secondary endpoints. While we are continuing to assess the top-line data from the trial, we may be unable to identify a viable path forward for continued development of this product candidate, which in turn could materially and adversely affect our business and operations.

Our success in large part is dependent upon our ability to develop our CCT products, and in particular, our lead product candidate, Habeo Cell Therapy (“Habeo”). In July 2017, we announced top-line results from our U.S. STAR clinical trial that evaluated the safety and efficacy of Habeo for hand impairment in patients with scleroderma. In this trial, Habeo did not achieve its primary endpoint of ~~improvement in hand dysfunction, compared to placebo, as measured by the Cochin Hand Function Score, or CHFS, at twenty-four (24) and forty-eight (48) weeks, nor did it achieve its secondary~~ endpoints of improvement in the Raynaud’s Condition Score, or RCS, and the Scleroderma Health Assessment Questionnaire, or SHAQ, at forty-eight (48) weeks, compared to placebo. The Company does not believe that this STAR clinical data is sufficient to submit a pre-market approval, or PMA, application for Habeo to the FDA for hand impairment in patients with scleroderma.

Analysis of the STAR data indicated that within a pre-specified subgroup analysis, Habeo-treated patients within the diffuse cutaneous scleroderma subset indicated improvements in the CHFS and the Health Assessment Questionnaire-Disability Index, or HAQ-DI (a measure of functional disability), that met or exceeded the published criteria for minimally important clinical differences in these measures as compared to STAR patients with diffuse cutaneous scleroderma within the placebo group. However, these differences may not be deemed sufficient to continue development of Habeo. Thorough analysis of our STAR data may result in the determination that there is not a viable plan for continued development of Habeo. ~~Further, anticipated discussions with the FDA and with other regulatory authorities regarding our~~ ~~STAR~~ data and Habeo may be unsuccessful or may result in imposition of onerous requirements should we pursue further development of this therapy. Even if we desire to design further trials and continue to pursue a path toward potential regulatory approval of Habeo, any such development will likely require significant financial and personnel resources. We may be unable to obtain sufficient capital to fund such further trials, and any such trials, if funded, may fail to yield positive results. Further, the failure to achieve our primary or secondary endpoints in the STAR trial will likely have an adverse effect on our current commercial sales of our cellular therapeutics, on the development and implementation of our EMEA managed access program, our and our partners’ efforts to develop, commercialize and sell our cellular therapeutics, and on our efforts to find additional partners to develop and commercialize our cellular therapeutic product candidates.

There can be no assurance that we will be able to further develop Habeo. Our continuing analyses of data from the STAR trial may produce negative or inconclusive results, or may be inconsistent with our previously announced top-line results. Because our cell therapy business is in substantial part dependent on the success of Habeo, if we are unable to identify, fund and ultimately execute an alternative development strategy for this product candidate or our other cell therapy candidates, we may be required to reduce or curtail our cell therapy activities, which would materially and adversely affect our business and operations, and could require us to liquidate, dissolve or otherwise wind down our operations. Further, if we decide to sell or otherwise dispose of our cell therapy platform, we may be unable to identify a suitable acquirer, or may be unable to negotiate and consummate a transaction on terms acceptable to us.

~~If we are unable to successfully partner with other companies to commercialize our product candidates, our business could materially suffer.~~

A key part of our business strategy is to leverage strategic partnerships/collaborations to commercialize our product candidates. We do not have the financial, human or other resources necessary to develop, commercialize, launch or sell our therapeutic offerings in all of the geographies that we are targeting, and thus it is important that we identify and partner with third parties who possess the necessary resources to bring our products to market. We expect that any such partners will provide regulatory and

reimbursement/pricing expertise, sales and marketing resources, and other expertise and resources vital to the success of our product offerings in their territories. We further expect, but cannot guarantee, that any such partnering arrangements will include upfront cash payments to us in return for the rights to develop, manufacture, and/or sell our products in specified territories, as well as downstream revenues in the form of milestone payments and royalties.

We are currently prioritizing our efforts to find a strategic partner for our Habeo. For various reasons, including the preliminary top-line data from our STAR clinical trial announced in July 2017 and the novelty of our cellular therapeutic approach, the regulatory and reimbursement environments for Habeo in certain markets, including Europe and the Asia-Pacific region, are complex and uncertain. There can be no assurance that regulatory agencies or authorities in the U.S., Europe, the Asia-Pacific region or elsewhere will grant conditional or full regulatory approval for Habeo on the timeframes we anticipate, or at all, nor can we guarantee that government or commercial payers will grant us favorable reimbursement for use of Habeo. In fact, we anticipate that our preliminary top-line STAR data will result in delays in our regulatory approval efforts for Habeo, or cause us to abandon or materially alter our regulatory approval strategies for Habeo. Further, even if we receive regulatory approval and favorable reimbursement, there is no guarantee that a market will develop for Habeo at our intended price points, or at all. These commercialization risks could affect prospective partners’ or collaborators’ willingness to enter into partnering arrangements on terms acceptable to us, or at all. Prospective partners may be unwilling to enter into Habeo collaboration/partnering agreements with us in light of our top-line STAR clinical trial data. We anticipate that it will be difficult to find a commercialization partner for Habeo on favorable terms, if at all. Further, if data from the currently enrolling French investigator-initiated SCLERADEC-II trial are not positive, or if the trial is discontinued prior to receipt of data, the regulatory and commercial hurdles for Habeo will further increase, especially in the EU.

We are also prioritizing our efforts to find a strategic partner to help commercialize and sell our ATI-0918 drug candidate, initially in Europe, the U.S., and China, and secondarily, to fund development and commercialization of our ATI-1123 product candidate. We do not currently have the commercial resources to market and sell either ATI-0918 or ATI-1123. There can be no assurance that we will enter into partnering agreements for either ATI-0918 or ATI-1123 with suitable partners on terms acceptable to us, or at all. At present, we do not intend to expend significant resources on development of ATI-1123. However, regardless of whether we enter into a partnering agreement for ATI-0918, we will still incur significant costs and expenses related to manufacturing, testing validation, and regulatory and clinical work necessary to support a generic drug application submission to EMA. If we cannot find a suitable partner for our ATI-0918 product candidate, our business could be significantly harmed.

We may also solicit partnering interest in our ECCO-50 Cell Therapy for use in knee osteoarthritis, but we anticipate that our partnering efforts with respect to this indication will be subordinate to our Habeo Cell Therapy and ATI-0918 partnering efforts. Further, while consistent trends were observed in most secondary endpoints relative to the placebo group in our ACT-OA knee osteoarthritis trial, the 12-week endpoint of single pain on walking question did not achieve statistical significance, so there can be no assurance that our partnering efforts for our ECCS-50 therapeutics will be successful.

In addition, we may seek development and/or commercial partners for the other therapeutic indications set forth in our clinical pipeline, including use of ECCI-50 Cell Therapy in stress urinary incontinence, or SUI, in men following surgical removal of the prostate gland (this therapeutic indication is currently the subject of a Phase III, investigator-initiated trial in Japan, called ADRESU).

There can be no assurance that this male SUI pipeline indication will be attractive to prospective partners. The male SUI market is small (approximately $45.0 million). We anticipate that the failure to achieve the primary and secondary endpoints in our STAR trial could materially hamper our efforts to identify prospective cell therapy partners or to negotiate cell therapy partnering transactions on terms favorable to us, or at all.

Even if we succeed in securing partners for our lead or other product candidates, our partners may fail to develop or effectively commercialize our product candidates. Partnerships and collaborations involving our products and product candidates pose a number of risks, including the following:

~~As a result, partnering agreements may not lead to development or commercialization of our lead product candidates or other product candidates in the most efficient manner or at all.~~

We will need substantial additional funding to develop our products and for our future operations. If we are unable to obtain the funds necessary to do so, we may be required to delay, scale back or eliminate our product development activities or may be unable to continue our business.

We have had, and we will continue to have, an ongoing need to raise additional cash from outside sources to continue funding our operations to profitability, including our continuing substantial research and development expenses. We do not currently believe that our cash balance and the revenues from our operations will be sufficient to fund the development and marketing efforts required to reach profitability without raising additional capital from accessible sources of financing in the near future. Although it is difficult to predict future liquidity requirements, we believe that our $4.8 million in cash and cash equivalents on hand as of September 30, 2017 will be sufficient to fund our currently contemplated operations at least through the first quarter of 2018. Our future capital requirements will depend on many factors, including:

We have secured capital historically from grant revenues, collaboration proceeds, and debt and equity offerings. We will need to secure substantial additional capital to fund our future operations. We cannot be certain that additional capital will be available on terms acceptable to us, or at all. Our ability to raise capital was adversely affected when the FDA put a hold on our ATHENA cardiac trials in mid-2014, which had an adverse impact to stock price performance and our corresponding ability to restructure our debt. Subsequently, a continued downward trend in our stock price resulting from a number of factors, including (i) general economic and industry conditions, (ii) challenges faced by the regenerative medicine industry as a whole, (iii) the market’s unfavorable view of certain of our recent equity financings conducted in 2014 and 2015 (which financings were priced at a discount to market and included 100% warrant coverage), (iv) market concerns regarding our continued need for capital (and the effects of any future capital raising transactions we may consummate), (v) market perceptions of our ATHENA and ACT-OA clinical trial data, and (vi) our recent Nasdaq listing deficiency issues and resultant 1-for-15 reverse stock split, made it more difficult to procure additional capital on terms reasonably acceptable to us. Most recently, the release in July 2017 of the top-line data from our STAR trial, in which we announced the failure to achieve the trial’s primary and secondary endpoints, resulted in a further substantial decrease in our stock price. Though our recent acquisition of the Cytori Nanomedicine business from Azaya Therapeutics, including our ATI-0918 and ATI-1123 drug candidates, appear to have been viewed favorably by our investors and the marketplace, we cannot assure you that this acquisition will not ultimately be viewed negatively and thus further hamper our efforts to attract additional capital. If we are unsuccessful in our efforts to raise any such additional capital, we may be required to take actions that could materially and adversely harm our business,

including a possible significant reduction in our research, development and administrative operations (including reduction of our employee base), surrendering of our rights to some technologies or product opportunities, delaying of our clinical trials or regulatory and reimbursement efforts, or curtailing of or even ceasing operations.

~~Our financing plans include pursuing additional cash through use of our at-the-market, or ATM, offering program, strategic corporate partnerships, licensing and sales of equity.~~ In November 2017, we commenced a public offering in which we distributed to holders of our common stock, at no charge, non-transferable subscription rights to purchase up to 10,000 units, each consisting of one share of our Series B Convertible Preferred Stock and 1,250 warrants to purchase one share of our common stock, at a subscription price of $1,000 per unit (the “2017 Rights Offering”). Each share of Series B Convertible Preferred Stock will be convertible into 2,500 shares of our common stock, subject to adjustment. Sales of the units in the 2017 Rights Offering, if any, will be made under our registration statement on Form S-1, filed on August 14, 2017. The 2017 Rights Offering is being conducted on a best-efforts basis and there is no minimum amount of proceeds necessary to be received in order for us to close the offering. However, we cannot provide any assurances that we will sell any of the units offered in the 2017 Rights Offering.

In addition, in December 2016, we entered into a purchase agreement, or the Lincoln Park Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, pursuant to which we may direct Lincoln Park to purchase up to $20.0 million in shares of our common stock from time to time over a 30-month period, subject to satisfaction of certain conditions. While we have an established history of raising capital through these platforms, and we are currently involved in negotiations with multiple parties, there is no guarantee that adequate funds will be available when needed from additional debt or equity financing, development and commercialization partnerships or from other sources or on terms acceptable to us. In addition, under current SEC regulations, at any time during which the aggregate market value of our common stock held by non-affiliates, or public float, is less than $75.0 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements, including sales under our ATM offering program, is limited to an aggregate of one-third of our public float. As of September 30, 2017, our public float was 34.5 million shares, the value of which was $12.6 million based upon the closing price of our common stock of $0.37 on such date. The value of one-third of our public float calculated on the same basis was approximately $4.2 million.

Further, our Loan and Security Agreement with Oxford Finance, LLC, or Oxford, as amended, requires us to maintain a minimum of $1.5 million in unrestricted cash and cash equivalents on hand to avoid an event of default under the Loan and Security Agreement. Based on our cash and cash equivalents on hand of approximately $4.8 million at September 30, 2017, we estimate that we must raise additional capital and/or obtain a waiver or restructure the Loan and Security Agreement to avoid defaulting under our $1.5 million minimum cash/cash equivalents covenant. If we are unable to avoid an event of default under the Loan and Security Agreement, our business could be severely harmed.

In addition to the funding sources previously mentioned, we continue to seek additional capital through product revenues and state and federal development programs, including additional funding opportunities though our current BARDA contract.

~~We may be or become the target of securities litigation, which is costly and time-consuming to defend.~~

In the past, following periods of market volatility in the price of a company’s securities, the reporting of unfavorable news or continued decline in a company’s stock price, security holders have often instituted class action litigation. The market value of our securities has steadily declined over the past several years for a variety of reasons, including the ~~announcement of the results of our STAR clinical trial in July 2017, and for other reasons~~ discussed elsewhere in this “Risk Factors” section, which heightens our litigation risk. If we face such litigation, we could incur substantial legal costs and our management’s attention could be diverted from the operation of our business, causing our business to suffer. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.

~~None~~We did not issue or sell any unregistered equity securities during the quarter ended March 31, 2020. However, on May 7, 2020, in accordance with the NanoTx License Agreement (as previously disclosed in our Current Report on Form 8-K filed March 30, 2020), we issued 230,769 shares of our common stock to NanoTx pursuant to a private placement exemption under Regulation D of the Securities Act of 1933.

~~None~~On May 13, 2020, we entered into an amended and restated employment agreement with our Chief Executive Officer, Marc Hedrick, which revised the terms set forth in the employment agreement between Mr. Hedrick and the Company, dated as of March 11, 2020, solely to provide that any annual bonus paid to Mr. Hedrick will be based upon his performance during the year for which the bonus is being paid, in light of the corporate goals and objectives established by the compensation committee of the Board.

~~Item 4. Mine Safety Disclosures~~In addition, on May 13, 2020, we entered into an amended and restated employment agreement with our Chief Financial Officer, Andrew Sims which revised the terms set forth in the employment agreement between Mr. Sims and the Company, dated as of March 11, 2020, solely to provide that any annual bonus paid to Mr. Sims will be based upon his performance during the year for which the bonus is being paid, in light of the corporate goals and objectives established by the compensation committee of the Board.

Effective, November 3, 2017, the Company appointed Broadridge Corporate Issuer Solutions, Inc., or Broadridge, as its transfer agent and registrar. All of the Company’s registered securities have been transferred from the Company’s previous transfer agent, Computershare Trust Company N.A., to Broadridge.

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.

DELAWARE		33-0827593
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~3020 CALLAN ROAD, SAN DIEGO, CALIFORNIA~~4200 MARATHON BLVD., SUITE 200, AUSTIN, TX		~~92121~~78756
(Address of principal executive offices)		(Zip Code)

Large Accelerated Filer	☐		Accelerated Filer	☐
Non-Accelerated Filer	☐☒	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☒
			Emerging growth company	☐

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	PSTV	Nasdaq Capital Market

			Page
PART I	~~FINANCIAL INFORMATION~~

	Item 1.	~~Financial Statements (Unaudited)~~	34

		~~Consolidated Condensed Balance Sheets~~	34

		~~Consolidated Condensed Statements of~~ ~~Operations and Comprehensive Loss~~	45

		~~Consolidated Condensed Statements of Stockholders’ Equity~~	6

		~~Consolidated Condensed Statements of Cash Flows~~	57

		~~Notes to Consolidated Condensed~~ ~~Financial Statements~~	68

	Item 2.	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	1519

	Item 3.	~~Quantitative and~~ ~~Qualitative Disclosures about Market Risk~~	2524

	Item 4.	~~Controls and Procedures~~	2524

PART II	~~OTHER INFORMATION~~

	Item 1.	~~Legal Proceedings~~	2625

	Item 1A.	~~Risk Factors~~	2625

	Item 2.	~~Unregistered~~ ~~Sales of Equity Securities and Use of Proceeds~~	30
	~~Item 3.~~	~~Defaults Upon Senior Securities~~	30
	~~Item 4.~~	~~Mine Safety Disclosures~~	30
	Item 5.	~~Other Information~~	3130

	Item 6.	~~Exhibits~~	3231

	As of March 31, 2020			As of December 31, 2019
Expected term	1 year			1.1 years
Common stock market price	$	1.88		$	2.40
Risk-free interest rate		0.17	%		1.59	%
Expected volatility		204	%		168	%
Resulting fair value (per warrant)	$	1.17		$	1.47

	Three Months Ended March 31, 2020
Warrant liability
Beginning balance	$	6,929
Change in fair value		(1,667	)
Ending balance	$	5,262

Warrant liability	Three Months Ended March 31, 2019
Beginning balance	$	916
Change in fair value		(210	)
Ending balance	$	706

	Three months ended										Nine months ended
	September 30, 2017					September 30, 2016					September 30, 2017					September 30, 2016
	Product Revenues		% of Total			Product Revenues		% of Total			Product Revenues		% of Total			Product Revenues		% of Total
Americas	$	112		24	%	$	79		11	%	$	315		15	%	$	670		21	%
Japan		279		60	%		575		79	%		1,434		71	%		2,232		70	%
EMEA		18		4	%		76		10	%		204		10	%		281		9	%
Asia Pacific		58		12	%		1		0	%		74		4	%		7		0	%
Total product revenues	$	467		100	%	$	731		100	%	$	2,027		100	%	$	3,190		100	%

	September 30, 2017		December 31, 2016
Raw materials	$	907	$	885
Work in process		839		1,021
Finished goods		1,762		1,819
	$	3,508	$	3,725


Consideration received	$	7,000
Transaction costs		(1,363	)
Net cash proceeds		5,637
Less:
Carrying value of business and assets sold		12,145
Net loss on sale of business	$	(6,508	)

	As of March 31, 2020
Assets
Operating	$	744
Financing	102
Total leased assets	$	846

Liabilities
Current:
Operating	$	136
Financing	108
Noncurrent:
Operating	624
Financing	4
Total lease liabilities	$	872

Weighted-average remaining lease term (years) - operating leases	6.74
Weighted-average remaining lease term (years) - finance leases	0.82
Weighted-average discount rate - operating leases		7.91	%
Weighted-average discount rate - finance leases		5	%

	Three Months Ended March 31, 2020
Lease expense:
Operating lease expense	$	55
Finance lease expense:
Depreciation of right-of-use assets	32
Interest expense on lease liabilities	2
Total lease expense	$	89

Cash payment information:
Operating cash used for operating leases	$	51
Financing cash used for financing leases	18
Total cash paid for amounts included in the measurement of lease liabilities	$	69

	Financing			Operating
	Leases			Leases

Remaining 2020	$	105		$	159
2021	7			183
2022	—			123
2023	—			100
Thereafter	—			447
Total minimum lease payments	$	112		$	1,012
Less: amount representing interest	0				(252	)
Present value of obligations under leases	112				760
Less: current portion		(108	)		(136	)
Noncurrent lease obligations	$	4		$	624

	February 15, 2017
Tangible assets	$	2,586
Intangible assets		1,686
Total assets	$	4,272

Accounts payable	$	1,796
Fair value of the common stock issued		2,311
Transaction costs		165
Total consideration	$	4,272

	Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2019		1,865		$	2,968.22
Granted		86,000		$	2.18
Cancelled/forfeited		(124	)	$	49,903.00
Outstanding as of March 31, 2020		87,741		$	51.44	$	—
Vested as of March 31, 2020		1,080		$	3,862.00	$	—
Vested and expected to be vested as of March 31, 2020		87,741		$	51.44	$	—

~~Exhibit No.~~
~~Description~~PLUS THERAPEUTICS, INC.

Exhibit Number	Exhibit Title	Filed with this Form 10-Q	Incorporated by Reference
Exhibit Number	Exhibit Title	Filed with this Form 10-Q	Form	File No.	Date Filed
3.1		~~Composite~~ ~~Certificate of ~~Incorporation (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 11, 2016)~~Incorporation~~
.		10-K	001-34375 Exhibit 3.1	03/11/2016
3.2		~~Certificate of Amendment to Amended~~ ~~and Restated ~~Bylaws~~Certificate of ~~Cytori Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 14, 2003)~~Incorporation.~~
		8-K	001-34375 Exhibit 3.1	05/10/2016
3.3		Certificate of Amendment to Amended and Restated ~~Bylaws~~Certificate of ~~Cytori Therapeutics, Inc. (incorporated by reference to our Current Report on Form 8-K filed with the Commission on May 6, 2014)~~Incorporation
.		8-K	001-34375 Exhibit 3.1	05/23/2018
3.4	~~Certificate of Amendment to Amended and Restated Certificate of Incorporation~~.		8-K	001-34375 Exhibit 3.1	07/29/2019
3.5	~~Certificate of Amendment to Amended and Restated Certificate of Incorporation~~.		8-K	001-34375 Exhibit 3.1	08/06/2019
3.6	~~Certificate of Designation of Preferences, Rights and Limitations of Series A 3.6% Convertible Preferred Stock ~~(incorporated by reference~~~~.		8-K	001-34375 Exhibit 3.1	10/08/2014
3.7	~~Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock~~.		8-K	001-34375 Exhibit 3.1	11/28/2017
3.8	~~Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock~~.		8-K	001-34375 Exhibit 3.1	07/25/2018
3.9	~~Amended and Restated Bylaws of Plus Therapeutics, Inc.~~		8-K	001-34375 Exhibit 3.2	07/29/2019
4.1	~~Form of Common Stock Certificate~~.		10-K	001-34375 Exhibit 4.33	03/09/2018
4.2	~~Form of Series S Warrant~~.		S-1/A	333-219967 Exhibit 4.27	10/03/2017
4.3	~~Series S Warrant Agent Agreement between Plus Therapeutics, Inc. and Broadridge Corporation Issuer Solutions, Inc~~.		S-1/A	333-219967 Exhibit 4.32	10/03/2017
4.4	~~Form of Series T Warrant~~.		POS AM	333-224502 Exhibit 4.28	07/09/2018
4.5	~~Form of Series T Warrant Agreement between Plus Therapeutics, Inc. and Broadridge Corporation Issuer Solutions, Inc~~.		POS AM	333-224502 Exhibit 4.36	07/09/2018
4.6	~~Form of Series U Warrant~~.		S-1/A	333-229485 Exhibit 4.37	09/16/2019
4.7	~~Form of Warrant Amendment Agreement~~		8-K	001-34375 Exhibit 4.1	04/23/2020
10.1	~~Second Amendment to ~~our Current Report~~~~ ~~~~on Form 8-K filed with~~ the ~~Commission on October 8, 2014)~~Plus Therapeutics, Inc. 2015 New Employee Incentive Plan~~		10-K	001-34375 Exhibit 10.25	03/30/2020
10.2**	~~Patent and Know-How License Agreement, dated March 29, 2020, between Plus Therapeutics, Inc. and NanoTx, Corp~~.		8-K	001-34375 Exhibit 10.1	03/30/2020
10.3**	~~Ninth Amendment to the Loan and Security Agreement, dated March 29, 2020, between Plus Therapeutics, Inc. and Oxford Finance LLC~~.		8-K	001-34375 Exhibit 10.2	03/30/2020

~~10.1~~
10.4#	~~Contract HHSO100201200008C dated September 27, 2012, by~~Employment Agreement between Marc Hedrick and ~~between Cytori Therapeuti~~~~cs,~~Plus Therapeutics, Inc. and the U.S. Department of Health and Human Services Biomedical Advanced Research and Development Authority (incorporated by reference to Amendment No. 1 to Form S-1 filed with the Commission on October 3, 2017)		8-K	001-34375 Exhibit 10.1	03/12/2020

~~10.2~~


10.5#	~~First Amendment to Loan~~Employment Agreement between Andrew Sims and ~~Security Agreement, dated September 20, 2017, by and between Cytori~~Plus Therapeutics, ~~Inc. and Oxford Finance, LLC (incorporated by reference to Amendment~~ ~~~~No. 1 to Form S-1 (Registration No. 333-219967) filed with the Commission on October 3, 2017)~~Inc~~.		8-K	001-34375 Exhibit 10.2	03/12/2020
10.6#	~~Amended and Restated Employment Agreement between Marc Hedrick and Plus Therapeutics, Inc~~.	X
10.7#	~~Amended and Restated Employment Agreement between Andrew Sims and Plus Therapeutics,~~ ~~Inc~~.	X

10.8#	Form of Indemnification Agreement.		8-K	001-34375 Exhibit 10.1	02/06/2020

31.1		~~Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a), as adopted~~ ~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ~~(filed herewith).~~~~
X
31.2		~~Certification of Principal Financial and~~ ~~Accounting Officer Pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of thethe Sarbanes-Oxley Act of 2002 ~~(filed herewith).~~~~
X
32.1*		~~Certifications Pursuant to 18 U.S.C. Section 1350/ Securities~~ ~~Exchange Act Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002~~~~(filed herewith).~~	X


101.INS		XBRL Instance Document

101.SCH		XBRL Schema Document

101.CAL		XBRL Calculation Linkbase Document

101.DEF		XBRL Definition Linkbase Document

101.LAB		XBRL Label Linkbase Document

101.PRE		XBRL Presentation Linkbase Document

	~~CYTORI~~PLUS THERAPEUTICS, INC.

	By:	/s/ Marc H. Hedrick
Dated: ~~November 9, 2017~~May 14, 2020		Marc H. Hedrick
		President & Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

	By:	/s/ ~~Tiago Girao~~Andrew Sims
Dated: ~~November 9, 2017~~ May 14, 2020		~~Tiago Girao~~Andrew Sims
		~~VP of Finance and~~ Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer and Principal Accounting Officer)