☒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,~~April 14, 2022, there were ~~35,119,410~~22,197,635 shares of the registrant’s common stock outstanding.

This report and the exhibits incorporated herein by reference contain “forward-looking statements” which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Statements other than statements of historical fact--constitute “forward-looking statements.” These forward-looking statements do not constitute guarantees of future performance. These forward-looking statements may be identified by terms such as “intend,” “expect,” “project,” “believe,” “anticipate,” “initiate,” “will,” “should,” “would,” “could,” “may,” “designed,” “potential,” “evaluate,” “hypothesize,” “plan,” “progressing,” “proceeding,” “exploring,” “opportunity,” “hopes,” “suggest,” 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 about our anticipated expenditures, including research and development, and general and administrative expenses; the Company’s strategic collaborations and license agreements, intellectual property, FDA approvals and interactions and government regulation; the potential size of the market for our product candidates; our research and development efforts; results from our pre-clinical and clinical studies and the implications of such results regarding the efficacy or safety of our product candidates; the safety profile, pathways, and efficacy of our product candidates and formulations; anticipated advantages of our product candidates over other products available in the market and being developed; the populations that will most benefit from our product candidates and indications that will be pursued with each product candidate; anticipated progress in our current and future clinical trials; plans and strategies to create novel technologies; our IP strategy; competition; future development and/or expansion of our product candidates and therapies in our markets; sources of competition for any of our product candidates; our pipeline; our ability to generate product or development revenue and the sources of such revenue; 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; our ability to transfer the drug product manufacture to a contract drug manufacturing organization; and the potential enhancement of our cash position through development, marketing, and licensing arrangements. 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, 2021, and under “Part II – Item 1A – Risk Factors” in this Quarterly report. These risks and uncertainties could cause actual results to differ materially from expectations or those expressed in these forward-looking statements.

Our actual results may differ, including materially, from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the following: 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 liquidity and capital resources and our 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, among others. 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, 2021, and under “Part II – Item 1A – Risk Factors” in this Quarterly report. These risks and uncertainties could cause actual results to differ materially from expectations or those expressed in these forward-looking statements.

We encourage you to read the risks described under “Risk Factor Summary” and “Part II – Item 1A – Risk Factors” in this report 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. Such forward-looking statements are not guarantees of future performance.


	As of September 30, 2017			As of December 31, 2016			March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	4,783		$	12,560		$	21,239		$	18,400
Accounts receivable, net of reserves of $167 in both 2017 and 2016, respectively		230			1,242
Restricted cash		429			350
Inventories, net		3,508			3,725
Other current assets		892			870			865			1,324
Total current assets		9,842			18,747			22,104			19,724

Property and equipment, net		3,308			1,157			1,558			1,477
Operating lease right-use-of assets								316			341
Goodwill								372			372
Intangible assets, net								150			51
Other assets		1,854			2,336			16			16
Intangibles, net		7,520			8,447
Goodwill		3,922			3,922
Total assets	$	26,446		$	34,609		$	24,516		$	21,981
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	4,907		$	5,872		$	3,203		$	4,151
Current portion of long-term obligations, net of discount		13,497			6,629
Operating lease liability								110			111
Term loan obligation, current								1,608			1,608
Total current liabilities		18,404			12,501			4,921			5,870

Deferred revenues		103			97
Long-term deferred rent and other		120			17
Long-term obligations, net of discount, less current portion		—			11,008
Noncurrent operating lease liability								235			269
Term loan obligation								4,718			5,005
Warrant liability								—			1
Total liabilities		18,627			23,623			9,874			11,145

Commitments and contingencies (Note 9)
Commitments and contingencies (Note 7)

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; 1,952 shares issued and outstanding at March 31, 2022 and December 31, 2021								—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 22,197,635 and 15,510,025 issued and outstanding at March 31, 2022 and December 31, 2021, respectively								22			16
Additional paid-in capital		404,047			388,769			465,646			457,730
Accumulated other comprehensive income		1,199			1,258
Accumulated deficit		(397,462	)		(379,063	)		(451,026	)		(446,910	)
Total stockholders’ equity		7,819			10,986			14,642			10,836
Total liabilities and stockholders’ equity	$	26,446		$	34,609		$	24,516		$	21,981

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

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

Development revenues:

Government contracts and other

1,306

1,879

2,856

5,163

1,306

1,879

2,856

5,163

Operating expenses:

Research and development

3,004

3,960

9,284

13,334

Sales and marketing

840

818

3,043

2,742

General and administrative

1,785

2,011

6,012

6,623

In process research and development acquired from Azaya Therapeutics

—

—

1,686

—

Total operating expenses

5,629

6,789

20,025

22,699

Operating loss

(4,343
)

(4,797
)

(17,053
)

(16,116
)

Other income (expense):

Interest income

5

4

24

8

Interest expense

(474
)

(645
)

(1,603
)

(1,947
)
Other income, net

5

54

233

928

Total other expense

(464
)

(587
)

(1,346
)

(1,011
)
Net loss

$
(4,807
)

$
(5,384
)

$
(18,399
)

$
(17,127
)

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

Comprehensive loss:

Net loss

$
(4,807
)

$
(5,384
)

$
(18,399
)

$
(17,127
)
Other comprehensive loss – foreign currency translation
adjustments

16

58

(59
)

(321
)
Comprehensive loss

$
(4,791
)

$
(5,326
)

$
(18,458
)

$
(17,448
)

	For the Three Months Ended March 31,
	2022			2021
Operating expenses:
Research and development	$	1,785		$	1,127
General and administrative		2,141			1,352
Total operating expenses		3,926			2,479
Operating loss		(3,926	)		(2,479	)

Other income (expense):
Interest income		7			4
Interest expense		(198	)		(247	)
Change in fair value of liability instruments		1			2
Total other expense		(190	)		(241	)
Net loss	$	(4,116	)	$	(2,720	)

Net loss per share, basic and diluted	$	(0.19	)	$	(0.33	)

Basic and diluted weighted average shares used in calculating net loss per share attributable to common stockholders		21,507,061			8,267,901

~~SEE NOTES TO UNAUDITED CONSOLIDATED~~ See Accompanying Notes to these Condensed Financial Statements


	Convertible												Additional							Total
	preferred stock						Common stock						paid-in			Accumulated				stockholders’
	Shares				Amount		Shares			Amount			capital			deficit				equity
Balance at December 31, 2020		1,954		$		—		6,749,028	$		7	$		436,535	$		(433,511	)	$		3,031
Stock-based compensation		—				—		—			—			107			—				107
Sale of common stock, net		—				—		2,534,879			2			7,076			—				7,078
Conversion of Series B Convertible Preferred Stock into common stock		(2	)			—		118			—			—			—				—
Issuance of common stock for exercise of warrants		—				—		896,500			1			2,016			—				2,017
Net loss		—				—		—			—			—			(2,720	)			(2,720	)
Balance at March 31, 2021		1,952		$		—		10,180,525	$		10	$		445,734	$		(436,231	)	$		9,513

Balance at December 31, 2021		1,952		$		—		15,510,025	$		16	$		457,730	$		(446,910	)	$		10,836
Stock-based compensation		—				—		—			—			180			—				180
Sale of common stock, net		—				—		6,687,610			6			7,736			—				7,742
Net loss		—				—		—			—			—			(4,116	)			(4,116	)
Balance at March 31, 2022		1,952		$		—		22,197,635	$		22	$		465,646	$		(451,026	)	$		14,642

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,
	2022			2021
Cash flows used in operating activities:
Net loss	$	(4,116	)	$	(2,720	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		147			88
Amortization of deferred financing costs and debt discount		115			151
Change in fair value of liability instruments		(1	)		(2	)
Share-based compensation expense		180			107
Non-cash lease expense		(10	)		1
Increases (decreases) in cash caused by changes in operating assets and liabilities:
Other current assets		459			(170	)
Accounts payable and accrued expenses		(650	)		(461	)
Net cash used in operating activities		(3,876	)		(3,006	)

Cash flows used in investing activities:
Purchases of property and equipment		(210	)		(84	)
Purchase of intangible assets		(117	)		0
In process research and development acquired		(250	)		0
Net cash used in investing activities		(577	)		(84	)

Cash flows from financing activities:
Principal payments of long-term obligations		(402	)		0
Payment of financing lease liability		0			(6	)
Proceeds from exercise of warrants		0			2,017
Proceeds from sale of common stock		7,694			7,180
Net cash provided by financing activities		7,292			9,191
Net increase in cash and cash equivalents		2,839			6,101
Cash and cash equivalents at beginning of period		18,400			8,346
Cash and cash equivalents at end of period	$	21,239		$	14,447

Supplemental disclosure of cash flows information:
Cash paid during period for:
Interest	$	87		$	96
Supplemental schedule of non-cash investing and financing activities:
Unpaid offering cost	$	171		$	102

~~Our~~The accompanying unaudited ~~consolidated~~ condensed financial statements as of ~~September 30, 2017~~March 31, 2022 and for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 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~~The condensed balance sheet at December 31, ~~2016~~2021 has been derived from the audited financial statements at December 31, ~~2016,~~2021, 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~~its subsidiaries (collectively, the “Company”) have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2022. These financial statements should be read in conjunction with the ~~consolidated~~ financial statements and notes therein included in ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021, filed with the Securities and Exchange Commission on ~~March~~February 24, ~~2017.~~

On May 10, 2016, following stockholder and Board approval, an amendment (the “Amendment”) to the Company’s amended and restated certificate of incorporation, as amended was filed and declared effective, which Amendment effectuated a one-for-fifteen (1:15) reverse stock split of the Company’s (i) outstanding common stock, and (ii) common stock reserved for issuance upon exercise of outstanding warrants and options (the “1:15 Reverse Stock Split”). Upon effectiveness of the 1:15 Reverse Stock Split, the number of shares of the Company’s common stock (x) issued and outstanding decreased from approximately 200 million shares (as of May 10, 2016) to approximately 13.3 million shares; (y) reserved for issuance upon exercise 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 to the Company’s 2014 Equity Incentive Plan) decreased from approximately 6.5 million common shares to approximately 0.4 million common shares. In connection with the 1:15 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.~~

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

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 and ASU No. 2016-20, respectively,~~2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the amendments of which further clarified aspects of Topic 606: identifying performance obligations and the licensing and implementation guidance, improvements to the operability and understandability of the implementation guidance on principal versus agent considerations and contract cost clarifications. The FASB issued the initial release of Topic 606 in ASU No. 2014-09, which requiresimpairment model by requiring entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount 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~~forward-looking approach ~~or a modified retrospective approach as of the date of adoption. We expect~~based on expected losses 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~~estimate credit losses for ~~interim~~most financial assets and ~~annual reporting periods beginning after~~certain other instruments that ~~date. Early adoption of ASU 2016-10 is permitted but not before the original effective date (annual periods beginning after December 15, 2017).~~ ~~We performed a~~

preliminary assessment 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 in standard will have on those deliverables. We will continue to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on the 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.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases. Under this new guidance,~~aren’t measured at ~~the commencement date, lessees~~fair value through net income. For available-for-sale debt securities, entities will be required to recognize ~~(i)~~an allowance for credit losses rather than a ~~lease liability, which is a lessee’s obligation~~reduction in carrying value of the asset. Entities will no longer be permitted to ~~make lease payments arising from a lease, measured on a discounted basis and (ii) a right-of-use asset, which is an asset~~consider the length of time that ~~represents the lessee’s right to use, or control the use of, a specified asset for the lease term.~~fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective in the first quarter of 2023 for calendar-year SEC filers that are smaller reporting companies as of the one-time determination date. Early adoption is permitted beginning in 2019. The Company plans to adopt the new guidance on January 1, 2023, and it does not ~~applicable for leases with a term~~expect that adoption of 12 months or less. 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~~its 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~~statements 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 charge for the amount by which the reporting unit's carrying amount exceeds its fair value. This update is effective for annual periods 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 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 about 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 not anticipate that the adoption of ASU 2016-18 will have a material impact on our consolidated 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.related disclosures.

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~~The Company’s most significant estimates and critical accounting policies involve ~~recognizing revenue,~~ reviewing ~~goodwill and intangible~~ assets for impairment, and determining the assumptions used in measuring ~~share-based~~stock-based compensation ~~expense, measuring expense related to our~~ ~~in process research and development~~ ~~acquisition, and valuing allowances for doubtful accounts and inventory reserves.~~expense.

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.

WeThe Company incurred net losses of ~~$4.8 million and $18.4~~$4.1 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. We have~~March 31, 2022. The Company had an accumulated deficit of ~~$397.5~~$451.0 million as of ~~September 30, 2017.~~March 31, 2022. Additionally, ~~we have~~the Company used net cash of ~~$13.9 million and $15.4~~$3.9 million to fund ~~our~~its operating activities for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern.~~March 31, 2022.

~~Further, the Loan and Security Agreement, with Oxford Finance, LCC (“Oxford”), as amended and further described~~

As disclosed in more detail in Note ~~5, requires us to maintain a minimum of $1.5 million in unrestricted~~9, the Company had entered into various financing agreements, and raised capital by issuing its common stock. The Company believes its current cash and cash equivalents ~~on hand~~will be sufficient to ~~avoid an event of default under~~fund its operations for at least 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~~next 12 months from the date these financial statements are issued.

The Company continues to seek additional capital ~~and/~~through strategic transactions and from other financing alternatives. If sufficient capital is not raised, the Company will at a minimum need to significantly reduce or ~~obtain~~curtail its research and development and other operations, and this would negatively affect its ability to achieve corporate growth goals.

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. The Company follows a ~~waiver or restructure~~three-level hierarchy to prioritize the ~~Loan and Security Agreement~~inputs used in the valuation techniques to ~~avoid defaulting under our $1.5 million minimum cash/cash equivalents covenant.~~derive fair values. The basis for fair value measurements for each level within the hierarchy is described below:

~~To date, these operating losses have been funded primarily from outside sources of invested capital including our recently completed~~

Certain warrants issued in an underwritten public offering ~~Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC~~in September 2019 (“~~Lincoln Park”~~Series U Warrants”) ~~and~~are classified as liability instruments. The Company estimated the ~~2016 Rights Offering (each defined below), our at-the-market (“ATM”) equity facility,~~fair value of 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 have a material and adverse impact on operations and will cause us to default on our loan.

On September 5, 2017, we received a written notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we 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 complianceSeries U Warrants with the ~~minimum bid price requirement,~~Black Scholes model. Because some of the ~~closing bid price~~inputs to the Company’s 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 Series U Warrants will bemarked to market as of ~~our common stock must be at least $1 per share for a minimum~~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 ~~ten consecutive business days during this 180-day period. In~~operations. As of March 31, 2022, 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~~fair value of ~~publicly held shares and all other initial listing standards for~~ the ~~Nasdaq Capital Market, with~~Series U Warrants was immaterial, and the ~~exception of the bid price requirement, if we provide written notice 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 the terms of the Underwriting Agreement, 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.

~~On June 15, 2016,~~ we closed a rights offering originally filed under Form S-1 registration statement in April 2016. Pursuant 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 and 3,352,306 warrants, with each warrant exercisable for one share of common stock at an exercise price of $3.06 per share, resulting in total gross proceeds of $17.1 million. See Note 12 for further discussion on the 2016 Rights Offering.

~~Should we be unable to raise additional cash from outside sources, this will have a material adverse impact on our 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 liabilitieschange in the ~~normal course~~fair value of ~~business,~~liability classified Series U Warrants during the three months ended March 31, 2022 and do2021 was 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.material.

Under our Joint Venture Termination Agreement (“Termination Agreement”), dated May 8, 2013, with Olympus Corporation (“Olympus”), we were required to pay Olympus a total purchase price of $6.0 million within two years of the date 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 Olympus as of September 30, 2017 and December 31, 2016.

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 itOxford Finance, LLC (“Oxford”) funded an aggregate principal amount of $17.7 million ~~(“Term~~(the “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 a three-month LIBOR rate with a floor of 1.00% plus 7.95%. Pursuant to the Loan and Security Agreement, ~~we were previously~~as amended, the Company is required to make interest only payments through ~~June~~May 1, ~~2016~~2021 and thereafter ~~we were~~it is required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through June 1, ~~2019,~~2024, 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~~the Company is required to make a final payment in an aggregate amount equal to approximately ~~$1.1~~$3.2 million. In connection with the Term Loan, on May 29, 2015, wethe Company issued to Oxford warrants to purchase an aggregate of ~~94,441~~188 shares of ~~our~~the Company’s 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.

OnFrom September ~~20,~~ 2017 weto March 2019, the Company entered into ~~an amendment~~a total of seven amendments to the Term Loan ~~pursuant to~~ which, ~~among~~amongst other things, ~~Oxford~~extended the interest only period, required repayment of $3.1 million using the proceeds received from sale of the Company’s former UK and Japan subsidiaries in April 2019, increased the ~~Lenders agreed to reduce~~final payment, increased the final payment fee upon maturity or early repayment of the Term Loan, and increased the minimum liquidity covenant level ~~originally at $5 million~~ to ~~$1.5~~$2.0 million. ~~The~~

On March 29, 2020, the Company entered into the Ninth Amendment ~~also extends the interest-only period under~~of the Loan and Security Agreement (the “Ninth Amendment”), pursuant to ~~January~~which Oxford agreed to defer the start date of principal repayment from May 1, ~~2018, with a~~2020 to May 1, 2021 and extended the term of the Term Loan from September 1, 2021 to June 1, 2024. The principal repayment start date was further ~~extension through August~~deferred to November 1, ~~2018 if~~2021. In addition, pursuant to the Ninth Amendment, on April 1, 2020, the Company ~~receives unrestricted net~~made a $5.0 million paydown of principal upon execution of the Ninth Amendment and $0.3 million of related final payment. In addition, an amendment fee of $1.0 million will be payable in connection with the Ninth 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 troubled debt restructuring. In addition, the Company 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 rate 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 a certain liquidity level when the total principal outstanding under the Loan and Security Agreement is less than $3 million. As of ~~September 30, 2017, we were~~March 31, 2022, there was $3.6 million principal amount outstanding under the Term Loan, excluding the $3.2 million final payment fee, and the Company was in compliance with all of the debt covenants under the Loan and Security Agreement.

The Company’s interest expense for each of the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and 2021 was ~~$0.5 million and $1.6 million and for the three and nine months ended September 30, 2016 was $0.6 million and $1.9 million, respectively.~~$0.2 million. Interest expense is calculated using the effective interest ~~method,~~method; therefore it is inclusive of non-cash amortization in the amount of ~~$0.2 million and $0.6~~$0.1 million for each of the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~$0.2 million and $0.7 million for the three and nine months ended September 30, 2016,~~2021, 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~~the Company’s 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~~the Company’s 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 wethe Company 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, 2022, 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 current cash flow position and the substantial doubt about our ability to continue as a going concern, the entire principal amount of the Term Loan has been reclassified to short-term. We will continue to evaluate the debt classification on a quarterly basis and evaluate for reclassification in the future should our 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 revenue for performing tasks under research and development agreements with governmental agencies like BARDA. 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 recognized $1.3 million and $2.9 million in BARDA revenue for 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.

~~Inventories are carried at the lower of cost or net realizable value, determined on the first-in, first-out (FIFO) method.~~

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 convertible 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. Lease renewable options are included in the estimation of lease term when it is reasonably certain that the Company will exercise such options.

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 finance leases are recorded within property and equipment, net in the condensed balance sheets. Leases with an initial term of 12 months or less are not recorded on the condensed balance sheets. Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term in the condensed statements of operations.

The Company leases laboratory, office and storage facilities in San Antonio, Texas, under operating lease agreements that expire in 2025. The Company also leases certain office space in Austin, Texas under a month-to-month operating lease agreement. On March 1, 2021, the Company entered into a lease agreement for office space in Charlottesville, Virginia (the “Charlottesville Lease”). The Charlottesville Lease has a term of 12 months and is renewable for four additional one-year periods. The minimum lease payment is $30,000 for the first twelve months, subject to a 3% annual increase if and when the lease is renewed. The lease commencement date is April 1, 2021 and currently expires on March 31, 2023. The Company measured the operating lease right-of-use asset and related lease liability related to the Charlottesville Lease as of the lease commencement date. In addition, the Company has entered into leases for certain equipment under various operating and finance leases. During 2021, contractual terms of all finance leases had expired and the Company did not have any right-of-use assets or lease liabilities relating to finance leases as of March 31, 2022. The Company’s existing operating 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 Company’s operating lease liabilities and corresponding right-of-use assets are included in the condensed balance sheets. As of March 31, 2022, weighted average discount rate used to measure operating lease liabilities and the operating leases remaining term were 9.0% and 2.82%, respectively.

The table below summarizes the Company’s lease costs from its unaudited condensed statement of operations, and cash payments from its unaudited condensed statement of cash flows during the three months ended March 31, 2022 and 2021 (in thousands):

Total rent expenses for the three months ended March 31, 2022 and 2021 were $60,000 and $50,000, respectively, 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 leases at March 31, 2022 are as follows (in thousands):

On March 31, 2022, the Company and Medidata Solutions, Inc. (“Medidata”) entered into a Statement of Work (the “SOW”), pursuant to which Medidata will build a Sythetic Control Arm^® (SCA) platform that facilitates the use of historical clinical data to incorporate into the Company’s Phase 2 clinical trial of Rhenium-186 NanoLiposome (¹⁸⁶RNL) in recurrent glioblastoma (“GBM”). The SOW is governed under the terms of a services agreement (the “Services Agreement”), dated November 5, 2021.

The SOW has a term of six (6) months. The Company will pay Medidata $1.45 million in managed services fees and a contingent managed services fee of $150,000 if the U.S. Food & Drug Administration approves a path forward for the Company to use the SCA in its clinical trial of ¹⁸⁶RNL for treatment of GBM. The SOW may only be terminated for a material breach by either party or if the clinical study’s authorization or approval is withdrawn by a regulatory agency.

On January 8, 2021, the Company entered into a Master Services Agreement (the “MSA”) with Piramal Pharma Solutions, Inc.

(“Piramal”), for Piramal to perform certain services related to the development, manufacture, and supply of the Company’s RNL-Liposome Intermediate Drug Product. The MSA includes the transfer of analytical methods, development of microbiological methods, process transfer and optimization, intermediate drug product manufacturing, and stability studies for the Company, which has been initiated at Piramal’s facility located in Lexington, Kentucky.

The MSA has a term of five years and will automatically renew for successive one-year terms unless either party notifies the other no later than six months prior to the original term or any additional terms of its intention to not renew the MSA. The Company has the right to terminate the MSA for convenience upon thirty days’ prior written notice. Either party may terminate the MSA upon an uncured material breach by the other party or upon the bankruptcy or insolvency of the other party.

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 ~~September~~ ~~30, 2017, we~~March 31, 2022, the Company did 0t have any clinical research study ~~obligations~~obligations.

On June 22, 2021, the Company was named as a defendant in an action brought by Lorem Vascular, Pte. Ltd. (“Lorem”) in the District Court for the District of ~~$0.8 million,~~ ~~which~~Delaware. The complaint alleges false representations were made to Lorem regarding the manufacturing facility in the United Kingdom (the “UK Facility”) that Lorem purchased from the Company under the Asset and Equity Purchase Agreement, dated March 29, 2019, between the Company and Lorem (the “Lorem Agreement”). Lorem also claims that false representations were made regarding the UK Facility’s certification to sell and distribute devices in the European Union and export such devices to China. In connection with these allegations, Lorem claims entitlement to at least $6,000,000 in compensatory damages and operational costs and expenses (collectively, the “Lorem Claim”). The Company believes that the Lorem Claim is ~~expected to be paid within a year. Should~~without merit and is vigorously defending 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,~~case. NaN liability was accrued as of ~~September~~ ~~30, 2017, we have a minimum purchase obligation of $4.5 million, $0.5 million of which~~March 31, 2022.

~~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 us that may arise as a result of currently pending legal proceedings will not have a material adverse effect on our financial condition, liquidity, or results of operations as a whole.

On ~~February 27, 2017, we~~December 31, 2021, the Company entered into a ~~Lease~~Patent and Know-How License Agreement (the “UTHSA License Agreement”) with The University of ~~office space for our corporate headquarters in~~Texas Health Science Center at San ~~Diego, California (the “Lease”). The initial term of~~Antonio, pursuant to which UTHSA granted 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 connectionCompany an irrevocable, perpetual, exclusive, fully paid-up license, with the ~~Lease, we issued a letter~~right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of ~~credit,~~ biodegradable alginate microspheres (BAM) containing nanoliposomes loaded with imaging and/or ~~Letter of Credit, in favor of~~therapeutic payloads.

Pursuant to the ~~Landlord~~UTHSA License Agreement, the Company was required to make an upfront payment, which was recorded as in-process research and development acquired in the ~~initial principal amount~~condensed statement 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 effectoperations for the ~~term of the Lease.~~year ended December 31, 2021. The upfront payment was paid in cash in January 2022.

~~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.~~NanoTx License Agreement

On ~~January 27, 2017, we~~March 29, 2020, the Company and NanoTx, Corp. (“NanoTx”) entered into a ~~Lease~~Patent and Know-How License Agreement ~~of office space for our office in Tokyo, Japan~~ (the ~~“Japan Lease”~~“NanoTx License Agreement”)~~. 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~~pursuant to 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 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:

~~As of September~~ ~~30, 2017,~~ ~~and as of December 31, 2016,~~NanoTx granted the Company ~~did not have any assets or liabilities measured at fair value presented on~~an irrevocable, perpetual, exclusive, fully paid-up license, with 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~~right to ~~estimate fair value. The disclosures of estimated fair value of financial instruments at September 30, 2017~~sublicense and ~~December 31, 2016, were determined using available market information~~to make, develop, commercialize and ~~appropriate valuation methods. Considerable judgment is necessary to interpret market data~~otherwise exploit certain patents, know-how 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~~technology related to the ~~short-term nature~~development of ~~these instruments.~~ ~~Further, based on~~radiolabeled nanoliposomes.

On May 7, 2020, all closing conditions under the ~~borrowing rates currently available for loans with similar terms, we believe~~NanoTx License Agreement were satisfied and the Company paid an upfront cash payment and issued 230,769 shares of its common stock to NanoTx. Cash and the fair value of ~~long-term debt approximates its carrying value.~~common stock issued is recorded as in-process research and development expenses, pursuant to authoritative literature for asset acquisition, in the statement of operations and comprehensive loss for the year ended December 31, 2020.

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 ~~a registration statement on Form S-1, originally filed on April 6, 2016, as amended (the “Registration Statement”),~~designate the terms and ~~declared effective~~conditions of any preferred stock the Company issues without further action by the ~~U.S. Securities and Exchange Commission (“SEC”) on May 26, 2016, and related prospectus (as supplemented), the Company registered, offered and sold~~common stockholders. On September 21, 2021, Series A 3.6% Convertible Preferred Stock was eliminated. There were 0 shares of Series A 3.6% Convertible Preferred Stock immediately prior to ~~its participating stockholders~~September 21, 2021, or December 31, 2020. There were 1,014 shares of ~~record~~Series B Convertible Preferred Stock outstanding as of ~~the announced May 20, 2016 record date, one non-transferable subscription right for each share~~March 31, 2022 and December 31, 2021. There were 938 shares of ~~common stock held by each stockholder~~Series C Preferred Stock outstanding as of ~~the record date (the “2016 Rights Offering”). Each right entitled the holder thereof to purchase one unit at the subscription price~~March 31, 2022 and December 31, 2021.

As of ~~$2.55 per unit, composed~~March 31, 2022, there were 938 outstanding shares of ~~one share~~Series C Preferred Stock that can be converted into an aggregate of 416,889 shares of common stock, and ~~0.5~~1,014 shares of ~~a warrant,~~Series B Convertible Preferred Stock that can be converted into an aggregate of 5,978 shares of common stock.

On September 25, 2019, the Company completed an underwritten public offering. The Company issued 289,000 shares of its common stock, along with ~~each whole warrant exercisable~~pre-funded warrants to purchase ~~one share~~2,711,000 shares of its common stock and Series U Warrants to purchase 3,450,000 shares of its common stock at ~~an exercise price~~$5.00 per share. The Series U Warrants have a term of ~~$3.06~~five years from the issuance date. In addition, the Company issued warrants to H.C. Wainwright & Co., LLC, as representatives of the underwriters, to purchase 75,000 shares of its common stock at $6.25 per share ~~for 30 months~~with a term of 5 years from the issuance date, in the form of ~~issuance. Pursuant~~Series U Warrants (the “Representative Warrants”).

In accordance with authoritative guidance, the pre-funded warrants are classified as equity. The Series U Warrants and the Representative Warrants were initially classified at issuance as liabilities due to ~~the 2016 Rights Offering, which closed on June 15, 2016,~~a contingent obligation for the Company ~~sold~~to settle the Series U Warrants with cash upon certain change in control events. In 2020, all but 2,500 Series U Warrants were amended and met the requirements to be classified within stockholder’s equity.

As of March 31, 2022, there were 2,141,000 outstanding Series U Warrants which can be exercised into an aggregate of ~~6,704,852 units, resulting in total net proceeds to~~2,141,000 shares of common stock.

On September 30, 2020, the Company ~~of $15.3 million. The warrants issued~~entered into the 2020 Purchase Agreement and registration rights agreement pursuant 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 at the issuance date. The warrants may be redeemed by the Company at $0.01 per warrant priorwhich Lincoln Park committed to ~~their expiration if~~purchase up to $25.0 million of the Company’s common ~~stock closes above $7.65 per share for 10 consecutive trading days.~~

~~On December 22, 2016, we entered into a~~stock. Under the terms and subject to the conditions of the 2020 Purchase Agreement, ~~(the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to which we have~~the Company had the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park iswas obligated to purchase up to ~~$20.0~~$25.0 million ~~in amounts~~ of ~~shares,~~the Company’s common stock. Such sales of ~~our~~ common stock by the Company were subject to certain limitations, and could occur from time to time, at the Company’s sole discretion, over the ~~30-month~~36-month period commencing on November 6, 2020, subject to the ~~date that a registration statement, which we filed with~~satisfaction of certain conditions.

On June 16, 2020, the ~~SEC in December 2016. We may direct~~Company received stockholder approval to permit issuances of the Company’s common stock (including the issuance of more than 19.99% of the Company’s common stock) to Lincoln Park ~~at its sole discretion~~pursuant to the 2020 Purchase Agreement. Based on the closing price of the Company’s common stock of $1.05 per share on March 16, 2020, the maximum number of shares the Company could issue and ~~subject to certain conditions, to purchase~~sell under the 2020 Purchase Agreement is approximately 23.8 million shares. Accordingly, the Company requested and received stockholder approval for the issuance of up to ~~100,000~~23.8 million shares of the Company’s common stock under the 2020 Purchase Agreement. The Company would seek additional stockholder approval before issuing more than 23.8 million shares.

Lincoln Park had no right to require the Company to sell any shares of common stock ~~on any business day but in no event will the amount of a single Regular Purchase (as defined in the~~to Lincoln Park, ~~Purchase Agreement) exceed $1.0 million. The purchase price of shares of common stock related~~but Lincoln Park was obligated to make purchases as the ~~Regular Purchases will be based on the prevailing market prices of such shares at the time of sales. Our~~Company directs, subject to certain conditions.

Actual sales of shares of common stock to Lincoln Park under the ~~Lincoln Park~~2020 Purchase Agreement ~~are limited~~depended on a variety of factors to ~~no more than~~be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The net proceeds under the 2020 Purchase Agreement to the Company depended on the frequency and prices at which the Company sold shares of its stock to Lincoln Park.

During the year ended December 31, 2021, the Company issued 5,685,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $12.5 million. During the three months ended March 31, 2022, the Company issued 5,665,000 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $7.0 million. The Company 0 longer has any additional shares of common stock registered to sell under the 2020 Purchase Agreement.

On January 14, 2022, the Company entered into an Equity Distribution Agreement (the “2022 Distribution Agreement”) with Canaccord Genuity LLC ( “Canaccord”), pursuant to which the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $5,000,000 shares (the “Shares”), with Canaccord acting as an agent for sales. Canaccord will use its commercially reasonable efforts to sell the Shares requested by the Company to be sold on its behalf. The Company has 0 obligation to sell any of the Shares. The Company may instruct Canaccord not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time and the Company may at any time suspend sales pursuant to the 2022 Distribution Agreement. During the three months ended March 31, 2022, the Company issued 1,022,610 shares under the 2022 Distribution Agreement for net proceeds of approximately $0.7 million.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “2020 Distribution Agreement”) with Canaccord. The Company had 0 obligation to sell any of the ATM Shares and it could instruct Canaccord not to sell the ATM Shares if the sales could not be effected at or above the price the Company designated from time to time and the Company could at any time suspend sales pursuant to the 2020 Distribution Agreement.

During the year ended December 31, 2021, the Company issued 2,179,193 shares under the 2020 Distribution Agreement for net proceeds of $6.3 million. The 2020 Distribution Agreement has been terminated.

On February 6, 2020, the Company amended the Company’s 2015 New Employee Incentive Plan (the “2015 Plan”) to increase the total number of shares of common stock reserved for issuance under the plan by 250,000 shares. Awards may only be granted under the 2015 Plan to employees who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as a material inducement to entering into employment with the Company. As of March 31, 2022, there were 90,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

On June 16, 2020, the stockholders of the Company approved the Company’s 2020 Stock Incentive Plan (the “2020 Plan”), which replaced the Company’s 2014 Equity Incentive Plan. The 2020 Plan provides for the award or sale of shares of common stock (including restricted stock), the award of stock units and stock appreciation rights, and the grant of both incentive stock options to purchase common stock. The 2020 Plan provides for the issuance of up to 550,000 shares of common stock, and the number of shares available for issuance will be increased to the extent that ~~would result~~awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan are forfeited or expire (except as otherwise provided in the ~~beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99%~~2020 Plan). On May 17, 2021, the stockholders of the ~~then outstanding shares~~Company approved an amendment and restatement to the 2020 Plan to increase the total number 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 Purchase

~~Agreement. On December 22, 2016, we issued to Lincoln Park 127,419~~ shares of common stock reserved for issuance under the 2020 Plan by 1,000,000 shares. As of March 31, 2022, there were 640,212 shares remaining and available for future issuances under the 2020 Plan.

Generally, options issued under the 2020 Plan are subject to a two-year or four-year vesting schedule with 25% of the options vesting one year anniversary of the grant date followed by equal monthly installment vesting, and have a ~~market value~~contractual term of 10 years.

As of March 31, 2022, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $1.3 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.79 years.

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. While the Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, the Company has not 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 considered the impacts of COVID-19 on the ~~date~~assumptions and estimates used to prepare its financial statements and determined that there were no material adverse impacts on the Company’s results of ~~issuance~~operations and financial position at March 31, 2022. The full extent to which the COVID-19 pandemic will directly or indirectly impact its business, results of ~~approximately $0.2 million~~operations and financial condition, will depend on future developments that are highly uncertain, including as ~~commitment shares in consideration~~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.

In response to the COVID-19 pandemic, the 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 employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for ~~entering into~~qualified improvement property. The CARES Act had no material impact on 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~~Company’s income tax provision for the ~~Lincoln Park Purchase Agreement to Lincoln Park. Through September 30, 2017, we sold a total of 1,490,937 shares under~~year ended December 31, 2021 or the ~~Lincoln Park Purchase Agreement, for proceeds of approximately $1.5 million.~~

~~During the nine~~three 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.

~~On April 11, 2017, we entered into an underwriting agreement with Maxim relating~~March 31, 2022. The Company continues to evaluate 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 the offering is $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 the terms~~impact of the ~~underwriting agreement, we granted Maxim a 45-day~~ ~~overallotment~~ ~~option to purchase up to 944,000 additional shares~~CARES Act on its financial position, results of ~~common stock.~~ ~~On May 31, 2017, Maxim exercised their overallotment option~~operations 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.~~cash flows.

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.

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

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

~~You~~analysis should be read ~~this MD&A~~ 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 ~~related~~ notes thereto contained in ~~Item 1 and~~ our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~

2021, as filed on February 24, 2022. This ~~report~~discussion contains ~~certain~~forward-looking 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 anticipateinvolve risks 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 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.uncertainties. Our actual results ~~will likely~~and the timing of selected events could differ ~~perhaps~~ materially from those anticipated in these forward-looking statements as a result of ~~various~~several factors, ~~including:~~including those set forth under 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 includedcaption “Cautionary Note Regarding Forward-Looking Statements” in this report, ~~are subject to a number of additional material risks and uncertainties, including but not limited to the risks described~~as well as under ~~the “Risk Factors” in~~"Part I – Item 1A ~~of Part I below, which we encourage you to read carefully.~~

~~We encourage you to read~~- Risk Factors" in our Annual Report on Form 10-K for the ~~risks described under “Risk Factors” carefully. We caution you not to place undue reliance on~~year ended December 31, 2021, in other subsequent filings with the ~~forward-looking statements contained~~SEC, and elsewhere in this ~~report.~~Quarterly Report on Form 10-Q. These statements, like all statements in this report, speak only as of the date of this ~~report~~Quarterly Report on Form 10-Q (unless ~~an earlier~~another date is indicated), and we undertake no obligation to update or revise ~~the~~these statements ~~except as required by law. Such forward-looking statements are not guarantees~~in light of future ~~performance~~developments.

Our Management’s Discussion and ~~actual results will likely differ, perhaps materially, from those suggested by such forward-looking statements.~~Analysis of Financial Condition and Results of Operations, or MD&A, includes the following sections:

~~This Quarterly report on Form 10-Q refers~~Plus Therapeutics, Inc. is a U.S. pharmaceutical company developing innovative, targeted radiotherapeutics for adults and children with rare and difficult-to-treat cancers. Our novel radioactive drug formulations and therapeutic candidates are designed to ~~trademarks~~deliver safe and effective doses of radiation to tumors. To achieve this, we have developed innovative approaches to drug formulation, including encapsulating radionuclides such as ~~Cytori Cell Therapy, Habeo Cell Therapy, Celution, StemSource, Celase, Intravase,~~Rhenium isotopes within nanoliposomes 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~~microspheres. Our formulations are ~~not~~ intended to ~~indicate~~achieve elevated tumor absorbed radiation doses and extended retention times such that the clearance of the isotope occurs after significant radiation decay, which we believe will contribute and provide less normal tissue/organ exposure and improved safety margins.

Traditional approaches to radiation therapy for cancer such as external beam radiation have many disadvantages including continuous treatment for 4-6 weeks (which is onerous for patients), radiation that inadvertently damages healthy cells and tissue, and a very limited amount of radiation that can be safely delivered, therefore, is frequently inadequate to fully destroy the cancer.

Our targeted radiotherapeutic platform and unique investigational drugs have the potential to overcome these disadvantages by directing higher, more powerful radiation doses at the tumor—and only the tumor—potentially in ~~any way~~a single treatment. By minimizing radiation exposure to healthy tissues while simultaneously maximizing efficacy, we hope to reduce the toxicity of radiation for patients, improving their quality of life and life expectancy. Our radiotherapeutic platform, combined with advances in surgery, nuclear medicine, interventional radiology, and radiation oncology, affords us the opportunity to target a broad variety of cancer types.

Our lead radiotherapeutic candidate, Rhenium-186 NanoLiposome (“¹⁸⁶RNL”) is designed specifically to target central nervous system (“CNS”) cancers including recurrent glioblastoma, leptomeningeal metastases, and pediatric brain cancers by direct localized delivery utilizing approved standard-of-care tissue access such as with conduction enhanced delivery (“CED”) and intraventricular brain catheters (Ommaya reservoir). Our recently acquired radiotherapeutic candidate, Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere (“¹⁸⁸RNL-BAM”) is designed to treat many solid organ cancers including primary and secondary liver cancers.

Our headquarters and manufacturing facilities are in Texas and are nearby world-class cancer institutions and researchers. Our dedicated team of engineers, physicians, scientists, and other professionals are committed to advancing our targeted radiotherapeutic technology for the benefit of cancer patients and healthcare providers worldwide and our current pipeline is focused on treating rare and difficult-to-treat cancers with significant unmet medical needs.

Our most advanced investigational drug, ¹⁸⁶RNL, is a patented radiotherapy potentially useful for patients with CNS and other cancers. Preclinical study data describing the use of¹⁸⁶RNL for several cancer targets have been published in peer-reviewed journals. Besides glioblastoma, leptomeningeal metastases, and pediatric brain cancer, ¹⁸⁶RNL has been reported to have potential applications for head and neck cancer, ovarian cancer, breast cancer and peritoneal scarcinomatosis.

The ¹⁸⁶RNL technology was part of a licensed radiotherapeutic portfolio that we acquired from NanoTx, Corp. (“NanoTx”) on May 7, 2020. The licensed radiotherapeutic has been evaluated in preclinical studies for several cancer targets and we have an active $3.0 million award from U.S. National Institutes of Health/National Cancer Institute which will provide financial support for the continued clinical development of ¹⁸⁶RNL for recurrent glioblastoma through the completion of a Phase 2 clinical trial including enrollment of up to 55 patients. Thus far, 23 patients have been treated in the Phase 1 clinical trial and the Phase 2 clinical trial has not ~~assert,~~yet been

We are currently conducting the ReSPECT-GBM and ReSPECT-LM clinical trials for recurrent glioblastoma (“GBM”) and leptomeningeal metastases (“LM””), respectively. In addition, we anticipate seeking the U.S. Food and Drug Administration (“FDA”) Investigational New Drug (“IND”) approval for the ReSPECT-PBC clinical trial for pediatric brain cancer (“PBC”) in late 2022 or early 2023.

¹⁸⁶RNL is a novel injectable radiotherapy designed to deliver targeted, high dose radiation directly into glioblastoma tumors in a safe, effective, and convenient manner that may ultimately prolong patient survival. ¹⁸⁶RNL is composed of the radionuclide Rhenium-186 and a nanoliposomal carrier, and is infused in a highly targeted fashion, directly into the tumor via precision brain mapping and convection enhanced delivery (“CED”). Potential benefits of ¹⁸⁶RNL compared to standard external beam radiotherapy (“EBRT”) include:

GBM is the most common, complex, and aggressive primary brain cancer in adults. Annually in the U.S., there are 12,900 GBM cases diagnosed and approximately 10,000 patients succumb to the ~~fullest extent under applicable law, our rights~~disease each year. The average life expectancy with primary glioblastoma is less than 24 months, with a one-year survival rate of 40.8% and a five-year survival rate of only 6.8%. GBM often causes and presents with headaches, seizures, vision changes and other significant neurological complications. Despite the best available medical treatments to ~~these trademarks~~eliminate the initial brain tumor, some microscopic disease frequently remains, with tumor regrowth within months. Approximately 90% or more of patients with primary GBM experience tumor recurrence. Complete surgical removal of GBM is not typically possible and ~~tradenames.~~

~~Our strategy~~GBM is often resistant or quickly develops resistance 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 ormost available to smaller companies. To meet this objective, we 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 the human adipose or fat tissue compartment is a source of a unique mixed population of stem, progenitor and regenerative cells that may hold substantial promise intherapies. Even today, the treatment of ~~numerous diseases~~GBM remains a significant challenge and ~~conditions. To bring~~it has been nearly a decade since the FDA approved a new therapy for this ~~promise~~disease.

For recurrent GBM, there are few currently approved treatments that in the aggregate, provide only marginal survival benefit. Furthermore, these therapies are associated with significant side effects, which limit dosing and prolonged use.

While EBRT has been shown to ~~health providers,~~be safe and effective in many malignancies including glioblastoma, the maximum possible administered dose is limited by toxicity to the normal tissues surrounding the malignancy. In contrast, targeted radiopharmaceuticals that precisely deliver radiation in the form of beta particles such as Iodine-131 for thyroid cancer, are known to minimize exposure to normal cells and tissues which we are developing novel therapies prepared and administered at 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~~hope will result in a ~~Cytori-sponsored U.S. randomized, placebo-controlled, double-blind, multi-center clinical~~safer and more effective treatment.

Interim results from our ongoing Phase 1/2a ReSPECT-GBM trial, ~~STAR (~~S~~cleroderma~~ T~~reatment with Celution Processed~~ A~~dipose Derived~~ R~~egenerative Cells), for~~suggest beta particle energy from our lead investigational drug ¹⁸⁶RNL may also have utility in treating GBM and other malignancies. More specifically, the ~~treatment of impaired hand function in patients with scleroderma. On July 24, 2017, we announced top-line,~~ preliminary data. The STAR trial enrolled and evaluated 88 patients with scleroderma, including 51 patients within 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~~from ReSPECT-GBM indicates that radiation, in the ~~primary and secondary endpoints~~form 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/high energy beta particles 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,electrons, can be effective against GBM. Thus far, we have been able to ~~further develop~~deliver up to 740 Gy of absorbed radiation to tumor issue without significant or dose limiting toxicities. Incomparison, current EBRT protocols for recurrent GBM typically recommend a total maximum dose of about 35 Gy.

In September 2020, the FDA granted both Orphan Drug designation 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~~Fast Track designations 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 acquisition 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~~¹⁸⁶RNL for the treatment of ~~impaired hand function in~~ patients with ~~scleroderma~~glioblastoma.

¹⁸⁶RNL is presently under clinical investigation in a multicenter, sequential cohort, open-label, volume and dose escalation study of the safety, tolerability, and distribution of ¹⁸⁶RNL given by CED to patients with recurrent or progressive malignant glioma after standard surgical, radiation, and/or chemotherapy treatment (NCT01906385). The study uses a modified Fibonacci dose escalation, followed by a planned expansion at the maximum tolerated dose/maximum feasible dose to determine efficacy. The trial is funded through ~~Cytori-sponsored~~Phase 2 in large part by a NIH/NCI grant. The planned enrollment in the NIH/NCI grant is 21 patients in the dose-escalation part of the study and ~~supported clinical~~34 patients in the expansion cohort. The study is in its 8^th dosing administration cohort and is under development ~~efforts.~~

At the Society for Neuro-Oncology Annual Meeting in November 2021, we presented patient data which at that time included the results for 22 patients treated in the ReSPECT-GBM trial. The trial, thus far, has shown that CED in recurrent GBM patients is feasible. Median absorbed dose to the tumor volume across all subjects in the first eight cohorts (n=22) was 267.5 Gy (range 8.9-740). In a subset of patients in whom tumor coverage was greater than or equal to 75%, the median absorbed dose was 405 Gy (range 146-593). By contrast, the median absorbed doses to the whole brain and the total body across all subjects were 0.55 Gy (range 0.001-2.728) and 0.09 Gy (range 0.001-0.182), respectively. Small doses, as delivered to the body, are typically well-tolerated. Based on observed and reported patient protocol activity and all available adverse event (“AE”) data, ¹⁸⁶RNL has been well-tolerated. No AEs with an outcome of death or study drug-related serious AEs have been reported. Furthermore, no patient has been discontinued from the study because of an AE. All AEs have been mild or moderate (Grade 1 or 2) in intensity, except for one case of Grade 3 vasogenic edema, which was considered by the investigator to be unrelated to the study drug. AEs considered by the investigator to be at least possibly related to ¹⁸⁶RNL have included Grade 1 to 2 skin and soft tissue infection, intermittent cephalgia, neck and jaw pain, nausea with or without vomiting, constipation, increased lethargy, difficulty walking (gait disturbance), worsening double vision, and dysuria. Scalp discomfort and tenderness related to the surgical procedure has also been reported.

In the ~~U.S., the STAR clinical trial evaluated the safety and efficacy of~~22 subjects with recurrent GBM receiving a single administration of ~~Habeo Cell Therapy~~¹⁸⁶RNL, the mean & median OS for ~~impaired hand function~~all 22 patients as of November 2021 was 48.1 & 33.1 weeks, respectively, with 7 patients alive. In a subset of 13 patients receiving a presumed therapeutic absorbed radiation dose to the tumor (>100 Gy), the mean & median OS was 64.8 & 47.1 weeks, respectively, with 7 of 13 patients alive. In contrast, in 9 patients receiving a presumed sub-therapeutic absorbed radiation dose to the tumor (<100 Gy), the mean and median OS was 23.9 & 22.3 weeks, respectively. A Kaplan-Meier curve comparing patients with ~~scleroderma.~~presumed therapeutic vs. sub-therapeutic radiation dose to the tumor showed a statistically significant difference between the groups (p=.0002). It is hypothesized that targeted infusion of ¹⁸⁶RNL into the tumor by CED, bypassing the blood-brain barrier and normal brain and external tissues, significantly spares normal tissues from radiation exposure and potential toxicity and concentrates radiation to the tumor and surrounding region of interest.

LM is a rare complication of cancer in which the disease spreads to the membranes (meninges) surrounding the brain and spinal cord. The ~~first sites for our STAR trial were initiated~~incidence of LM is growing and occurs in ~~July 2015 and final enrollment~~approximately 5% 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~~people with late-stage cancer, or ~~48 weeks, the trial data reported potentially clinically meaningful improvement~~110,000 people in the ~~primary~~U.S. each year. It is highly lethal with an average 1-year survival of just 7%. LM occurs with cancers that are most likely to spread to the central nervous system. The most common cancers to spread to the leptomeninges are breast cancer, lung cancer, melanoma and ~~secondary endpoints~~gastrointestinal cancers---though most solid tumors have the potential for LM spread.

The ReSPECT-LM Phase 1 clinical trial (ClinicalTrials.gov NCT05034497) is predicated in part upon preclinical studies in which tolerance to doses of¹⁸⁶RNL as high as 1,075 Gy was shown in animal models with LM without significant observed toxicity. Furthermore, treatment led to marked reduction in tumor burden in both ~~hand function~~C6 and ~~scleroderma-associated functional disability,~~MDA-231 LM models.

In October 2021, the FDA announced clearance of our IND application for ~~Habeo-treated patients compared to placebo,~~¹⁸⁶RNL for the treatment of LM. Subsequently, in November 2021, the FDA granted a Fast Track designation for ¹⁸⁶RNL for the treatment of leptomeningeal metastases. We treated our first patient 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)~~ReSPECT-LM Phase 1 clinical trial in Q1 2022.

The ReSPECT-LM multi-center, sequential cohort, open-label, dose escalation study is evaluating the safety, tolerability, and ~~efficacy~~distribution of ~~a single administration~~¹⁸⁶RNL via intrathecal infusion to the ventricle of ~~Habeo Cell Therapy for impaired hand function in~~ patients with ~~scleroderma.~~LM after standard surgical, radiation, and/or chemotherapy treatment. The ~~first sites were initiated in October 2015;~~primary endpoint of the study is the incidence and 32severity of ~~40 targeted patients were enrolled through September 2017.~~adverse events and dose limiting toxicities.

~~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~~ReSPECT-PBC Clinical Trial for a single approval trial based 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.Pediatric Brain Cancer

~~With respect to~~In August 2021, we announced plans for treating pediatric brain cancer at the ~~remainder~~2021 American Association of ~~our current CCT clinical pipeline:~~

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~~2 pediatric brain cancers. High-grade glioma (HGG) 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~~fast-growing CNS tumor that forms in glial cells of the ~~disease, known as systemic sclerosis, or SSc. SSc~~brain and spinal cord. It can be found almost anywhere within the CNS, but is ~~further sub-classified as diffuse cutaneous~~most commonly within the supratentorium in children ages 15-19. HGG tumors in children act differently from those in adults, causing headaches, seizures, and ~~limited cutaneous SSc. Diffuse subset tends to produce more severe manifestations~~difficulty achieving developmental milestones depending on the tumor location. Approximately 360-400 children are diagnosed 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 menHGG annually in North America and the ~~condition~~5-year survival rate is ~~typically detected between~~approximately 20%. In contrast to HGG, ependymoma is a rare, slow- or fast-growing (depending on the ~~ages of 30~~grade) primary CNS tumor that forms in ependymal cells in the brain and ~~50. More than 90% of scleroderma~~spinal cord—and may spread throughout the CNS, though infrequently. All ependymomas can recur, but patients are ~~afflicted~~often tumor-free for years before testing shows tumor regrowth, either at the initial tumor site or elsewhere within the CNS. Symptoms depend on tumor location and size, usually including irritability, sleeplessness, vomiting, nausea, back pain, arm/leg weakness, and headaches.

Approximately 250 children are diagnosed 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 publishedependymoma annually in the ~~Annals~~U.S. while 71% of children with Grade II and 57% with

Based on the ~~Rheumatic Diseases~~aggregate preclinical and clinical work completed to date in ~~May 2014~~adult recurrent glioblastoma, we hypothesize that ^186RNL may offer potential clinical benefit for PBCs, such as high-grade glioma and ~~demonstrated approximately~~ependymoma. We intend to submit an IND application to the FDA for ¹⁸⁶RNL for the treatment of PBC (high-grade glioma and ependymoma) in late 2022 or early 2023.

In January 2022, we announced that we licensed BAM patents and technology from The University of Texas Health Science Center at San Antonio (“UT Health Science Center at San Antonio”) to expand our tumor targeting capabilities and precision radiotherapeutics pipeline. We intend to combine our Rhenium NanoLiposome technology with the BAM technology to create a ~~50 percent improvement at six months across four important~~novel radioembolization technology. Initially, we intend to utilize the Rhenium-188 isotope, ¹⁸⁸RNL-BAM for the intra-arterial embolization and ~~validated endpoints used~~local delivery of a high dose of targeted radiation for a variety of solid organ cancers such as hepatocellular cancer, hepatic metastases, pancreatic cancer and many others.

Preclinical data from an ex vivo embolization experiment in which Technetium-99m-BAM was intra-arterially delivered to ~~assess the clinical status in patients with scleroderma with impaired hand function. Two-year follow up data in the SCLERADEC-I trial~~a bovine kidney perfusion model was presented at the ~~Systemic Sclerosis World Congress in February 2016~~recent 2021 Society of Interventional Radiology (“SIR”) Annual Scientific Meeting. The study concluded that the technology required for radiolabeling BAM could successfully deliver, embolize and ~~published~~retain radiation in the ~~journal~~ ~~Current Research~~target organ.¹⁸⁸RNL-BAM is a preclinical investigational drug we intend to further develop and move into clinical trials. Specifically, in ~~Translational Medicine~~ ~~in November 2016~~2022, we intend to transfer the ¹⁸⁸RNL-BAM technology from UT Health Science Center at San Antonio, fabricate and ~~demonstrated sustained improvement in~~scale the ~~following four key endpoints: CHFS, SHAQ, RCS,~~drug product, and ~~hand pain, as assessed by~~complete certain preclinical studies to support a ~~standard visual analogue scale.~~future FDA IND submission. Our likely initial clinical target is liver cancer which is the 6^th most common and 3^rd deadliest cancer worldwide. It is a rare disease with increasing U.S. annual incidence (42,000) and deaths (30,000).

On March 31, 2022, we ~~released top-line results for three-year follow-up~~entered into a Statement of Work (the “SOW”) with Medidata Solutions, Inc. (“Medidata”), pursuant to which Medidata will build a Synthetic Control Arm^® (SCA) platform that facilitates the use of historical clinical data ~~showing sustained benefits materially consistent with those shown in two-year data.~~

~~In 2014, Drs. Guy Magalon and Brigitte Granel, under~~to incorporate into 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 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~~Company’s Phase 2 clinical trial of ~~88 patients~~¹⁸⁶RNL in GBM.

The SOW has a term of six (6) months. We will pay Medidata $1.45 million in managed services fees and a contingent managed services fee of $150,000 if the U.S. Food & Drug Administration approves a path forward for us to use the ~~treatment of impaired hand function~~SCA in ~~scleroderma. The trial evaluates the safety 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~~¹⁸⁶RNL for treatment of GBM. The SOW may only be terminated for a material breach by either party or if the clinical study’s authorization or approval is withdrawn by a regulatory agency.

On December 31, 2021, we entered into an exclusive license agreement 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 exchangeUT Health Science Center at San Antonio 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 intendglobal rights to develop and ~~potentially~~ commercialize ~~both, most likely in conjunction~~¹⁸⁸RNL-BAM. Under the license agreement with aUT Health Science Center at San Antonio, we are required to use commercial reasonable efforts to develop the ¹⁸⁸RNL-BAM product candidate acquired under the license agreement. Further, we are subject to future milestone, earn-out and ~~or commercial partner.~~other payments to UT Health Science Center at San Antonio all of which are tied to our commercialization and sale activities for product candidates.

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-0918Refer 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~~“Liquidity and Capital Resources” section below 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.information on our recent financings.

~~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 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 and nine months ended September 30, 2017, we incurred $1.2 million and $2.7 million in qualified expenditures. During the three and nine months ended September 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~~.

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,~~product candidates, payment of regulatory fees, laboratory supplies, pre-clinical studies, and clinical ~~studies.~~ 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, 2022 and ~~2016~~2021 (in thousands):

The ~~decrease~~increase of $0.7 million in research and development expenses ~~excluding share-based compensation,~~ for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 as compared to the same period in ~~2016 is~~2021 was due primarily to ~~a decrease~~increased expenditures related to increase in development costs of ~~approximately $0.7~~¹⁸⁶RNL of $0.5 million ~~and $3.2 million~~as we ramp up to plan for the ~~three and nine months periods in clinical study expenses as well as a decrease~~pivotal trial, an increase of ~~approximately $0.3 million and $0.7~~$0.1 million in ~~salaries~~professional expenses and ~~benefits as a result~~an increase of ~~completion of enrollment~~$0.1 million in ~~our U.S. clinical trials enrolling in 2016.~~personnel expenses.

We expect aggregate research and development expenditures ~~remain consistent at current levels for~~to increase in absolute dollars during 2022 due to the ~~balance~~expected costs of ~~2017, as we begin our clinical activities on the RELIEF clinical trial and our ongoing~~ development ~~efforts~~ of the ~~recently~~¹⁸⁶RNL™ therapy acquired ~~ATI-0918 asset~~ from ~~Azaya.~~

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 and 2016 (in thousands):

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

~~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.~~¹⁸⁸RNL-BAM.

~~The future:~~ ~~We expect sales and marketing expenditures to slightly decrease during the balance of 2017, as we delay efforts on commercial readiness activities for Habeo in the U.S.~~

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, 2022 and ~~2016~~2021 (in thousands):

General and administrative expenses ~~excluding share-based compensation decreased~~increased by ~~$0.2 million and $0.6~~approximately $0.8 million during the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022 as compared to the same ~~periods~~period in ~~2016 is~~2021. The increase was primarily due to ~~decreases in salary~~an increase of $0.6 million of legal, intellectual property and other professional expenses, and an increase of $0.2 million of personnel related ~~benefits expense consistent with our ongoing cost curtailment efforts.~~expenses.

We expect general and administrative expenditures to remain ~~materially~~generally consistent in 2022 as compared with the year ended December 31, 2021, subject to litigation cost which is not predictable at ~~current levels for the balance of 2017.~~this time.

~~Share-based~~Stock-based compensation ~~expenses include~~expense includes charges related to ~~options and restricted~~ stock ~~awards~~options 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~~stock-based compensation expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (in thousands):

For the three months ended
September 30,

For the nine months ended
September 30,

2017

2016

2017

2016

Cost of product revenues

$
5

$
10

$
18

$
35

Research and development-related

28

102

116

363

Sales and marketing-related

28

39

91

131

General and administrative-related

117

128

363

395

Total share-based compensation

$
178

$
279

$
588

$
924

	Three Months Ended March 31,
	2022		2021
Research and development	$	25	$	21
General and administrative		155		86
Total share-based compensation	$	180	$	107

The ~~decrease~~increases in ~~share-based~~our stock-based compensation ~~expenses for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 is~~was primarily ~~related to a lower annual grant activity caused by reductions in headcount and~~ due to ~~the decline~~increases in ~~the stock price during 2017~~grants of stock-based options as ~~compared to the same period in 2016, 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,~~well as ~~appropriate, to non-employee service providers. In addition, previously-granted options will continue to vest in accordance with their original terms. As~~higher grant-date fair value of September 30, 2017, 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 which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 1.58 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.stock-based awards.

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, 2022 and ~~2016~~2021 (in thousands):

~~The future:~~We expect interest expense in ~~2017~~2022 to decrease as compared with 2021 due to ~~the decrease in the~~scheduled debt principal ~~balance of the Loan and Security Agreement, dated May 29, 2015, or the Loan and Security Agreement, with Oxford Finance LLC, or Oxford.~~repayments which commenced on November 1, 2021.

The following is a summary of our key liquidity measures at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (in thousands):

~~We incurred net losses of $4.8 million and $18.4 million for~~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. We have an accumulated deficit of $397.5 million as of September 30, 2017. Additionally, we have used net cash of $13.9 million and $15.4 million to fund our operating activities for the nine 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 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.

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.

~~To date, these~~periods presented, operating losses have been funded primarily from outside sources of invested capital ~~including~~in our ~~recently completed underwritten public offering,~~common stock. We believe that our ~~Lincoln Park Purchase Agreement (“Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”)~~cash and cash equivalents of $21.2 million at March 31, 2022 will enable us to fund our current and planned operations for at least the ~~2016 Rights Offering (each defined below), our at-the-market (“ATM”) equity facility,~~next twelve months and beyond from the ~~Loan and Security Agreement and gross profits.~~ date these condensed financial statements were issued.

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.

~~In November 2017,~~On January 14, 2022, we ~~commenced a public offering in~~entered into an Equity Distribution Agreement (the “2022 Distribution Agreement”) with Canaccord Genuity LLC (the “Agent”, or “Canaccord”), pursuant to which we ~~distributed~~may issue and sell, from time to ~~holders~~time, shares of ~~our~~its common stock ~~at no charge, non-transferable subscription rights to purchase~~having an aggregate offering price of 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~~$5,000,000 (the ~~“2017 Rights Offering”~~“Shares”)~~. Each share of Series B Convertible Preferred Stock will be convertible into 2,500 shares of our common stock, subject to adjustment.~~, depending on market demand, with the Agent acting as an agent for sales. Sales of the ~~units in the 2017 Rights Offering, if any, will~~Shares may 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~~by any method permitted by law deemed to be ~~received~~an “at the market offering” as defined in ~~order for us to close the offering. However, we cannot provide any assurances that we will sell any~~Rule 415(a)(4) of the ~~units offered in~~Securities Act of 1933, as amended, including, without limitation, sales made directly on or through the ~~2017 Rights Offering.~~

~~On June 15, 2016,~~Nasdaq. Since January 14, 2022, we issued 1,022,610 shares under 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 units consisting of a total of 6,704,852 shares of common stock and 3,352,306 warrants, with each warrant exercisable2022 Distribution Agreement for ~~one share of common stock at an exercise price of $3.06 per share, resulting in total gross proceeds to us of $17.1 million.~~

~~During the nine months ended September 30, 2017, we sold 894,050 shares of our common stock under our ATM offering program, receiving total~~ net proceeds of approximately ~~$1.5~~$0.7 million. ~~Although sales of~~

On October 23, 2020, we entered into an Equity Distribution Agreement (the “2020 Distribution Agreement”) with Canaccord, pursuant to which we could issue and sell, from time to time, our common stock ~~have taken place pursuant to our ATM offering program, there can be no assurance that~~in “at the market” offerings, depending on market demand, with Canaccord acting as an agent for sales. During 2021, we ~~will be successful in consummating future sales based on prevailing market conditions or in~~issued 2,179,193 shares under 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~~2020 Distribution Agreement for net proceeds 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$6.3 million. The 2020 Distribution Agreement has been terminated.

On 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.

~~On December 22, 2016,~~2020, we entered into the ~~Lincoln Park~~2020 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~~committed to purchase up to ~~$20.0~~$25.0 million ~~in amounts~~ of our common stock. During 2021, we issued 5,685,186 shares of our common stock ~~over~~under the ~~30-month period commencing on~~2020 Purchase Agreement for total proceeds of $12.5 million. During the ~~date that a registration statement, that~~three months ended March 31, 2022, we ~~filed 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~~issued 5,665,000 shares of common stock onfor net proceeds of approximately $7.0 million under the 2020 Purchase Agreement. We no longer have any ~~business day but in no event will the amount of a single Regular Purchase exceed $1.0 million. The purchase price of~~additional shares of common stock ~~related~~registered to sell under the ~~Regular Purchases will be based on the prevailing market prices of such shares~~2020 Purchase Agreement, and at ~~the~~this time ~~of sales. Our sales of~~we do not intend to register any additional shares of common stock ~~to Lincoln Park~~ under the ~~Lincoln Park~~2020 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.

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 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. There may be continued market volatility due to the ~~issuance and sale of 8.6 million shares of~~pandemic, downturn in global economy, or other events, which could cause our ~~common~~ stock ~~par value $0.001 per share. The~~ price to ~~the public~~decline. This in ~~this offering is $1.10 per share. Maxim agreed~~turn will likely negatively impact our ability 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 the Company. The offering closed on April 17, 2017. In addition, under the terms of the Underwriting Agreement,raise funds through equity-related financings.

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 or if we are unable to do so in a timely manner or on commercially reasonable terms, it would have a material adverse impact on ~~operations and will cause us to default on~~ our ~~loan.~~

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.

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, 2022 and ~~2016~~2021 is summarized as follows (in thousands):

On March 31, 2022, we entered into the SOW with Medidata pursuant to which Medidata will build a Synthetic Control Arm® (SCA) platform that facilitates the use of historical clinical data to incorporate into the Company’s Phase 2 clinical trial of 186RNL in GBM.

During the six month term of the SOW, we will pay Medidata $1.45 million in managed services fees. Further, if the U.S. Food & Drug Administration approves a path forward for us to use the SCA in its clinical trial of 186RNL for treatment of GBM, we will pay Medidata an additional contingent managed services fee of $150,000.

We are also obligated to make ongoing principal and interest payments under the Term Loan with Oxford through the maturity date of June 1, 2024 (See Note 5 of the accompanying condensed financial statements for more information). In addition, as described in more detail in Note 7 of the accompanying condensed financial statements, we are obligated to make operating lease payments for our office and laboratory space and we may be required to make payments under certain of our other contractual agreements.

Net cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 was ~~$13.9 million. Overall, our~~$3.9 million compared to $3.0 million in the same period of 2021. Our operational cash use ~~decreased~~increased during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 as compared to the same period in ~~2016,~~2021, due primarily to ~~a decrease in losses from operations (when adjusted~~increased expenditures for ~~non-cash items) of $1.1 million~~our research and ~~an improvement of $0.3 million in working capital management.~~development activities.

Net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2017 resulted primarily~~March 31, 2022 were related to cash payments of $0.3 million made for in process research and development assets from ~~cash outflows for payment for long-lived assets purchased as part of Azaya’s acquisition of $1.2 million~~UTHSA and ~~purchase~~purchases of fixed assets and intangible assets of $0.3 million.Net cash used in investing activities for the three months ended March 30, 2021 was primarily related to purchases of fixed assets.

~~The net~~Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 was primarily related ~~primarily~~ to ~~sale~~sales of common stock of ~~$12.4~~$7.7 million, ~~offset~~net of offering cost through the 2022 Distribution Agreement with Canaccord and the 2020 Purchase Agreement with Lincoln Park.

Net cash provided by ~~cash used in principal payments on our debt~~financing activities for the three months ended March 31, 2021 was primarily related to sales of ~~$4.7 million.~~common stock of $7.2 million, net of offering cost through the 2020 Purchase Agreement with Lincoln Park and the 2022 Distribution Agreement with Canaccord, as well as $2.0 million from exercise of warrants.

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. We operate 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 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.~~ 2021 and there have been no material changes during the three months ended March 31, 2022.

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, 2022 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,~~On June 22, 2021, we were ~~not~~named as a ~~party~~defendant in an action brought by Lorem Vascular, Pte. Ltd. (“Lorem”) in the District Court for the District of Delaware. The complaint alleges false representations were made to ~~any material legal proceeding.~~ Lorem regarding the manufacturing facility in the United Kingdom (the “UK Facility”) that Lorem purchased from us under the Equity Purchase Agreement, dated March 29, 2019, between us and Lorem (the “Lorem Agreement”). Lorem also claims that false representations were made regarding the UK Facility’s certification to sell and distribute devices in the European Union and export such devices to China. In connection with these allegations, Lorem claims entitlement to at least $6,000,000 in compensatory damages and operational costs and expenses (collectively, the “Lorem Claim”). We believe that the Lorem Claim is without merit and we are vigorously defending the case.

~~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~~2021. There have been no material changes to the SEC on March 24, 2017, which we strongly encourage you to review with all other information contained or incorporated by reference in this report before you decide to invest in our common stock. In addition to those risk factors ~~we identified the following new risks or substantive changes from the risks described in our Annual Report on Form 10-K. If any of the risks described~~included in our Annual Report on Form 10-K our Quarterly Reports, or discussed below actually occurs, our business, financial condition, results of operations and our future growth prospects could be materially and adversely affected. Under these circumstances, the trading price of our common stock could decline, and you may lose all or part of your investment.

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

Following notice from Nasdaq staff in June 2015 and December 2015, we had a hearing in January 2016 relating to our noncompliance with the $1.00 minimum bid price per share requirement. The Nasdaq Hearing Panel granted us until May 31, 2016 to come into compliance with the minimum bid price requirement, including requirements relating to obtaining stockholders approval of a reverse stock split that would bring our stock price above $1.00 per share for a minimum of 10 consecutive trading days. We transferred the listing of our common stock from the Nasdaq Global Market to the Nasdaq Capital Market in February 2016. In May 2016, we consummated a 1-for-15 reverse stock split pursuant to which the minimum bid price per share of our common stock rose above $1.00. Pursuant to a letter dated May 26, 2016, the Nasdaq staff delivered notice to us that we had regained compliance with Nasdaq’s minimum bid price rule.

On September 5, 2017, we received notice from Nasdaq staff relating to our noncompliance with the $1.00 minimum bid price per share requirement. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have been granted a 180 calendar day compliance period, or until March 5, 2018, to regain compliance with the minimum bid price requirement. During the compliance period, our shares of common stock will continue to be listed and traded on Nasdaq. To regain compliance, the closing bid price of our shares of common stock must meet or exceed $1.00 per share for at least 10 consecutive business days during the 180 calendar day compliance period.

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.~~ year ended December 31, 2021.

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.

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.

+ Portions of this exhibit have been excluded in compliance with Item 601 of Regulation S-K.

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~~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)

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

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

			Page
PART I	~~FINANCIAL INFORMATION~~

	Item 1.	~~Financial Statements~~	3

		~~Consolidated Condensed Balance Sheets~~	3

		~~Consolidated Condensed Statements of~~ ~~Operations and Comprehensive Loss~~ (Unaudited)	4

		~~~~Consolidated~~ Condensed Balance Sheets~~	4

		Condensed Statements of ~~Cash Flows~~Operations	5

		~~~~Notes to Consolidated~~ Condensed~~ ~~~~Financial~~ Statements~~ of Stockholders’ Equity	6

		Condensed Statements of Cash Flows	7

		Notes to Condensed Financial Statements	8

	Item 2.	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	1516

	Item 3.	~~Quantitative and~~ ~~Qualitative Disclosures about Market Risk~~	2522

	Item 4.	~~Controls and Procedures~~	2523

PART II	~~OTHER INFORMATION~~

	Item 1.	~~Legal Proceedings~~	2623

	Item 1A.	~~Risk Factors~~	26
	~~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~~	3123
	Item 6.	~~Exhibits~~	3224

	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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	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

Development revenues:
Government contracts and other		1,306			1,879			2,856			5,163
		1,306			1,879			2,856			5,163
Operating expenses:
Research and development		3,004			3,960			9,284			13,334
Sales and marketing		840			818			3,043			2,742
General and administrative		1,785			2,011			6,012			6,623
In process research and development acquired from Azaya Therapeutics		—			—			1,686			—
Total operating expenses		5,629			6,789			20,025			22,699
Operating loss		(4,343	)		(4,797	)		(17,053	)		(16,116	)

Other income (expense):
Interest income		5			4			24			8
Interest expense		(474	)		(645	)		(1,603	)		(1,947	)
Other income, net		5			54			233			928
Total other expense		(464	)		(587	)		(1,346	)		(1,011	)
Net loss	$	(4,807	)	$	(5,384	)	$	(18,399	)	$	(17,127	)

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

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

	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	%

	As of March 31,
	2022		2021
Outstanding stock options		1,170,873		691,263
Preferred stock		422,867		422,867
Outstanding warrants		2,141,378		2,141,378
Total		3,735,118		3,255,508


	Operating Leases
Remainder of 2022	$	114
2023	137
2024	113
2025	18
Thereafter		—
Total minimum lease payments	$	382
Less: amount representing interest		(37	)
Present value of obligations under leases		345
Less: current portion		(110	)
Noncurrent lease obligations	$	235

	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		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Balance as of December 31, 2021		1,170,890		$	5.01		9.00
Granted		—		$	—
Cancelled/forfeited		(17	)	$	24,706.00
Balance as of March 31, 2022		1,170,873		$	4.65		8.75	$	-
Vested and expected to vest at March 31, 2022		460,217		$	8.04		8.47	$	-
Exercisable at March 31, 2022		1,102,117		$	4.74		8.73	$	-

	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016
Cost of product revenues (excluding amortization of intangible assets and share-based compensation)	$	176		$	551		$	974		$	1,498
Amortization of intangible assets		306			57			919			237
Share-based compensation		5			10			18			35
Total cost of product revenues	$	487		$	618		$	1,911		$	1,770
Total cost of product revenues as % of product revenues		104.3	%		84.5	%		94.3	%		55.5	%

	As of September 30,			As of December 31,
	2017			2016		March 31, 2022		December 31, 2021
Cash and cash equivalents	$	4,783		$	12,560	$	21,239	$	18,400

Current assets	$	9,842		$	18,747	$	22,104	$	19,724
Current liabilities		18,404			12,501		4,921		5,870
Working capital	$	(8,562	)	$	6,246	$	17,183	$	13,854


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
		~~Description~~
1.1	Distribution Agreement, dated January 14, 2022, by and among Plus Therapeutics, Inc. and Canaccord Genuity LLC		8-K	001-34375 Exhibit 1.1	01/14/2022

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)~~	001-34375 Exhibit 3.1	03/11/2016

3.2	Certificate of Amendment to Amended and Restated Certificate	~~Amended~~ ~~and Restated Bylaws of Cytori Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 14, 2003)~~	8-K	001-34375 Exhibit 3.1	05/10/2016

3.3		~~Certificate of Amendment to Amended and Restated ~~Bylaws of Cytori Therapeutics, Inc. (incorporated by reference to our Current Report on Form~~ Certificate~~		8-K ~~filed with the Commission on May 6, 2014)~~	001-34375 Exhibit 3.1	05/23/2018

3.4	Certificate of Amendment to Amended and Restated Certificate	~~Certificate of Designation of Preferences, Rights and Limitations of Series A 3.6% Convertible Preferred Stock (incorporated by reference to our Current Report~~ ~~on Form~~	8-K ~~filed with the Commission on October 8, 2014)~~	001-34375 Exhibit 3.1	07/29/2019

~~10.1~~
3.5	~~Contract HHSO100201200008C dated September 27, 2012, by~~Certificate of Amendment to Amended and ~~between Cytori Therapeuti~~cs, 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)Restated Certificate		8-K	001-34375 Exhibit 3.1	08/06/2019

~~10.2~~		~~First Amendment to Loan and Security Agreement, dated September 20, 2017, by and between Cytori 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)~~
3.6	Amended and Restated Bylaws of Plus Therapeutics, Inc.		8-K	001-34375 Exhibit 3.1	09/21/2021

10.1+	Medidata Services Agreement and Statement of Work	X

~~31.1~~
10.2	~~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).~~Distribution Agreement, dated January 14, 2022, by and among Plus Therapeutics, Inc. and Canaccord Genuity LLC.		8-K	011-34375 Exhibit 1.1	1/14/2022

~~31.2~~
31.1	~~Certification of Principal ~~Financial~~Executive 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

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 the Sarbanes-Oxley Act of 2002	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		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	X

101.SCH		Inline XBRL Schema Document	X

101.CAL		Inline XBRL Calculation Linkbase Document	X

101.DEF		Inline XBRL Definition Linkbase Document	X

101.LAB		Inline XBRL Label Linkbase Document	X

~~101.PRE~~


101.PRE	Inline XBRL Presentation Linkbase Document	X
.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	X

	~~CYTORI~~PLUS THERAPEUTICS, INC.

	By:	/s/ Marc H. Hedrick
Dated: ~~November 9, 2017~~April 21, 2022		Marc H. Hedrick
		President & Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

	By:	/s/ ~~Tiago Girao~~Andrew Sims
Dated: ~~November 9, 2017~~ April 21, 2022		~~Tiago Girao~~Andrew Sims
		~~VP of Finance and~~ Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer and Principal Accounting Officer)