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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTIONS 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 0-52108
  Athersys, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

20-4864095(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)3201 Carnegie Avenue, Cleveland, Ohio(Address of principal
    executive offices)

44115-2634(Zip Code)   Registrants telephone number, including area code
 (216) 431-9900
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $.001 per share

NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      Documents
    Incorporated By Reference.
  Form 10-K




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##### 





TABLE OF
    CONTENTS
   
 PART IItem 1.

Business


3Item 1A.

Risk Factors


18Item 1B.

Unresolved Staff Comments


33Item 2.

Properties


33Item 3.

Legal Proceedings


33Item 4.

Submission of Matters to a Vote of Security
    Holders


33Item 4A.

Executive Officers of the Registrant


33PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


35Item 6.

Selected Financial Data


36Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


37Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


48Item 8.

Financial Statements and Supplementary Data


49Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosures


71Item 9A.

Controls and Procedures


71Item 9B.

Other Information


71PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


71Item 11.

Executive Compensation


72Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


72Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


72Item 14.

Principal Accountant Fees and Services


72PART IVItem 15.

Exhibits and Financial Statement Schedules


73EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1   2




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PART I  ITEM 1.
    BUSINESS.          ®
 3




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Business
    Strategy
    
    Efficiently develop product candidates in established areas
    of significant clinical need.  We will continue to
    develop our leading product candidates (e.g., ATHX-105 and
    MultiStem) using a fast follower approach, thereby
    mitigating risk and reducing costs. This approach allows us to
    leverage others prior clinical efforts and validation in
    the development of
    best-in-class
    product candidates with differentiated profiles. Our intention
    is to develop our products for ultimate commercialization by us,
    our partners or licensees after they have received approval from
    the United States Food and Drug Administration, or FDA.
    Apply our proprietary technologies toward the rapid
    identification, validation, and development of therapeutic
    product candidates.  We will continue to use our
    proprietary technologies to identify and validate therapeutic
    product candidates. We believe our technologies, including RAGE
    and MultiStem, provide us a competitive advantage in drug
    discovery and product development by allowing us to move
    products quickly from the discovery phase into clinical trials.
    We will select candidates for internal development based on
    several factors, including the required regulatory approval
    pathway and the potential market into which the product may be
    sold, and our ability to feasibly fund development activities
    through commercialization and marketing of the approved product.
    Enter into licensing or co-development arrangements for
    certain product candidates.  We intend to license
    certain of our product candidates to, or co-develop them with,
    qualified collaborators to broaden and accelerate our product
    development and commercialization efforts. In order to enhance
    the value of our product candidates in these potential licensing
    or collaboration arrangements, we plan to internally develop our
    product candidates through at least Phase II clinical
    trials whenever possible. We anticipate that this strategy will
    help us to enhance our return on product candidates for which we
    enter into collaborations through the receipt of strategic
    equity investments, license fees, milestone payments, and profit
    sharing or royalties. 4




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
    Continue to expand our intellectual property
    portfolio.  Our intellectual property is important
    to our business and we take significant steps to protect its
    value. We have an ongoing research and development effort, both
    through internal activities and through collaborative research
    activities with others, which aims to develop new intellectual
    property and enable us to file patent applications that cover
    new applications of our existing technologies or product
    candidates, including MultiStem.
    Out-license non-core applications of our
    technologies.  Certain elements of our
    technologies, such as their application toward the development
    of novel diagnostics or their use for the analysis,
    characterization or production of certain types of therapeutic
    product candidates, may not be relevant to the key elements of
    our corporate strategy. We believe these applications may have
    significant potential value, however, and can provide capital to
    us that can be applied to our other development efforts. Where
    appropriate, we may seek to license non-core applications of our
    technologies to others to realize this value.  Our
    Current Programs
    Pharmaceutical
    Programs
  ATHX-105
    for Obesity
     5




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best-in-class back-up
  ® ®
     6




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and/or
  H3
    Antagonists for the Treatment of Sleep Disorders and Certain
    Other Cognitive Disorders
     7




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®
      Regenerative
    Medicine Programs
  MultiStem 
    A Novel Approach to Regenerative Medicine
       8




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
    Broad plasticity and multiple potential mechanisms of
    action.  MultiStem cells have a demonstrated
    ability in animal models to form multiple cell types and appear
    to be able to deliver therapeutic benefit through multiple
    mechanisms, such as producing factors that protect tissues
    against damage and inflammation, as well as enhancing or playing
    a direct role in revascularization or tissue regeneration.
    Large scale production.  Unlike conventional
    stem cells, such as blood-forming or hematopoietic stem cells,
    MultiStem cells may be produced on a large scale, processed, and
    cryogenically preserved, and then used clinically in a rapid and
    efficient manner. Material obtained from a single donor may be
    used to produce hundreds of thousands or more of individual
    doses.
    Off-the-shelf utility.  Unlike
    traditional bone marrow or hematopoietic stem cell transplants,
    which require extensive genetic matching between donor and
    recipient, MultiStem cells do not appear, based on preclinical
    testing in animals, to require extensive tissue matching prior
    to administration. MultiStem treatment may be allogeneic,
    meaning that these cells would not need to be genetically
    matched between donor and recipient. This feature, combined with
    the ability to establish large MultiStem banks, could make it
    practical for clinicians to efficiently deliver stem cell
    therapy to a large number of patients.
    Safety.  Other stem cell types, such as
    embryonic stem cells, can pose serious safety risks, such as the
    formation of tumors or ectopic tissue. In contrast, MultiStem
    cells have an outstanding safety profile that has been compiled
    over several years of preclinical study in a range of animal
    models by a variety of investigators.      MultiStem
    for Heart Attack, HSC Transplant Support in Treatment of
    Hematologic Malignancies & Stroke
     9




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Heart
    Attack
          HSC
    Transplant Support in Hematologic Malignancy
     10




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Stroke
         11




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Other Key
    Technologies
    Collaborations
    and Partnerships
  Angiotech
          
    if at least one cell therapy product has obtained regulatory
    approval and we and Angiotech have shared profits with respect
    to sales of at least one cell therapy product, the date that
    there has been no sales for 12 months of any cell therapy
    product that has been the subject of profit-sharing, unless a
    clinical development candidate is in at least a Phase III
    clinical or later; and
    the later of (1) the expiration date of the last-to-expire
    patent licensed to Angiotech, which is expected to be
    August 5, 2019 based on currently issued patents, and
    (2) the
    15-year
    anniversary.   12




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and/or
  Bristol-Myers
    Squibb
      Competition
     13




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14




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Intellectual
    Property
    back-up
       15




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Research
    and Development
    Government
    Regulation
            
    preclinical tests in animals that demonstrate a reasonable
    likelihood of safety and effectiveness in human patients;
    submission to the FDA of an IND, which must become effective
    before clinical trials in humans can commence. If Phase I
    clinical trials are to be conducted initially outside the United
    States, a different regulatory filing is required, depending on
    the location of the study;
    adequate and well controlled human clinical trials to establish
    the safety and efficacy of the drug or biologic in the intended
    disease indication; 16




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
    for drugs, submission of a New Drug Application, or NDA, or a
    Biologic License Application, or BLA, with the FDA; and
    FDA approval of the NDA or BLA before any commercial sale or
    shipment of the drug.          Employees
      Available
    Information
  Form 10-K, Form 10-Q, Form 8-K www.athersys.com
 17




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Merger
    and Name Change
    ITEM 1A.
    RISK
    FACTORS    Risks
    Related To Our Business and Our Industry
  Athersys
    has incurred losses since inception and we expect to incur
    significant net losses in the foreseeable future and may never
    become profitable.
    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 or may be unable to
    continue our business.
    
    the progress and costs of our research and development programs,
    including our ability to develop our current portfolio of
    therapeutic products, or discover and develop new ones; 18




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
    our ability, or our partners ability and willingness, to advance
    partnered products or programs;
    the cost of prosecuting, defending and enforcing patent claims
    and other intellectual property rights;
    the progress, scope, costs, and results of our preclinical and
    clinical testing of any current or future pharmaceutical or
    MultiStem related products;
    the time and cost involved in obtaining regulatory approvals;
    the cost of manufacturing our product candidates;
    expenses related to complying with GMP of therapeutic product
    candidates;
    costs of financing the purchases of additional capital equipment
    and development technologies;
    competing technological and market developments;
    our ability to establish and maintain collaborative and other
    arrangements with third parties to assist in bringing our
    products to market and the cost of such arrangements.
    the amount and timing of payments or equity investments that we
    receive from collaborators or changes in or terminations of
    future or existing collaboration and licensing arrangements and
    the timing and amount of expenses we incur to supporting these
    collaborations and license agreements;
    costs associated with the integration of any new operation,
    including costs relating to future mergers and acquisitions with
    companies that have complementary capabilities;
    expenses related to the establishment of sales and marketing
    capabilities for products awaiting approval or products that
    have been approved;
    the level of our sales and marketing expenses; and
    our ability to introduce and sell new products.      We are
    heavily dependent on the successful development and
    commercialization of our two key product candidates, ATHX-105
    and MultiStem, and if we encounter delays or difficulties in the
    development of either or both candidates, our business would be
    harmed.
    
    delays in the ability to make either product in quantities or in
    a form that is suitable for any required preclinical studies or
    clinical trials; 19




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
    delays in the design, enrollment, implementation or completion
    of required preclinical studies and clinical trials;
    an inability to follow our current development strategy for
    obtaining regulatory approval from the FDA because of changes in
    the regulatory approval process;
    less than desired or complete lack of efficacy or safety in
    preclinical studies or clinical trials; and
    intellectual property constraints that prevent us from making,
    using, or commercializing either product candidate.  The
    results seen in animal testing of our product candidates may not
    be replicated in humans.
  ATHX-105,
  
    test short-term safety and tolerability;
    study the absorption, distribution, metabolism and elimination
    of the product candidate;
    study the biochemical and physiological effects of the product
    candidate and the mechanisms of the drug action and the
    relationship between drug concentration and effect; and
    understand the product candidates side effects at various
    doses and schedules.    Our
    products are in an early stage of development and we currently
    have no therapeutic products approved for sale. If we are unable
    to develop, obtain regulatory approval or market any of our
    product candidates, our financial condition will be negatively
    affected, and we may have to curtail or cease our
    operations.
  and/or
   20




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We may
    not successfully maintain our existing collaborative and
    licensing arrangements, or establish new ones, which could
    adversely affect our ability to develop and commercialize our
    product candidates.
        15-year and/or
     21




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If our
    collaborators do not devote sufficient time and resources to
    successfully carry out their contracted duties or meet expected
    deadlines, we may not be able to advance our product candidates
    in a timely manner or at all.
      product-by-product
  Even
    if we or our collaborators receive regulatory approval for our
    products, those products may never be commercially
    successful.
    
    health concerns, whether actual or perceived, or unfavorable
    publicity regarding our obesity drugs, stem cell products or
    those of our competitors;
    the timing of market entry as compared to competitive products;
    the rate of adoption of products by our collaborators and other
    companies in the industry;
    any product labeling that may be required by the FDA or other
    United States or foreign regulatory agencies for our products or
    competing or comparable products;
    convenience and ease of administration;
    pricing; 22




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
    perceived efficacy and side effects;
    marketing;
    availability of alternative treatments;
    levels of reimbursement and insurance coverage; and
    activities by our competitors.  We may
    experience delays in clinical trials and regulatory approval
    relating to our products that could adversely affect our
    financial results and our commercial prospects for our
    pharmaceutical or stem cell products.
      non-clinical
  and/or
    If our
    pharmaceutical product candidates do not successfully complete
    the clinical trial process, we will not be able to partner or
    market them. Even successful clinical trials may not result in a
    partnering transaction or a marketable product and may not be
    entirely indicative of a products safety or
    efficacy.
   23




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
    the size of the patient population;
    the proximity of patients to clinical sites;
    the eligibility criteria for the trial;
    the perceptions of investigators and patients regarding
    safety; and
    the availability of other treatment options.  Even
    if we obtain regulatory approval of any of our product
    candidates, the approved products may be subject to
    post-approval studies and will remain subject to ongoing
    regulatory requirements. If we fail to comply, or if concerns
    are identified in subsequent studies, our approval could be
    withdrawn and our product sales could be
    suspended.
  follow-up
   24




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We
    will rely on third parties to manufacture our pharmaceutical
    product candidates and our MultiStem product candidate. There
    can be no guarantee that we can obtain sufficient and acceptable
    quantities of our pharmaceutical product candidates or of our
    MultiStem product candidate on acceptable terms, which may delay
    or impair our ability to develop, test and market such
    products.
        If we
    do not comply with applicable regulatory requirements in the
    manufacture and distribution of our product candidates, we may
    incur penalties that may inhibit our ability to commercialize
    our products and adversely affect our revenue.
    If we
    are unable to create and maintain sales, marketing and
    distribution capabilities or enter into agreements with third
    parties to perform those functions, we will not be able to
    commercialize our product candidates.
   25




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and/or
  If we
    are unable to attract and retain key personnel and advisors, it
    may adversely affect our ability to obtain financing, pursue
    collaborations or develop our product candidates.
        Our
    ability to compete in the biopharmaceutical market may decline
    if we do not adequately protect our proprietary
    technologies.
      
    we were the first to file patent applications or to invent the
    subject matter claimed in patent applications relating to the
    technologies or product candidates upon which we rely; 26




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
    others will not independently develop similar or alternative
    technologies or duplicate any of our technologies;
    others did not publicly disclose our claimed technology before
    we conceived the subject matter included in any of our patent
    applications;
    any of our pending or future patent applications will result in
    issued patents;
    any of our patent applications will not result in interferences
    or disputes with third parties regarding priority of invention;
    any patents that may be issued to us, our collaborators or our
    licensors will provide a basis for commercially viable products
    or will provide us with any competitive advantages or will not
    be challenged by third parties;
    we will develop additional proprietary technologies that are
    patentable;
    the patents of others will not have an adverse effect on our
    ability to do business; or
    new proprietary technologies from third parties, including
    existing licensors, will be available for licensing to us on
    reasonable commercial terms, if at all.        We may
    not have adequate protection for our unpatented proprietary
    information, which could adversely affect our competitive
    position.
   27




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Disputes
    concerning the infringement or misappropriation of our
    proprietary rights or the proprietary rights of others could be
    time consuming and extremely costly and could delay our research
    and development efforts.
         28




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Many
    potential competitors, including those who have greater
    resources and experience than we do, may develop products or
    technologies that make ours obsolete or
    noncompetitive.
              We
    will use hazardous and biological materials in our business. Any
    claims relating to improper handling, storage or disposal of
    these materials could be time consuming and
    costly.
   29




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If we
    acquire products, technologies or other businesses, we will
    incur a variety of costs, may have integration difficulties and
    may experience numerous other risks that could adversely affect
    our business.
    
    we may have to issue convertible debt or equity securities to
    complete an acquisition, which would dilute our stockholders and
    could adversely affect the market price of the common stock;
    an acquisition may negatively impact our results of operations
    because it may require us to incur large one-time charges to
    earnings, amortize or write down amounts related to goodwill and
    other intangible assets, or incur or assume substantial debt or
    liabilities, or it may cause adverse tax consequences,
    substantial depreciation or deferred compensation charges;
    we may encounter difficulties in assimilating and integrating
    the business, technologies, products, personnel or operations of
    companies that we acquire;
    certain acquisitions may disrupt our relationship with existing
    collaborators who are competitive to the acquired business;
    acquisitions may require significant capital infusions and the
    acquired businesses, products or technologies may not generate
    sufficient revenue to offset acquisition costs;
    an acquisition may disrupt our ongoing business, divert
    resources, increase our expenses and distract our management;
    acquisitions may involve the entry into a geographic or business
    market in which we have little or no prior experience; and
    key personnel of an acquired company may decide not to work for
    us.    To the
    extent we enter markets outside of the United States, our
    business will be subject to political, economic, legal and
    social risks in those markets, which could adversely affect our
    business.
    
    changes and limits in import and export controls;
    increases in custom duties and tariffs; 30




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
    changes in currency exchange rates;
    economic and political instability;
    changes in government regulations and laws;
    absence in some jurisdictions of effective laws to protect our
    intellectual property rights; and
    currency transfer and other restrictions and regulations that
    may limit our ability to sell certain products or repatriate
    profits to the United States.    Foreign
    governments often impose strict price controls on approved
    products, which may adversely affect our future profitability in
    those countries, and the re-importation of drugs to the United
    States from foreign countries that impose price controls may
    adversely affect our future profitability.
    If we
    elect not to sell our products in foreign countries that impose
    government mandated price controls because we decide it is
    uneconomical to do so, a foreign government or patent office may
    attempt to terminate our intellectual property rights in that
    country, enabling competitors to make and sell our
    products.
    We may
    encounter difficulties managing our growth, which could
    adversely affect our business.
    We may
    be sued for product liability, which could adversely affect our
    business.
   31




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The
    availability, manner, and amount of reimbursement for our
    product candidates from government and private payers are
    uncertain, and our inability to obtain adequate reimbursement
    for any products could severely limit our product
    sales.
      Public
    perception of ethical and social issues surrounding the use of
    adult-derived stem cell technology may limit or discourage the
    use of our technologies, which may reduce the demand for our
    therapeutic products and technologies and reduce our
    revenues.
  adult-derived
 32




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 4A.
    EXECUTIVE
    OFFICERS OF THE REGISTRANT  Regulation S-K.
      Gil Van Bokkelen, Ph.D.
   Dr. Van Bokkelen
  William (BJ) Lehmann, Jr., J.D.
   Mr. Lehmann
 33




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John J. Harrington, Ph.D.
   Dr.. Harrington
  Robert J. Deans, Ph.D.
   Dr. Deans
  Laura K. Campbell, CPA
   Ms. Campbell
 34




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowYear ending December 31, 2007:Second Quarter

$
10.00


$
5.25Third Quarter

$
8.75


$
7.00Fourth Quarter (through December 11, 2007)

$
8.00


$
4.40   mark-up,
    High


LowYear ending December 31, 2007:Fourth Quarter (from December 12, 2007 through
    December 31, 2007)

$
5.01


$
3.51   Holders
    Dividend
    Policy
   35




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ITEM 6.
    SELECTED
    FINANCIAL DATA  Year Ended December 31,2003


2004


2005


2006


2007(In thousands, except per share data)Consolidated Statement of Operations Data:Revenues:License fees

$
1,393


$
820


$
763


$
1,908


$
1,433Grants


759



2,318



2,833



1,817



1,827Total revenues


2,152



3,138



3,596



3,725



3,260Costs and expenses:Research and development


13,675



12,415



12,578



9,741



15,817Purchased in-process R&D


9,500















General and administrative


10,882



4,717



3,755



3,347



7,975Depreciation


1,803



1,297



982



528



283Restructuring costs


1,076



107



251







Loss from operations


(34,784
)


(15,398
)


(13,970
)


(9,891
)


(20,815
)Other income (expense):Other income and equity in earnings of unconsolidated affiliate


1,114







18



208



2,017Interest income


644



317



317



119



1,591Interest expense


(135
)


(73
)


(964
)


(1,047
)


(1,263
)Accretion of premium on convertible debt














(260
)


(456
)Loss before cumulative effect of change in accounting principle

$
(33,161
)

$
(15,154
)

$
(14,599
)

$
(10,871
)

$
(18,926
)Cumulative effect of change in accounting principle














306



Net loss


(33,161
)


(15,154
)


(14,599
)


(10,565
)


(18,926
)Preferred stock dividends


(2,164
)


(2,325
)


(2,253
)


(1,408
)


(659
)Deemed dividend resulting from induced conversion of convertible
    preferred stock


















(4,800
)Net loss attributable to common stockholders

$
(35,325
)

$
(17,479
)

$
(16,852
)

$
(11,973
)

$
(24,385
)Basic and diluted net loss per common share attributable to
    common stockholders:Loss before cumulative effect of change in accounting principle

$
(130.90
)

$
(59.82
)

$
(57.79
)

$
(41.89
)

$
(2.26
)Cumulative effect of change in accounting principle














1.05



Net loss

$
(130.90
)

$
(59.82
)

$
(57.79
)

$
(40.84
)

$
(2.26
)Weighted average shares outstanding, basic and diluted


269,861



292,173



291,612



293,142



10,811,119   36




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December 31,2003


2004


2005


2006


2007Consolidated Balance Sheet Data:Cash and cash equivalents

$
4,580


$
3,303


$
1,080


$
1,528


$
13,248Restricted cash


670















Available-for-sale securities (short-term)


18,909



13,976



3,481







22,477Working capital (deficit)


18,514



17,018



1,828



(3,206
)


32,849Available-for-sale securities (long-term)


1,833















13,850Total assets


30,503



20,894



7,309



4,266



52,225Long-term obligations, less current portion


578



7,215



4,684



9,310



Accrued dividends


8,911



11,236



7,473



8,882



Total stockholders equity (deficit)


14,951



1,151



(8,584
)


(20,007
)


47,631   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
  Overview
       37




---



##### Table of Contents



1-for-1.67
               38




---



##### Table of Contents



Results
    of Operations
      Revenues
  Year Ended December 31,2007


2006


2005License fees

$
1,433


$
1,908


$
763Grant revenue


1,827



1,817



2,833$
3,260


$
3,725


$
3,596   Research
    and development expenses
  Year Ended December 31,Type of Expense

2007


2006


2005Personnel costs

$
2,813


$
2,721


$
4,587Research supplies


679



1,208



2,286Facilities


762



879



1,127Clinical and preclinical development costs


5,723



2,702



966Sponsored research


465



579



1,129Patent legal fees


1,086



595



714Other


1,821



781



968Stock-based compensation


2,468



276



801$
15,817


$
9,741


$
12,578  39




---



##### Table of Contents



General
    and administrative expenses
  Year Ended December 31,Type of Expense

2007


2006


2005Personnel costs

$
1,987


$
1,891


$
1,858Facilities


330



291



286Legal and professional fees


1,165



590



446Other


1,822



392



508Stock-based compensation


2,671



183



657$
7,975


$
3,347


$
3,755   Year
    Ended December 31, 2007 Compared to Years Ended
    December 31, 2006
  Revenues.
  Research and Development Expenses.
  General and Administrative Expenses.
 40




---



##### Table of Contents



Depreciation.
  Other Income and Equity in Earnings of Unconsolidated
    Affiliate.
  Interest Income.
  Interest Expense.
  Accretion of Premium on Convertible Debt. paid-in-capital
  Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Revenues.
  Research and Development Expenses.
 41




---



##### Table of Contents



General and Administrative Expenses.
  Depreciation.
  Restructuring Costs.
  Other Income and Equity in Earnings of Unconsolidated
    Affiliate.
  Interest Income.
  Interest Expense.
  Accretion of Premium on Convertible Debt. paid-in-capital
  Cumulative Effect of Change in Accounting
    Principle.
 42




---



##### Table of Contents



Liquidity
    and Capital Resources
                 43




---



##### Table of Contents



Less Than








More ThanContractual Obligations

Total


1 Year


1-3 Years


3-5 Years


5 YearsOperating lease for facilities

$
741,000


$
309,000


$
432,000







Long-term debt (principal)

$
1,800,000


$
1,800,000











Long-term debt (interest)

$
75,000


$
75,000











Research funding

$
1,327,000


$
336,000


$
991,000Total

$
3,943,000


$
2,520,000


$
1,423,000







      44




---



##### Table of Contents



30-day
      Critical
    Accounting Policies and Management Estimates
      Revenue
    Recognition
  Revenue
    Recognition No. 00-21, Revenue Arrangements with Multiple
    Deliverables,
     45




---



##### Table of Contents



Collaborative
    Arrangements
    Clinical
    Trial Costs
    Investments
    in Available-for-Sale Securities
    Stock-Based
    Compensation
       46




---



##### Table of Contents



Recently
    Issued Accounting Standards
  Fair Value Measurements
  CAUTIONARY
    NOTE ON FORWARD-LOOKING STATEMENTS
  This annual report on
    Form 10-K
    contains forward-looking statements within the meaning of the
    Private Securities Litigation Reform Act of 1995 that involve
    risks and uncertainties. These forward-looking statements relate
    to, among other things, the expected timetable for development
    of our product candidates, our growth strategy, and our future
    financial performance, including our operations, economic
    performance, financial condition, prospects, and other future
    events. We have attempted to identify forward-looking statements
    by using such words as anticipates,
    believes, can, continue,
    could, estimates, expects,
    intends, may, plans,
    potential, should, will, or
    other similar expressions. These forward-looking statements are
    only predictions and are largely based on our current
    expectations. These forward-looking statements appear in a
    number of places in this annual report.
    
    our ability to successfully complete clinical trials for our
    product candidates;
    the possibility of delays in, adverse results of, and excessive
    costs of the development process;
    changes in external market factors;
    changes in our industrys overall performance;
    changes in our business strategy;
    our ability to protect our intellectual property portfolio;
    our possible inability to enter into licensing or co-development
    arrangements for certain product candidates;
    our possible inability to execute our strategy due to changes in
    our industry or the economy generally;
    changes in productivity and reliability of suppliers;
    the success of our competitors and the emergence of new
    competitors; and
    the risks mentioned elsewhere in this annual report under
    Item 1A, Risk Factors.   47




---



##### Table of Contents



Forms 10-Q, 8-K 10-K
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Risk
     48




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Athersys,
    Inc.
  Consolidated
    Financial Statements
  Years
    Ended December 31, 2007, 2006 and 2005
  Contents
   
 Reports of Independent Registered Public
    Accounting Firm


50Consolidated Balance Sheets as of
    December 31, 2007 and 2006


52Consolidated Statements of Operations for each of
    the years ended December 31, 2007, 2006 and 2005


53Consolidated Statements of Stockholders
    Equity (Deficit) for each of the years ended December 31,
    2007, 2006 and 2005


54Consolidated Statements of Cash Flows for each of
    the years ended December 31, 2007, 2006 and 2005


55Notes to Consolidated Financial Statements


56   49




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           Share-Based
    Payment
  Internal Control  Integrated Framework
    50




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     Internal Control 
    Integrated Framework
              51




---



##### Table of Contents



Athersys,
    Inc.



Consolidated
    Balance Sheets  December 31,2007


2006(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
13,248


$
1,528Available-for-sale
    securities


22,477



Accounts receivable


836



872Receivable from Angiotech


63



Investment interest receivable


262



Deposit


163



Prepaid expenses and other


394



261Total current assets


37,443



2,661Available-for-sale
    securities


13,850



Deposit


100



100Notes receivable, net


86



562Equipment, net


387



509Accounts receivable, net


42



117Equity investments


317



317Total assets

$
52,225


$
4,266LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable

$
1,011


$
898Accrued compensation and related benefits


71



423Accrued clinical trial costs


735



Accrued expenses and other


993



1,214Current portion of long-term debt, net


1,784



3,332Total current liabilities


4,594



5,867Long-term debt






1,800Convertible promissory notes, net






7,510Accrued interest






214Accrued dividends






8,882Stockholders equity (deficit):Convertible preferred stock, at stated value; no shares
    authorized at December 31, 2007; 481,540 shares
    authorized, 364,524 shares issued and outstanding with an
    aggregate liquidation preference of $68,187 at December 31,
    2006;






68,301Preferred stock, at stated value; 10,000,000 shares
    authorized, and no shares issued and outstanding at
    December 31, 2007 and December 31, 2006






Common stock, $0.001 par value; 100,000,000 shares
    authorized, 18,927,988 shares issued and outstanding at
    December 31, 2007; 1,433,972 shares authorized,
    293,770 shares issued and outstanding at December 31,
    2006;


19



Additional paid-in capital


208,039



53,495Treasury stock, at cost






(250
)Accumulated other comprehensive income


52



Accumulated deficit


(160,479
)


(141,553
)Total stockholders equity (deficit)


47,631



(20,007
)Total liabilities and stockholders equity (deficit)

$
52,225


$
4,266    52




---



##### Table of Contents



Athersys,
    Inc.
 Consolidated
    Statements of Operations  Year Ended December 31,2007


2006


2005(In thousands, except share and per share amounts)RevenuesLicense fees

$
1,433


$
1,908


$
763Grant revenue


1,827



1,817



2,833Total revenues


3,260



3,725



3,596Costs and expensesResearch and development (including stock compensation expense
    of $2,468, $276 and $801 in 2007, 2006 and 2005, respectively)


15,817



9,741



12,578General and administrative (including stock compensation expense
    of $2,671, $183 and $657 in 2007, 2006 and 2005, respectively)


7,975



3,347



3,755Depreciation


283



528



982Restructuring costs (including stock compensation income of $128)










251Total costs and expenses


24,075



13,616



17,566Loss from operations


(20,815
)


(9,891
)


(13,970
)Other income


2,017



91



18Equity in earnings of unconsolidated affiliate






117



Interest income


1,591



119



317Interest expense


(1,263
)


(1,047
)


(964
)Accretion of premium on convertible debt


(456
)


(260
)


Loss before cumulative effect of change in accounting
    principle


(18,926
)


(10,871
)


(14,599
)Cumulative effect of change in accounting principle






306



Net loss

$
(18,926
)

$
(10,565
)

$
(14,599
)Preferred stock dividends


(659
)


(1,408
)


(2,253
)Deemed dividend resulting from induced conversion of
    convertible preferred stock


(4,800
)






Net loss attributable to common stockholders

$
(24,385
)

$
(11,973
)

$
(16,852
)Basic and diluted net loss per common share attributable to
    common stockholdersLoss before cumulative effect of change in accounting principle

$
(2.26
)

$
(41.89
)

$
(57.79
)Cumulative effect of change in accounting principle






1.05



Net loss

$
(2.26
)

$
(40.84
)

$
(57.79
)Weighted average shares outstanding, basic and diluted


10,811,119



293,142



291,612    53




---



##### Table of Contents



Athersys,
    Inc.



Consolidated
    Statements of Stockholders Equity (Deficit)  Convertible














Accumulated


Unearned





TotalPreferred Stock


Common Stock


Additional





Other


Compensation





StockholdersNumber


Stated


Number


Par


Paid-in


Treasury


Comprehensive


Common Stock


Accumulated


Equityof Shares


Value


of Shares


Value


Capital


Stock


Income (Loss)


Options


Deficit


(Deficit)(In thousands, except share amounts)Balance at January 1, 2005


422,468


$
68,301



292,257


$



$
51,831


$



$
(35
)

$
(2,557
)

$
(116,389
)


1,151Issuance of common stock, net










72







3



















3Repurchase of common and preferred stock


(57,944
)






(1,388
)










(250
)














(250
)Amortization of unearned compensation






























1,330







1,330Forfeitures of common stock options


















(418
)










418







Accrued dividends  Class C


















(1,306
)


















(1,306
)Accrued dividends  Class E


















(947
)


















(947
)Reversal of Class E accrued preferred dividends


















6,016



















6,016Comprehensive Loss:Net loss


































(14,599
)


(14,599
)Unrealized gain on available for sale securities


























18











18Total comprehensive loss






































(14,581
)Balance at December 31, 2005


364,524



68,301



290,941







55,179



(250
)


(17
)


(809
)


(130,988
)


(8,584
)Issuance of common stock










2,829







130



















130Issuance of common stock warrant


















250



















250Adoption of SFAS No. 123(R)


















(809
)










809







Stock-based compensation


















153



















153Accrued dividends  Class C


















(1,408
)


















(1,408
)Comprehensive Loss:Net loss


































(10,565
)


(10,565
)Unrealized gain on available for sale securities


























17











17Total comprehensive loss






































(10,548
)Balance at December 31, 2006


364,524



68,301



293,770







53,495



(250
)










(141,553
)


(20,007
)Stock based compensation


















5,139



















5,139Accrued dividends  Class C


















(659
)


















(659
)Elimination of cumulative accrued dividends 
    Class C


















9,541



















9,541Conversion of preferred stock to common stock


(364,524
)


(68,301
)


1,912,356



2



68,299



















Issuance of common stock from warrant exercises










1,003,190



1



9



















10Retirement of treasury stock


















(250
)


250















Shares of common stock for Merger with BTHC VI, Inc.










299,622



























Issuance of common stock, net of expenses










13,001,379



13



58,479



















58,492Issuance of common stock warrants


















492



















492Issuance of common stock for conversion of convertible notes










2,417,671



3



13,494



















13,497Comprehensive Loss:Net loss


































(18,926
)


(18,926
)Unrealized gain on available for sale securities


























52











52Total comprehensive loss






































(18,874
)Balance at December 31, 2007





$




18,927,988


$
19


$
208,039


$



$
52


$



$
(160,479
)

$
47,631    54




---



##### Table of Contents



Athersys,
    Inc.



Consolidated
    Statements of Cash Flows  Year Ended December 31,2007


2006


2005(In thousands)Operating activitiesNet loss

$
(18,926
)

$
(10,565
)

$
(14,599
)Adjustments to reconcile net loss to net cash used in operating
    activities:Depreciation


283



528



982Fixed asset impairment










87Gain on sale of equipment










(18
)Equity in earnings of unconsolidated affiliate






(117
)


Accretion of premium on convertible debt


456



260



Provision/forgiveness of notes receivable


193



122



Earned milestone applied to note receivable


283







Stock-based compensation


5,139



459



1,330Expense related to warrants issued to lenders


476







Income from cumulative effect of change in accounting principle






(306
)


Amortization of premium (discount) on available for sale
    securities and other


(52
)


15



(44
)Changes in operating assets and liabilities:Accounts receivable


111



(361
)


22Receivable from Angiotech


(63
)






Prepaid expenses and other assets


(558
)


21



10Accounts payable and accrued expenses


592



1,546



112Net cash used in operating activities


(12,066
)


(8,398
)


(12,118
)Investing activitiesPurchase of available for sale securities


(46,316
)


(3,426
)


(5,006
)Proceeds from maturities of available for sale securities


10,100



6,932



15,563Proceeds from sale of equipment










23Purchases of equipment


(161
)


(83
)


(239
)Net cash (used in) provided by investing activities


(36,377
)


3,423



10,341Financing activitiesPrincipal payments on debt


(3,332
)


(2,083
)


(199
)Proceeds from convertible promissory notes


5,000



7,500



Repurchase of common and preferred stock held in treasury










(250
)Proceeds from issuance of common stock, net


58,495



6



3Net cash provided by (used in) financing activities


60,163



5,423



(446
)Increase (decrease) in cash and cash equivalents


11,720



448



(2,223
)Cash and cash equivalents at beginning of year


1,528



1,080



3,303Cash and cash equivalents at end of year

$
13,248


$
1,528


$
1,080    55




---



##### Table of Contents



Athersys,
    Inc.



Notes to
    Consolidated Financial Statements  A.
    Background,
    Recent Merger and Offering        1-for-1.67
       56




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   A.
    Background,
    Recent Merger and
    Offering  (Continued)      30-day
    B.
    Accounting
    Policies  Principles
    of Consolidation
    Revenue
    Recognition
  Revenue
    Recognition, No. 00-21, Revenue Arrangements with Multiple
    Deliverables,
   57




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   B.
    Accounting
    Policies  (Continued)      Cash and
    Cash Equivalents
    Research
    and Development
    Collaborative
    Arrangements
    Clinical
    Trial Costs
    Royalties
    Investments
    in
    Available-for-Sale
    Securities
  available-for-sale. Available-for-sale
 58




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   B.
    Accounting
    Policies  (Continued)  available-for-sale available-for-sale
  Long-Lived
    Assets
      Patent
    Costs and Rights
    Comprehensive
    Income (Loss)
  available-for-sale
  Concentration
    of Credit Risk
    Use of
    Estimates
    Stock-Based
    Compensation
  Share-Based Payment Accounting
    for Stock Issued to Employees Accounting for Stock
    Based Compensation
 59




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   B.
    Accounting
    Policies  (Continued)            Year EndedDecember 31,2005Net loss attributable to common stockholders:As reported

$
(16,852
)Total stock compensation expense included in net loss, as
    reported


1,260Total stock compensation expense under the fair value method for
    all awards


(2,312
)Pro forma net loss attributable to common stockholders

$
(17,904
)Net loss per common share attributable to common stockholders:Basic and diluted  as reported

$
(57.79
)Basic and diluted  pro forma

$
(61.40
)  60




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   B.
    Accounting
    Policies  (Continued)    December 31,2007

2006

2005Volatility

73.4%

53.6%

49.8%Risk-free interest rate

5.3%

4.8%

3.7%Expected life of option

5.36 years

4.0 years

4.0 yearsExpected dividend yield

0.0%

0.0%

0.0%   Net Loss
    per Share
  Earnings Per Share
      
    Outstanding stock options to purchase 3,679,884, 116,083, and
    138,795 shares of common stock for the years ended
    December 31, 2007, 2006 and 2005, respectively;
    Warrants to purchase 5,125,496, 25,639, and 25,639 shares
    of common stock for the years ended December 31, 2007, 2006
    and 2005, respectively;
    Shares of common stock issuable upon conversion of convertible
    preferred stock in the amount of 160,041 for the year ended
    December 31, 2007 and 364,524 for both the years ended
    December 31, 2006 and 2005; and
    Shares of common stock issuable upon the conversion of the
    convertible promissory notes in the amount of 112,098 and 72,995
    for the years ended December 31, 2007 and 2006.  Reclassification
    Recently
    Issued Accounting Standard
  Fair Value Measurements
 61




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   B.
    Accounting
    Policies  (Continued)    C.
    Equipment    December 31,2007


2006Laboratory equipment

$
5,839


$
5,825Office equipment and leasehold improvements


3,481



3,3349,320



9,159Accumulated depreciation


(8,933
)


(8,650
)$
387


$
509   D.
    Notes
    Receivable; MCL Acquisition  Note
    Receivable from Officer
    MCL
    Acquisition and Note Receivable
       62




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   D.
    Notes
    Receivable; MCL
    Acquisition  (Continued)    E.
    Financial
    Instruments  Investments
    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


FairCost


Losses


Gains


ValueFloating Rate Notes

$
6,000


$



$



$
6,000Debt securities issued by U.S. Treasury


20,400







49



20,449Corporate debt securities


3,336



(6
)


9



3,339Commercial paper


6,539











6,539$
36,275


$
(6
)

$
58


$
36,327   available-for-sale available-for-sale
  available-for-sale available-for-sale,
  December 31, 2007Amortized


EstimatedCost


Fair ValueDue in one year or less

$
22,439


$
22,477Due after one year through two years


13,836



13,850$
36,275


$
36,327   Financing
    Arrangements
     63




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   E.
    Financial
    Instruments  (Continued)    Long-Term
    Debt
    December 31,2007


2006Notes payable to lenders; issued November 2004; matures June
    2008, including $487,500 terminal payment; 13% interest rate;
    secured

$
1,800


$
5,132Discount related to warrant issuance


(16
)


Total, net


1,784



5,132Less  current portion, net


1,784



3,332Long-term debt

$



$
1,800          64




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   E.
    Financial
    Instruments  (Continued)    F.
    Collaboration        No. 07-1, Accounting for Collaborative Arrangements
  G.
    Convertible
    Bridge Notes     65




---



##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   G.
    Convertible
    Bridge Notes  (Continued)      five-year
  H.
    Capitalization        
    Convertible Class A, B, C, D, F and G Preferred stock,
    which generally were entitled to voting rights, dividends when
    declared, liquidation rights, and conversion rights at the
    holders election on a 1:1 basis;
    Convertible Class C and E Preferred Stock carried
    cumulative, accrued dividends; and
    The Class E Preferred Stock had limited voting rights and
    liquidation rights. As of October 2005, the shares of
    Class E Preferred stock were no longer convertible into
    shares of common stock, and the accrued dividend was no longer
    payable. 66




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##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   H.
    Capitalization  (Continued)     December 312007


2006Stock option plans


4,500



277Conversion of Class A, B, C, D, F, and G preferred stock






365Conversion of unissued blank check preferred stock






9Conversion of convertible notes  Angiotech*






1,887Conversion of convertible notes  Bridge investors*






532Warrants to purchase common stock  Bridge investors*






1,000Warrants to purchase common stock  Offering


4,976



Warrants to purchase common stock  Lenders*


149



149Warrant to purchase common stock  Miscellaneous






269,625



4,245     *
    
    Amounts were not determinable at December 31, 2006, but
    were determined in June 2007 in connection with the Offering  I.
    Joint
    Venture  EITF 96-16)
  wind-up
  J.
    Stock
    Option Plans     67




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##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   J.
    Stock
    Option Plans  (Continued)          WeightedAverageNumber of


ExerciseOptions


PriceOutstanding January 1, 2005


149,017


$
92.61Granted


1,470



362.63Exercised


(63
)


41.84Forfeited


(11,628
)


133.89Outstanding December 31, 2005


138,796



92.05Granted






Exercised


(72
)


83.68Forfeited


(22,641
)


150.91Outstanding December 31, 2006


116,083



80.62Granted


3,738,000



5.06Exercised






Forfeited/Terminated/Expired


(174,199
)


51.21Outstanding December 31, 2007


3,679,884


$
5.24Vested during 2007


1,663,957


$
5.02Vested and exercisable at December 31, 2007


1,668,591


$
5.42   68




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##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   J.
    Stock
    Option Plans  (Continued)  December 31, 2007Options Outstanding


Options Vested and ExercisableWeighted








WeightedAverage


Weighted





Average


WeightedRemaining


Average





Remaining


AverageNumber of


Contractual


Exercise


Number of


Contractual


ExerciseExercise Price

Options


Life


Price


Options


Life


Price$ 4.99-  7.80


3,675,250



8.45


$
5.06



1,663,957



8.76


$
5.02$69.74-278.95


4,634



2.25


$
152.08



4,634



2.25


$
152.083,679,884











1,668,591     K.
    Income
    Taxes        December 31,2007


2006Net operating loss carryforwards

$
2,387


$
Net operating loss carryforwards  Pre-Merger NOL


3,066



37,369Research and development credit carryforwards


438



5,759Compensation expense


1,221



4,275Other


539



568Total deferred tax assets


7,651



47,971Valuation allowance for deferred tax assets


(7,651
)


(47,971
)Net deferred tax assets

$



$
     Accounting for Uncertainty in
    Income Taxes
 69




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##### Table of Contents



Athersys,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   K.
    Income
    Taxes  (Continued)    L.
    Profit
    Sharing Plan and 401(k) Plan    M.
    Quarterly
    Financial Data (unaudited)    2007First


Second


Third


Fourth


FullQuarter


Quarter


Quarter


Quarter


YearRevenues

$
879


$
723


$
860


$
798


$
3,260Net loss

$
(2,720
)

$
(7,069
)

$
(4,439
)

$
(4,698
)

$
(18,926
)Preferred stock dividends

$
(375
)

$
(284
)

$



$



$
(659
)Deemed dividend resulting from induced conversion of convertible
    preferred stock

$



$
(4,800
)

$



$



$
(4,800
)Net loss attributable to common stockholders

$
(3,095
)

$
(12,153
)

$
(4,439
)

$
(4,698
)

$
(24,385
)Basic and diluted net loss per common share attributable to
    common stockholders

$
(10.54
)

$
(2.53
)

$
(0.23
)

$
(0.25
)

$
(2.26
)   2006First


Second


Third


Fourth


FullQuarter


Quarter


Quarter


Quarter


YearRevenues

$
629


$
490


$
1,126


$
1,480


$
3,725Loss before cumulative effect of change in accounting principle

$
(2,793
)

$
(3,295
)

$
(2,067
)

$
(2,716
)

$
(10,871
)Net loss

$
(2,487
)

$
(3,295
)

$
(2,067
)

$
(2,716
)

$
(10,565
)Preferred stock dividends

$
(348
)

$
(347
)

$
(347
)

$
(366
)

$
(1,408
)Net loss attributable to common stockholders

$
(2,835
)

$
(3,642
)

$
(2,414
)

$
(3,082
)

$
(11,973
)Basic and diluted net loss per common share attributable to
    common stockholders:Loss before cumulative effect of change in accounting principle

$
(10.78
)

$
(12.40
)

$
(8.22
)

$
(10.49
)

$
(41.89
)Cumulative effect of change in accounting principle


1.05















1.05Net loss

$
(9.73
)

$
(12.40
)

$
(8.22
)

$
(10.49
)

$
(40.84
)  70




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation of disclosure controls and
    procedures:
  Managements report on internal control over financial
    reporting: Rule 13a-15(f). Form 10-K
  Changes in internal control:
  ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K
       71




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION      ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED SHAREHOLDER MATTERS    Equity Compensation Plan Information.
  Number of SecuritiesRemaining AvailableNumber of





for Future IssuanceSecurities to





Under Equitybe Issued Upon





CompensationExercise of


Weighted-Average


Plans (ExcludingOutstanding


Exercise Price of


Securities ReflectedOptions


Outstanding Options


in Column(a))Plan Category

(a)


(b)


(c)Equity compensation plan approved by security holders


2,442,750


$
5.00



592,250Equity compensation plan not approved by security holders(1)


1,237,134


$
5.72



232,500Total


3,679,884







824,750     (1)
    
    Includes 4,634 of shares of common stock issuable upon exercise
    of stock options that were assumed by BTHC VI in the Merger.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
   72




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements:
                Financial Statement Schedules:
      Balance atBeginning of








Balance atYear


Additions


Deductions


End of Year(In thousands)Year Ended December 31, 2007Deducted from asset accounts:Allowance for doubtful accounts

$



$
193
(A)

$



$
193Tax valuation allowances


47,971



1,954



42,274
(B)


7,651Total 2007

$
47,971


$
2,147


$
42,274


$
7,844Year Ended December 31, 2006Deducted from asset accounts:Tax valuation allowances

$
43,974


$
3,997


$

(B)

$
47,971Total 2006

$
43,974


$
3,997


$



$
47,971Year Ended December 31, 2005Deducted from asset accounts:Tax valuation allowances

$
38,861


$
5,113


$

(B)

$
43,974Total 2005

$
38,861


$
5,113


$



$
43,974     (A)
    
     Reserve on note receivable.(B)
    
     Deferred tax assets are fully offset by valuation
    allowances. As a result of the June 2007 equity offering and
    merger, the Company lost the use of a significant portion of its
    pre-merger net operating loss carryforwards.   73




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##### Table of Contents



Exhibits.
  Exhibit No.

Exhibit Description2
.1

Agreement and Plan of Merger, dated as of May 24, 2007, by
    and among Athersys, Inc., BTHC VI, Inc. and B-VI Acquisition
    Corp. (incorporated herein by reference to Exhibit 10.1 to
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on May 24, 2007)2
.2

First Amendment to Agreement and Plan of Merger, dated as of
    June 8, 2007, by and among Athersys, Inc., BTHC VI, Inc.
    and B-VI Acquisition Corp. (incorporated herein by reference to
    Exhibit 2.2 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)3
.1

Certificate of Incorporation of Athersys, Inc., as amended as of
    August 31, 2007 (incorporated herein by reference to
    Exhibit 3.1 to the registrants Registration Statement
    on
    Form S-3/A
    (Registration
    No. 333-144433)
    filed with the Commission on October 10, 2007)3
.2

Bylaws of Athersys, Inc., as amended as of October 30, 2007
    (incorporated herein by reference to Exhibit 3.1 to the
    registrants Current Report on
    Form 10-K
    (Commission
    No. 000-52108)
    filed with the Commission on October 31, 2007)10
.1*

Research Collaboration and License Agreement, dated as of
    December 8, 2000, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.2*

Cell Line Collaboration and License Agreement, dated as of
    July 1, 2002, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.2 to the registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on September 27, 2007)10
.3*

Extended Collaboration and License Agreement, dated as of
    January 1, 2006, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.3 to the registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on September 27, 2007)10
.4

License Agreement, effective as of May 5, 2006, by and
    between Athersys, Inc. and Angiotech Pharmaceuticals, Inc.
    (incorporated herein by reference to Exhibit 10.4 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.5

Sublicense Agreement, effective as of May 5, 2006, by and
    between Athersys, Inc. and Angiotech Pharmaceuticals, Inc.
    (incorporated herein by reference to Exhibit 10.5 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.6

Amended and Restated Registration Rights Agreement, dated as of
    April 28, 2000, by and among Athersys, Inc. and the
    stockholders of Athersys, Inc. parties thereto (incorporated
    herein by reference to Exhibit 10.6 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.7

Amendment No. 1 to Athersys, Inc. Amended and Restated
    Registration Rights Agreement, dated as of January 29,
    2002, by and among Athersys, Inc., the New Stockholders, the
    Investors, Biotech and the Stockholders (each as defined in the
    Amended and Restated Registration Rights Agreement, dated as
    April 28, 2000, by and among Athersys, Inc. and the
    stockholders of Athersys, Inc. parties thereto) (incorporated
    herein by reference to Exhibit 10.7 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.8

Amendment No. 2 to Athersys, Inc. Amended and Restated
    Registration Rights Agreement, dated as of November 19,
    2002, by and among Athersys, Inc., the New Stockholders, the
    Investors, Biotech and the Stockholders (each as defined in the
    Amended and Restated Registration Rights Agreement, dated as
    April 28, 2000, as amended, by and among Athersys, Inc. and
    the stockholders of Athersys, Inc. parties thereto)
    (incorporated herein by reference to Exhibit 10.8 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 74




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##### Table of Contents



Exhibit No.

Exhibit Description10
.9

Amendment No. 3 to Amended and Restated Registration Rights
    Agreement, dated as of May 15, 2007, by and among Athersys,
    Inc. and the Existing Stockholders (as defined therein)
    (incorporated herein by reference to Exhibit 10.9 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.10

BTHC VI, Inc. Long-Term Incentive Plan (incorporated herein by
    reference to Exhibit 10.10 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.11

BTHC VI, Inc. Equity Incentive Compensation Plan (incorporated
    herein by reference to Exhibit 10.11 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.12

Loan and Security Agreement, and Supplement, dated as of
    November 2, 2004, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc., Venture Lending & Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.1 to the registrants
    Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on November 14, 2007)10
.13

Second Amendment to Loan and Security Agreement, dated as of
    October 30, 2007, by and among ABT Holding Company,
    Advanced Biotherapeutics, Inc., Venture Lending and Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.2 to the registrants
    Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on November 14, 2007)10
.14

Amendment to Loan and Security Agreement, dated as of
    September 29, 2006, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc., Venture Lending & Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.13 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.15

Amended and Restated Employment Agreement, dated as of
    December 1, 1998 but effective as of April 1, 1998, by
    and between Athersys, Inc. and Dr. Gil Van Bokkelen
    (incorporated herein by reference to Exhibit 10.14 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.16

Amendment No. 1 to Amended and Restated Employment
    Agreement, dated as of May 31, 2007, by and between
    Advanced Biotherapeutics, Inc. and Gil Van Bokkelen
    (incorporated herein by reference to Exhibit 10.15 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.17

Non-Competition and Confidentiality Agreement, dated as of
    December 1, 1998, by and between Athersys, Inc. and
    Dr. Gil Van Bokkelen (incorporated herein by reference to
    Exhibit 10.16 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.18

Amended and Restated Employment Agreement, dated as of
    December 1, 1998 but effective as of April 1, 1998, by
    and between Athersys, Inc. and Dr. John J. Harrington
    (incorporated herein by reference to Exhibit 10.17 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.19

Amendment No. 1 to Amended and Restated Employment
    Agreement, dated as of May 31, 2007, by and between
    Advanced Biotherapeutics, Inc. and John Harrington (incorporated
    herein by reference to Exhibit 10.18 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.20

Non-Competition and Confidentiality Agreement, dated as of
    December 1, 1998, by and between Athersys, Inc. and
    Dr. John J. Harrington (incorporated herein by reference to
    Exhibit 10.19 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 75




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##### Table of Contents



Exhibit No.

Exhibit Description10
.21

Employment Agreement, dated as of May 22, 1998, by and
    between Athersys, Inc. and Laura K. Campbell (incorporated
    herein by reference to Exhibit 10.20 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.22

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Laura Campbell (incorporated herein by reference to
    Exhibit 10.21 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.23

Employment Agreement, dated as of September 25, 2000, by
    and between Advanced Biotherapeutics, Inc. and Kurt Brunden
    (incorporated herein by reference to Exhibit 10.22 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.24

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Kurt Brunden (incorporated herein by reference to
    Exhibit 10.23 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.25

Non-Competition and Confidentiality Agreement, dated as of
    September 25, 2000, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Kurt Brunden (incorporated herein by
    reference to Exhibit 10.24 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.26

Employment Agreement, dated as of October 3, 2003, by and
    between Advanced Biotherapeutics, Inc. and Robert
    Deans, Ph.D. (incorporated herein by reference to
    Exhibit 10.25 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.27

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Robert Deans (incorporated herein by reference to
    Exhibit 10.26 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.28

Non-Competition and Confidentiality Agreement, dated as of
    October 3, 2003, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Robert Deans (incorporated herein by
    reference to Exhibit 10.27 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.29

Employment Agreement, dated as of January 1, 2004, by and
    between Advanced Biotherapeutics, Inc. and William Lehmann
    (incorporated herein by reference to Exhibit 10.28 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.30

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and William Lehmann (incorporated herein by reference to
    Exhibit 10.29 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.31

Non-Competition and Confidentiality Agreement, dated as of
    September 10, 2001, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and William Lehmann (incorporated herein
    by reference to Exhibit 10.30 to the registrants
    Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.32

Form Incentive Agreement by and between Advanced
    Biotherapeutics, Inc. and named executive officers, and
    acknowledged by Athersys, Inc. and ReGenesys, LLC (incorporated
    herein by reference to Exhibit 10.31 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.33

Form Amendment No. 1 to Incentive Agreement by and
    between Advanced Biotherapeutics, Inc. and named executive
    officers, and acknowledged by Athersys, Inc. and ReGenesys, LLC
    (incorporated herein by reference to Exhibit 10.32 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 76




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##### Table of Contents



Exhibit No.

Exhibit Description10
.34

Securities Purchase Agreement, dated as of June 8, 2007, by
    and among Athersys, BTHC VI, Inc. and Investors (as defined
    therein) (incorporated herein by reference to Exhibit 10.33
    to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.35*

Exclusive License Agreement, dated as of May 17, 2002, by
    and between Regents of the University of Minnesota and MCL LLC,
    assumed by ReGenesys, LLC through operation of merger on
    November 4, 2003 (incorporated herein by reference to
    Exhibit 10.34 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.36*

Strategic Alliance Agreement, by and between Athersys, Inc. and
    Angiotech Pharmaceuticals, Inc., dated as of May 5, 2006
    (incorporated herein by reference to Exhibit 10.35 to the
    registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on October 9, 2007)10
.37

Amendment No. 1 to Cell Line Collaboration and License
    Agreement, dated as of January 1, 2006, by and between
    Athersys, Inc. and Bristol-Myers Squibb Company (incorporated
    herein by reference to Exhibit 10.36 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.38

Consulting Agreement, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Dr. Kurt Brunden, dated as of
    July 23, 2007 (incorporated herein by reference to
    Exhibit 10.13 to the registrants Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on August 17, 2007)10
.39

Form Indemnification Agreement for Directors, Officers and
    Directors and Officers (incorporated herein by reference to
    Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on August 6, 2007)10
.40

Advisory Agreement, dated as of May 24, 2007, by and
    between Halter Financial Group, L.P. and Athersys, Inc.
    (incorporated herein by reference to Exhibit 10.40 to the
    registrants Registration Statement on
    Form S-1/A
    (Registration
    No. 333-144433)
    filed with the Commission on September 12, 2007).21


List of Subsidiaries23


Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm24


Power of Attorney31
.1

Certification of Gil Van Bokkelen, Chairman and Chief Executive
    Officer, pursuant to SEC
    Rules 13a-14(a)
    and 15d-14(a) adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Laura Campbell, Vice President of Finance,
    pursuant to SEC
    Rules 13a-14(a)
    and 15d-14(a) adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Gil Van Bokkelen, Chairman and Chief Executive
    Officer, and Laura Campbell, Vice President of Finance, pursuant
    to 18 U.S.C. Section 1350, adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Confidential treatment requested as to certain portions, which
    portions have been filed separately with the Securities and
    Exchange Commission
    
    Indicates management contract or compensatory plan, contract or
    arrangement in which one or more directors or executive officers
    of the registrant may be participants 77




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##### Table of Contents



SIGNATURES
      By:
    /s/  Gil Van Bokkelen   Title:
    Chief Executive Officer    Signature

Title

Date/s/  Gil
    Van BokkelenGil
    Van Bokkelen

Chief Executive Officer and Chairman of the Board of
    Directors
    (Principal Executive Officer)

March 14, 2008/s/  Laura
    K. CampbellLaura
    K. Campbell

Vice President, Finance
    (Principal Financial Officer and Principal Accounting Officer)

March 14, 2008*John
    J. Harrington

Executive Vice President, Chief Scientific Officer and Director

March 14, 2008*William
    C. Mulligan

Director

March 14, 2008*George
    M. Milne, Jr.

Director

March 14, 2008*Jordan
    S. Davis

Director

March 14, 2008*Floyd
    D. Loop

Director

March 14, 2008*Michael
    Sheffery

Director

March 14, 2008*Lorin
    J. Randall

Director

March 14, 2008     *
    
    Gil Van Bokkelen, by signing his name hereto, does hereby sign
    this
    Form 10-K
    on behalf of each of the above named and designated directors of
    the Company pursuant to a Power of Attorney executed by such
    persons and filed with the Securities and Exchange Commission.  By:
    /s/ Gil Van Bokkelen     78




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##### Table of Contents



EXHIBIT
    INDEX
  Exhibit No.

Exhibit Description2
.1

Agreement and Plan of Merger, dated as of May 24, 2007, by
    and among Athersys, Inc., BTHC VI, Inc. and B-VI Acquisition
    Corp. (incorporated herein by reference to Exhibit 10.1 to
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on May 24, 2007)2
.2

First Amendment to Agreement and Plan of Merger, dated as of
    June 8, 2007, by and among Athersys, Inc., BTHC VI, Inc.
    and B-VI Acquisition Corp. (incorporated herein by reference to
    Exhibit 2.2 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)3
.1

Certificate of Incorporation of Athersys, Inc., as amended as of
    August 31, 2007 (incorporated herein by reference to
    Exhibit 3.1 to the registrants Registration Statement
    on
    Form S-3/A
    (Registration
    No. 333-144433)
    filed with the Commission on October 10, 2007)3
.2

Bylaws of Athersys, Inc., as amended as of October 30, 2007
    (incorporated herein by reference to Exhibit 3.1 to the
    registrants Current Report on
    Form 10-K
    (Commission
    No. 000-52108)
    filed with the Commission on October 31, 2007)10
.1*

Research Collaboration and License Agreement, dated as of
    December 8, 2000, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.2*

Cell Line Collaboration and License Agreement, dated as of
    July 1, 2002, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.2 to the registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on September 27, 2007)10
.3*

Extended Collaboration and License Agreement, dated as of
    January 1, 2006, by and between Athersys, Inc. and
    Bristol-Myers Squibb Company (incorporated herein by reference
    to Exhibit 10.3 to the registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on September 27, 2007)10
.4

License Agreement, effective as of May 5, 2006, by and
    between Athersys, Inc. and Angiotech Pharmaceuticals, Inc.
    (incorporated herein by reference to Exhibit 10.4 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.5

Sublicense Agreement, effective as of May 5, 2006, by and
    between Athersys, Inc. and Angiotech Pharmaceuticals, Inc.
    (incorporated herein by reference to Exhibit 10.5 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.6

Amended and Restated Registration Rights Agreement, dated as of
    April 28, 2000, by and among Athersys, Inc. and the
    stockholders of Athersys, Inc. parties thereto (incorporated
    herein by reference to Exhibit 10.6 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.7

Amendment No. 1 to Athersys, Inc. Amended and Restated
    Registration Rights Agreement, dated as of January 29,
    2002, by and among Athersys, Inc., the New Stockholders, the
    Investors, Biotech and the Stockholders (each as defined in the
    Amended and Restated Registration Rights Agreement, dated as
    April 28, 2000, by and among Athersys, Inc. and the
    stockholders of Athersys, Inc. parties thereto) (incorporated
    herein by reference to Exhibit 10.7 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.8

Amendment No. 2 to Athersys, Inc. Amended and Restated
    Registration Rights Agreement, dated as of November 19,
    2002, by and among Athersys, Inc., the New Stockholders, the
    Investors, Biotech and the Stockholders (each as defined in the
    Amended and Restated Registration Rights Agreement, dated as
    April 28, 2000, as amended, by and among Athersys, Inc. and
    the stockholders of Athersys, Inc. parties thereto)
    (incorporated herein by reference to Exhibit 10.8 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 79




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##### Table of Contents



Exhibit No.

Exhibit Description10
.9

Amendment No. 3 to Amended and Restated Registration Rights
    Agreement, dated as of May 15, 2007, by and among Athersys,
    Inc. and the Existing Stockholders (as defined therein)
    (incorporated herein by reference to Exhibit 10.9 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.10

BTHC VI, Inc. Long-Term Incentive Plan (incorporated herein by
    reference to Exhibit 10.10 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.11

BTHC VI, Inc. Equity Incentive Compensation Plan (incorporated
    herein by reference to Exhibit 10.11 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.12

Loan and Security Agreement, and Supplement, dated as of
    November 2, 2004, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc., Venture Lending & Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.1 to the registrants
    Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on November 14, 2007)10
.13

Second Amendment to Loan and Security Agreement, dated as of
    October 30, 2007, by and among ABT Holding Company,
    Advanced Biotherapeutics, Inc., Venture Lending and Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.2 to the registrants
    Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on November 14, 2007)10
.14

Amendment to Loan and Security Agreement, dated as of
    September 29, 2006, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc., Venture Lending & Leasing IV,
    Inc., and Costella Kirsch IV, L.P. (incorporated herein by
    reference to Exhibit 10.13 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.15

Amended and Restated Employment Agreement, dated as of
    December 1, 1998 but effective as of April 1, 1998, by
    and between Athersys, Inc. and Dr. Gil Van Bokkelen
    (incorporated herein by reference to Exhibit 10.14 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.16

Amendment No. 1 to Amended and Restated Employment
    Agreement, dated as of May 31, 2007, by and between
    Advanced Biotherapeutics, Inc. and Gil Van Bokkelen
    (incorporated herein by reference to Exhibit 10.15 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.17

Non-Competition and Confidentiality Agreement, dated as of
    December 1, 1998, by and between Athersys, Inc. and
    Dr. Gil Van Bokkelen (incorporated herein by reference to
    Exhibit 10.16 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.18

Amended and Restated Employment Agreement, dated as of
    December 1, 1998 but effective as of April 1, 1998, by
    and between Athersys, Inc. and Dr. John J. Harrington
    (incorporated herein by reference to Exhibit 10.17 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.19

Amendment No. 1 to Amended and Restated Employment
    Agreement, dated as of May 31, 2007, by and between
    Advanced Biotherapeutics, Inc. and John Harrington (incorporated
    herein by reference to Exhibit 10.18 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.20

Non-Competition and Confidentiality Agreement, dated as of
    December 1, 1998, by and between Athersys, Inc. and
    Dr. John J. Harrington (incorporated herein by reference to
    Exhibit 10.19 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 80




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##### Table of Contents



Exhibit No.

Exhibit Description10
.21

Employment Agreement, dated as of May 22, 1998, by and
    between Athersys, Inc. and Laura K. Campbell (incorporated
    herein by reference to Exhibit 10.20 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.22

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Laura Campbell (incorporated herein by reference to
    Exhibit 10.21 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.23

Employment Agreement, dated as of September 25, 2000, by
    and between Advanced Biotherapeutics, Inc. and Kurt Brunden
    (incorporated herein by reference to Exhibit 10.22 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.24

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Kurt Brunden (incorporated herein by reference to
    Exhibit 10.23 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.25

Non-Competition and Confidentiality Agreement, dated as of
    September 25, 2000, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Kurt Brunden (incorporated herein by
    reference to Exhibit 10.24 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.26

Employment Agreement, dated as of October 3, 2003, by and
    between Advanced Biotherapeutics, Inc. and Robert
    Deans, Ph.D. (incorporated herein by reference to
    Exhibit 10.25 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.27

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and Robert Deans (incorporated herein by reference to
    Exhibit 10.26 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.28

Non-Competition and Confidentiality Agreement, dated as of
    October 3, 2003, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Robert Deans (incorporated herein by
    reference to Exhibit 10.27 to the registrants Current
    Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.29

Employment Agreement, dated as of January 1, 2004, by and
    between Advanced Biotherapeutics, Inc. and William Lehmann
    (incorporated herein by reference to Exhibit 10.28 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.30

Amendment No. 1 to Employment Agreement, dated as of
    May 31, 2007, by and between Advanced Biotherapeutics, Inc.
    and William Lehmann (incorporated herein by reference to
    Exhibit 10.29 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.31

Non-Competition and Confidentiality Agreement, dated as of
    September 10, 2001, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and William Lehmann (incorporated herein
    by reference to Exhibit 10.30 to the registrants
    Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.32

Form Incentive Agreement by and between Advanced
    Biotherapeutics, Inc. and named executive officers, and
    acknowledged by Athersys, Inc. and ReGenesys, LLC (incorporated
    herein by reference to Exhibit 10.31 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.33

Form Amendment No. 1 to Incentive Agreement by and
    between Advanced Biotherapeutics, Inc. and named executive
    officers, and acknowledged by Athersys, Inc. and ReGenesys, LLC
    (incorporated herein by reference to Exhibit 10.32 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007) 81




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##### Table of Contents



Exhibit No.

Exhibit Description10
.34

Securities Purchase Agreement, dated as of June 8, 2007, by
    and among Athersys, BTHC VI, Inc. and Investors (as defined
    therein) (incorporated herein by reference to Exhibit 10.33
    to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.35*

Exclusive License Agreement, dated as of May 17, 2002, by
    and between Regents of the University of Minnesota and MCL LLC,
    assumed by ReGenesys, LLC through operation of merger on
    November 4, 2003 (incorporated herein by reference to
    Exhibit 10.34 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.36*

Strategic Alliance Agreement, by and between Athersys, Inc. and
    Angiotech Pharmaceuticals, Inc., dated as of May 5, 2006
    (incorporated herein by reference to Exhibit 10.35 to the
    registrants Current Report on
    Form 8-K/A
    (Commission
    No. 000-52108)
    filed with the Commission on October 9, 2007)10
.37

Amendment No. 1 to Cell Line Collaboration and License
    Agreement, dated as of January 1, 2006, by and between
    Athersys, Inc. and Bristol-Myers Squibb Company (incorporated
    herein by reference to Exhibit 10.36 to the
    registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on June 14, 2007)10
.38

Consulting Agreement, by and among Athersys, Inc., Advanced
    Biotherapeutics, Inc. and Dr. Kurt Brunden, dated as of
    July 23, 2007 (incorporated herein by reference to
    Exhibit 10.13 to the registrants Quarterly Report on
    Form 10-Q
    (Commission
    No. 000-52108)
    filed with the Commission on August 17, 2007)10
.39

Form Indemnification Agreement for Directors, Officers and
    Directors and Officers (incorporated herein by reference to
    Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    (Commission
    No. 000-52108)
    filed with the Commission on August 6, 2007)10
.40

Advisory Agreement, dated as of May 24, 2007, by and
    between Halter Financial Group, L.P. and Athersys, Inc.
    (incorporated herein by reference to Exhibit 10.40 to the
    registrants Registration Statement on
    Form S-1/A
    (Registration
    No. 333-144433)
    filed with the Commission on September 12, 2007).21


List of Subsidiaries23


Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm24


Power of Attorney31
.1

Certification of Gil Van Bokkelen, Chairman and Chief Executive
    Officer, pursuant to SEC
    Rules 13a-14(a)
    and 15d-14(a) adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Laura Campbell, Vice President of Finance,
    pursuant to SEC
    Rules 13a-14(a)
    and 15d-14(a) adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Gil Van Bokkelen, Chairman and Chief Executive
    Officer, and Laura Campbell, Vice President of Finance, pursuant
    to 18 U.S.C. Section 1350, adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Confidential treatment requested as to certain portions, which
    portions have been filed separately with the Securities and
    Exchange Commission
    
    Indicates management contract or compensatory plan, contract or
    arrangement in which one or more directors or executive officers
    of the registrant may be participants 82