Cytosorbents Corp

Previous wording

In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-ATR antithrombotic removal system, an investigational device based on an equivalent polymer technology to CytoSorb, to reduce the severity of perioperative bleeding in high-risk surgery due to blood thinning drugs. It has received two U.S. Food and Drug Administration (“FDA”) Breakthrough Device Designations: one for the removal of ticagrelor and another for the removal of the direct oral anticoagulants (DOAC) apixaban and rivaroxaban in a cardiopulmonary bypass circuit during urgent cardiothoracic procedures. The Company submitted a De Novo Request to the FDA in September 2024, requesting marketing authorization of DrugSorb-ATR to reduce the severity of perioperative bleeding in CABG patients on the antithrombotic drug ticagrelor, which was accepted for substantive review in October 2024. On April 25, 2025, the FDA issued a denial letter regarding the Company’s De Novo Request for DrugSorb-ATR, identifying remaining deficiencies that must be addressed before the De Novo Request can be granted, and the device can be authorized for commercialization in the U.S. The Company believes these items can be most effectively and expeditiously resolved through the formal appeal process. In July, the Company participated in an appeal hearing with the FDA for supervisory review (administrative appeal) under 21 CFR 10.75. The appeal hearing included FDA senior leadership, Company management and our external surgical experts. The Company continues to believe that remaining deficiencies in its DeNovo application can be effectively resolved through this supervisory review process which is expected to be completed by the end of August 2025, and that a final regulatory decision can be achieved in 2025.

Current wording

In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-ATR antithrombotic removal system, an investigational device based on an equivalent polymer technology to CytoSorb, to reduce the severity of perioperative bleeding in high-risk surgery due to blood thinning drugs. It has received two U.S. Food and Drug Administration (“FDA”) Breakthrough Device Designations: one for the removal of ticagrelor and another for the removal of the direct oral anticoagulants (DOAC) apixaban and rivaroxaban in a cardiopulmonary bypass circuit during urgent cardiothoracic procedures. The Company is actively pursuing regulatory approval of DrugSorb-ATR with the FDA and will pursue regulatory approval with Health Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in either the U.S. or Canada.

Previous wording

For the six months ended June 30, 2025, we generated total revenue of approximately $18.3 million, an increase of approximately $0.5 million, or 2.9%, and 1.8% on a constant currency basis, as compared to revenues of approximately $17.8 million for the six months ended June 30, 2024. Revenue growth was led by strength in our direct German and International territories compared to lower performance in the second quarter of 2024 and the first quarter of 2025. The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025. We are making steady progress with this important initiative, and are pleased with this initial improvement in our second quarter of 2025, and remain confident it will lead to stronger execution and improved performance in Germany and our financial results overall this year.

Current wording

For the three months ended September 30, 2025, we generated total revenue of approximately $9.5 million, an increase of approximately $0.9 million, or 10.1%, and 3.8% on a constant currency basis, as compared to revenues of approximately $8.6 million for the three months ended September 30, 2024. Revenue growth was led by strength in our distributor and strategic partner sales and direct sales outside of Germany, partially offset by lower revenue in our direct German market. The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025. We are making steady progress with this important initiative and are tracking to expectations through the third quarter of 2025, and remain confident it will lead to stronger execution and improved performance in Germany and our financial results overall into next year.

Previous wording

Our research and development costs were approximately $1.3 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.3 million, or 16.9%. This decrease was driven by a decrease in our clinical trial costs due to the completion of the STAR-T clinical trial, and other payroll and project-related cost reductions.

Current wording

Our research and development costs were approximately $0.9 million and $1.8 million for the three months ended September 30, 2025 and 2024, respectively, a decrease of approximately $0.9 million, or 49.7%. This decrease was driven by a decrease in our clinical trial costs due to the completion of the STAR-T clinical trial, the reduction of grant funded projects, and other payroll and project-related cost reductions.

Previous wording

Our selling, general and administrative expenses were approximately $9.2 million and $8.6 million for the three months ended June 30, 2025 and 2024, respectively, an increase of approximately $0.6 million, or 7.2%. This increase was mainly due to higher legal, financial and consulting costs of $0.5 million and net other compensation expenses of $0.1 million, partially offset by lower royalty expenses of and $0.2 million. The decrease in royalty expense was the result of the expiration of a 4% royalty in August of 2024.

Current wording

Our selling, general and administrative expenses were approximately $8.6 million and $8.3 million for the three months ended September 30, 2025 and 2024, respectively, an increase of approximately $0.3 million, or 4.2%. The increase is primarily due to costs associated with the regulatory submission and anticipated commercial approval and launch of DrugSorb-ATR in North America, partially offset by lower non-cash stock comp and other compensation costs, and lower royalty expense as a result of the expiration of a 4% royalty in August of 2024.

Previous wording

For the three months ended June 30, 2025, the gain on foreign currency transactions was approximately $6.2 million, as compared to a loss on foreign currency transactions of approximately $0.5 million for the three months ended June 30, 2024. The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2025 to $1.17 per Euro from $1.08 at March 31, 2025. The prior year loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2024, to $1.07 per Euro from $1.08 per Euro at March 31, 2024.

Current wording

For the three months ended September 30, 2025, the loss on foreign currency transactions was approximately $0.1 million, as compared to a gain on foreign currency transactions of approximately $2.7 million for the three months ended September 30, 2024. The loss was directly related to the slight decrease in the spot exchange rate of the Euro to the U.S. dollar as of September 30, 2025 compared to June 30, 2025. The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of September 30, 2024, to $1.11 per Euro from $1.07 per Euro at June 30, 2024.

Previous wording

Our loss from operations decreased by 9.4% to approximately $7.5 million, from $8.2 million for the six months ended June 30, 2025, and 2024, respectively. This improvement was primarily the result of a 5.0% reduction in operating expenses year over year, partially offset by the decrease in gross profit.

Current wording

Our loss from operations decreased by 40.7% to approximately $2.9 million, from $4.8 million for the nine months ended September 30, 2025, and 2024, respectively. This improvement was primarily the result of a 5.5% reduction in operating expenses year over year, and the increase in gross profit.

Previous wording

For the three months ended June 30, 2025, we generated total revenue of approximately $9.6 million, an increase of approximately $0.8 million, or 8.8%, as compared to revenues of approximately $8.8 million for the three months ended June 30, 2024. Revenue growth was led by strength in our direct German and International territories compared to lower performance in the second quarter of 2024 and the first quarter of 2025. The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025. We are making steady progress with this important initiative and are pleased with this initial improvement in our second quarter of 2025, and remain confident it will lead to stronger execution and improved performance in Germany and our financial results overall this year.

Current wording

For the nine months ended September 30, 2025, we generated total revenue of approximately $27.8 million, an increase of approximately $1.4 million, or 5.2%, and 2.2% on a constant currency basis, as compared to revenues of approximately $26.4 million for the nine months ended September 30, 2024. Revenue growth was led by strength in our other direct European territories, and distributors and strategic partner sales, and partially offset by a decrease in revenue in our direct German market. The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025. We are making steady progress with this important initiative and are tracking to expectations through the third quarter of 2025, and remain confident it will lead to stronger execution and improved performance in Germany and our financial results overall into next year.

Previous wording

Gross profit was approximately $6.8 million for the three months ended June 30, 2025, an increase of approximately $0.3 million, or 4.8%, as compared to gross profit of $6.5 million for the three months ended June 30, 2024. Gross margins were 70.9% and 73.5% for the three months ended June 30, 2025 and 2024, respectively. The decrease in gross margin was primarily due to the write - off of inventory of $0.1 million which had a negative impact on gross margin of 1.5%.

Current wording

Gross profit was approximately $19.7 million for the nine months ended September 30, 2025, an increase of approximately $1.1 million, or 5.7%, as compared to gross profit of $18.6 million for the nine months ended September 30, 2024. Gross margins were 70.7% and 70.5% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Our research and development costs were approximately $2.9 million and $3.8 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.8 million, or 22.4%. This decrease was driven by a decrease in our clinical trial costs due to the completion of the STAR-T clinical trial, and other payroll and project-related cost reductions.

Current wording

Our research and development costs were approximately $3.8 million and $5.6 million for the nine months ended September 30, 2025 and 2024, respectively, a decrease of approximately $1.8 million, or 31.3%. This decrease was driven by a decrease in our clinical trial

Previous wording

Our selling, general and administrative expenses were approximately $17.6 million and $17.8 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $0.2 million, or 1.3%. This decrease was mainly due to decreases in stock-based compensation and royalty expenses of $0.9 million and $0.7 million, respectively, which was partially offset by increases in legal, financial and consulting costs of $0.5 million, and net other compensation expenses of approximately $0.6 million. The decrease in royalty expense was the result of the expiration of a 4% royalty in August of 2024.

Current wording

Our selling, general and administrative expenses were approximately $26.2 million and $26.1 for the nine months ended September 30, 2025 and 2024, respectively, an increase of approximately $0.1 million, or 0.4%. This increase was mainly due to increases in legal, regulatory, financial and consulting costs including costs associated with our 2024 audited financial statements, as well as regulatory filings and initial costs associated with the anticipated approval and commercial launch of DrugSorb-ATR in North America, partially offset by decreases in stock-based compensation expense, and royalty expenses. The decrease in stock-based compensation expense was primarily related to the full vesting of certain stock options in earlier periods and the decrease in royalty expense was the result of the expiration of a 4% royalty in August of 2024.

Previous wording

For the six months ended June 30, 2025, the gain on foreign currency transactions was approximately $9.2 million, as compared to a loss on foreign currency transactions of approximately $2.0 million for the six months ended June 30, 2024. The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2025 to $1.17 per Euro from $1.03 per Euro at December 31, 2024. The prior year loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2024, to $1.07 per Euro from $1.11 per Euro at December 31, 2023.

Current wording

For the nine months ended September 30, 2025, the gain on foreign currency transactions was approximately $9.1 million, as compared to a gain on foreign currency transactions of approximately $0.7 million for the nine months ended September 30, 2024. The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of September 30, 2025 to $1.17 per Euro from $1.03 per Euro at December 31, 2024. The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of September 30, 2024, to $1.11 per Euro from $1.10 per Euro at December 31, 2023.

Previous wording

Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of June 30, 2025, we had current assets of approximately $23.0 million and current liabilities of approximately $9.8 million.

Current wording

Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of September 30, 2025, we had current assets of approximately $21.3 million and current liabilities of approximately $12.6 million.

Previous wording

We have an effective shelf registration statement dated September 30, 2024 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units. Approximately $149.7 million of this amount was available as of June 30, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility. At June 30, 2025, approximately $19.4 million was available for use under the ATM facility.

Current wording

We have an effective shelf registration statement dated September 30, 2024 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units. Approximately $149.7 million of this amount was available as of September 30, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility. At September 30, 2025, approximately $19.4 million was available for use under the ATM facility. During the nine months ended September 30, 2025, we did not raise any proceeds under the ATM facility.

Previous wording

On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with the Avenue Capital Group. Avenue Capital Group agreed to loan the Company up to an aggregate of $20 million, to be disbursed in two tranches: (1) one tranche of $15 million (“Tranche 1”), of which $10 million is available to the Company on the Closing Date and $5 million which remained classified as restricted cash through January 10, 2025, when it was released from its restriction as the following conditions were met: (i) the FDA has accepted Company’s application for review with respect to DrugSorb-ATR De Novo 510(k) and (ii) the Company has received a minimum of $3 million in net proceeds from the sale of its equity securities after the Closing Date. A second tranche of up to $5 million, may be disbursed at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company receives FDA marketing approval of its DrugSorb-ATR application (“Tranche 2” and together with Tranche 1, the “Avenue Capital Commitment”). All unpaid principal and accrued and unpaid interest shall be due and payable in full by the maturity date. If the 2nd tranche is fully funded by December 2025, and the Company achieves the Interest-Only Milestone of the Avenue Capital Commitment, the maturity date is January 1, 2028; otherwise, the maturity date is July 1, 2027. Commencing on August 1, 2024, the Company makes monthly interest only payments during the initial 25-month period following the Closing Date, followed by equal monthly installments through the maturity date consisting of principal plus accrued and unpaid interest, unless otherwise extended by six months upon achievement of the Interest-Only Milestone.

Current wording

On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with the Avenue Capital Group (“Loan”). Avenue Capital Group agreed to loan the Company up to an aggregate of $20 million (the “Avenue Capital Commitment”), to be disbursed in two tranches. The first tranche of $15.0 million (“Tranche 1”), consists of $10.0 million which was available to the Company on the Closing Date and $5.0 million constitutes restricted cash, which was released from its restriction on January 10, 2025, as the following conditions were achieved: (i) the FDA has accepted Company’s application for review with respect to DrugSorb-ATR De Novo 510(k) and (ii) the Company has received a minimum of $3.0 million in net proceeds from the sale of its equity securities after the Closing Date. The restriction was released on a dollar-for-dollar basis for equity raised between $3.0 million and $5.0 million. The second tranche (“Tranche 2”) consists of $5.0 million, which may be disbursed at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company receives FDA marketing approval of its DrugSorb-ATR application. The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and will additionally be used for working capital purposes and to fund general business requirements. Amounts borrowed under the Avenue Capital Commitment shall bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (5.00%) or (B) thirteen and one-half percent (13.50%). The loan requires interest-only payments for the first 24 months through July 1, 2026, followed by equal monthly

Previous wording

We are also proactively managing our resources with a focus on driving commercial success, investing in key areas such as our regulatory submissions of DrugSorb-ATR to the FDA and Health Canada and the development of clinical data. We have also instituted and continue to maintain tight control over expenditures and have lowered our spending over the past year.

Current wording

We proactively manage our resources with a focus on driving commercial success, investing in key areas such as our regulatory submissions of DrugSorb-ATR to the FDA and Health Canada and the development of clinical data. We have instituted and continue to maintain tight control over expenditures and have lowered our spending over the past year. Further, on November 13, 2025, the Company announced it initiated a Strategic Workforce and Cost Reduction Plan to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. This initiative follows a comprehensive review of the Company’s cost structure and operating model. As part of the Strategic Workforce and Cost Reduction Plan, the Company reduced its workforce by approximately 10%, reduced and realigned operating and production expenses, and now expects that the Company will reach operating cash flow break-even in the first quarter of 2026. The Company expects to record a charge of up to $0.9 million that will include severance and other cash and non-cash charges related to the restructuring. The estimated costs that we expect to incur, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially.

Previous wording

As of June 30, 2025, we had approximately $11.7 million in cash, including approximately $10.2 million in unrestricted cash and cash equivalents and $1.5 million of non-current restricted cash, which raises substantial doubt about the Company’s ability to continue as a going concern.

Current wording

As of September 30, 2025, we had approximately $9.1 million in cash, including approximately $7.6 million in unrestricted cash and cash equivalents and $1.5 million of non-current restricted cash. These cash and restricted cash balances considered with our historical cash used in operations, notwithstanding our Strategic Workforce and Cost Reduction Plan and the impact of the Amended Loan and Security Agreement both of which were announced on November 13, 2025, raises substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the accompanying condensed consolidated financial statements are issued.

Previous wording

Our expected future capital requirements may depend on many factors, including expanding our customer base and sales force, the timing and extent of spending in obtaining regulatory approval and introduction of new products, including the potential regulatory approval and introduction of DrugSorb-ATR in the U.S. and Canada which decisions are expected in 2025, our ability to successfully appeal the denial letter received from the FDA, relating to our De Novo Request for DrugSorb-ATR, and the related opportunity to receive Tranche 2 of Avenue Capital Commitment by December 31, 2025 and achieve the Interest-Only Milestone of the Avenue Capital Commitment and extend the interest-only period by six months to January 1, 2027. Additional sources of liquidity available to us include the 2024 Shelf, other public or private equity offerings, debt financing or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. The increasing need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount. As a result of these additional uncertainties, the accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company routinely evaluates other financing sources, including less or non-dilutive debt financing, additional grant funding, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof. There can be no assurance that management will be successful in these endeavors.

Current wording

Our expected future capital requirements may depend on many factors, including expanding our customer base and sales force, the timing and extent of spending in obtaining regulatory approval and introduction of new products, including the potential regulatory approval and introduction of DrugSorb-ATR in the U.S. which decision is now expected in mid-2026, and the related opportunity to receive Tranche 2b of the Amended Avenue Capital Commitment by December 31, 2026. Additional sources of liquidity available to us include the 2024 Shelf, other public or private equity offerings, debt financing or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. Although the Company has taken actions to achieve cash flow breakeven, if it does not achieve this goal, the potential increased need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount. As a result of these additional uncertainties, the accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company routinely evaluates other financing sources, including less or non-dilutive debt financing, additional grant funding, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof. There can be no assurance that management will be successful in these endeavors.

Previous wording

For further discussion regarding the Loan Agreement please see Long Term Debt note to our Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

For further discussion regarding the Loan and Security Agreement, and Amended Load and Security Agreement please see Note 6, “Long Term Debt” and Note 10, “Subsequent Events” to our Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report on Form 10-Q.