Cytosorbents Corp

Previous wording

CytoSorbents’ lead product, CytoSorb®, is approved in the European Union and distributed in dozens of countries worldwide, with more than 270,000 devices used cumulatively to date. CytoSorb was originally launched in the European Union under CE mark as the first cytokine adsorber. Additional CE mark extensions were granted for bilirubin and myoglobin removal in clinical conditions such as liver disease and trauma, respectively, and for ticagrelor and rivaroxaban removal in cardiothoracic surgery procedures. CytoSorb has also received FDA EUA in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure, to reduce pro-inflammatory cytokine levels. CytoSorb is not yet approved in the United States.

Current wording

CytoSorbents’ lead product, CytoSorb®, is approved in the European Union and distributed in more than 70 countries worldwide, with nearly 300,000 devices used cumulatively to date. CytoSorb was originally launched in the European Union under CE mark as the first cytokine adsorber. Additional CE mark extensions were granted for bilirubin and myoglobin removal in clinical conditions such as liver disease and trauma, respectively, and for ticagrelor and rivaroxaban removal in cardiothoracic surgery procedures. CytoSorb has also received FDA EUA in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure, to reduce pro-inflammatory cytokine levels. CytoSorb is not yet approved in the United States.

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, which facilitates engagement with FDA senior leadership and our external surgical experts. The Company intends to file the appeal within 60 days of receipt of the denial letter, or by June 25, 2025. Given the expedited timelines associated with the appeal process, the Company believes that a final regulatory decision can be achieved in 2025. On November 1, 2024 we received Medical Device Single Audit Program (MDSAP) certification, a key regulatory milestone that certifies compliance of our quality management system with the standard regulatory requirements of Canada, the United States, Brazil, Japan and Australia; and then promptly submitted our Medical Device License (MDL) marketing application to Health Canada on November 1, 2024, with MDSAP certification - a requirement for the submission. CytoSorbents’ DrugSorb-ATR application with Health Canada remains under advanced review. While Health Canada has indicated that application reviews are currently delayed beyond their target Market Authorization Time (MAT) due to a backlog, they have reaffirmed their commitment to issuing a decision as soon as possible. We believe that we can receive a final regulatory decision in 2025. DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively. Upon approval, the Company expects to rapidly commercialize DrugSorb-ATR in the U.S. and Canada to address this large unmet medical need, with an initial estimated total addressable market of $300 million today to over $1 billion over time as we pursue additional indications for DrugSorb-ATR to remove additional classes of blood thinners and expansion of the antithrombotic removal application beyond cardiac surgery and across other surgical specialtie…

Excerpt shortened here; the source contains the full paragraph.

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 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.

Previous wording

Summary of Operational and Business Highlights

Current wording

Summary of Operational and Recent Business Highlights

Previous wording

Gross profit was approximately $6.2 million for the three months ended March 31, 2025, a decrease of approximately $0.7 million or 10%, as compared to gross profit of $6.9 million for the three months ended March 31, 2024. Gross margins were 71.1% and 76.5% for the three months ended March 31, 2025 and 2024, respectively. The decrease in gross margin was primarily due to a 23% reduction in the number of units produced, partially offset by an 11% reduction in production costs year over year.

Current 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%.

Previous wording

Our research and development costs were approximately $1.7 million and $2.2 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $0.5 million, or 26%. 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 $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.

Previous wording

For the three months ended March 31, 2025, the gain on foreign currency transactions was approximately $3.0 million, as compared to a loss on foreign currency transactions of approximately $1.4 million for the year three months ended March 31, 2024. The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of March 31, 2025 of $1.08 from $1.04 at as 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 March 31, 2024, to $1.08 from $1.11 at December 31, 2023.

Current 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.

Previous wording

For the three months ended March 31, 2025, we generated total revenue of approximately $8.7 million a decrease of approximately $0.3 million, or 2.9%, and flat on a constant currency basis, as compared to revenues of approximately $9.0 million for the three months ended March 31, 2024,. Strong revenue growth in our distributor and other direct sales territories across the E.U. was offset by a temporary disruption in direct sales in Germany during the quarter. This was primarily due to our proactive reorganization and strategic realignment of our German commercial team and sales approach that is intended to renew sales growth in the country through deeper customer engagement, more effective market development, and improved sales representative productivity. We are making steady progress with this important initiative and are confident it will lead to stronger execution and improved performance in Germany and our financial results overall this year.

Current 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.

Previous wording

Our selling, general and administrative expenses were approximately $8.4 million and $9.3 million for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $0.9 million, or 9%. This decrease was mainly due to decreases in royalty expenses and stock-based compensation of $0.5 million and $0.3 million, respectively. 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 $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.

Previous wording

Our loss from operations decreased by 17% to approximately $3.9 million, from $4.7 million for the three months ended March 31, 2025, and 2024, respectively. This improvement was primarily the result of a 12% reduction in operating expenses year over year.

Current 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.

Previous wording

Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of March 31, 2025, we had current assets of approximately $25.4 million and current liabilities of approximately $9.7 million.

Current 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.

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 $149.6 million of this amount was available as of March 31, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility. At March 31, 2025, approximately $19.6 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 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.

Previous wording

On January 10, 2025, the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”), raising aggregate gross proceeds of $6.25 million ($5.4 million net of fees) from the sale of all 6.25 million Units reserved for the Rights Offering. Participants in the Rights Offering received Units, each Unit comprising of one share of common stock of the Company, one Series A Right Warrant to purchase one share of common stock, and one Series B Right Warrant to purchase one share of common stock. Up to an additional 6.25 million shares of common stock may be issued upon exercise of the Right Warrants. Proceeds from the closing of the subscription period satisfy a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to now become unrestricted, and available for use. On February 24, 2025, approximately 1.4 million Series A Right Warrants were exercised by holders, including members of management and the Board of Directors, at an exercise price of $1.13 per warrant, providing an additional $1.6 million in aggregate gross proceeds ($1.4 million net of fees). 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 U.S. 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 significantly over the past year.

Current wording

On January 10, 2025, the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”), raising aggregate gross proceeds of $6.25 million ($5.4 million net of fees) from the sale of all 6.25 million Units reserved for the Rights Offering. Participants in the Rights Offering received Units, each Unit comprising of one share of common stock of the Company, one Series A Right Warrant to purchase one share of common stock with an expiration date of February 24, 2025, and one Series B Right Warrant to purchase one share of common stock with an expiration date of April 10, 2025. Up to an additional 6.25 million shares of common stock may be issued upon exercise of the Right Warrants. Proceeds from the closing of the subscription period satisfy a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to now become unrestricted, and available for use. On February 24, 2025, approximately 1.4 million Series A Right Warrants were exercised by holders, including members of management and the Board of Directors, at an exercise price of $1.13 per warrant, providing an additional $1.6 million in aggregate gross proceeds ($1.4 million net of fees). On April 4, 2025, the Board of Directors extended the expiration date of the Series B Right Warrants from April 10, 2025 to June 10, 2025. On June 11, 2025, the 5-day volume weighted average price of Common Stock over the last five-trading days prior to June 10, 2025 was lower than the minimum required price of $2.00 and, as a result, the Series B Right Warrants issued in connection with the previously announced Rights Offering expired worthless pursuant to their terms.

Previous wording

As of March 31, 2025, we have approximately $13.1 million in cash, including approximately $11.6 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 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.

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 regulatory approval and introduction of DrugSorb-ATR in the U.S. and Canada which is expected in 2025, our ability to successfully respond to or 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 extend the principle re-payment terms of the facility beginning in the third quarter of 2026. Additional sources of liquidity available to us include issuance of additional equity securities through the Series B Right Warrant, or 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 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. 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.

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, 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.

Current 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.

Previous wording

On October 22, 2024, the Company announced that the FDA had accepted its application of for DrugSorb-ATR, which was one of the two conditions required by the restricted cash debt covenant. Proceeds from the Rights Offering on January 10, 2025 satisfied the second condition of the debt covenant which now allows for the $5,000,000 of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.

Current wording

On October 22, 2024, the Company announced that the FDA had accepted its application of DrugSorb-ATR, which was one of the two conditions required by the restricted cash debt covenant. Proceeds from the Rights Offering on January 10, 2025 satisfied the second condition of the debt covenant which now allows for the $5.0 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.

Previous wording

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

Current 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.