CytoSorbents Strengthens Balance Sheet with Closing of Oversubscribed Rights Offering
Rhea-AI Summary
CytoSorbents (NASDAQ: CTSO) has successfully closed its oversubscribed rights offering, raising $6.25 million in gross proceeds through the sale of 6,250,000 Units. Each Unit includes one common stock share and two warrants (Series A and B). The offering was oversubscribed by 68% with total demand of 10,514,896 Units.
The proceeds satisfy a debt covenant, unlocking $5.0 million in restricted cash. This strengthens the company's balance sheet with approximately $10.8 million in net liquidity after offering fees. The company's preliminary Q4 2024 cash burn was $2.6 million, with estimated cash and equivalents of $9.6 million as of December 31, 2024. The pro-forma cash balance after the offering would be approximately $15.4 million.
Positive
- Rights offering oversubscribed by 68%, demonstrating strong investor confidence
- Unlocked $5.0 million in restricted cash through debt covenant satisfaction
- Net liquidity increased by $10.8 million
- Stable quarter-over-quarter cash burn ($2.6M in Q4 vs $2.7M in Q3 2024)
Negative
- Potential dilution from issuance of 6.25M new shares
- Additional dilution possible from exercise of up to 6.25M warrant shares
- Quarterly cash burn remains significant at $2.6M
Insights
This oversubscribed rights offering represents a important financial milestone for CytoSorbents. The
The company's Q4 2024 cash burn of
The warrant structure is particularly interesting, with two series offering different price ranges (
The strong investor response to this rights offering, evidenced by demand for 10.5 million units against 6.25 million available, demonstrates robust market confidence in CytoSorbents' growth trajectory. Notably, insider participation with approximately 450,000 units from leadership and board members signals strong internal conviction in the company's prospects.
The timing aligns strategically with their anticipated 2025 DrugSorb-ATR launch in major North American markets. This strengthened balance sheet positions them favorably for commercial expansion while maintaining their innovation pipeline. The dual-warrant structure creates a potential catalyst timeline through April 2025, which could drive increased market attention and trading activity.
Oversubscribed Rights Offering Generated
Offering Proceeds Satisfies Debt Covenant, Unlocking
PRINCETON, N.J., Jan. 13, 2025 (GLOBE NEWSWIRE) -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification, announced today that the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”) at 5:00 PM EST on January 10, 2025. The Company raised aggregate gross proceeds of
The Rights Offering was oversubscribed by
Proceeds from the closing of the subscription period satisfy a debt covenant which allows for
“We are pleased with the successful conclusion of the Rights Offering, which strengthens our balance sheet with liquidity to continue to drive innovation and execution in our core international business while we pursue U.S. and Canadian approval and launch of DrugSorb-ATR in 2025,” commented Dr. Phillip Chan, Chief Executive Officer of CytoSorbents. “We are grateful to our shareholders for their strong support and thank them for their confidence in our vision, our progress, and the growing momentum of our therapies in transforming the treatment of critically ill and cardiac surgery patients worldwide.”
Estimated Pro-Forma December 31, 2024 Cash Balance and Q4 2024 Cash Burn
The pro forma balance of estimated cash, cash equivalents, and restricted cash on December 31, 2024, after giving effect to the Rights Offering as if it had occurred on December 31, 2024, would have been approximately
Excluding the effect of the Rights Offering financing, the Company had preliminary, estimated, unaudited cash, cash equivalents and restricted cash on December 31, 2024 of approximately
The estimates of cash, cash equivalents, and restricted cash, as of December 31, 2024, and the estimate of cash burn for the fourth quarter ended December 31, 2024, disclosed in this press release are preliminary and unaudited. The Company expects to report full, audited results for the fourth quarter and year ended December 31, 2024, on March 6, 2025.
The Right Warrants
The Right Warrants are exercisable commencing on their date of issuance and the exercise price shall be equal to (i) in the case of the Series A Right Warrants,
Exercise of the Right Warrants require additional investment separate from the purchase of the Units. 6,250,000 shares of common stock remain reserved for exercise of the Right Warrants, after which any remaining unexercised Right Warrants will immediately expire worthless. The Right Warrants are transferable until they have expired.
Management Hosting Investor Meetings In San Francisco This Week
Management is hosting in-person investor meetings in San Francisco alongside the 43rd Annual J.P. Morgan Healthcare Conference being held January 13-16, 2025, in San Francisco, CA. ICR Healthcare is coordinating meetings on the Company’s behalf. Although availability is now limited, to schedule a meeting with Dr. Phillip Chan - Chief Executive Officer and Peter J. Mariani - Chief Financial Officer, please send requests to ICR Healthcare at ir@cytosorbents.com.
Biotech Showcase™ 2025
Additionally, Dr. Phillip Chan will participate in a panel discussion at Biotech Showcase™ 2025 on Wednesday, January 15, 2025. Details are as follows:
| Panel: | The Need for Novel Responses to Disease Threat(s) in a Fast-Changing World: A Q&A with Government, NGO and Industry Participants |
| Location: | Hilton San Francisco Union Square Yosemite C |
| Time: | 8:00-9:00 AM PST |
| Registration: | https://informaconnect.com/biotech-showcase/registration-options/ |
About Moody Capital Solutions, Inc.
For nearly 40 years, Moody Capital Solutions Inc. has operated as an investment bank, focusing on private placements, mergers & acquisitions, corporate advisory, divestitures, spin-outs and best-efforts underwritings. The investment bankers at Moody Capital pride themselves on their ability to bring together the necessary resources to solve most of the complex capital and treasury issues facing companies in a thoughtful and focused manner. Moody Capital Solutions, Inc. is a member of FINRA/SIPC.
About CytoSorbents Corporation (NASDAQ: CTSO)
CytoSorbents Corporation is a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery through blood purification. CytoSorbents’ proprietary blood purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. Cartridges filled with these beads can be used with standard blood pumps already in the hospital (e.g. dialysis, ECMO, heart-lung machines). CytoSorbents’ technologies are used in a number of broad applications. Specifically, two important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding and 2) the removal of inflammatory agents in common critical illnesses such as sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis that can lead to massive inflammation, organ failure and patient death. In these diseases, the risk of death can be extremely high, and there are few, if any, effective treatments.
CytoSorbents’ lead product, CytoSorb®, is approved in the European Union and distributed in 76 countries worldwide, with more than a quarter million 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 Emergency Use Authorization 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.
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 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. In September 2024, the Company submitted a De Novo medical device application to the U.S. FDA requesting marketing approval to reduce the severity of perioperative bleeding in CABG patients on the antithrombotic drug ticagrelor, which was accepted for substantive review in October 2024. In November 2024, the Company received its Medical Device Single Audit Program (MDSAP) certification and submitted its Medical Device License (MDL) application to Health Canada. DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively.
The Company has numerous marketed products and products under development based upon this unique blood purification technology protected by many issued U.S. and international patents and registered trademarks, and multiple patent applications pending, including ECOS-300CY®, CytoSorb-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb™, ContrastSorb, and others. For more information, please visit the Company’s website at https://ir.cytosorbents.com/ or follow us on Facebook and X.
Forward-Looking Statements
This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, representations and contentions, and the outcome of our regulatory submissions, the anticipated benefits of the Rights Offering, and are not historical facts and typically are identified by use of terms such as “may,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release represent management’s current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks discussed in our Annual Report on Form 10-K, filed with the SEC on March 14, 2024, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws.
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U.S. Company Contact:
Peter J. Mariani
Chief Financial Officer
pmariani@cytosorbents.com
Investor Relations Contact:
Aman Patel, CFA
Investor Relations, ICR Healthcare
(443) 450-4191
ir@cytosorbents.com
FAQ
How much did CytoSorbents (CTSO) raise in its January 2025 rights offering?
What is the structure of CTSO's rights offering units?
How much restricted cash did CTSO unlock through the rights offering?
What was CTSO's cash burn in Q4 2024?
What is the exercise price range for CTSO's Series A and B warrants?
