CytoSorbents (NASDAQ: CTSO) outlines global blood purification push and FDA path
CytoSorbents Corporation focuses on blood purification technologies for critical care and cardiac surgery, built around highly porous polymer bead cartridges used with standard hospital blood pumps. Its flagship CytoSorb device is approved in the European Union and distributed in more than 70 countries, with over 300,000 devices used and cumulative sales of about $285.3 million.
The company is pursuing North American approval of DrugSorb‑ATR to remove antithrombotic drugs during coronary artery bypass graft surgery. A pivotal STAR‑T trial showed safety and reduced perioperative bleeding in urgent CABG patients on ticagrelor, but the FDA denied the initial De Novo request in 2025, asking for more information; CytoSorbents is preparing a new submission after further discussions. Health Canada also refused the initial license, with resubmission planned after U.S. clarity.
CytoSorbents supplements product revenue with about $44.0 million of cumulative non‑dilutive grants for programs like HemoDefend‑BGA and hyperkalemia adsorbers, and records a 3% royalty on specified products, totaling roughly $1.1 million in 2025. As of June 30, 2025, non‑affiliate market value was approximately $60.6 million, with about 62.7 million common shares outstanding as of March 20, 2026.
Positive
- Established international revenue base: CytoSorb is CE‑marked, distributed in more than 70 countries, and has generated approximately $285.3 million in cumulative product sales, providing a diversified non‑U.S. revenue platform.
- Strong non‑dilutive funding history: The company has secured about $44.0 million in grants and contracts from U.S. government agencies for programs like HemoDefend‑BGA and hyperkalemia treatments, reducing reliance on equity financing.
- Supportive clinical and registry data: COSMOS and STAR Registry publications report favorable survival, organ support and bleeding outcomes associated with CytoSorb technology in real‑world critical care and cardiac surgery settings, reinforcing clinical adoption.
- Manufacturing and quality infrastructure in place: ISO 13485 and MDSAP certifications, plus a certified Princeton manufacturing site, support global scaling and are prerequisites for markets like Canada and other MDSAP jurisdictions.
Negative
- Regulatory setbacks for DrugSorb‑ATR: The FDA denied the initial De Novo request in April 2025 and upheld the denial on appeal while requesting more information, and Health Canada issued a Notice of Refusal, delaying potential U.S. and Canadian commercialization.
- Concentrated product focus: A large portion of the growth story depends on DrugSorb‑ATR and expansion of CytoSorb indications; setbacks in these programs could materially affect future revenue trajectories.
- Ongoing royalty obligations: A perpetual 3% royalty on sales of defined "Covered Products" resulted in about $1.1 million of costs in 2025, structurally pressuring gross margins as sales scale.
- Reimbursement and market access dependence: Adoption in many geographies relies on procedure codes, DRG structures, and favorable evaluations from bodies like NICE and German hospital reform outcomes, adding policy and pricing risk.
Insights
Regulatory setbacks slow DrugSorb‑ATR, but pathway remains open.
CytoSorbents has an established EU business with CytoSorb and a broad international footprint, but its key U.S. growth driver, DrugSorb‑ATR, faces regulatory delays. The pivotal STAR‑T trial showed safety and reduced bleeding in urgent CABG patients on ticagrelor, supporting clinical rationale.
The FDA’s April 25, 2025 De Novo denial and an August 2025 appeal decision upheld the need for additional evidence, though the agency proposed a potential expedited path if new analyses support the desired label. Health Canada issued a related refusal, with re‑filing deferred until better U.S. visibility.
These decisions postpone potential U.S. and Canadian revenues from DrugSorb‑ATR and extend development spending, which can weigh on a company with a non‑affiliate equity value of about $60.6 million. Actual long‑term impact hinges on the content of the new De Novo submission and the outcome of the typical 150‑day FDA review once filed.
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CYTOSORBENTS CORPORATION
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
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PART I | | |
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Item 1. Business. | | 1 |
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Item 1A. Risk Factors. | | 18 |
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Item 1B. Unresolved Staff Comments. | | 33 |
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Item 1C. Cybersecurity | | 33 |
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Item 2. Properties. | | 34 |
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Item 3. Legal Proceedings. | | 34 |
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Item 4. Mine Safety Disclosures. | | 34 |
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | | 35 |
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Item 6. Reserved | | 35 |
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | | 35 |
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. | | 43 |
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Item 8. Financial Statements and Supplementary Data. | | 43 |
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | | 43 |
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Item 9A. Controls and Procedures. | | 44 |
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Item 9B. Other Information. | | 46 |
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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection. | | 46 |
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Item 10. Directors, Executive Officers and Corporate Governance. | | 47 |
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Item 11. Executive Compensation. | | 47 |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | | 47 |
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Item 13. Certain Relationships and Related Transactions, and Director Independence. | | 47 |
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Item 14. Principal Accounting Fees and Services. | | 47 |
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Item 15. Exhibits, Financial Statement Schedules. | | 48 |
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Item 16. Form 10-K Summary | | 53 |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, or this Report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts. Unless otherwise indicated, the terms “CytoSorbents,” “Company,” “we,” “us” and “our” refer to CytoSorbents Corporation.
From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the applicable Report or public statement. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report or public statement and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A — Risk Factors” below.
TRADEMARKS
This Report includes our trademarks and trade names, such as “CytoSorb,” “CytoSorb XL,” “ECOS-300CY,” “BetaSorb,” “ContrastSorb,” “DrugSorb,” “DrugSorb-ATR,” “HemoDefend-RBC,” “HemoDefend-BGA, “K+ontrol,” “VetResQ,” and “PuriFi” which are protected under applicable intellectual property laws and are the property of CytoSorbents Corporation and its subsidiaries. This Report also contains the trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this Report may appear without the ™, ®, or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by these other parties.
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PART I
Item 1. Business.
Overview
We are 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, continuous renal replacement therapy or CRRT, extracorporeal membrane oxygenation or ECMO, and heart-lung machines), where blood is repeatedly recirculated outside the body, through our cartridges where toxic substances are removed, and then back into the body. 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 and toxins in common critical illnesses that can lead to massive inflammation, organ failure and patient death. The breadth of these critical illnesses include, for example, sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis as well as the removal of liver toxins that accumulate in acute liver dysfunction or failure, and the removal of myoglobin in severe rhabdomyolysis that can otherwise lead to renal failure. 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 more than 70 countries worldwide, with more than 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. In 2020, CytoSorb 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, authorized, or cleared 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 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 United States or Canada.
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 drug removal application beyond cardiac surgery and across other surgical specialties. We believe that DrugSorb-ATR has the potential to become an “all-in-one” countermeasure for these agents.
Our executive offices are located at 305 College Road East, Princeton, New Jersey 08540, and our telephone number is (732) 329-8885. Our website address is http://www.cytosorbents.com. We have included our website address as an inactive textual reference only. We make available free of charge through our website our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material, or furnish it to the SEC. We also similarly make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons. We are not including the information contained at http://www.cytosorbents.com, or at any other website address, as part of, or incorporating it by reference into, this Annual Report on Form 10-K.
Our Products and Applications
CytoSorbents’ technology platform centers on hemocompatible, highly porous polymer beads that act like tiny sponges to remove harmful substances from blood by pore capture and concentration-dependent adsorption, without the need for ligands, antibodies, cells or biologics. CytoSorbents commercializes three different cartridges based on this bead technology. CytoSorb for critical care and cardiac surgery and ECOS-300CY for ex vivo organ perfusion in transplant are approved in the E.U., while VetResQ
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for emergency and critical care in animals is commercialized primarily in the U.S. CytoSorbents is currently seeking U.S. FDA and Health Canada marketing approval for DrugSorb-ATR to reduce the severity of perioperative bleeding in patients on the blood thinning drug, Brilinta, undergoing coronary artery bypass graft (CABG) surgery. The Company also commercializes the PuriFi hemoperfusion pump in select countries internationally.
CytoSorb is an extracorporeal blood purification cartridge that is approved in the European Union and distributed in more than 70 countries worldwide to reduce “cytokine storm” in common critical illnesses 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. CytoSorb removes the “fuel to the fire” of deadly inflammation that is often associated with organ failure and poor clinical outcomes. Given that an estimated 40-60% of patients in the ICU suffer from severe inflammation (e.g. sepsis, COVID, flu, trauma, burns, lung failure, complications of surgery, cytokine release syndrome, liver failure, pancreatitis, etc.) where the level of inflammation is directly correlated to severity of illness, CytoSorb is strategically positioned to help these patients. CytoSorb is also approved to reduce bilirubin (e.g. in liver failure) and myoglobin (e.g. in trauma and critical illness). CytoSorb is also used during and after cardiothoracic surgery to remove antithrombotic drugs and inflammatory mediators that can otherwise lead to postoperative complications, including severe bleeding, shock, failure to wean from mechanical ventilation, sepsis, and multiple organ failure. CytoSorb is also used in cardiac surgery applications to reduce inflammatory mediators and blood thinners, targeting a reduction in complications of cardiac surgery like sepsis, bleeding, and shock.
In contrast to dialysis which works like the kidney to remove metabolic waste products, small molecules, and water-soluble drugs in about 10-15% of patients in the intensive care unit who develop kidney failure, CytoSorb functions like the liver to remove a broad range of small to mid-molecular weight toxins that dialysis does not remove well – including cytokines, inflammatory mediators, bacterial toxins, liver toxins such as bilirubin and bile acids, proteins such as myoglobin, hemoglobin, and activated complement, peptides, fat-soluble drugs, and hydrophobic protein-bound substances. Because of this, CytoSorb is “Expanding the Dimension of Blood Purification™” in critical care and cardiac surgery, treating inflammation and also other conditions where toxic substances can cause harm, while restoring balance. Based on numerous published studies, we believe treating the right patient, at the right time, with the right therapy of CytoSorb can lead to improved clinical outcomes. In particular, when used early and aggressively on a hyperinflamed patient with worsening organ failure, CytoSorb treatment is associated with the reversal or prevention of many complications such as shock, acute respiratory distress syndrome (ARDS), and kidney failure. CytoSorb was granted U.S. FDA Emergency Use Authorization in April 2020 for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure. CytoSorb is not yet cleared or approved in the U.S.
DrugSorb-ATR is an investigational device that uses an equivalent polymer technology to CytoSorb to address a large unmet need for blood thinner reversal in cardiothoracic surgery. Millions of people worldwide are on anti-thrombotic drugs, also called blood thinners, to reduce the risk of heart attack and stroke. However, when one of those patients requires emergent cardiac surgery, guidelines recommend they wait 3-5 days for the blood thinners to “wash out” of their systems to avoid bleeding complications. Often the surgery cannot wait and patients are operated at a very high risk for major bleeding. The goals of DrugSorb-ATR are to allow patients to get the critical surgery they need without delay while also reducing the severity of bleeding complications. DrugSorb-ATR installs easily into a cardiopulmonary bypass (CPB) machine and as whole blood is pumped through the cartridge during an operation, it removes the free drug from blood to reverse its antithrombotic effect.
DrugSorb-ATR is initially focused on reducing the severity of perioperative bleeding in CABG patients on the anti-thrombotic drug Brilinta® (ticagrelor, AstraZeneca) in the U.S. and Canada, where approximately 60,000 patients on this medication will need urgent cardiovascular surgery annually in those two markets each year. Given current U.S. and Canadian prescribing trends that favor Brilinta over its competitors, Plavix (clopidogrel, BMS, Sanofi) and Effient (prasugrel, Daiichi Sankyo, Eli Lilly), and the recent availability of generic ticagrelor in the U.S. since mid-2025, the number of eligible patients could increase substantially. Coronary Artery Bypass Grafting (CABG) is the most common type of cardiac surgery worldwide, and per the European Multicenter Study on CABG (E-CABG) Registry, the rate of severe bleeding is more than 3 times higher when patients undergo CABG within two days of the last dose of Brilinta, compared to those who underwent a 4-5 day washout. Data from our U.S. and Canada pivotal STAR-T (Safe and Timely Antithrombotic Removal of Ticagrelor) trial and European STAR Registry suggest the use of CytoSorbents’ technology enables CABG patients to safely undergo surgery within 2 days of the last dose of Brilinta without the associated increased bleeding risk. CytoSorbents’ technology was granted two FDA Breakthrough Device Designations, one for the removal of ticagrelor (2020) and another (2021) for the removal of the direct oral anticoagulants (DOACs) Eliquis (apixaban, Pfizer, BMS) and Xarelto (rivaroxaban, Janssen, Bayer). In September 2024, the Company submitted its initial 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 initial Medical Device License (MDL) application to Health Canada.
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The Company continues to actively pursue regulatory approval of DrugSorb-ATR with the U.S. FDA and expects to pursue regulatory approval in Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively. See further discussion in ‘Cardiac Surgery’ below.
If granted or approved, DrugSorb-ATR presents a potentially valuable value proposition to multiple stakeholders. For patients, they would be able to undergo their critical CABG surgery without significant delay and have reduced bleeding risk. For surgeons, it can potentially help get these patients into the operating room faster, while helping to avoid severe intra and postoperative bleeding complications that can be a nightmare scenario for surgeons while negatively impacting their surgical outcomes and the scheduling of new patient surgeries. For hospitals, decreased washout times in the hospital, fewer bleeding complications that require expensive ICU recovery, and faster throughput of revenue-generating cardiac surgeries means potentially better resource utilization, lower costs, and improved revenues while decreased adverse events help preserve a hospital’s quality rating.
Given that DrugSorb-ATR is an FDA Breakthrough Device and that a large percentage of the target population fall under the U.S. Centers for Medicare and Medicaid Services (CMS), the Company expects to pursue additional reimbursement and coverage options through the New Technology Add on Payment (NTAP) and Transitional Coverage for Emerging Technologies (TCET) programs. Though we believe these additional programs are not necessary to sell DrugSorb, we believe they could enhance what we believe is an already strong value proposition based on expected clinical benefit and cost savings.
ECOS-300CY is approved in the E.U. to reduce cytokines and other inflammatory mediators when used in an ex vivo organ perfusion system, with the goal of helping to preserve or improve the health and quality of harvested solid organs to be transplanted. Due to the severe shortage of donor organs, the majority of transplanted solid organs come from brain dead donors (“BDD”) and donation after cardiac death (DCD). However, cytokine storm and severe inflammation is common in these patients, which can degrade the functioning of solid organs like the heart, lungs, liver, and kidneys, resulting in substandard organs that often must be discarded. Although data demonstrate improved clinical outcomes when these organs undergo ex vivo organ perfusion, an increasing amount of published data in animal transplant models and real-world human clinical data highlight that the use of our technology with ex vivo organ perfusion is associated with better outcomes in terms of organ function and post-transplant outcomes, compared to ex vivo organ perfusion alone. Because of this, we believe the ECOS-300CY cartridge has the potential to significantly expand the solid organ donor pool and reduce the more than 150,000 patients on transplant waiting lists in the U.S. and E.U.
CytoSorbents announced a development partnership with Aferetica srl in 2017 to provide its ECOS-300CY technology under the exclusive trade name, PerSorb™, as part of Aferetica’s program to develop the PerLife™ ex vivo organ perfusion system. In 2021, commercialization of PerSorb™ and Aferetica’s PerLife™ ex vivo organ perfusion system commenced in Italy.
VetResQ is a broad-spectrum blood purification adsorber commercially available in the U.S. animal health market to help treat drug intoxication, deadly inflammation (via hemoadsorption of cytokines, bacterial toxins and other inflammatory mediators) and toxic injury in animals with critical illnesses such as drug overdose, septic shock, toxic shock syndrome, toxin-mediated diseases, pancreatitis, trauma, liver failure, heat stroke and lung injury. VetResQ is based upon an equivalent polymer technology to CytoSorb and is configured in three different sized cartridges (50, 150 and 300mL) to accommodate treatment of small, medium, and large animals such as cats, dogs, and high-value animals such as foals and horses. VetResQ is compatible with standard hemodialysis, continuous renal replacement therapy (“CRRT”), and hemoperfusion blood pumps. Based upon cumulative studies, VetResQ is capable of reducing a broad range of excessive inflammatory mediators and toxins that could otherwise cause direct tissue injury or serious systemic inflammation that can rapidly lead to instability, organ failure, and death. VetResQ is available in the U.S. only for veterinary animal usage and is not for human use.
PuriFi is an E.U. Medical Device Regulation (MDR) approved advanced hemoperfusion pump that we co-developed with our original equipment manufacturing (OEM) partner, and launched in June 2024 in the E.U. and other select countries. It can replace standard hospital blood pumps to implement our various blood purification therapies. The PuriFi peristaltic blood pump features a number of differentiating innovations that separate it from other standard hemoperfusion pumps including a pre-assembled adult and pediatric blood line kit, auto-priming, an auto-leveling bubble catcher, an intuitive touchscreen graphical user interface with a step-by-step user-friendly set-up guide, optional blood warming, and a rapid 10-minute set-up time. Together, these unique features enable an easy and rapid way to administer CytoSorbents’ blood purification technologies like CytoSorb and VetResQ for critically ill and cardiac surgery patients.
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Clinical Studies
We are focusing our company sponsored clinical research efforts on critical care and cardiac surgery applications of our technology, including the following:
Country | | Trial Name | | Indication | | Status |
United States |
| STAR-T | | Ticagrelor Removal During Cardiac Surgery | | Completed |
United States |
| STAR-D | | Direct Anticoagulants Removal During Cardiac Surgery | | Terminated |
United States | | CTC Registry | | CytoSorb in COVID-19 patients on ECMO under EUA | | Completed |
Germany | | PROCYSS | | Refractory Septic Shock Patients | | Paused and amending protocol |
International |
| STAR Registry | | Real world outcomes in antithrombotic removal | | Enrolling |
International |
| COSMOS Registry | | Real world outcomes in multiple critical care applications | | Enrolling |
Critical Care
In 2011, CytoSorb received EU regulatory approval under the CE Mark as an extracorporeal cytokine adsorber to be used in clinical situations where cytokines are elevated. As part of the CE Mark process, in 2011 we completed our randomized, controlled, European Sepsis Trial amongst 14 trial sites in Germany, with enrollment of 100 patients with sepsis and respiratory failure. The trial established that CytoSorb was well-tolerated and safe with no serious device related adverse events reported. The trial also demonstrated the ability of CytoSorb to reduce cytokines such as IL-6 from the blood of septic patients.
In April 2020, we received U.S. FDA Emergency Use Authorization for the treatment of adult critically ill COVID-19 patients with confirmed or imminent respiratory failure. The U.S. CytoSorb Therapy in COVID-19 (CTC) Registry was launched to capture outcomes and device utilization patterns from multiple U.S. participating centers. Initial results on critically ill COVID-19 patients on extracorporeal membrane oxygenation (ECMO) treated with CytoSorb at participating U.S. centers showed high 90-day survival rates (73%). This is in contrast to the approximately 50% 90-day survival rates when CytoSorb was not used, as reported from the North American cohort of the Extracorporeal Life Support Organization (ELSO) Registry. The initial CTC results on the first 52 critically ill patients from five U.S. ECMO centers were presented at the International Symposium of Intensive Care Medicine conference in August 2021 in Brussels, Belgium, and published in the peer reviewed journal Frontiers in Medicine. The CTC registry completed enrollment with 100 patients from five centers, and the final results mirror the high survival (74%) seen in the previous analysis and have been published in the peer reviewed journal Critical Care. The data further demonstrate that earlier intervention with CytoSorb and ECMO was associated with shorter need for mechanical ventilation, ECMO support, and ICU length of stay. These results lend support to our concept of “enhanced lung rest,” where ECMO helps the lungs rest by oxygenating blood extracorporeally and reducing the need for mechanical ventilation that can cause ventilator-induced lung injury, while CytoSorb reduces the circulating inflammatory mediators that cause continued capillary leak syndrome in the lungs. Together, the goal of this dual-therapy strategy is to give the lungs a chance to recover and heal, a pre-requisite for weaning off mechanical ventilation and ECMO.
The German PROCYSS multicenter, randomized controlled trial evaluating the ability of CytoSorb to restore hemodynamic stability in patients with refractory septic shock is paused, pending a protocol amendment, due to slow enrollment. The Company in collaboration with Principal Investigator and scientific committee of the trial are critically reviewing options to modify the current study design with the intent of enabling better study progress and anticipates this process to be completed in 2026.
The international COSMOS Registry was designed to capture real world outcomes and device utilization patterns across multiple critical care indications including but not limited to sepsis, acute respiratory failure, postoperative vasoplegia, rhabdomyolysis, acute liver failure, and acute pancreatitis. The Registry includes study sites in Spain, Germany, Portugal, Poland, Austria, and Italy. The Registry is contributing data for original analyses for presentations at international critical care conferences and publications in peer-reviewed journals on an ongoing basis. In October 2025, an article was published discussing the treatment of critically ill patients under the COSMOS Registry (Ferrer R, et al. The International Prospective CyboSorb Treatment of Critically Ill Patients (COSMOS) Registry: Interim Results From the First 150 Patients. Journal of Intensive Medicine.) The results of the paper on the first 150 patients enrolled in the COSMOS Registry demonstrated that the use of CytoSorb was associated with improvements in lactate, creatinine, norepinephrine needs, fluid balance, and oxygenation and that observed mortality rate was favorable compared with risk-based predictions. In December 2025, an article was published discussing the treatment of patients with severe rhabdomyolysis enrolled in the COSMOS Registry (Ferrer R, et al. Hemoadsorption therapy in severe rhabdomyolysis: a report from the international, prospective COSMOS (CytOSorb® TreatMent of Critically ill PatientS) registry. Renal Failure). The results of this paper suggested that CytoSorb is an effective method to rapidly and safely reduce myoglobin levels in severe rhabdomyolysis and therefore may lead to improved kidney function. In February 2026, an article was published discussing the treatment of 300 critically ill patients under the COSMOS Registry (Ferrer R, et al. The
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international, prospective COSMOS (CytOSorb® TreatMent Of Critically Ill PatientS) Registry: results from the first 300 patients. Journal of Anesthesia Analgesia and Critical Care). The results of this paper in 300 COSMOS patients extended and validated the observations from the earlier publication in 150 patients by showing that real-world CytoSorb® use as part of standard care in critically ill patients can be associated with improvements in several clinical and laboratory parameters and that observed mortality rates are lower than mortality estimates historically associated with standardized and established risk scores used in critical care.
Cardiac Surgery
In January 2020, CytoSorb received European Union CE Mark label expansion to include the removal of ticagrelor during cardiopulmonary bypass in patients undergoing cardiothoracic surgery. In May 2020, CytoSorb also received European Union CE Mark label expansion to include rivaroxaban removal for the same indication. The international Safe and Timely Antithrombotic Removal (STAR) Registry is designed to capture real world clinical and health economic outcomes with intraoperative antithrombotic drug removal. The Registry is actively recruiting in the U.K., Germany, Austria, Belgium, Switzerland and Sweden. Initial data outputs from the STAR Registry have already been presented at the EuroPCR and at the European Association of Cardiothoracic Surgery conferences in previous years with new analyses expected to be presented on an ongoing basis at international conferences and published in peer-reviewed journals in 2026 and beyond. In August 2024, an article was published discussing the initial results of patients on antithrombotic drugs undergoing cardiac surgery under the STAR Registry (Schmoeckel M, et al. Intraoperative haemoadsorption for antithrombotic drug removal during cardiac surgery: initial report of the international safe and timely antithrombotic removal (STAR) registry. Journal of Thrombosis Thrombolysis). This initial report of the ongoing STAR registry showed that the intraoperative use of CytoSorb is simple and safe and may potentially mitigate the expected high bleeding risk of patients on antithrombotic drugs undergoing cardiac surgery before completion of the recommended washout period. In January 2025, an article was published discussing treatment of patients on direct oral anticoagulants (DOAC) under the STAR Registry (Schmoeckel M, et al. Direct-acting oral anticoagulant removal by intraoperative hemoadsorption in CABG and/or single valve surgery: interim analysis of the International Safe and Timely Antithrombotic Removal (STAR) registry. Journal of Cardiothoracic Surgery). This interim report of the ongoing STAR-registry showed that in patients on DOAC undergoing non-deferable CABG and/or single valve surgery, the intraoperative use of CytoSorb is associated with low rates of severe perioperative bleeding complications. In August 2025, an article was published discussing the treatment of patients on antithrombotic drugs undergoing heart transplantation under the STAR Registry (Schmitto J, et al. Intraoperative antithrombotic drug removal during heart transplantation: A case series from the International Safe and Timely Antithrombotic Removal (STAR) registry. Journal of Heart and Lung Transplantation Open). This case series from the ongoing STAR registry showed that intraoperative antithrombotic removal with CytoSorb is simple, safe and potentially effective in minimizing serious perioperative bleeding complications in patients on ticagrelor or DOAC undergoing heart transplantation. In January 2026, an article was published discussing the treatment of patients on ticagrelor undergoing coronary artery bypass grafting (CABG) surgery (Storey RF, et al. Early CABG with intraoperative hemoadsorption in patients on ticagrelor: Real-world data from the international Safe and Timely Antithrombotic Removal (STAR) registry. Cardiovascular Revascularization Medicine). This paper on 102 patients on ticagrelor undergoing urgent CABG showed that intraoperative ticagrelor removal with CytoSorb is simple, safe and may help reduce ticagrelor-related bleeding in patients operated before completing the guideline recommended 3-day washout.
In July 2021, we received FDA Investigational Device Exemption (IDE) approval to conduct a double-blind, randomized, controlled clinical study in 120 patients entitled, “Safe and Timely Antithrombotic Removal – Ticagrelor (STAR-T),” in the United States to support FDA marketing approval. This was done under the previously announced FDA Breakthrough Device Designation granted for the removal of ticagrelor in a cardiopulmonary bypass circuit to reduce the likelihood of serious perioperative bleeding during urgent cardiac surgery. In October 2021, the first patient was enrolled with multiple U.S. STAR-T study sites open. In November 2022, the first milestone was completed with the first one-third of patients enrolled, triggering the first Data Safety Monitoring Board (DSMB) meeting. The DSMB recommended to continue the study as planned without any modifications. In 2022, we also received FDA approval to expand the study to Canada and subsequently received Health Canada approval allowing inclusion of Canadian sites into the STAR-T trial in January 2023. In early 2023, the study exceeded 50% enrollment and reached the 2nd milestone of 67% enrollment in the Spring of 2023, triggering another DSMB safety review, which found no safety concerns and recommended completion of the trial. The study completed enrollment in July of 2023 triggering the final DSMB safety review following database lock in December 2023, which reported no safety concerns thereby meeting the primary safety endpoint of the study. Based on the initial analysis of the STAR-T data, the study did not meet the primary effectiveness endpoint in the overall patient population that underwent different types of cardiac surgeries. However, the study did demonstrate evidence of reduced bleeding complications, including serious bleeding events, in patients in the pre-specified isolated coronary artery bypass graft (“CABG”) surgery population. Patients undergoing CABG surgery represented more than 90% of the overall study population. The topline results of the U.S. and Canadian 140-patient, pivotal STAR-T randomized controlled trial were presented at the 104th Annual Meeting of the American Association for Thoracic Surgery (“AATS”) held in Toronto, Canada on April 28, 2024. The Company submitted the DrugSorb-ATR medical device De Novo marketing application to the FDA on September 27, 2024. 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
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regulatory requirements of Canada, the United States, Brazil, Japan and Australia; and promptly submitted our Medical Device License (MDL) marketing application to Health Canada on November 1, 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 authorized for commercialization in the U.S. The Company filed an appeal of the decision through the formal appeal process with the FDA. In July 2025, 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.
In August 2025, the Company received an FDA appeal decision where the FDA found no issues with device safety but upheld its prior De Novo denial decision citing the need for additional information to support the Company’s desired label indication. Additionally, the FDA proactively proposed a potential expedited path forward for market authorization but noted the Company could also appeal to a final higher level within the FDA with the Director of the FDA’s Center for Devices and Radiologic Health (CDRH). In September 2025, the Company announced that it decided to not file a final appeal with the CDRH because of positive FDA upper management feedback for a reasonable path forward that would allow for a suitable and potentially expedited De Novo grant for the Company’s original desired label indication. The Company expects to file a new De Novo application with additional information that includes analyses of new real-world data to support its desired label indication. As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA in November 2025. The Company conducted a formal pre-submission meeting with the FDA in late January 2026 and continues to engage with the FDA to clarify and confirm the requirements for the new De Novo submission. The interactive discussions regarding the information to be included in the new submission are ongoing, and the Company expects to provide an update of the anticipated timing for the new submission once these interactive discussions with the FDA on the final requirements are complete. Following the new De Novo submission, a regulatory decision would be expected following a typical 150-day review process but may be accelerated or extended depending on interactive discussions with the FDA related to submission questions.
On June 26, 2025, Health Canada issued a Notice of Refusal of the Company’s Medical Device License application, identifying remaining deficiencies that must be addressed before the application may be granted and the device authorized for commercialization. On September 16, 2025 the Company announced that it had timely filed a Level 1 “Request For Reconsideration” with Health Canada. However, following interactive discussions with the Medical Devices Directorate Bureau Director and the Company’s Canadian regulatory counsel, it was recommended that any subsequent review of DrugSorb-ATR in Canada be delayed until better clarity was received from the FDA. As such, the Company withdrew the Request for Reconsideration and will provide a new Medical Device License application to Health Canada with improved visibility from the FDA.
In January 2026, the results of the STAR-T trial entitled, “Randomized, Sham-Controlled Trial of Intraoperative Ticagrelor Removal to Reduce Perioperative Bleeding” were published in the leading U.S. peer-reviewed cardiothoracic surgery journal, the Journal of Thoracic and Cardiovascular Surgery. (Mack MJ, et al. on behalf of the STAR-T Investigators, J Thorac Cardiovasc Surg). This paper with the main results of the double-blind, randomized STAR-T trial showed that the intraoperative use of DrugSorb-ATR is safe in patients undergoing cardiac surgery within 2 days of ticagrelor discontinuation and that among patients undergoing urgent, nondeferrable CABG surgery the device was associated with significant reductions in the severity of perioperative bleeding compared with controls.
In October 2021, we also received FDA Investigational Device Exemption (IDE) approval to conduct a double-blind, randomized, controlled clinical study for up to 120 patients entitled, “Safe and Timely Antithrombotic Removal – Direct Oral Anticoagulants (STAR-D),” in the United States to support FDA marketing approval. This was done under the previously announced 2nd FDA Breakthrough Device Designation granted for our DrugSorb-ATR Antithrombotic Removal System. This Breakthrough Device designation covers the removal of the Direct Oral Anticoagulants (DOACs) apixaban and rivaroxaban in a cardiopulmonary bypass circuit to reduce the likelihood of serious perioperative bleeding during urgent cardiac surgery. The STAR-D study was initiated, but the Company ultimately decided to place it on hold for business reasons, specifically related to prioritization and focused resource allocation to the completion of the STAR-T study and the subsequent regulatory submissions to FDA and Health Canada. Further discussions with the FDA to determine an appropriate label expansion strategy to include the removal of DOACs will ensue following the completion of the ongoing review of the current FDA application for DrugSorb-ATR for use in patients undergoing CABG surgery on ticagrelor.
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Research and Development
We have been engaged in research and development since inception. Since 2012, we have been awarded an aggregate of approximately $44.0 million in grants, contracts, and other non-dilutive funding from DARPA ($3.8M over 5 years), the U.S. Army ($100K Phase I SBIR; $50K Phase I option, $803K Phase II SBIR, $443K Phase II enhancement), the U.S. Air Force $3.1M Rapid Innovation Fund, the Congressionally Directed Medical Research Program Office, (“CDMRP”, $718K), the National Heart, Lung and Blood Institute and USSOCOM ($203K Phase I SBIR; $1.5M Phase II SBIR; $3.0M Bridge SBIR), the Joint Program Executive Office – Chemical and Biological Defense, (JPEO-CBD), ($150K Phase I and Phase I option, $1.0M Phase II), the U.S. Army Peritoneal dialysis/mesh packing for hyperkalemia ($150K Phase I SBIR, $1.0M Phase II, $1.5M Sequential Phase II), Universal Plasma ($150K Phase I and 1.0M Phase II STTR; $2.9M US Army and CDMRP Rapid Innovation Fund; $4.4M CDMRP; $1.1M US Army Sequential Phase II; $2M DMRDP; and $4.3M JWMRP), Lipopolysaccharide Adsorption In Sepsis (National Institution of General Medical Sciences $282K), the U.S. Air Force program ($75K), New Jersey Technology Business Tax Certificate Program for research related expenses ($10.3M), and others to further develop our technologies for sepsis, trauma and burn injury, and blood transfusions, respectively. Some payments are based on achieving certain technology milestones.
Commercial and Research Partners
Fresenius Medical Care AG
The Company has developed various multi-country distribution and/or co-marketing agreements with Fresneius Medical Care AG dating back to December 2014. Over the years, these agreements have included partnerships to support the commercialization of CytoSorb in various countries including, France, Poland, Sweden, Denmark, Norway, Czech Republic, Finland, South Korea, Mexico, Colombia and Ecuador.
In August 2022, CytoSorbents and Fresenius expanded their partnership with a new Marketing Agreement to promote CytoSorb globally (excluding the US) for critical care. Fresenius would promote CytoSorb as the featured solution for cytokine, bilirubin, and myoglobin removal on its critical care platforms worldwide with the exception of the U.S., in a comprehensive marketing campaign. The Marketing Agreement also included the certification of compatibility of CytoSorb for usage on Fresenius’ current critical care platforms and provided for potential new collaborations on novel future innovations. The initial three-year agreement automatically renews for two years. Under the terms of this agreement, CytoSorbents would pay royalties on sales to offset program-specific marketing costs. Due to delays in the full implementation of this Marketing Agreement, no royalties were earned or paid under this agreement in 2024 or 2025.
Aferetica s.r.l.
In 2015, we entered into a distribution agreement for CytoSorb with Aferetica s.r.l., a distributor based in Bologna, Italy that specializes in the sale of certain medical products and devices, specifically extracorporeal therapies, in the critical care, cardiac surgery and liver disease markets (“Aferetica”). The agreement was renewed and is ongoing.
In 2021, CytoSorbents and Aferetica announced the commercial launch in Italy of the PerSorb™ adsorber and the PerLife™ ex vivo organ perfusion system, respectively, to help restore and preserve harvested organs for transplant. The PerSorb adsorber is a private-label version of CytoSorbents’ ECOS-300CY cartridge that is approved in the E.U. for this application.
Terumo Cardiovascular Group
On January 1, 2024, we entered into a second amended and restated agreement to an original distribution agreement from October 2016. Under the terms of this amended and restated agreement, Terumo received non-exclusive distribution rights in France to promote and sell the CytoSorb CPB procedure pack for intra-operative use during cardiac surgery at specifically named hospitals in France. This amended and restated agreement allowed the Company to sell directly to other hospital customers in France for the cardiac surgery application. The agreement expired on January 1, 2025; however Terumo and the Company are continuing to operate under those terms as they negotiate an updated agreement.
B. Braun Avitum AG
In March 2021, we announced the launch of a global co-marketing agreement with B. Braun Avitum AG, one of the world’s leading manufacturers of medical devices and pharmaceutical products and services, to promote the use of CytoSorb® with B. Braun’s latest OMNI® continuous blood purification platform and OMNIset® Plus bloodline set (set version 3.0 or higher). The CytoSorb®
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adsorber is used in critical care for the extracorporeal removal of cytokines and inflammatory mediators from the bloodstream and can be operated with the B. Braun OMNI® acute dialysis machine. B. Braun will supply the market with the OMNI® and OMNIset® Plus while CytoSorbents and its network of direct sales, strategic partners, and distributors will continue to supply the market with CytoSorb®. This global co-marketing agreement applies to the countries where both products are registered (U.S. market is specifically excluded).
The Advisory Boards
From time to time our management meets with scientific advisors to obtain expert opinions on basic science, critical care medicine and cardiac surgery. We compensate all our Scientific Advisory Board (SAB) members according to fair market value and reimburse them for their travel expenses when attending meetings in person.
Royalty Agreement
The Company has been party to an agreement whereby it pays a perpetual royalty of three percent on sales of its technology since 2003. In November 2022, all rights, title and interest to the Royalty was assigned to ROKK, LLC. In August 2024, the Company and ROKK entered into the Amended and Restated Agreement to, among other items, clarify the scope of the term “gross revenue” from which the three percent royalty payment is calculated. Under the Amended and Restated Agreement, the term “Covered Product” means the Company’s flagship product, CytoSorb, together with the currently commercialized versions of VetResQ and ECOS-300CY, as well as the versions of DrugSorb and DrugSorb-ATR that have been evaluated in human clinical trials, in each case as of the date of the Amended and Restated Agreement. For the year ended December 31, 2025, we recorded royalty costs of approximately $1.1 million.
License Agreement
In 2003, Purolite filed a lawsuit against us asserting, among other things, co-ownership and co-inventorship of certain of our patents. On September 1, 2006, the United States District Court for the Eastern District of Pennsylvania approved a Stipulated Order and Settlement Agreement under which we and Purolite agreed to the settlement of the action. The Settlement Agreement provides us with the exclusive right to use our patented technology and proprietary know how relating to adsorbent polymers for a period of 18 years. In particular, the Settlement Agreement relates to several of our issued patents and several of our pending patent applications covering our biocompatible polymeric resins, our methods of producing these polymers, and the methods of using the polymers to remove impurities from physiological fluids, such as blood.
Under the terms of the Settlement Agreement, we have agreed to pay Purolite royalties of 2.5% to 5% on the sale of those of our products, if and when those products are sold commercially, that are used in direct contact with blood or, in certain cases, in direct contact with a physiological fluid other than blood. The royalty payments provided for under the Settlement Agreement would apply to CytoSorb, VetResQ, and BetaSorb products. The 18-year term of this license agreement expired in August of 2024, and no further payments were made. For the year ended December 31, 2025, per the terms of the license agreement, we did not record royalty costs associated with this license agreement.
Product Payment & Reimbursement
CytoSorb
Germany
Effective January 1, 2024, the coding (“OPS”) for plasmapheresis, adsorption (previously: immunoadsorption) and related treatments has been extensively restructured to enable a more precise and rational classification. Therefore, the coding for hemoadsorption therapy (including CytoSorb device) has been updated to the new procedure code “8-821.30 hemoperfusion [whole blood adsorption]: selective, removal of hydrophobic substances (low and/or middle-sized molecules)”. This coding keeps on triggering the previous supplementary reimbursement that each hospital negotiates on an annual basis with the health insurers (valid in 2025: “ZE2025-09” as this code is being updated annually). A dedicated coding as well as reimbursement for hemoadsorption was effective since January 1, 2017 (procedure code “8-821.2 adsorption of hydrophobic, small and middle-sized molecular substances”). According to the hospital’s budget negotiations, the reimbursement rate not only covers the cost of the device, but the procedural costs as well.
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Switzerland
Since 2020, the most specific procedure code (“CHOP”) for any treatment with CytoSorb has been installed: “99.76.31 Adsorption of hydrophobic, small and middle-sized molecular substances”. Before, in 2018 CytoSorb had to be coded via the pre-existing CHOP code 99.76.99 “Extracorporeal immunoadsorption, other” and in 2019 CytoSorb was assigned the first dedicated procedure code from the Swiss Federal Statistical Office, a division of the Federal Department of Home Affairs in Switzerland under the category “99.76.12 Adsorption of Cytokines and Interleukin”. Use of these specific codes since 2019 gave Swiss hospitals the ability to collect cost data related to CytoSorb treatments. In 2021, SwissDRG performed the first cost analysis of all procedures coded with 99.76.31. This analysis showed that there was no additional treatment costs associated with use of CytoSorb against the relevant DRGs, suggesting CytoSorb may be cost neutral or even cost-saving across all indications.
Europe (excluding Germany and Switzerland)
Payment for our CytoSorb device in patients with life-threatening illnesses is country dependent in Europe. Most European markets issue reimbursement for standard therapies only, i.e. those recommended in relevant treatment guidelines. The Company is currently conducting randomized controlled trials (RCTs) to achieve this in some major indications. In the meantime, we are leveraging health economics, local data generation and KOL management in all major territories, with our partners and local sales teams, such as France, England, Italy, Spain, Russia, Belgium, Netherlands, Luxembourg, Poland, Sweden, Norway, Denmark and Finland.
In the United Kingdom, market access and reimbursement of drugs, medical devices and diagnostics is heavily dependent on the guidance published by the National Institute for Health and Care Excellence (NICE). In 2020, NICE published a Report on “Cytokine adsorption devices for treating respiratory failure in people with COVID-19”. The report showed that cytokine adsorption devices reduce levels of cytokines in the blood in people with COVID-19. This may help improve lung function. In 2021, NICE published its report on CytoSorb for the removal of ticagrelor in urgent and emergent cardiac surgery patients in a MedTech Innovation Briefing (MIB) called “CytoSorb for reducing risk of bleeding during cardiac surgery”. The MIB highlights the safety and efficacy of CytoSorb in this indication, as well its innovative nature and the substantial cost savings CytoSorb generates and has aided adoption in the UK.
Other Markets
CytoSorb is currently marketed and distributed in more than 70 countries around the world. It is generally paid for through the standard DRG (diagnosis related group) payment, dedicated reimbursement codes, tender orders, private insurance, and/or self-pay. We are actively pursuing generation of new procedure codes in many countries we are currently serving. Across all countries, we are mitigating financial barriers though use of health economics, local data generation and targeted KOL management.
United States
CytoSorb is not yet approved in the U.S. but received FDA Emergency Use Authorization (“EUA”) in April 2020 for use in adult critically ill COVID-19 patients with imminent or confirmed respiratory failure. Although EUA remains in effect in the United States, the Company last sold a CytoSorb device under the EUA in 2024. There is currently no specific reimbursement for CytoSorb in the U.S. Payment for our CytoSorb device in the U.S. for this application falls under the DRG prospective repayment system, which is currently the predominant inpatient hospital reimbursement methodology in the U.S., that was increased for COVID-19 applications as part of the CARES Act. Under this system, hospital reimbursement is generally based upon pre-determined amounts payable for specific diagnoses (e.g. septic shock with respiratory failure), regardless of the number of services provided during the patient’s stay. If CytoSorb can improve outcomes and reduce the costs of ICU treatment and hospital length of stay, it could potentially save hospitals a significant amount of money.
In June 2023, CMS announced a new initiative called “Transitional Coverage for Emerging Technologies” (TCET) that would provide guaranteed coverage to FDA Breakthrough Devices for a certain period of time. In August 2024, CMS published a final notice detailing the TCET pathway. Eligibility requires a) FDA Breakthrough Device Designation, b) Determination that the device falls within a Medicare benefit category c) It is not also covered by a CMS National Coverage Determination (NCD), and d) that no other law or regulation excludes participation. Manufacturers can voluntarily submit a formal self-nomination to be evaluated for the TCET program within 12 months of anticipated FDA marketing authorization. The FDA reviews applications on a quarterly basis with a strong focus on clinical evidence and will approve up to 5 devices a year for the program using existing NCD criteria. CMS anticipates that approved devices will have coverage under a TCET NCD for approximately 5 or more years as evidence is generated to address identified evidence gaps that can lead to a predictable, long-term Medicare coverage determination. CytoSorbents plans to pursue CMS TCET coverage given that it believes that DrugSorb-ATR, which was granted FDA Breakthrough Device Designation for the removal of ticagrelor
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(April 2020) and Direct Oral Anticoagulants (DOACs) apixaban and rivaroxaban (August 2021) during emergent or urgent cardiothoracic surgery, meets these criteria.
Competition
General
Our core adsorbent porous polymer bead technology is used in our marketed products, such as the CytoSorb, ECOS-300CY, and VetResQ cartridges, and other products under advanced development, such as CytoSorb XL and DrugSorb-ATR. We believe these products represent a unique approach to disease states and health complications associated with the presence of larger toxins (often referred to as middle molecular weight toxins) and poorly dialyzable drugs in the bloodstream, including sepsis, acute respiratory distress syndrome (ARDS), trauma, severe burn injury, pancreatitis, post-operative complications of cardiac surgery, damage to organs donated for transplant prior to organ harvest, renal disease, drug intoxication, and perioperative bleeding due to antithrombotic drugs. In many of these illnesses, with the exception of antibiotics and in some cases steroids, current standard of care therapy in the ICU is predominantly supportive care. Technologies such as mechanical ventilation, vasopressors and inotropes, and dialysis are often called “life support” and can keep critically ill patients alive, but do not actively reverse the underlying pathology, and in many cases can exacerbate illness. This is a major reason why critical illness remains a major unmet medical need and is associated with high morbidity and mortality, often exceeding 30%.
There are four common forms of blood purification, including hemodialysis, hemofiltration, hemoperfusion, and therapeutic plasma exchange (TPE). All modes are generally supported by standard hemodialysis machines. All take blood out of the body to remove toxins and unwanted substances from blood and utilize extracorporeal circuits and blood pumps. Dialysis and hemofiltration remove substances from blood by diffusion and ultrafiltration, respectively, through a semi-permeable membrane, allowing the passage of certain sized molecules across the membrane, but preventing the passage of other, larger molecules. Therapeutic plasma exchange can use either apheresis machines to centrifugally remove plasma or fluid from whole blood, or specialized plasma separator hemofilters that do the same, but requires replacement of plasma and/or fluid. Hemoperfusion utilizes solid or porous sorbents to remove substances based on pore capture and surface adsorption, not filtration. Of the four blood purification modalities, hemoperfusion is the easiest to implement.
CytoSorb: CytoSorb is a hemoperfusion cartridge, using an adsorbent of specified pore range, which controls the size of the molecules which can diffuse into the adsorbent and vastly increases the area available for surface adsorption. As whole blood flows over our polymer adsorbent, middle molecules such as cytokines diffuse into the polymer adsorbent and are adsorbed and removed from blood. For example, we have demonstrated the ability of CytoSorb to reduce key cytokines in the blood of human patients in a wide variety of settings, including for example, septic shock, ARDS, and endotoxemia. Our devices do not use semipermeable membranes or dialysate. In addition, our devices do not remove fluids from the blood like hemodialysis, hemofiltration, or TPE. Finally, our technology can be easily connected to a wide range of extracorporeal blood pumps and support high blood flow rates over the course of 24 hours, whereas other blood purification technologies require much more complexity and can only support relatively low flow rates. Accordingly, we believe that our technology has significant advantages as compared to other blood purification products, including ease of use. We believe we are the leader in acute care blood purification for many of our various clinical applications, which is highlighted by the significantly greater number of peer-reviewed publications than any of our competitors. Examples of E.U. approved blood purification competitors that claim to reduce cytokines include Oxiris and SepteX (Vantive), PMMA (Toray), HA330 and HA380 (Jafron), TPE (multiple manufacturers), Efferon-CT and Efferon-LPS (Efferon), and EMIC-2 (Fresenius Medical Care).
DrugSorb-ATR: To our knowledge, CytoSorb is the only therapy approved for the removal of ticagrelor and rivaroxaban (Xarelto®, Janssen, Bayer) in the E.U. during cardiac surgery in urgent or emergent cardiopulmonary bypass. The only recommended alternative is to wait for 3 to 5 days to allow natural drug elimination and washout prior to surgery. In the U.S., there are no approved or cleared therapies to reverse the effects of ticagrelor or DOAC anticoagulants during cardiac surgery. Besides DrugSorb-ATR, PhaseBio, a now defunct clinical-stage biopharmaceutical company, had licensed an intravenously administered monoclonal antibody fragment with high affinity for ticagrelor called bentracimab and conducted the U.S. REVERSE-IT (Rapid and SustainEd ReVERSal of TicagrElor – Intervention Trial) study, a Phase 3, prospective, multi-center, open-label, single-arm, non-controlled trial designed to study reversal of the antiplatelet effects of ticagrelor with bentracimab to treat patients who present with uncontrolled major or life-threatening bleeding (n=8) or when used prophylactically in patients who require urgent surgery or an invasive procedure to prevent bleeding (n=142). Investigators reported a rapid reversal of anti-platelet activity in both subgroups. Among surgical patients, 66.4% had mild GUSTO (Global Use of Strategies to Open Occluded Coronary Arteries bleeding scale) bleeding, and 33.6% had moderate GUSTO bleeding perioperatively. Treatment-emergent adverse events (i.e. adverse events that were not present prior to treatment initiation or an event already present that worsens in either intensity or frequency following exposure to the treatment) were reported by 92.7% of enrolled patients. Four patients died (2.8%): two with septic shock, and two with cardiogenic shock. Of 150 patients, eight patients
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(5.3%) had thrombotic events, including two ischemic strokes, one transient ischemic attack, three myocardial infarctions, and two with arterial thromboembolisms in the right lower extremity. In November 2021, based on FDA feedback, PhaseBio announced that it continued to enroll more patients into the uncontrolled major or life-threatening bleeding arm of the study and intended to submit a BLA for both subgroups by Summer 2022. However, in October 2022, PhaseBio filed for Chapter 11 bankruptcy. The bentracimab asset was transferred to PhaseBio’s creditor, SFJ Pharmaceuticals in December 2022, who filed an FDA Biologics License Application (BLA) for bentracimab in mid-2024 based on a second interim analysis of the REVERSE-IT trial, SFJ and SERB Pharma presented Final Phase 3 results of the prospective, single arm, non-controlled REVERSE-IT involving a total of 141 patients undergoing surgery and 71 patients with life-threatening bleeding related to ticagrelor in March 2025 at the American College of Cardiology 2025 Scientific Session. Key outcomes indicated Bentracimab restored platelet function in the majority of participants but 18% of surgical patients and 12% of bleeding patients experienced serious adverse events with a thromboembolic event rate of 4%. Bentracimab has received FDA Breakthrough Therapy designation and, in 2025, Orphan Drug designation for this indication. SERB Pharmaceuticals has acquired exclusive U.S. commercial rights for the biologic. We believe DrugSorb-ATR has significant advantages, particularly safety, cost, and ease of use, over Bentracimab in cardiac surgery.
In December 2025, AstraZeneca voluntarily withdrew Andexxa from the US market, the only marketed biologic reversal agent for direct oral anticoagulants (DOACs) such as rivaroxaban and apixaban, after the FDA stated that the serious risks of the product, including a high rate of serious or fatal thromboembolic events, led them to conclude that the risks of the product outweigh its benefits and did not issue a full approval. A competitor’s decision to voluntarily withdraw its product from FDA consideration may create a potential opportunity for the Company by reducing competitive pressure and increasing interest in alternative therapeutic options. Because the Company’s products utilize a different modality, do not share the same underlying risks that led to the withdrawal, and will offer a lower cost than an expensive biologic reversal agent, it may be viewed more favorably by regulators, clinicians, and potential partners, and could provide an opportunity success upon approval from the FDA.
ECOS-300CY: To our knowledge, there are no specifically approved therapies for cytokine removal other than ECOS-300CY for ex vivo organ perfusion.
VetResQ: Because VetResQ uses the equivalent polymer technology to CytoSorb, it benefits from the extensive human clinical experience in critical care, including diseases that also affect animals such as sepsis and infection, drug intoxication, pancreatitis, ARDS, and many other illnesses. Aimalojic competes with VetResQ in the U.S. animal health market primarily in the indication of drug overdose.
Government Research Grants
We have historically been successful in obtaining technology development contracts from governmental agencies such as the National Institutes of Health and the U.S. Department of Defense, including the Defense Advanced Research Projects Agency (“DARPA”), the U.S. Army, U.S. Special Operations Command (“USSOCOM”), the U.S. Air Force, Air Force Material Command (“USAF/AFMC”) and others. Currently, we are continuing to develop HemoDefend-BGA for universal plasma based on funding, in part, by the U.S. Army Medical Research Acquisition Activity (“USAMRAA”), the NHLBI, and the USAF/AFMC.
The HemoDefend-BGA blood purification technology platform is designed to reduce anti-A and anti-B antibodies in plasma, platelets, and whole blood. The goal is to enable the production of freeze dried or frozen “universal plasma” that can administered to anyone, regardless of blood type, enable the administration of off-type platelets, or enable fresh warm whole blood transfusions, respectively. If this technology is successfully developed and approved, it could have a number of important benefits, including: a) eliminating the need for blood-typed plasma, enabling its rapid use in trauma resuscitation and mass casualty events b) freeze-dried universal plasma would not require refrigeration, making it ideal for first responders, paramedics, medics, and stockpiling c) reducing the risk of transfusion reactions and improving patient outcome d) Enabling the use of low titer whole blood, ideal for trauma resuscitation; and e) reducing the risk of hemolytic transfusion reactions from blood-derived products.
In July 2020, the Company was awarded a three-year contract by the Assistant Secretary of Defense for Health Affairs, endorsed by the CDMRP, as part of a Peer Reviewed Medical Research Program Technology/ Therapeutic Development Award to complete preclinical development of the HemoDefend™-BGA plasma and whole blood adsorber (award number W81XWH2010712). This award provides for maximum funding of approximately $4.4 million over a three-year period. As of December 31, 2025, we received approximately $4.4 million in funding under this contract and no further funding remaining under this contract.
On April 19, 2021, the Company received notification that it received a U.S. Army Medical Research Acquisition Activity Award (the “USAMRAAA”) entitled “Investigation of a potassium adsorber for the treatment of hyperkalemia induced by traumatic injury and acute kidney injury in austere medicine.” The USAMRAAA Phase II Sequential Award, for up to $1.4 million, was granted
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to the Company to continue development of two novel and distinct treatment options for life-threatening hyperkalemia. This award is being funded by the USAMRAAA under Contract No. W81XWH21C0045. As of December 31, 2025, we received $1.4 million funding under the contract and no further funding remains under the contract.
On May 9, 2022, the Company received a USAMRAA Award (“USAMRAAA”) entitled “Demonstration of the Safety and Efficacy of Field-Ready Blood Group Antibody (BGA) Adsorber in the Porcine Universal Transfusion Model.” The Department of Defense (DoD) Defense Medical Research and Development Program (DMRDP) Joint Program Committee 6 (JPC-6) Combat Casualty Care Research Program (CCCRP) Battlefield Resuscitation for the Immediate Stabilization of Combat Casualties Award, for up to $1.9 million, was granted to the Company to validate the safety and efficacy of the BGA device in a preclinical study in pigs. This award is being funded by the USAMRAAA under Contract No. W81XWH-22-1-0235. As of December 31, 2025, we received $1.8 million funding under the contract and have approximately $0.1 million remaining under the contract, which is expected to be completed in 2026.
On August 22, 2022, the Company received a USAMRAAA entitled “Integrating Isoagglutinin Reduction for a Universal Dried Plasma Product for Battlefield and First Responder Use.” This three-year Phase III contract, which is valued at $4.3 million, is to be used to customize the design of the HemoDefend-BGA™ filter for sterile integration into collections systems for freeze-dried plasma processing to generate freeze-dried universal plasma. Without the need for blood typing, widespread availability of universal plasma could help save lives via faster emergency treatment in both civilian and military settings. This award is being funded by the USAMRAAA under Contract No. W81XWH-22-C0046. As of December 31, 2025, we have received $4.2 million funding under the contract and have approximately $0.1 million remaining under the contract, which is expected to be completed in 2026.
These grants represent a substantial research cost savings to us, and we believe demonstrate the strong interest of the medical and scientific communities in our technology. We are also exploring potential eligibility in several other government-sponsored grant programs which could, if approved, represent a future source of non-dilutive funds for our research programs.
New Jersey Technology Business Tax Certificate Program
We may be eligible, from time to time, to receive cash from the sale of our Net Operating Losses and R&D tax credits under the State of New Jersey Technology Business Tax Certificate Program. As of December 31, 2025, we have accrued a receivable of $0.4 million from the approved sale of our 2024 and 2023 state NOL and research and development credits, respectively. We expect to collect this receivable in the first half of 2026. As of December 31, 2024, we accrued a receivable of $1.7 million from the approved sale of our 2023 state NOL and research and development credits. We collected this amount in April 2025.
Regulation
The medical devices that we manufacture are subject to regulation by numerous regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, the most comprehensive of which require that a clinical evaluation be conducted before a device receives approval for commercial distribution.
European Union Regulatory Process
In the EU, medical devices that we manufacture are required to comply with the Medical Devices Directive 93/42/EC (“MDD”) and obtain CE Mark certification in order to market medical devices. The CE Mark certification, granted following approval from an independent notified body, is an EU-wide international symbol evidencing adherence to quality assurance standards and compliance with the MDD or other applicable European Medical Devices Directives. Distributors of medical devices may also be required to comply with other foreign regulations. The time required to obtain these foreign approvals to market our products may be longer or shorter than that required in the U.S., and requirements for those approvals may differ from those required by the FDA. In Europe, our devices are classified as Class IIb, and currently conform to the MDD. As of May 27, 2021, devices that have not received CE Mark renewal under the MDD or where existing device or processes are substantially amended, certification would be required in accordance with the new European Union Medical Device Regulation (“MDR”). However, devices already certified under the MDD can continue to use the CE Mark under the MDD until the expiry of those MDD CE certificates and in August of 2019, we announced that CytoSorb received renewal of its EU CE Mark through May 2024. In March 2023, the EU Parliament and Council extended the MDR transition period for CytoSorbents’ CytoSorb device (Class IIb) to December 2028 and it will stay CE Marked under MDD until the end of transition period (subject to Notified Body surveillance) or until the full transition to MDR certification before the end of the transition period.
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In March 2011, we successfully completed our technical file review with our notified body and received approval to apply the CE Mark to the CytoSorb device for multiple indications for use. We also achieved ISO 13485:2003 Full Quality Systems certification, an internationally recognized quality standard designed to ensure that medical device manufacturers have the necessary comprehensive management systems in place to safely design, develop, manufacture and distribute medical devices in the EU. In June of 2024 we completed our MDSAP audit and received approval in November of 2024 extending the coverage of our ISO 13485 Certificate with the inclusion of Canadian Quality Systems requirements under MDSAP.
Since 2011, CytoSorbents has maintained a valid ISO13485 certificate. In July 2018, we successfully completed an audit upgrade from an ISO 13485:2003 certification to an ISO 13485:2016 certification, valid through 2019. Subsequent surveillance and recertification audits have been successfully completed to maintain the certification. In April 2022, we successfully completed an annual ISO 13485:2016 surveillance audit that encompassed both the Deer Park manufacturing site and the new manufacturing facility at 305 College Road East, Princeton, NJ. In September 2022, we received ISO 13485 Certification of this new facility, clearing the way for full manufacturing of CytoSorb, DrugSorb-ATR, and ECOS-300CY from this site. This certification is currently maintained.
In the EU, as in other geographies, there are limits to the claims we are allowed to make, associated with the use of our devices. Specifically, claims that are made are required to be in applicable CE Certificate and based on our Clinical Evaluation Report, which is part of the conformity assessment process conducted by the Notified Body. If our claims exceed the assessed claims, either regarding performance or intended uses, we may be subject to regulatory actions, which could include customer notifications or even product recalls.
U.S. FDA Medical Device Regulatory Process: The FDA approval process for medical devices ensures that products entering the market meet safety and efficacy standards. Medical devices are classified into three categories—Class I, II, and III—based on risk. Class I devices pose the lowest risk and are often exempt from premarket review, while Class II and III devices require more rigorous regulatory oversight. There are three primary pathways for FDA approval: the 510(k) clearance, De Novo classification, and Premarket Approval (PMA).
The 510(k) clearance pathway is the most common and applies primarily to Class II devices. It requires manufacturers to demonstrate that their device is “substantially equivalent” to a legally marketed predicate device. This means that the new device must have the same intended use and similar technological characteristics as the predicate. If the FDA determines substantial equivalence, the device can be marketed without undergoing extensive clinical testing. However, if no suitable predicate exists, the manufacturer must pursue an alternative pathway.
The De Novo classification pathway is intended for novel, low-to-moderate-risk devices that do not have a predicate but are not high-risk enough to require PMA. This process allows the FDA to classify new devices into Class I or II based on a risk assessment. Unlike the 510(k) pathway, De Novo requires more robust evidence of safety and effectiveness, but it does not demand the extensive clinical trial data needed for PMA.
The Premarket Approval (PMA) process is the most stringent pathway and typically reserved for high-risk Class III devices. It requires comprehensive scientific and clinical data to demonstrate reasonable assurance of safety and effectiveness. This pathway is typically reserved for life-sustaining or life-supporting devices, as well as those that pose significant risks. The PMA process includes rigorous clinical trials, manufacturing inspections, and post-market surveillance requirements. Because of the extensive data and regulatory scrutiny, the PMA process is the most time-consuming and expensive of the three pathways.
Each of these regulatory pathways is designed to balance patient safety with innovation, ensuring that medical devices entering the market are both effective and appropriately regulated based on their level of risk.
We remain actively engaged with the FDA seeking clearance of DrugSorb-ATR to reduce the severity of perioperative bleeding in patients on the blood thinning drug ticagrelor that require CABG surgery under the De Novo classification, which we believe is supported by the favorable benefit to risk profile established by the pivotal STAR-T trial data and STAR Registry data for this application.
With FDA clearance or approval, both before and after a device for the U.S. market is commercially released, we would have ongoing responsibilities under FDA regulations. The FDA reviews design and manufacturing practices, labeling and record keeping, complaint handling, and manufacturers’ required reports of adverse events and device malfunctions and other information to identify potential problems with marketed medical devices. We would also be subject to periodic inspection by the FDA for compliance with the FDA’s QSR requirements, as mentioned above. In addition, the FDA and other U.S. regulatory bodies (including the Federal Trade Commission, the Office of the Inspector General of the Department of Health and Human Services, the Department of Justice (DOJ),
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and various state Attorneys General) monitor the manner in which we promote and advertise our products. Although physicians are permitted to use their medical judgment to employ medical devices for indications other than those cleared or approved by the FDA, we are prohibited from promoting products for such “off-label” uses and can only market our products for cleared or approved uses. If the FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the FDA could require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health; order a recall, repair, replacement, or refund of such devices, detain or seize adulterated or misbranded medical devices; or ban such medical devices. The FDA may also impose operating restrictions, enjoin and/or restrain certain conduct resulting in violations of applicable law pertaining to medical devices, including a hold on approving new devices until issues are resolved to its satisfaction, and work with the DOJ to assess civil or criminal penalties against our officers, employees, or us. Conduct giving rise to civil or criminal penalties may also form the basis for private civil litigation by third-party payers or other persons allegedly harmed by our conduct.
The placement of our devices in the U.S. market would be subject to regulation by the U.S. Department of Health and Human Services and comparable state agencies responsible for reimbursement and regulation of health care items and services. U.S. laws and regulations are imposed primarily in connection with the Medicare and Medicaid programs, as well as the government’s interest in regulating the quality and cost of health care.
Federal health care laws apply when we or customers submit claims for items or services that are reimbursed under Medicare, Medicaid, or other federally funded health care programs. The principal federal laws include: (1) the False Claims Act which prohibits the submission of false or otherwise improper claims for payment to a federally-funded health care program; (2) the Anti-Kickback Statute which prohibits offers to pay or receive remuneration of any kind for the purpose of inducing or rewarding referrals of items or services reimbursable by a Federal health care program; (3) the Stark law which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these programs for the provision of certain designated health services if the physician (or a member of the physician’s immediate family) has a financial relationship with that provider; and (4) health care fraud statutes that prohibit false statements and improper claims to any third-party payer. There are often similar state false claims, anti-kickback, and anti-self referral and insurance laws that apply to state-funded Medicaid and other health care programs and private third-party payers and some state laws apply regardless of payor (i.e., even in self-pay scenarios). These and other laws (including, for example, the Physician Payment Sunshine Act and state transparency and compliance laws) will become increasingly important as we progress toward commercialization in the U.S. In addition, the U.S. Foreign Corrupt Practices Act can be used to prosecute companies in the U.S. for arrangements with physicians, or other parties outside the U.S. if the physician or party is a government official of another country and the arrangement violates the law of that country.
The laws applicable to us are subject to change, and subject to evolving interpretations. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees could be subject to severe criminal and civil penalties including substantial fines and damages, and exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid.
The process of obtaining clearance or approval to market products is costly and time-consuming in virtually all of the major markets in which we expect to sell products and may delay the marketing and sale of our products. Countries around the world have recently adopted more stringent regulatory requirements, which are expected to add to the delays and uncertainties associated with new product releases, as well as the pre-clinical, clinical and regulatory costs of supporting those releases. No assurance can be given that any of our other medical devices will be approved on a timely basis, if at all, or that our CytoSorb® device will be approved for CE Mark labeling under the MDR in other potential medical applications or that it will be approved for cytokine adsorption in markets not covered by the CE Mark on a timely basis, or at all. In addition, regulations regarding the development, manufacture and sale of medical devices are subject to future change. We cannot predict what impact, if any, those changes might have on our business. Failure to comply with regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations.
Health Canada Regulatory Process: In Canada, DrugSorb-ATR is classified as a Class III medical device (range Class I to IV). These devices require regulatory approval from Health Canada through the Medical Devices Bureau (MDB) within the Therapeutic Products Directorate. Manufacturers must submit a Medical Device License Application (MDLA) which includes detailed information on a device’s safety, effectiveness, quality and risk mitigation measures. The application must comply with MDR and include a summary of clinical evidence, risk assessments, biocompatibility testing, and performance data. Health Canada conducts a scientific and regulatory review to ensure the device meets the Canadian Medical Device Conformity Assessment System (CMDCAS) requirements. In addition, Medical Device Single Audit Program (MDSAP) certification, that certifies medical device manufacturer compliance of its quality management system with the standard and regulatory requirements of Canada, the U.S., Brazil, Japan, and Australia, is a pre-requisite for filing an MDLA. If approved, the manufacturer receives a Medical Device License (MDL), allowing commercial distribution in Canada. Post-market surveillance, including mandatory incident reporting and compliance with MDSAP ensures continued safety and
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effectiveness. CytoSorbents received MDSAP certification and then submitted its initial MDLA for DrugSorb-ATR to Health Canada on November 1, 2024. 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.
Other Regulatory Matters:
FDA Emergency Use Authorization: On April 10, 2020 the FDA granted CytoSorbents Emergency Use Authorization of CytoSorb to treat patients 18 years of age or older, with confirmed COVID-19 admitted to the ICU with confirmed or imminent respiratory failure. Per the FDA, “The Emergency Use Authorization (EUA) authority allows the FDA to help strengthen the nation’s public health protections against chemical, biological, radiological, and nuclear (CBRN) threats by facilitating the availability and use of medical countermeasures needed during public health emergencies. Under Section 564 of the Federal Food, Drug, and Cosmetic Act (the “Act”), the FDA commissioner may allow unapproved medical products or unapproved uses of approved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening disease or conditions caused by CBRN threat agents when there are no adequate, approved, and available alternatives.”
EUA is an authorization limited in scope and subject to FDA discretion regarding EUA duration. Devices with EUA are neither formally cleared nor approved for the indication to treat patients with COVID-19 infection. Such devices are authorized only for the duration of the declaration that circumstances exist justifying the authorization of the emergency use of the device under Section 564(b)(l) of the Act, 21 U.S.C § 360bbb-3(b)(1), unless the authorization is terminated or revoked sooner. The FDA can at its discretion cancel the EUA approval when there is no longer a threat to public health.
Hospital Reform in Germany: In July 2023, Germany’s federal and state governments issued a consensus white paper that proposed hospital reform and a change in how hospitals are funded. In October 2024, the German Parliament fully passed the Hospital Care Improvement Act mandating hospital reform beginning in January 2025 through 2029. As part of the reform, government payments to hospitals would de-emphasize the DRG (diagnosis-related group) “lump sum” payment system that incentivizes revenue generation through more patients treated and procedures performed, and instead emphasize base payments focused on quality measures and appropriate patient care. This is expected to favor a shift of routine operations and procedures to outpatient centers, consolidation of smaller hospitals into larger ones, and importantly, an increased focus of remaining hospitals on sicker patients, more complex operations such as cardiothoracic surgery and organ transplant, and on therapies that help reduce the severity of illness and help patients recover faster. Hospitals must meet strict quality standards to receive money for operations. In addition, a 50 billion euro Hospital Transformation Fund is being established to make investments in modern infrastructure over 10 years to improve efficiency and reduce costs. Given that the goal of our therapies is to improve clinical outcomes while reducing the costs of critical care and cardiac surgery by controlling deadly inflammation and other life-threatening conditions, while reducing the need for expensive life support measures that keep patients in the hospital, we believe such reform may favor our business in the near and longer-term. Hospital administrators expect such change will take careful planning and time, potentially years, to implement.
VetResQ: In the U.S., the FDA does not require submission of a 510(k), PMA, or any other pre-market review application for devices used in veterinary medicine. Device manufacturers who exclusively manufacture or distribute veterinary devices are not required to register their establishments and list veterinary devices and are exempt from some post-marketing reporting. FDA does have regulatory oversight over veterinary devices and can take appropriate regulatory action. It is the responsibility of the manufacturer and/or distributor of these articles to assure that these animal devices are safe, effective, and properly labeled.
Other Country Requirements: Exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries medical devices are regulated. Frequently, device companies may choose to seek and obtain regulatory approval of a device in a foreign country prior to application in the U.S., as we have done, given the differing regulatory requirements. However, this does not ensure approval of a device in the U.S.
Sales and Marketing
In 2012, we established our European subsidiary, CytoSorbents Europe GmbH, a wholly-owned subsidiary of CytoSorbents Corporation. Following the completion of a controlled market release in late June 2012, CytoSorb was formally launched in Germany with the fourth quarter of 2012 being the first full quarter of direct CytoSorb sales with our sales force in place. We began expansion into Austria and Switzerland. In March 2016, we established CytoSorbents Switzerland GmbH, a wholly-owned subsidiary of CytoSorbents Europe GmbH, to conduct marketing and direct sales in Switzerland. This subsidiary began operations during the second quarter of 2016. In 2017 we began direct sales in Belgium and Luxembourg. On March 5, 2019, the Company announced the expansion of direct sales of CytoSorb for all applications to Poland and the Netherlands, and critical care applications to Sweden, Denmark and Norway. In 2021, we expanded direct sales to include all applications in Sweden, Denmark and Norway. As part of this effort, the
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Company established CytoSorbents Poland Sp. z.o.o. In March 2022, the Company formed CytoSorbents Medical UK Limited to provide marketing and direct sales services in the United Kingdom and the Republic of Ireland. In October 2022, the Company formed CytoSorbents France SAS to provide marketing and direct sales services in France. In May 2023, the Company formed CytoSorbents India Private Limited to provide marketing and direct sales services in India. In January 2025, we announced the opening of our new Regional Sales Subsidiary in Dubai, United Arab Emirates (UAE), providing a gateway into the Middle East and Africa. From the beginning of the controlled market release in the fourth quarter of 2011 through December 31, 2025, we achieved cumulative sales of CytoSorb of approximately $285.3 million. During this time period, the CytoSorb device represented substantially all of our product sales.
We are approved to sell CytoSorb in all 27 countries in the EU, including Germany, Italy, France and Spain as well as the United Kingdom, and currently have either direct sales or distributors or strategic partnerships in more than 70 countries worldwide.
Registration of CytoSorb is typically required in each of these countries prior to active commercialization, in a process that can take several months to more than a year to achieve. Variability in the timing of registration affects the initiation of active commercialization in these countries, which affects the timing of expected CytoSorb sales. We cannot generally predict the timing of these registrations, and there can be no guarantee that we will ultimately achieve registration in countries where we have established distribution. Outside of the EU, CytoSorb has distribution in Turkey, India, Sri Lanka, Australia, New Zealand, Russia, Serbia, Vietnam, Malaysia, Hong Kong, Taiwan, Chile, Panama, Costa Rica, Colombia, Brazil, Mexico, Argentina, Perú, Guatemala, Ecuador, Bolivia, the Dominican Republic, El Salvador, Iceland, Israel, UAE, Iran, Saudi Arabia and other Middle Eastern countries, and South Korea. We cannot guarantee that we will generate meaningful sales in the countries where we have established registration, due to other factors such as market adoption, reimbursement and/or geopolitical developments. We continuously evaluate other potential distributor and strategic partner networks in other countries that accept CE Mark approval.
In addition to our direct and distributor commercial channels, we have a number of strategic partners to market and distribute CytoSorb. These partners include Fresenius Medical Care AG, B. Braun Avitum AG, Aferetica s.r.l., and Terumo Cardiovascular Group. In August 2022, we expanded our partnership with Fresenius Medical Care to a global marketing collaboration. For detailed information regarding these partnerships, see the section entitled “Commercial and Research Partners” in item 1 of this report.
A significant portion of our revenues are from product sales in Germany. All of our grant receipts are from government agencies in the United States.
During the year ended December 31, 2025 no distributor accounted for more than 10% of the Company’s total revenue. During the year ended December 31, 2024, one distributor accounted for 11% of the Company’s total revenue.
Orders received for product from both direct customers and distributors are fulfilled upon receipt. Accordingly, we have no significant sales backlog.
Intellectual Property and Patent Litigation
The medical device market in which we primarily participate is in large part technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. However, intellectual property litigation to defend or create market advantage is inherently complex, unpredictable and is expensive to pursue. Litigation often is not ultimately resolved until an appeal process is completed and appellate courts frequently overturn lower court patent decisions.
Moreover, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These forces frequently drive settlement not only of individual cases, but also of a series of pending and potentially related and unrelated cases. In addition, although monetary and injunctive relief is typically sought, remedies are generally not determined until the conclusion of the proceedings and are frequently modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other forums, both domestic and international.
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We rely on a combination of patents, trademarks, trade secrets and non-disclosure agreements to protect our intellectual property. As of the issuance date of this Annual Report on Form 10-K, our patent portfolio includes 24 issued United States patents as well as multiple issued foreign patents and pending patent applications both in the U.S. and internationally, directed to various compositions and methods of use related to our blood purification technologies, which are expected to expire between 2026 and 2044 absent any patent term extensions. Management believes that any near-term expiring patents will not have a significant impact on our ongoing business. The following table provides a brief description of our patents that have been issued in the U.S.:
Patent | | | Patent | | Patent | |
No. | | Description/Indications | | Term | | Expiration |
9931457 | | Compositions and Methods Useful in Selectively Modifying the Internal and External Surfaces of Porous Polymer Beads | | 20 Years | | 1/6/2032 |
11969535 | | Connector Assembly and Methods of Use | | 20 Years | | 9/13/2038 |
12121879 | | Crosslinked Polysaccharide Based Absorbents for Removal of Anti-A and/or Anti-B Antibodies From Human Plasma and Whole Blood | | 20 Years | | 12/2/2039 |
11020521 | | Hemocompatibility Modifiers For Cross-Linked Polymeric Material | | 20 Years | | 3/31/2034 |
11752250 | | Hemocompatibility Modifiers For Cross-Linked Polymeric Material | | 20 Years | | 3/31/2034 |
10946040 | | Method of Treating Inflammation | | 20 Years | | 4/1/2031 |
10867001 | | Method of Treating Inflammation | | 20 Years | | 4/1/2031 |
10034894 | | Method of Treating Inflammation | | 20 Years | | 4/1/2031 |
11058715 | | Method of Treating Inflammation | | 20 Years | | 4/1/2031 |
9717755 | | Method of Treating Inflammation | | 20 Years | | 4/1/2031 |
12076474 | | Method of Treating Traumatic Brain Injury | | 20 Years | | 5/21/2038 |
11602585 | | Methods for Reducing Contamination in a Biological Substance | | 20 Years | | 6/28/2033 |
11202855 | | Methods for Removal of Toxins from Blood | | 20 Years | | 3/22/2038 |
12280196 | | Methods of Using Polymers | | 20 Years | | 6/28/2033 |
11723916 | | Multi-Functional Hemocompatible Porous Polymer Bead Sorbent for Removing Protein Based Toxins and Potassium from Biological Fluids | | 20 Years | | 10/21/2036 |
11040061 | | Multi-Functional Hemocompatible Porous Polymer Bead Sorbent for Removing Protein Based Toxins and Potassium from Biological Fluids | | 20 Years | | 10/21/2036 |
12208116 | | Multi-Functional Hemocompatible Porous Polymer Bead Sorbent For Removing Protein Based Toxins and Potassium from Biological Fluids | | 20 Years | | 10/21/2036 |
10064406 | | Polymeric Sorbent for Removal of Impurities from Whole Blood and Blood Products | | 20 Years | | 1/5/2032 |
10426158 | | Polymeric Sorbent for Removal of Impurities from Whole Blood and Blood Products | | 20 Years | | 8/10/2032 |
11065600 | | The Use of a Hemocompatible Porous Polymer Bead Sorbent for Removal of Endotoxemia-Inducing Molecules | | 20 Years | | 5/18/2037 |
11826724 | | Use of A Hemocompatible Porous Polymer Bead Sorbent For Removal of Endotoxemia-Inducing Molecules | | 20 Years | | 5/18/2037 |
10314859 | | Use of Gastrointestinally Administered Porous Enteron Sorbent Polymers to Prevent or Treat Radiation Induced Mucositis, Esophagitis, Enteritis, Colitis, and Gastrointestinal Acute Radiation Syndrome | | 20 Years | | 10/2/2035 |
9931357 | | Use of Gastrointestinally Administered Porous Enteron Sorbent Polymers to Prevent or Treat Radiation Induced Mucositis, Esophagitis, Enteritis, Colitis, and Gastrointestinal Acute Radiation Syndrome | | 20 Years | | 10/2/2035 |
8211310 | | Size-Selective Polymer System | | 20 Years | | 11/20/2026 |
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There can be no assurance that pending patent applications will result in issued patents, that patents issued to us will not be challenged or circumvented by competitors, or that such patents will be found to be valid or sufficiently broad to protect our technology or to provide us with a competitive advantage. Certain of these patents also have foreign counterparts.
We also rely on non-disclosure and non-competition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary technology. There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets and proprietary knowledge.
We may find it necessary to initiate litigation to enforce our patent rights, to protect our trade secrets or know-how and to determine the scope and validity of the proprietary rights of others. Patent litigation can be costly and time-consuming, and there can be no assurance that our litigation expenses will not be significant in the future or that the outcome of litigation will be favorable to us. Accordingly, we may seek to settle some or all of our pending litigation described below. Settlement may include cross-licensing of the patents which are the subject of the litigation as well as our other intellectual property and may involve monetary payments to or from third parties.
We currently hold multiple trademarks including CytoSorb®, ECOS-300CY®, VetResQ®, HemoDefend™, BetaSorb™, DrugSorb™, and K+ontrolTM. We have spent considerable resources registering the trademark and building brand awareness and equity of the CytoSorb® tradename, which has been used in commerce since 2006. We expect to maintain and defend our various trademarks to the fullest extent possible.
Environmental Matters
We believe that there are no compliance issues associated with applicable environmental laws and regulations that would have a material adverse effect on us or our business. We incur waste removal costs in connection with both our solid and liquid wastes which are byproducts of our manufacturing process. We utilize the services of various qualified contractors to dispose of these waste products. These waste removal costs amounted to approximately $0.3 million for the year ended December 31, 2025.
Employees
As of the issuance date of this Annual Report on Form 10-K, we had 129 employees. We also utilize consultants and temporary service providers who are not our employees, as necessary. None of our employees are represented by a labor union or are subject to collective-bargaining agreements and we believe we have good relationships with our employees.
Item 1A. Risk Factors
Risks Related to our Business and our Industry
We have a history of losses and may incur future losses.
We have experienced substantial operating losses since inception. As of December 31, 2025, we had an accumulated deficit of approximately $312.2M, which included net losses of approximately $8.2M and $20.7M for the years ended December 31, 2025 and 2024, respectively. Our losses have resulted principally from costs incurred in the research and development of our polymer technology, clinical studies and general and administrative expenses. The Company is targeting breakeven through a combination of improved sales (through expanding our customer base in existing markets, launching new products, and achieving additional regulatory approvals to enter new markets) manufacturing and operating efficiencies, and cost reduction and management programs. The amount of future losses and when, if ever, we will achieve profitability are uncertain. Our ability to achieve profitability will depend, among other things, on continued adoption and usage of our products in the market, obtaining additional regulatory approvals in markets not covered by the CE mark, establishing sales and marketing arrangements with third parties, satisfactory reimbursement in key territories, and raising sufficient funds to finance our activities. No assurance can be given that our product development and commercial efforts will be successful, that additional regulatory approvals in other countries will be obtained, that any of our products will be manufactured at a competitive cost and will be of acceptable quality, that reimbursement will be available or satisfactory, that we will be able to achieve profitability or that profitability, if achieved, can be sustained, or our ability to raise additional capital when needed or on terms acceptable to us. Our failure with respect to any or all of these matters would have a material adverse effect on our business, operating results, financial condition and prospects.
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We may require additional capital in the future to fund our operations and failure to raise additional capital or generate cash flows necessary to maintain our operations could reduce our ability to compete successfully and harm our results of operations.
As of December 31, 2025, we had current assets of approximately $20.6 million, including total cash and cash equivalents of $7.8 million, including restricted cash of $1.5 million and current liabilities of approximately $9.7 million. For the year ended December 31, 2025, our cash burn, which we define as the total of cash used in operating and investing activities from our statement of cash flows, was approximately $12.8 million. Our current and historical cash burn is not necessarily indicative of our future use of cash and cash equivalents.
In the future, we may require additional financing to support our operations and may have to raise additional funds by selling equity, issuing debt, borrowing funds, refinancing our existing debt, or selling assets. We may not be able to obtain additional debt or equity financing on favorable terms, in a timely manner, or at all. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests. If we engage in additional debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specific liquidity or other ratios, or restrict our ability to pay dividends or make acquisitions. We would likely require additional capital to support the commercialization of our products and proposed products, to initiate and complete new additional clinical studies and for general working capital purposes. The amount of long-term capital we require will depend on various factors, including the rate of sales growth and market adoption of our products; product gross margins; the progress and costs of our research and development, pre-clinical and clinical studies; the time and expense associated with obtaining regulatory approvals in additional countries or for new indications; costs related to protecting and enforcing our intellectual property; the development of sales, marketing, and distribution capabilities; and market acceptance, reimbursement, and training of physicians and other healthcare personnel.
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 December 31, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility, under which we are not obligated to make or continue to make any sale of shares of our common stock under the “at-the-market” offerings. During the year ended December 31, 2025, the Company did not sell any shares pursuant to the Sale Agreement (as defined below). At December 31, 2025, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations.
On December 30, 2021, we entered into an Open Market Sale Agreement with Jefferies LLC (the “Sale Agreement”), also referred to herein as our “ATM facility”). Pursuant to the Sale Agreement we may offer to sell, from time to time, shares of our common stock, up to a maximum of $2.5 million. During the year ended December 31, 2024, the Company sold 382,823 shares pursuant to the Sale Agreement, at an average selling price of $1.04 per share, generating net proceeds of approximately $0.3 million. During the year ended December 31, 2025, the Company did not sell any shares pursuant to the Sale Agreement.
In June 2024, we closed on a $20 million term-loan facility with Avenue Capital Group which provided an initial tranche of $15 million at the closing, of which $10 million was immediately available at closing and $5 million that remained classified as restricted cash through January 10, 2025, when it was released from its restriction. Under this initial facility, another tranche of $5 million would have been available at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company received FDA marketing approval of its DrugSorb-ATR application. Concurrently with the closing of the first tranche, the Company paid off our existing debt with Bridge Bank.
On November 13, 2025, the Company and Avenue Capital Group entered into the First Amendment to Loan Documents (“the Amended Loan and Security Agreement”), amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented. Under the terms of the Amended Loan and Security Agreement the Company drew an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and received an extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. We will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group, and a further six-month extension of the interest only period to the July 1, 2027 maturity date subject to FDA approval of DrugSorb-ATR, between January 1, 2026 and December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the original loan. The Amended Loan and Security Agreement requires that we maintain certain operating cash burn targets (as defined in the Amended Loan and Security Agreement).
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
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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 6,250,000 shares of common stock may have been issued upon exercise of the Rights 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.
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, 90% of the 5-day volume weighted average price of our Common Stock over the last 5-trading days prior to the expiration date of the Series A Right Warrants on February 24, 2025, rounded down to the nearest whole cent but (x) not lower than $1.00 and (y) not higher than $2.00, and (ii) in the case of the Series B Right Warrants, 90% of the 5-day volume weighted average price of our common stock over the last 5-trading days prior to the expiration date of the Series B Right Warrants on April 10, 2025, rounded down to the nearest whole cent but (x) not lower than $2.00 and (y) not higher than $4.00.
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.
As of the issuance date of this Annual Report on Form 10-K, we have raised a total of $6.8 million, net of offering fees, through the Rights Offering, and the exercise of the Series A Right Warrants. The equity raises also provided for $5 million of restricted cash to become unrestricted.
The Company will continue evaluating various financing alternatives, including debt financing, strategic partnerships and other non-equity financing arrangements, including royalty financing. While there can be no assurance that the Company will be successful in obtaining alternative non-equity financing, if such financing is obtained through arrangements with collaborative partners or other non-dilutive sources, such as royalty financing, the Company may have to relinquish economic and/or proprietary rights to some of its technologies or products under development that it would otherwise seek to develop or commercialize itself. These events may result in shareholder dilution and a decline in our share price, which could have a material adverse effect on the Company’s business, operating results, financial condition and prospects.
A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.
A pandemic, epidemic or outbreak of an infectious disease may materially and adversely affect our business and operations. Such an event could disrupt global economies and our supply chain, limit access to necessary raw materials, and impact the manufacturing, commercialization, and demand for CytoSorb. It could also delay our research and development activities and the conduct, enrollment, and completion of current and future clinical trials, including due to patient access limitations, staffing shortages, or healthcare facilities prioritizing other matters. Outbreaks may disrupt the operations of the U.S. Food and Drug Administration and other health authorities, potentially delaying regulatory reviews and approvals, including for DrugSorb-ATR and other product candidates. Employee disruptions, remote working environments, and hiring challenges could reduce operational efficiency and delay development timelines, grant execution, and manufacturing activities. In addition, economic uncertainty and financial market volatility resulting from such events could limit our access to capital and negatively affect our liquidity. Macroeconomic and healthcare system pressures, including staffing shortages, reduced hospital capacity, and restricted access to hospitals, may result in lower-than-expected sales of CytoSorb. The ultimate impact of any such event remains uncertain.
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Our operating results are subject to seasonal fluctuation.
Our total revenue is subject to seasonal fluctuation. Our sales seasonality is affected by a number of factors, including but not limited to, hospital budgets and buying patterns, customer, employee and healthcare worker vacation schedules, religious, national, and state holidays, scientific and medical conference schedules, seasonal illnesses such as influenza, seasonal or weather-related differences in hospital admissions and the timing of insurance benefits, among others. See “A pandemic, epidemic or outbreak of an infectious disease may materially and adversely affect our business and operations.” As a result, seasonality has had, and we expect it to continue to have, an impact on our results of operations.
Although historically we have been a research and development company, we are currently commercializing some of our products. There can be no assurance that we will be successful in continuing and expanding commercial operations or balancing our research and development activities with our commercialization activities.
We have historically been engaged primarily in research and development activities and have generated limited revenues to date. With the launch of our CytoSorb product in the EU and elsewhere, there can be no assurance that we will be able to successfully manage the balance of our research and development operations with our planned commercial enterprise. Potential investors should be aware of the problems, delays, expenses and difficulties frequently encountered by an enterprise in balancing development, which include unanticipated problems relating to testing, product registration, product labeling, regulatory compliance and manufacturing, with commercialization, which includes problems with market adoption, reimbursement, marketing problems and additional costs. Our products and product candidates will require significant additional research and testing, and we will need to overcome significant regulatory burdens prior to commercialization in other countries, such as the U.S., and for ongoing compliance for our CE Mark. Although we believe we are currently adequately capitalized, we will need to raise additional funds to complete additional clinical studies and obtain regulatory approvals in other countries before we can begin selling our products in markets not covered by our CE Mark. There can be no assurance that after the expenditure of substantial funds and efforts, we will successfully develop and commercialize any products, generate any significant revenues or ever achieve and maintain a substantial level of sales of our products.
If users of our products are unable to obtain adequate reimbursement from third-party payers, or if reimbursement is not available in specific countries, or if new restrictive legislation is adopted, market acceptance of our products may be limited and we may not achieve anticipated revenues.
The continuing efforts of government and insurance companies, health maintenance organizations and other payers of healthcare costs to contain or reduce costs of health care may affect our future revenues and profitability, the future revenues and profitability of our potential customers, suppliers and collaborative partners, and the availability of capital. For example, in certain foreign markets, pricing or profitability of medical devices is subject to government control. In the United States, given recent federal and state government initiatives directed at lowering the total cost of health care, the U.S. Congress and state legislatures will likely continue to focus on health care reform, the cost of medical devices and on the reform of the Medicare and Medicaid systems. While we cannot predict whether any such legislative or regulatory proposals will be adopted, the announcement or adoption of these proposals could materially harm our business, financial condition and results of operations.
Our ability to commercialize our products will depend in part on the extent to which appropriate reimbursement levels for the cost of our products and related treatment are obtained by governmental authorities, private health insurers and other organizations, such as health maintenance organizations (“HMOs”). Third-party payers are increasingly challenging the prices charged for medical care. Also, the trend toward managed health care in the United States and the concurrent growth of organizations such as HMOs, which could control or significantly influence the purchase of health care services and medical devices, as well as legislative proposals to reform health care or reduce government insurance programs, may all result in lower prices for our products. The cost containment measures that health care payers and providers are instituting and the effect of any health care reform could materially harm our ability to operate profitably.
Outside of the United States, reimbursement systems vary significantly by country. Many foreign markets often have a combination of government-managed and privately-managed healthcare systems that govern reimbursement for medical devices and related procedures. Socialized medicine is common in the EU, and reimbursement and the pricing of medical devices is generally subject to governmental control. Application for reimbursement, subsequent approvals, if any, and pricing negotiations with governmental authorities can take considerable time after a device has been CE marked. Private insurance has similar challenges. CytoSorb is currently reimbursed in Germany under government-funded insurance, and in other countries may be covered under the diagnosis-related group (“DRG”), or “lump sum payment” reimbursement, or other generalized reimbursement for acute care medical products. See “Risk Factors ― “Our business could be harmed by adverse economic conditions in Germany, our primary geographical market, or by economic and/or political instability in Germany, the EU or elsewhere caused by various factors.” We are continuously working to
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obtain or improve upon the type and amount of reimbursement available to us in countries where CytoSorb is available, and as we attempt to move from an existing reimbursement platform to a new reimbursement platform, we may experience interruptions and/or reductions in the amount available for reimbursement. Because of this, there can be no assurance that new reimbursement will be obtained or that existing reimbursement will continue or that such reimbursement will be sufficient to adequately cover the cost of the device or treatment. As a result, our future revenues, profitability and access to capital may be negatively affected by any interruption or reduction in amounts of reimbursement. We plan to seek reimbursement for our product in other EU and non-EU countries to help further adoption. There can be no assurance when, or if, this additional reimbursement might be approved.
We depend upon key personnel who may terminate their employment with us at any time.
As of the issuance date of this Annual Report on Form 10-K, we had 129 full-time and part-time employees as well as several consultants and temporary employees. Our success will depend to a significant degree upon the continued services of our key management team and advisors, including, Dr. Phillip Chan, our Chief Executive Officer; Peter J. Mariani, our Chief Financial Officer; Vincent Capponi, our President and Chief Operating Officer and Dr. Efthymios Deliargyris, our Chief Medical Officer. On July 30, 2019, we entered into amended and restated executive employment agreements with its principal executives, Dr. Phillip P. Chan, Chief Executive Officer, Vincent Capponi, President and Chief Operating Officer, and Kathleen P. Bloch, Chief Financial Officer. Each agreement had an initial term of three years and were retroactively effective as of January 1, 2019. On April 12, 2020, CytoSorbents Corporation entered into an executive employment agreement with Dr. Efthymios Deliargyris, who began employment as Chief Medical Officer on May 1, 2020, with an initial term that expired on December 31, 2021. On August 14, 2024, CytoSorbents Corporation entered into an executive employment agreement with Peter J. Mariani, who began employment as Chief Financial Officer on August 14, 2024 following the retirement of former CFO Kathy Bloch, with an initial term that expired on December 31, 2025. After the expiration of the initial terms, the employment agreements automatically renew for additional terms of one year unless either party provides written notice of non-renewal at least 60 days prior to a renewal. The employment agreements for the Named Executive Officers above have automatically renewed for subsequent one-year terms. There can be no assurance that key management personnel or other members of our management team and advisors will continue to provide services to us. In addition, our success will depend on our ability to attract and retain other highly skilled personnel. We may be unable to recruit such personnel on a timely basis, if at all. Management and other employees may voluntarily terminate their employment with us at any time. Additionally, the increasing demand for qualified personnel may make it more difficult for us to attract and retain qualified employees. Changing demographics and labor work force trends may make it difficult for us to replace departing employees at our manufacturing and other facilities and we may experience increased turnover rates. U.S. labor market conditions are currently challenging, and labor shortages have been exacerbated during and following the COVID-19 pandemic. These conditions are expected to persist into 2026 and may lead to higher labor costs. If we fail to attract and retain qualified personnel, or if we experience labor shortages, we may experience higher costs and other difficulties. The loss of services of key personnel, or the inability to attract and retain additional qualified personnel, could result in delays in development or approval of our products, loss of sales and diversion of management resources.
We may not be successful in obtaining the FDA’s or Health Canada’s authorization and successful commercialization for DrugSorb-ATR in the U.S. or Canada, respectively.
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 filed an appeal of the decision through the formal appeal process with the FDA. 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.
On August 14, 2025, the Company received an FDA appeal decision following its July 2025 in-person supervisory administrative review (appeal) meeting with the FDA under 21 CFR 10.75. In the appeal decision, the FDA found no issues with device safety but upheld its prior De Novo denial decision citing the need for additional information to support the Company’s desired label indication. Additionally, the FDA proactively proposed a potential expedited path forward for market authorization but noted the Company could also appeal to a final higher level within the FDA with the Director of the FDA’s Center for Devices and Radiologic Health (CDRH). In September 2025, the Company announced that it decided to not file a final appeal with the CDRH because of positive FDA upper management feedback for a reasonable path forward that would allow for a suitable and potentially expedited De Novo grant for the Company’s original desired label indication. The Company expects to file a new De Novo application with additional information that includes analyses of new real-world data to support its desired label indication. As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA in November 2025. The Company conducted a formal pre-submission meeting with the FDA in late January 2026 and continues to engage with the FDA to clarify and confirm the requirements for the new De Novo submission. The interactive discussions regarding the information to be included in the new submission are ongoing, and the Company expects to provide an update of the anticipated timing for the new submission once these interactive
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discussions with the FDA on the final requirements are complete. Following the new De Novo submission, a regulatory decision would be expected following a typical 150-day review process but may be accelerated or extended depending on interactive discussions with the FDA related to submission questions.
On June 26, 2025, Health Canada issued a Notice of Refusal of the Company’s Medical Device License application, identifying remaining deficiencies that must be addressed before the application may be granted and the device authorized for commercialization. On September 16, 2025 the Company announced that it had timely filed a Level 1 “Request For Reconsideration” with Health Canada. However, following interactive discussions with the Medical Devices Directorate Bureau Director and the Company’s Canadian regulatory counsel, it was recommended that any subsequent review of DrugSorb-ATR in Canada be delayed until better clarity was received from the FDA. As such, the Company withdrew the Request for Reconsideration and will provide a new Medical Device License application to Health Canada with improved visibility from the FDA.
We may be unsuccessful in obtaining the FDA’s or Health Canada’s authorization and successfully commercialization of DrugSorb-ATR in the U.S or Canada which may significantly impact our ability to generate any significant revenues or ever achieve and maintain a substantial level of sales of our product candidates in the U.S. and Canada.
Acceptance of our medical devices in the marketplace is uncertain, and failure to achieve market acceptance will prevent or delay our ability to generate revenues.
Our future financial performance will depend, at least in part, upon the introduction, and customer and healthcare community acceptance of our products. Even with current or future regulatory or marketing approvals for our CytoSorb, ECOS-300CY, and PuriFi pump devices, other products like VetResQ, and product candidates such as DrugSorb-ATR, these products may not achieve market acceptance in the countries where they are sold. There is no guarantee that we will be able to achieve additional regulatory approvals, and even if we do, our products may not achieve market acceptance in the countries covered by such approvals.
The degree of market acceptance of our products will depend on several factors, including our ability to obtain regulatory clearance for marketing claims related to the uses we are developing; demonstrate and achieve acceptance of the safety, efficacy, and advantages of our polymer technology, as reflected in product adoption, sales, reimbursement, and inclusion in treatment guidelines;secure favorable pricing and reimbursement from government and third-party payers;compete effectively against similar or competing products; attract corporate partners to support commercialization; and successfully market our products.
Physicians, patients, payers or the medical community in general may be unwilling to accept, utilize or recommend any of our products. For example, the approval of our CytoSorb device as a cytokine adsorber as well as the data we have gathered in our clinical studies to support device usage in this indication may not be sufficient for market acceptance in the medical community. We may also need to conduct additional clinical studies to gather additional data for marketing purposes. If we are unable to obtain regulatory approval or commercialize and market our products when planned, we may not achieve any market acceptance or generate revenue.
If we are unable to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and product candidates similar or identical to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.
Our commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to our products and product candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our products and product candidates that are important to our business. We cannot be certain that patents will be issued or granted with respect to applications that are currently pending or that we apply for in the future with respect to one or more of our products and product candidates, or that issued or granted patents will not later be found to be invalid and/or unenforceable.
The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, distribution partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.
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The patent position of medical device companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued, and even if issued, the patents may not meaningfully protect our products or product candidates, effectively prevent competitors and third parties from commercializing competitive products or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.
Changes in the patent laws, implementing regulations or interpretation of the patent laws in the United States and other countries may also diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States, and many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions.
We cannot be certain that our patents and patent rights will be effective in protecting our products, product candidates and technologies. In addition, our existing patents are scheduled to expire between 2026 and 2044. Failure to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects.
We may face litigation from third parties claiming that our products infringe on their intellectual property rights or seek to challenge the validity of our patents.
Our future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developed from years of research and development. In addition to the previously settled “Purolite” litigation discussed below, we may be exposed to additional future litigation by third parties seeking to challenge the validity of our rights based on claims that our technologies, products or activities infringe the intellectual property rights of others or are invalid, or that we have misappropriated the trade secrets of others.
Since our inception, we have sought to contract with large, established manufacturers to supply commercial quantities of our adsorbent polymers. As a result, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers. We believe that these disclosures, while necessary for our business, have resulted in the attempt by potential suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating manufacturing rights.
We previously engaged in discussions with the Brotech Corporation and its affiliate, Purolite International, Inc. (collectively referred to as “Purolite”), which had demonstrated a strong interest in being our polymer manufacturer. For a period of time beginning in December 1998, Purolite engaged in efforts to develop and optimize the manufacturing process needed to produce our polymer products on a commercial scale. However, the parties eventually decided not to proceed. In 2003, Purolite filed a lawsuit against us asserting, among other things, co-ownership and co-inventorship of certain of our patents. On September 1, 2006, the United States District Court for the Eastern District of Pennsylvania approved a Stipulated Order and Settlement Agreement under which we and Purolite agreed to the settlement of the action. The Settlement Agreement provides us with the exclusive right to use our patented technology and proprietary know how relating to adsorbent polymers for a period of 18 years. Under the terms of the Settlement Agreement, we have agreed to pay Purolite royalties of 2.5% to 5% on the sale of certain of our products through August 2024, after which time no royalties are due under this settlement agreement.
The expiration or loss of patent protection may adversely affect our future revenues and operating earnings.
We rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing, and sale of our products and product candidates. In particular, patent protection is important in the development and eventual commercialization of our products and product candidates. Patents covering our products and product candidates normally provide market exclusivity, which is important in order for our products and product candidates to become profitable.
Our existing patents are scheduled to expire between 2026 and 2044. While we are seeking additional patent coverage which may protect the technology underlying these patents, there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will not be infringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan. In the United States, the natural expiration of a utility patent typically is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection for our products and product candidates, we may be open to competition from generic versions of such methods and devices.
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We have received and continue to seek additional regulatory approvals of our products and product candidates, but the approval process involves lengthy and costly clinical studies and is, in large part, not in our control. The failure to obtain government approvals, internationally or domestically, for our products and product candidates, or to comply with ongoing governmental regulations could prevent, delay or limit introduction or sale of our products and result in the failure to achieve revenues or maintain our operations.
CytoSorb has already achieved marketing authorization in the EU under the CE marking process and the Medical Devices Directive. It is manufactured at our manufacturing facility in New Jersey under ISO 13485 Full Quality Systems certification. The manufacturing and marketing of our products is subject to extensive and rigorous government regulation in the EU, as well as in the U.S. and in other countries. In the U.S. and other countries, the process of obtaining and maintaining required regulatory approvals is lengthy, expensive, and uncertain. There can be no assurance that we will ever obtain the necessary additional approvals to sell our products in the United States or other non-EU countries. Even if we do ultimately receive FDA approval or clearance for any of our products, we will be subject to extensive ongoing regulation. While we have received approval from our notified body to apply the CE mark to our CytoSorb device, we will be subject to extensive ongoing regulation and auditing requirements to maintain the CE mark.
Our products are subject to international regulation as medical devices under the Medical Devices Directive and, once our CE Mark under MDD expires in December 2028 will be subject to the new European Union Medical Device Regulation (“MDR”). In Europe, the notified body and Competent Authority govern, where applicable, development, clinical studies, labeling, manufacturing, registration, notification, clearance or approval, marketing, distribution, record keeping, and reporting requirements for medical devices. Different regulatory requirements may apply to our products depending on how they are categorized by the notified body under these laws. Current international regulations classify our CytoSorb device as a Class IIb device. Even though we have received CE mark certification of the CytoSorb device, there can be no assurance that we will be able to continue to comply with the required annual auditing requirements or other international regulatory requirements that may be applicable. In addition, there can be no assurance that government regulations applicable to our products or the interpretation of those regulations will not change. The extent of potentially adverse government regulation that might arise from future legislation or administrative action cannot be predicted. There can be no assurances that reimbursement will be granted or that additional clinical data will be required to establish reimbursement.
If we fail to maintain the CE Mark in the European Union, we will not be able to commercially sell and market CytoSorb.
In March 2011, CytoSorb, was “CE marked” in the EU as an extracorporeal cytokine adsorber indicated for use in clinical situations where cytokines are elevated, allowing for commercial marketing. The CE Mark demonstrates that a conformity assessment has been carried out and the product complies with the Medical Devices Directive. A re-certification audit was conducted in April 2019. The successful completion of this audit CE-certifies CytoSorb under the current Medical Device Directive (93/42/EEC) until December 2028. Prior to the expiration of such certificate, we will apply for certification under the new Medical Devices Regulation (MDR). Failure to certify CytoSorb under the Medical Devices Regulation will prevent us from using the CE mark for commercial distribution of CytoSorb in the European Union. Any new product that we submit for the CE Mark after August 2019 must be approved under the new Medical Devices Regulation.
Furthermore, if we are unable to obtain re-certification for CytoSorb’s current use, fail to do so before the existing certificate expires, are unable to satisfy the more stringent requirements of the Medical Devices Regulation, or are required to conduct additional research or modify technical documentation in connection with any variation of the uses for which the CE Mark has been affixed, our revenues and operating results could be adversely affected and our reputation could be harmed:
We may pursue various indications for our product candidates, and they may be subject to different FDA regulatory pathways for marketing authorization, and under the jurisdiction of different FDA review divisions within the FDA.
As we seek to determine commercially viable indications for our product candidates, we may consider pursuing a variety of indications that may be approved through one of several different FDA regulatory clearance or approval pathways, and under the jurisdiction of different FDA review divisions within the FDA. We expect the pathways available to us will be impacted by the FDA regulatory history of the category of “sorbent hemoperfusion systems” and our options may also be impacted by the FDA’s interpretations and application of these and other regulatory standards to our product candidates. The regulatory pathways available to us may impact the level and type of data necessary to support our applications, and the post-marketing requirements to which we and our products will be subject.
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Inadequate funding for the FDA, the SEC and other government agencies, or the downsizing thereof in connection with proposals to reduce or eliminate budgetary deficits, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, affect whether government agencies award, promptly pay or continue to fund amounts awarded under grants from such agencies, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
The ability of the FDA to review and approve new drugs and medical devices can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
The ability of the FDA to review and approve new drugs and medical devices can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and medical devices to be reviewed and/or approved by necessary government agencies as well as affect whether we receive timely payment of amounts awarded to us under grants and contracts with government agencies which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. Additionally, proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to U.S. government agencies that fund research and development activities.
Adverse economic conditions and political or regulatory developments could materially and adversely affect our business.
Weakness, volatility, or instability in the global economy, particularly in the United States and Europe, including inflation, rising energy costs, or financial market disruptions, could negatively affect demand for our products and harm our revenue and operating results. In addition, changes in domestic or international political, trade, tax, or regulatory policies may increase our costs, disrupt our operations, or adversely affect our financial condition. Because we operate internationally, we may be subject to evolving trade laws, tariffs, export restrictions, and potential retaliatory measures. Domestically, we may be adversely affected by budgetary constraints, funding cuts, staffing shortages, or shifts in regulatory priorities at agencies overseeing our products and reimbursement, including the FDA and the U.S. Department of Health and Human Services, which could delay approvals, disrupt oversight, or require significant resources to address compliance. Additionally, keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, will require an increased amount of management attention and external resources. If economic or political conditions deteriorate or regulatory requirements become more burdensome, our business, results of operations, and financial condition may be materially and adversely affected.
Clinical study results for our CytoSorb and/or DrugSorb-ATR device may not be indicative of our future clinical study results, and we cannot assure you that any clinical study results will lead to results sufficient for necessary regulatory clearances or product sales. Additionally, clinical and pre-clinical data is susceptible to varying interpretations, which could delay, limit, reduce, or prevent additional regulatory clearances or product sales.
To date, we have conducted limited clinical studies on our CytoSorb and DrugSorb-ATR product. There can be no assurance that we will successfully complete additional clinical studies or that our current or future clinical studies will lead to results necessary to receive additional regulatory approvals in markets not covered by the CE Mark. While clinical studies conducted by us and others have produced results we believe to be encouraging, data already obtained, or in the future obtained, from pre-clinical studies and clinical studies do not necessarily predict the results that will be obtained from later pre-clinical studies and clinical studies. CytoSorb, DrugSorb-ATR and our other products and product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in previous studies, which could result in decreased sales of our products and product candidates and have an adverse effect on our business and results of operations. Moreover, pre-clinical and clinical data are susceptible to varying interpretations, which could delay, limit or prevent additional regulatory approvals in markets not covered by the CE Mark. A number of companies in the
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medical device and pharmaceutical industries have suffered significant setbacks in advanced clinical studies, even after promising results in earlier studies. The failure to adequately demonstrate the safety and effectiveness of CytoSorb, DrugSorb-ATR or another product under development could delay or prevent regulatory clearance of the device, resulting in delays to commercialization, and could materially harm our business and results of operations. Even though we have received approval to apply the CE Mark to our CytoSorb device as a cytokine adsorber, there can be no assurance that we will be able to receive approval under the MDR for other potential applications of CytoSorb, or that we will receive regulatory clearance or marketing approval from authorities in other targeted regions or countries.
We are and will be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon us should we be sued.
Our business exposes us to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing of medical devices. We cannot be sure that claims will not be asserted against us. A successful liability claim or series of claims brought against us could have a material adverse effect on our business, financial condition and results of operations.
We cannot give assurances that we will be able to continue to obtain or maintain adequate product liability insurance on acceptable terms, if at all, or that such insurance will provide adequate coverage against potential liabilities. Claims or losses in excess of any product liability insurance coverage that we may obtain could have a material adverse effect on our business, financial condition and results of operations.
Certain university and other relationships are important to our business and may potentially result in conflicts of interests.
We work with many medical and clinical advisors in critical care, cardiac surgery, trauma, and other areas who are associated with healthcare institutions. Their association with these institutions may currently or in the future involve conflicting interests in the event they or these institutions enter into consulting or other arrangements with competitors of ours.
Although we have significant manufacturing experience and capabilities, we may not be able to manufacture sufficient quantities at an acceptable cost or quality, or without shut-downs or delays.
In March 2011, we received approval from our notified body to apply the CE Mark to our CytoSorb device for commercial sale as a cytokine adsorber. We also achieved ISO 13485:2003 Full Quality Systems certification, and have since upgraded to ISO 13485:2016 Full Quality Systems certification, an internationally recognized quality standard designed to ensure that medical device manufacturers have the necessary comprehensive management systems in place to safely design, develop, manufacture and distribute medical devices in the EU. We also achieved the Medical Device Single Audit Program (MDSAP) certification that is necessary for product approval in certain countries such as Canada. We manufacture CytoSorb at our manufacturing facilities in New Jersey for sale in the EU and around the world, as well as for additional clinical studies. Manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to current Good Manufacturing Practices (“cGMP”) for medical devices, as set forth in the QSR. As such, we are subject to continual review and periodic inspections to assess compliance with cGMP/QSR requirements as required by our International notified body. Accordingly, we must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. We have limited experience in establishing, supervising and conducting commercial manufacturing. If we or the third-party manufacturers of our products fail to adequately establish, supervise and conduct all aspects of the manufacturing processes, we may not be able to commercialize our products on a timely basis, or at all.
We depend on a limited number of suppliers for chemicals, other raw materials, and molded parts used in the development and manufacture of our products. Although we typically second source and validate the quality of chemicals, raw materials, and molded parts any change in the availability of these components, or availability of single sourced materials, without an alternative source may result in lengthy delays or disruptions in manufacturing if we need to change or cannot identify a supplier for any reason which could have a material impact on our business and results of operations.
Our ability to manufacture and distribute products is dependent, in part, upon availability and quality of chemicals, raw materials, molded parts and other components supplied by third parties. Any disruption in the supply of these ingredients or components or any problems in their standard of quality could materially affect our ability to manufacture and distribute our products, maintain sufficient inventory levels or otherwise meet customer demand, and could result in legal liabilities that could materially affect our ability to realize profits or otherwise harm our business, financial, and operating results. We primarily source the raw materials for our products from domestic suppliers but may be required to source from international suppliers if our domestic suppliers are unable to meet our supply requirements. Generally, we typically second source and validate the quality of chemicals, raw materials, and molded parts. We
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do not have any significant concentration of risk with respect to any one particular supplier. If we were to change the supplier of a raw material for a product, the cost for the material could be greater than the amount we paid with the previous supplier. Changes in suppliers are rare but could occur as a result of a supplier’s business failing, an issue arising from an FDA inspection, failure to maintain our required standards of quality, or a force majeure event. As a result, we carefully select suppliers, based on various factors including quality, reliability of supply, and long-term financial stability. From time to time, we may experience temporary or long-term disruptions in the supply of certain of our raw materials that could have a material adverse effect on our business, financial condition and results of operations.
Due to our limited resources for marketing, sales and distribution, and our reliance on many different distributors, we may be unsuccessful in our efforts to successfully commercialize our products in one or more countries.
We have limited resources for marketing, sales, and distribution. We expect to enter into additional agreements with third parties for the commercial marketing, and distribution of our products. There can be no assurance that any third parties we may engage to market and distribute our products will satisfy their financial or contractual obligations to us, effectively promote our products, or refrain from offering, designing, manufacturing, or promoting competing products. If for any reason any party we engage is unable or chooses not to perform its obligations under our marketing and distribution agreement, we would experience delays in product sales and incur increased costs, which would harm our business and financial results.
If for any reason any party we engage is unable or chooses not to perform its obligations under our marketing and distribution agreement, we would experience delays in product sales and incur increased costs, which would harm our business and financial results.
Our results of operations can be significantly affected by foreign currency fluctuations and regulations.
A significant portion of our revenues is currently derived in the local currencies of the foreign jurisdictions in which our products are sold. Accordingly, we are subject to risks relating to fluctuations in currency exchange rates. In the future, and especially as we further expand our sales efforts in international markets, our customers will increasingly make payments in non-U.S. currencies. Fluctuations in foreign currency exchange rates could affect our revenues, operating costs and operating margins. In addition, currency devaluation can result in a loss to us if we hold deposits of that currency or if it reduces the cost-competitiveness of our products. We cannot predict the effect of future exchange rate fluctuations on our operating results.
If we are unable to convince physicians and other health care providers as to the benefits of our products, we may incur delays or additional expense in our attempt to establish market acceptance.
Broad use of our products may require physicians and other health care providers to be informed about our products and their intended benefits, often supported by clinical data. The time and cost of such an educational process and obtaining such clinical data may be substantial. Inability to successfully carry out this education process, or obtain adequate positive clinical data, may adversely affect market acceptance of our products. We may be unable to educate physicians regarding our products in sufficient numbers or in a timely manner to achieve our marketing plans or to achieve product acceptance. Any delay in physician education may materially delay or reduce demand for our products. In addition, we may expend significant funds towards physician education before any acceptance or demand for our products is created, if at all.
The market for our products is rapidly changing and competitive, and new devices and drugs, which may be developed by others, could impair our ability to maintain and grow our business and remain competitive.
The medical device and pharmaceutical industries are subject to rapid and substantial technological change. Developments by others may render our technologies and products noncompetitive or obsolete. We also may be unable to keep pace with technological developments and other market factors. Technological competition from medical device, pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying into the field is intense and is expected to increase. Many of these entities have significantly greater research and development capabilities and budgets than we do, as well as substantially more marketing, manufacturing, financial and managerial resources. These entities represent significant competition for us.
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Our business could be harmed by adverse economic conditions in Germany, our primary geographical market, or by economic and/or political instability in Germany, the EU or elsewhere caused by various factors.
For the year ended December 31, 2025, we derived approximately 32% of our net product sales from sales in Germany. Despite modest European and global growth, there are many economic and political issues that could negatively impact the health of Germany’s economy, the broader EU economy, and the world economy overall. Examples include the uncertainty over the implications of the United Kingdom’s exit from the EU, also known as “Brexit,” economic instability in a number of EU member countries, and changes in the political leadership in the EU and United States. Germany and other European countries face additional risks to their local economies, some of which include the impact of foreign exchange fluctuations, unemployment, tightening of monetary policy, the economic burden of immigration, diminished liquidity and reliance on debt, the rising cost of healthcare, and other factors. In addition, the German government, insurance companies, health maintenance organizations and other payers of healthcare costs continue to focus on healthcare reform and containment of healthcare costs. For example, in October 2024, the German Parliament fully passed the Hospital Care Improvement Act mandating hospital reform beginning in January 2025 through 2029. As part of the reform, government payments to hospitals would de-emphasize the DRG (diagnosis-related group) “lump sum” payment system that incentivizes revenue generation through more patients treated and procedures performed, and instead emphasize base payments focused on quality measures and appropriate patient care. This is expected to favor a shift of routine operations and procedures to outpatient centers, consolidation of smaller hospitals into larger ones, and importantly, an increased focus of remaining hospitals on sicker patients, more complex operations such as cardiothoracic surgery and organ transplant, and on therapies that help reduce the severity of illness and help patients recover faster. Hospitals must also meet strict quality standards to receive money for operations. Although we believe our products are aligned with the goals of Germany healthcare reform, the ultimate scope, implementation and timing of these reforms remains uncertain and we cannot accurately predict the impact that such reforms may have on our business, our customers, our existing reimbursement and such policies and procedures for seeking reimbursement, or our results of operations. Furthermore, we cannot predict whether Germany’s economy will continue to grow or decline consistent with the overall global economy, which decline would negatively impact the demand for medical devices and healthcare technologies generally and lead to reduced spending on the products we provide. In addition, continued healthcare cost containment efforts may result in lower prices and a reduction or elimination of reimbursement for our products. Due to the concentration of our product sales in this country, any of the foregoing may have a negative impact on our revenues, business operations and financial condition.
Economic downturns, international trade disruptions, wars, terrorism, and geopolitical conflicts could materially and adversely affect our business and operating results.
Significant portions of our business are conducted in Europe (including the U.K.), Asia, and other international markets. Economic instability, trade disputes, sanctions, tariffs, regulatory changes, pandemics, wars, military actions, acts of terrorism, and other geopolitical conflicts — including the war between Russia and Ukraine, the conflict in the Middle East, the evolving conflicts in Iran and Israel and the surrounding areas, and trade tensions involving the United States, China, Canada, and Mexico — could disrupt global commerce, financial markets, travel, and supply chains. These events may result in changes to regulations affecting our products or intellectual property, disruptions to our manufacturing or commercial operations, delays or cancellations of customer orders, reduced healthcare spending, difficulties marketing and distributing our products, challenges engaging with or collecting payment from customers in affected regions (including Russia, where our products are distributed), or restrictions on sales due to existing or future sanctions. Such conditions may also impair our ability to raise capital or access the capital markets.
We cannot predict the duration or severity of these events or their long-term impact. Any significant economic downturn, trade disruption, armed conflict, terrorist activity, or related sanctions or retaliatory measures could materially and adversely affect our business, results of operations, and financial condition.
We could be adversely affected by violations of the Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
We are subject to the Foreign Corrupt Practices Act (the “FCPA”), which generally prohibits companies and their intermediaries from making payments to non-U.S. government officials for the purpose of obtaining or retaining business or securing any other improper advantage. We are also subject to anti-bribery laws in the jurisdictions in which we operate. Although we have policies and procedures designed to ensure that we, our employees and our agents comply with the FCPA and other anti-bribery laws, there is no assurance that such policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries with respect to our business or any businesses that we acquire. We do business in a number of countries in which FCPA violations by other companies have recently been enforced. Failure to comply with the FCPA, other anti-bribery laws or other laws governing the conduct of business with foreign government entities, including local laws, could disrupt our business and lead to severe criminal and civil penalties, including imprisonment, criminal and civil fines, loss of our export licenses, suspension of our ability to do business with the federal government, denial of government reimbursement for our products and/or
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exclusion from participation in government healthcare programs. Other remedial measures could include further changes or enhancements to our procedures, policies, and controls and potential personnel changes and/or disciplinary actions, any of which could have a material adverse effect on our business, financial condition, results of operations and liquidity. We could also be adversely affected by any allegation that we violated such laws.
We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
Our products are subject to export control and import laws, tariffs, and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our products must be made in compliance with these laws, tariffs, and regulations. If we fail to comply with these laws, tariffs, and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.
In addition, changes in our products or changes in applicable export or import laws, tariffs, and regulations may create delays in the introduction and sale of our products in international markets or, in some cases, prevent the export or import of our products to certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws, tariffs, and regulations, or change in the countries, governments, persons, products, or technologies targeted by such laws, tariffs, and regulations, could also result in decreased use of our products, or in our decreased ability to export or sell our products to existing or potential customers. Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business, financial condition and results of operations.
Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation.
In the ordinary course of our business, we generate, collect, and store proprietary information, including intellectual property, business information, and employee personal data, and the secure storage, transmission, and access to this information are critical to our operations and reputation. Cybersecurity incidents have become increasingly common across industries, and we face risks from hackers, employees, contractors, and other third parties who may attempt to gain unauthorized access to, misappropriate, or inadvertently expose our confidential information, including through phishing or other sophisticated attacks, particularly in remote working environments. We have experienced previous attempts to penetrate our systems and, although we maintain multi-layered security safeguards, our information technology networks and infrastructure remain vulnerable to evolving threats, technological advances, and human error or malfeasance. We may not detect unauthorized access promptly or be able to remediate breaches effectively. Any compromise of our data security or unauthorized access to, or disclosure or loss of, confidential or proprietary information could disrupt our operations, harm our reputation, provide competitors with valuable information, result in additional costs, and materially and adversely affect our business.
Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
European Union member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations. Moreover, the collection and use of personal health data in the European Union, which was formerly governed by the provisions of the European Union Data Protection Directive, was replaced with the European Union General Data Protection Regulation, or the GDPR, in May 2018. The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States, provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. The recent implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase our cost of doing business. In addition, new regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business. In this regard, we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.
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In the U.S., even for companies that are not “covered entities” or business associates” under HIPAA, the U.S. Federal Trade Commission, or the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 U.S.C § 45(a). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Medical data is considered sensitive data that merits stronger safeguards. The FTC’s guidance for appropriately securing consumers’ personal information is similar to what is required by the HIPAA Security Rule. Some state privacy and security laws apply more broadly than HIPAA and associated regulations. For example, California recently enacted legislation – the California Consumer Privacy Act, or CCPA – which went into effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Legislators have stated that they intend to propose amendments to the CCPA before it goes into effect, and the California Attorney General will issue clarifying regulations. Although the law includes limited exceptions, including for certain information collected as part of clinical trials as specified in the law, it may regulate or impact our processing of personal information depending on the context. It remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted.
Risks Connected to Our Securities
We are not in compliance with the continued listing standards of the Nasdaq Stock Market LLC (“Nasdaq”), and our common stock could be delisted if we do not regain compliance with listing standards within time frame required by the Nasdaq staff, which could have a material adverse effect on the liquidity of our common stock.
Our common stock is listed on the Nasdaq Stock Market LLC (“Nasdaq”). On October 2, 2025, we were notified that we were not in compliance with the Nasdaq’s continued listing requirements relating to the minimum average closing price per share of our common stock, because the average closing price of our common stock over a consecutive 30 trading-day period was below $1.00 per share (the “Minimum Bid Price Requirement”).
We have timely notified the Nasdaq of our intent to regain compliance with the minimum price condition within a 180-day cure period provided by Nasdaq rules, or until March 31, 2026 (the “Compliance Date”). We can regain compliance at any time within the cure period if, the closing bid price of the Company’s common stock meets or exceeds $1.00 per common share for a minimum of 10 consecutive business days prior to the Compliance Date, unless the Nasdaq staff exercises its discretion to require the Company to meet the Minimum Bid Price Requirement for a longer period pursuant to applicable Nasdaq rules. If we fail to regain compliance with the Nasdaq’s minimum price condition by the end of the cure period, the Company would be eligible for an additional compliance period of 180 days provided it presents an acceptable plan to Nasdaq to regain compliance. In accordance with the Nasdaq Listing Rules, the Company has filed for a 180-day extension to regain compliance with the Minimum Bid Price Requirement, including the Company’s intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. and expects the Nasdaq will respond to the Company’s request subsequent to March 31, 2026.
The Company intends to actively monitor the closing bid price of its common stock and will consider its options to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing standards. If the Company is unable to regain compliance with the Minimum Bid Price Requirement, our common stock will be subject to the Nasdaq’s suspension and delisting procedures.
During this time, our common stock will continue to be listed on the Nasdaq, subject to our compliance with other Nasdaq continued listing requirements. However, there can be no assurance about our ability to regain compliance with the Nasdaq’s minimum price condition within the applicable cure periods.
The price of our common stock has been highly volatile due to factors that will continue to affect the price of our stock.
Our common stock closed as high as $1.31 and as low as $0.62 per share between January 1, 2025 and December 31, 2025 on Nasdaq. On December 31, 2025, the closing price of our common stock, as reported on Nasdaq, was $0.64. Historically, medical device company securities such as our common stock have experienced extreme price fluctuations. Some of the factors contributing to this volatility include fluctuations in our operating results; regulatory developments; announcements of product releases, clinical data, acquisitions, or partnerships by us or our competitors; analyst or media reports; changes in our financial condition; and general market conditions. There is no assurance that the price of our common stock will not continue to be volatile.
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Directors, executive officers and principal stockholders own a significant percentage of the shares of common stock, which will limit your ability to influence corporate matters.
Our directors, executive officers and principal stockholders together beneficially own a significant percentage of the voting control of the common stock on a fully diluted basis. Accordingly, these stockholders could have a significant influence over the outcome of any corporate transaction or other matter submitted to stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets and also could prevent or cause a change in control. The interests of these stockholders may differ from the interests of our other stockholders. Third parties may be discouraged from making a tender offer or bid to acquire us because of this concentration of ownership. As of December 31, 2025, three shareholders hold 16.6% of our shares and our directors and officers hold 6.3% of our shares on a fully diluted basis.
Our Board of Directors’ authority to issue additional securities and anti-takeover provisions in our governing documents under Delaware law could adversely affect the rights of our common stockholders and discourage or delay a change in control.
On December 3, 2014, we effected a 25:1 reverse stock split and changed our state of incorporation from Nevada to Delaware through a merger with our wholly owned Delaware subsidiary, at which time we adopted our current certificate of incorporation and bylaws. Our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of “blank check” preferred stock and up to 100,000,000 shares of common stock, a substantial portion of which remains available for issuance, in each case without stockholder approval. The issuance of preferred stock with rights and preferences determined by our Board of Directors, or additional shares of common stock, could dilute existing stockholders and adversely affect the voting power and other rights of holders of our common stock. In addition, provisions of our certificate of incorporation and bylaws, as well as Delaware law, may discourage, delay, or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares, and may limit stockholders’ ability to influence the direction or management of the Company.
In our previous Form 10K, we identified a material weakness in our internal control over financial reporting, which could, if not effectively remediated, result in additional restatements of our financial statements, and a failure to meet our reporting and financial obligations, each of which could adversely affect our results of operations and financial condition.
As discussed above, our management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025, due to a material weakness relating to the accounting for stock-based compensation corresponding to grants of restricted stock units. Specifically, our controls were not effectively designed or operating to ensure that non-cash restricted stock unit expense was properly accounted for. We are actively engaged in remediating the identified material weakness. Management has begun implementing measures to strengthen our internal control over financial reporting, including redesigning internal control procedures and enhancing documentation processes related to the accounting for restricted stock unit grant and vesting events. These efforts are intended to ensure accurate and timely reporting in accordance with U.S. GAAP for both interim and annual periods. Because of the inherent limitations in all control systems, no evaluation or strengthening of controls can provide absolute assurance that all control failures within the Company have been or will be detected. Accounting standards are complex and are subject to changing guidance and differing interpretations. Notwithstanding the exertion of significant effort and resources to interpret and apply accounting standards (and any related guidance), it is possible that they may be misinterpreted or misapplied, or that prior interpretations may be reconsidered and changed, which may result in technical accounting errors. Any such accounting error could result in additional restatements of our previously issued consolidated financial statements. Accordingly, we cannot be certain that our efforts to remediate the identified material weakness will ensure effective internal control over financial reporting going forward. We also face risks associated with the cost of establishing, maintaining and enhancing effective internal control over financial reporting. We have invested and expect to continue to invest significant resources in future years, to develop and maintain the necessary documentation and testing procedures required by Section 404(a) of the Sarbanes-Oxley Act. Ensuring we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort.
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Item 1B. Unresolved Staff Comments.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 1C. Cybersecurity.
Risk Management and Strategy
We recognize the importance of managing the material risks of cybersecurity threats, and we have implemented processes for identifying and assessing cybersecurity risks and incidents.
With respect to cybersecurity risks and threats, we utilize various
Governance
Our Chief Executive Officer and Chief Financial Officer are primarily responsible for timely updating the Board of Directors and the Audit Committee of the Board of Directors (the “Audit Committee”) about any material cybersecurity incidents or threats or any cybersecurity related issues worthy of their attention.
Our Board of Directors has designated the
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Item 2. Properties.
We currently operate one facility in Princeton, New Jersey and two facilities in Berlin, Germany as follows:
| 1. | In March 2021, we entered into a lease agreement for a new 48,511 square foot operating facility at 305 College Road East, Princeton, New Jersey, which contains office, laboratory, manufacturing and warehouse space. The lease commenced in April 2021 and expires in March 2037. As of December 31, 2025, our monthly base rent is approximately $124,000. |
| 2. | Our office facility leases in Berlin, Germany requires combined base rent payments amounting to approximately $12,100 per month. The initial lease term of both leases ends August 31, 2031. In addition, the Company is obligated to monthly operating expenses of approximately $3,000 per month. |
| 3. | Our warehouse facility lease in Berlin, Germany commenced on April 1, 2021 and requires monthly payments of base rent of approximately $7,800 through its expiration on March 31, 2031. |
In the opinion of management, the leased properties are adequately insured, are in good condition and suitable for the conduct of our business. We also collaborate with numerous institutions, universities and commercial entities who conduct research and testing of our products at their facilities.
Item 3. Legal Proceedings.
From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of business. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact because of defense and settlement costs, diversion of management resources and other factors.
On March 5, 2024, a former employee, filed a complaint against us in the Superior Court of New Jersey, Law Division, Mercer County, alleging retaliatory termination in breach of the New Jersey Conscientious Employee Protection Act (“CEPA”). Following further discussion, the parties agree there was a professional misunderstanding between them and have amicably resolved the litigation.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Beginning on December 23, 2014, our common stock began trading on Nasdaq under the symbol “CTSO.” Previously, the Company’s common stock traded in the over-the counter-market on the OTC Bulletin Board.
Approximate Number of Equity Security Holders
As of December 31, 2025, there were approximately 9,395 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is larger than the number of stockholders of record.
Issuer Purchases of Securities
There were no repurchases of the Company’s securities during the year ended December 31, 2025.
We have an effective shelf registration statement that was declared effective on 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 December 31, 2025. We have also allocated $20.0 million of our total shelf amount to our ATM facility. As of December 31, 2025, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations.
Recent Sales of Unregistered Securities
We had no sales of unregistered securities in 2025 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the results of operations and financial condition for the fiscal years ended December 31, 2025 and 2024 should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Report.
Overview
We are 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, four important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding 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 3) the removal of liver toxins that accumulate in acute liver dysfunction or failure and 4) the removal of myoglobin in severe rhabdomyolysis that can otherwise lead to renal failure. 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 more than 70 countries worldwide, with more than 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.
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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.
The Company continues to actively pursue regulatory approval of DrugSorb-ATR with the U.S. FDA and expects to pursue regulatory approval in Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively. See further discussion in ‘Cardiac Surgery’ below.
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 www.cytosorbents.com or follow us on Facebook and X.
Summary of Operational and Business Highlights
| ● | Total product revenue was $37.1 million for the year ended December 31, 2025, an increase of 4.1%, compared to the year ended December 31, 2024 |
| ● | Gross profit for the year ended December 31, 2025 was 71.5% compared to 69.9% in the prior year, |
| ● | Our loss from operations was improved by 10.4% to approximately $14.7 million, from $16.5 million for the years ended December 31, 2025 and 2024 respectively. This improvement was primarily the result of revenue growth and gross margin improvement. |
| ● | In the first quarter, we strengthened our balance sheet with the completion of a shareholder Rights Offering in January 2025 that provided $5.4 million net proceeds, and then added another $1.4 million net proceeds with the exercise of the Series A Right Warrant in February 2025. |
| ● | In April 2025, we further supplemented our cash balance with the receipt of $1.7 million from the sale of our 2023 and amended 2022 Net Operating Loss (NOL) and R&D tax credits from the Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority (NJEDA). |
| ● | We continued to see real world validation of improved clinical outcomes (reduced serious perioperative bleeding) in cardiac surgery patients on a blood thinner from data presented at several global cardiac surgery conferences including EuroPCR, ESCVS, EACTS, and TCT. |
| ● | On July 31, 2025 the Company highlighted data demonstrating the vital and evolving role of CytoSorb therapy in the treatment of sepsis and septic shock–among the deadliest challenges in critical care medicine. Recent data demonstrate early and intensive use of CytoSorb therapy was associated with improved clinical outcomes for patients suffering from these conditions. The Company presented a World Sepsis Day Global Webinar on September 10, 2025 in commemoration of Sepsis Awareness Month and World Sepsis Day. See our Current Report on Form 8-K, filed with the SEC on August 1, 2025, for additional information. |
| ● | On September 16, 2025, the Company announced that it would file a new De Novo application for DrugSorb-ATR with the FDA. This decision followed an appeal meeting and decision by the FDA that upheld its previous denial of the Company’s DrugSorb-ATR De Novo application, but affirmed that there were no safety related issues with the device, and requested additional information to support the Company’s desired label indication. As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA in November 2025. The Company conducted a formal pre-submission meeting with the FDA in late January 2026 and continues to engage with the FDA to clarify and confirm the requirements for the new De Novo submission. The interactive discussions regarding the information to be included in the new submission are ongoing, and the Company expects to provide an update of the anticipated timing for the new submission once these interactive discussions with the FDA on the final requirements are complete. Following the new De Novo submission, a regulatory decision would be expected following a typical 150-day review process but may be accelerated or extended depending on interactive discussions with the FDA related to submission questions. |
| ● | On November 13, 2025, the Company amended its credit facility with Avenue Capital Group which provided access to an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and for the extension of the interest-only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. The Company will have access to an additional aggregate $2.5 million (“Tranche 2b”) and also will receive a further six-month extension of the interest-only period to the July 1, 2027 maturity date upon FDA approval of DrugSorb-ATR by December 31, 2026. |
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| ● | On November 13, 2025, the Company announced it initiated a strategic workforce and cost reduction plan (the “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 second half of 2026. The Company recorded a restructuring charge in the fourth quarter of approximately $0.5 million that included cash-based severance and other compensation related charges of approximately $0.4 million, and other non-cash charges of approximately $0.1 million related to the restructuring. |
Impact of Inflation and Other Issues:
The recent high inflationary environment impacted us in various ways. Due to the competitive labor market and rising inflation, our labor costs have risen significantly in order to attract and retain qualified employees throughout our organization. In addition, we have experienced raw material price increases primarily related to the oil-based chemicals used in the polymer manufacturing process as well as additional requests for higher fuel surcharges from most suppliers. Rising energy costs, including electricity and fossil fuels, have also made it more expensive to support our operations, manufacturing, and commercial activities. We have also experienced increases in our transportation costs; however, we have been able to substantially mitigate these cost increases by implementing bulk shipping methods. Inflationary pressures may continue to impact our product gross margins and other costs in the future.
Results of Operations
Comparison of the year ended December 31, 2025 and 2024
| | | | | | | | | | | |
| | For the Year Ended December 31, |
| ||||||||
| | 2025 | | 2024 |
| ||||||
| | | | | % of | | | | | % of |
|
| | Amount | | Revenue | | Amount | | Revenue |
| ||
| | (in thousands) | | | | (in thousands) | | | | ||
Revenue | | $ | 37,063 |
| 100 | % | $ | 35,595 | | 100.0 | % |
Cost of goods sold | |
| 10,572 | | 28.5 | % |
| 10,708 | | 30.1 | % |
Gross profit | |
| 26,491 | | 71.5 | % |
| 24,887 | | 69.9 | % |
Operating expenses: | |
| |
| | |
| |
| | |
Research and development | |
| 5,085 | | 13.7 | % |
| 7,607 | | 21.4 | % |
Selling, general and administrative | |
| 35,645 | | 96.2 | % |
| 33,732 | | 94.8 | % |
Restructuring | | | 510 | | 1.4 | % | | — | | — | % |
Total operating expenses | |
| 41,240 | | 111.3 | % |
| 41,339 | | 116.1 | % |
Loss from operations | |
| (14,749) | | (39.8) | % |
| (16,452) | | (46.2) | % |
Other income (expense): | |
| |
| | |
| |
| | |
Interest expense, net | |
| (2,612) | | (7.0) | % |
| (1,399) | | (3.9) | % |
Gain (loss) on foreign currency transactions | | | 9,321 | | 25.1 | % | | (4,225) | | (11.9) | % |
Loss on abandoned patents | | | (559) | | (1.5) | % | | (334) | | (0.9) | % |
Total other income (expense), net | |
| 6,150 | | 16.6 | % |
| (5,958) | | (16.7) | % |
Loss before benefit from income taxes | | $ | (8,599) | | (23.2) | % | $ | (22,410) | | (63.0) | % |
Benefit from income taxes | | | 401 | | 1.1 | % | | 1,691 | | 4.8 | % |
Net loss | | $ | (8,198) | | (22.1) | % | | (20,719) | | (58.2) | % |
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Revenue
For the year ended December 31, 2025, we generated total revenue of approximately $37.1 million as compared to revenues of approximately $35.6 million for the year ended December 31, 2024, an increase of approximately $1.5 million, or 4.1%, and down 0.4% on a constant currency basis. 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 progress with this important initiative, and remain confident it will lead to stronger execution and improved performance.
Gross Profit
Gross profit was approximately $26.5 million for the year ended December 31, 2025, an increase of approximately $1.6 million or 6.4%, as compared to gross profit of $24.9 million for the year ended December 31, 2024. Gross margins were 71.5% and 69.9% for the years ended December 31, 2025 and 2024, respectively.
Research and Development Expenses
Our research and development costs were approximately $5.1 million and $7.6 million for the years ended December 31, 2025 and 2024, respectively, a decrease of approximately $2.5 million, or 33.2%. This decrease was driven by a decrease in our clinical trial costs due primarily to the completion of the STAR-T clinical trial, lower grant funded projects, as well as other clinical and product development program reductions.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses were approximately $35.6 million and $33.7 million for the years ended December 31, 2025 and 2024, respectively, an increase of approximately $1.9 million, or 5%. 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.
Restructuring Expenses
During the fourth quarter of 2025, we initiated a strategic workforce and cost reduction plan (the “Strategic Workforce and Cost Reduction Plan”) to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. Our restructuring expenses were $0.5 million for the year ended December 31, 2025. These costs primarily included cash-based severance and related workforce reduction charges of $0.4 million and other non-cash costs of $0.1 million.
Loss From Operations
Our loss from operations (including the impact of the $0.5 million restructuring charge) decreased by 10.4% to approximately $14.7 million, from $16.5 million for the years ended December 31, 2025 and 2024 respectively. This improvement was the result of revenue growth and gross margin improvement.
Interest Expense, Net
For the year ended December 31, 2025, net interest expense was approximately $2.6 million, as compared to $1.4 million for the year ended December 31, 2024. The increase was due to interest incurred on our credit facility for the full year of 2025, which began in the third quarter of 2024. Additionally, we amended our credit facility which increased the principal balance outstanding under the credit facility by $2.5 million effective November 13, 2025.
Gain (Loss) on Foreign Currency Transactions
For the year ended December 31, 2025, the gain on foreign currency transactions was approximately $9.3 million, compared to a loss on foreign currency transactions of approximately $4.2 million for the year ended December 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 December 31, 2025, as compared to December 31,
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2024. The exchange rate of the Euro to the U.S. dollar was $1.17 per Euro as of December 31, 2025, as compared to $1.03 per Euro at December 31, 2024. The 2024 loss is directly related to the decrease of the exchange rate of the Euro as of December 31, 2024, as compared to December 31, 2023. The exchange rate of the Euro to the U.S. dollar was $1.03 per Euro as of December 31, 2024, as compared to $1.11 per Euro as of December 31, 2023.
Loss on Abandoned Patents
Loss on abandoned patents was approximately $0.6 million for the year ended December 31, 2025, an increase of approximately $0.2 million or 67.4%, as compared to loss on abandoned patents of $0.3 million for the year ended December 31, 2024.
Benefit from Income Taxes
Our benefit from income taxes was approximately $0.4 million and $1.7 million for the years ended December 31, 2025, and 2024, respectively. This benefit was realized by utilizing the New Jersey Technology Business Tax Certificate Transfer Program whereby the State of New Jersey allows us to sell a portion of our state net operating losses and R&D credits to a third party.
Liquidity and Capital Resources
Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of December 31, 2025, we had current assets of approximately $20.6 million and current liabilities of approximately $9.7 million.
Effective Shelf Registration
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 December 31, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility. At December 31, 2025, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations. For the year ended December 31, 2025, we did not raise any proceeds under the ATM facility.
Loan and Security Agreement
On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with 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”), consisted of $10.0 million which was available to the Company on the Closing Date and $5.0 million constituted restricted cash, which was released from its restriction on January 10, 2025, as the following conditions were achieved: (i) the FDA accepted the Company’s application for review with respect to its DrugSorb-ATR De Novo 510(k) and (ii) the Company 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”) consisted of $5.0 million, which would have been disbursed at the Company’s request between July 1, 2025 and December 31, 2025, if the Company received FDA marketing approval of its DrugSorb-ATR application, which it did not. The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and were additionally used for working capital purposes and to fund general business requirements. Amounts borrowed under the Avenue Capital Commitment 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 required interest-only payments for the first 24 months through July 1, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity, on July 1, 2027; provided, however that if the Company had drawn the full amount of Tranche 2 by December 31, 2025, and achieved for the trailing six month period ended June 30, 2026, at least $25 million of revenue, (the Interest only Milestone as defined in the Loan), the Interest only Period would have been extended by six months to January 1, 2027, followed by equal monthly installments of principal plus accrued and unpaid interest through January 1, 2028.
On November 13, 2025, the Company and Avenue Capital Group entered into the Amended Loan and Security Agreement, amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement funded an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and provided an extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. The Company will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group and also receive a further six-month extension of the interest-only period to the July 1, 2027 maturity date subject to FDA approval of DrugSorb-ATR prior to December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate,
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replace Tranche 2 of the Avenue Capital Commitment. The Amended Loan and Security Agreement requires that the Company maintain certain operating cash burn targets (as defined in the Amended Loan and Security Agreement) prior to FDA approval of DrugSorb-ATR.
Under the terms of the Amended Loan and Security Agreement, we issued additional warrants to Avenue Capital Group to purchase 1,428,571 shares of the Company’s common stock for cash at the exercise price of $0.70, which expire on November 13, 2030. The number of warrants and exercise price are fixed.
For further discussion regarding the Loan Agreement please see Note 5, Long Term Debt, to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.
Rights Offering
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 have been issued upon exercise of the Right Warrants. Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to 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.
Technology Business Tax Certificate Transfer Program
In April 2025, we further supplemented our cash balance with the receipt of $1.7 million from the sale of our 2023 and amended 2022 Net Operating Loss (NOL) and R&D tax credits from the Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority (NJEDA).
Resource Allocation and Path to Cash-Flow Profitability
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 followed 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 second half of 2026. The Company recorded a charge of $0.5 million that includes severance and other cash and non-cash charges related to the restructuring.
As of December 31, 2025, we have approximately $7.8 million in cash (a non-GAAP measure), including approximately $6.3 million in unrestricted cash and cash equivalents, and $1.5 million of non-current restricted cash which may not be sufficient to fund the Company’s operations beyond the next twelve months from the issuance of these consolidated financial statements. 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, raises substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the accompanying consolidated financial statements are issued.
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 would allow for the opportunity to receive Tranche 2b of the Amended Credit Facility, and receive an additional 6-month extension of the interest-only period on the credit facility. 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
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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. 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.
On September 16, 2025, the Company announced that it would file a new De Novo application for DrugSorb-ATR with the FDA. This decision followed an appeal meeting and decision by the FDA to uphold its previous denial of the Company’s original DrugSorb-ATR application, but affirmed that there were no safety related issues with the device, and requested additional information to support the Company’s desired label indication. As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA on November 7, 2025. The Company conducted a formal pre-submission meeting with the FDA in late January 2026 and continues to engage with the FDA to clarify and confirm the requirements for the new De Novo submission. The interactive discussions regarding the information to be included in the new submission are ongoing, and the Company expects to provide an update of the anticipated timing for the new submission once these interactive discussions with the FDA on the final requirements are complete. Following the new De Novo submission, a regulatory decision would be expected following a typical 150-day review process but may be accelerated or extended depending on interactive discussions with the FDA related to submission questions.
Loan and Security Agreement
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 shall make 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.
On November 13, 2025, we and Avenue Capital Group entered into the First Amendment to Loan Documents (the “Amended Loan and Security Agreement”), amending our Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement provides for access to an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and for the extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. We will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group, subject to FDA approval of DrugSorb-ATR, between January 1, 2026 and December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the Loan. The Amended Loan and Security Agreement requires that we maintain certain operating cash burn targets (as defined) prior to FDA approval of DrugSorb-ATR and provides for a further six-month extension of the interest only period to the July 1, 2027 maturity date upon FDA approval of DrugSorb-ATR.
Under the terms of the Amended Loan and Security Agreement, we issued additional warrants to Avenue Capital Group to purchase 1,428,571 shares of the Company’s common stock for cash at the exercise price of $0.70, which expire on November 13, 2030. The number of warrants and exercise price are fixed.
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 $5.0 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.
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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)%.
For further discussion regarding the Loan Agreement please see Note 5, Long Term Debt, to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.
Rights Offering
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.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting estimates have significant effect in the preparation of our consolidated financial statements.
Uncertain tax positions and valuation allowances:
The Company records income tax expense and related liabilities based on estimates of amounts expected to be taxable or deductible in tax returns filed in various jurisdictions. These tax returns are subject to examination by taxing authorities, which may occur several years after the date of the financial statements. During such examinations, disputes may arise regarding the timing or validity of certain items, including the recognition of taxable income or deductions, and the resolution of these matters may take an extended period of time.
The Company evaluates uncertain tax positions related to income taxes in accordance with FIN 48, which establishes the recognition threshold and measurement guidance for financial statement recognition of tax positions taken or expected to be taken in a tax return. Under this guidance, the Company assesses whether the tax position is more likely than not to be sustained upon examination by the relevant taxing authority based on the technical merits of the position. For positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. For positions that do not meet this threshold, no tax benefit is recognized in the financial statements.
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. In addition, the Company offsets liabilities for unrecognized tax benefits against deferred tax assets associated with net operating loss or tax credit carryforwards when the uncertain tax position would be settled for the presumed amount at the balance sheet date.
The Company also evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, the Company considers available positive and negative evidence, including expectations of future taxable income. If the Company determines that it will be able to realize deferred tax assets in excess of the amount currently recorded, an adjustment would be made to increase income in the period such determination is made. Conversely, if the Company determines that it will not be able to realize all or a portion of its deferred tax assets, the deferred
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tax asset would be reduced and the resulting adjustment would be recognized as an expense in the period of determination. Either determination could have a material impact on the Company’s financial statements.
Fair Value of Warrants
The Company issues warrants in connection with certain financing transactions. The fair value of these warrants is estimated using the Black-Scholes option pricing model or the Monte Carlo pricing model, which requires management to make significant estimates and assumptions regarding inputs that are not directly observable in the market. These estimates include, among other things, the expected volatility of the Company’s common stock, the expected term of the warrants, the risk-free interest rate, and the expected dividend yield.
Expected volatility is generally based on the historical volatility of the Company’s common stock and, when appropriate, comparable publicly traded companies. The expected term represents the period of time the warrants are expected to remain outstanding, which may differ from the contractual term depending on the specific features of the warrants. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities consistent with the expected term of the warrants, and the dividend yield is based on the Company’s historical and expected dividend policy.
Because the valuation relies on significant assumptions, changes in these inputs could materially affect the estimated fair value of the warrants and the related amounts recorded in the Company’s financial statements. If the warrants are classified as liabilities, the Company remeasures the fair value of the warrants at each reporting date, and changes in fair value are recognized in the consolidated statements of operations. Accordingly, fluctuations in the underlying assumptions used in the valuation model, particularly expected volatility and the Company’s stock price, may result in significant non-cash gains or losses in future periods.
Management believes the assumptions used in estimating the fair value of the warrants are reasonable; however, actual results and future changes in these assumptions could differ materially from those estimates and could have a material impact on the Company’s financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 8. Financial Statements and Supplementary Data.
Our Consolidated Financial Statements and notes thereto are included elsewhere in this Annual Report on Form 10-K and incorporated herein by reference. See Item 15 of Part IV.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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Item 9A. Controls and Procedures
Management’s Evaluation of our Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including, our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective due to a material weakness, as further described below.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025.
Material Weakness in Internal Control Over Financial Reporting
A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis.
Material Weakness — Continuing from Prior Year
The Company previously disclosed a material weakness in internal control over financial reporting as of December 31, 2024 in our Annual Report on Form 10-K for the year ended December 31, 2024 related to the accounting for stock-based compensation corresponding to grants of Restricted Stock Units. Specifically, our controls were not effectively designed or operating to ensure that restricted stock unit grants or vesting activities were recorded within the proper accounts and at the proper amounts. As described below, while management has developed and implemented certain remediation actions to address the material weakness, further actions are still ongoing or have not been implemented for a sufficient amount of time to test and conclude on the effectiveness of the remediation actions as of December 31, 2025. Although most of our remediation efforts have been in place and functioning properly for much of the year, in connection with our preparation of our consolidated financial statements as of and for the year ended December 31, 2025, we
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identified two transactions related to unique RSU vesting events that required adjustment. As a result, the material weakness related to the accounting for stock-based compensation corresponding to Restricted Stock Units continues to be present as of December 31, 2025.
Material Weakness — Newly Identified in Current Year
During the year ended December 31, 2025, management identified a new material weakness related to the Company’s financial statement consolidation and reporting, as controls over the consolidation and monthly close processes were deemed not to be operating effectively, a determination which is at least partially attributable to the significant volume of manual procedures involved in these processes. Specifically, deficiencies in the review and reconciliation of intercompany balances resulted in (i) losses not being appropriately allocated to the correct jurisdiction when preparing the income tax provision and (ii) foreign currency transaction gains related to an intercompany balance being recorded incorrectly during the fourth quarter of 2025. As a result, net operating losses were not initially reflected properly in the income tax disclosures, and foreign currency transaction gains were materially misstated in the Company’s consolidated financial statements prior to being corrected.
Discussion of Remediation Activities
Remediation of the identified material weaknesses and strengthening our internal control environment is an identified priority for us and will continue to be a priority in 2026. We are committed to completing the remediation of these material weaknesses as expeditiously as possible and expect these enhancements to be fully implemented during the fiscal year ending December 31, 2026. However, the material weaknesses will not be considered fully remediated until the new controls have been operational for a sufficient period of time and tested to demonstrate their effectiveness.
With continued oversight from the Audit Committee, the Company’s management has begun to design and implement changes in processes and controls to remediate the material weaknesses described above. These internal control enhancements include, but are not limited to, the following:
Accounting for Stock-Based Compensation Corresponding to Grants of Restricted Stock Units
Management intends to continue implementing measures to strengthen our internal control over the accounting for restricted stock unit grant and vesting events. These efforts are intended to ensure accurate and timely reporting in accordance with U.S. GAAP for both interim and annual periods. Key steps in our remediation plan include:
| - | Developing and implementing more robust control procedures to validate that the inputs and assumptions used in stock-based compensation expense calculation models are accurate and reflect proper application of generally accepted accounting principles. |
| - | Increasing oversight and review by executive management to ensure the completeness and accuracy of restricted stock unit expense calculations and their corresponding Journal Entries. |
Financial Statement Consolidation and Reporting
Actions to address this material weakness are currently being developed, with the following primary solutions having been identified:
| - | A consolidation tool is currently being implemented, which will eliminate the need for the Company to manually execute the consolidation of its various entities at the end of each period. |
| - | A financial close automation tool is also being implemented, which will create automated workflows, approval streams, and checklists for a variety of period-end close procedures (balance sheet reconciliations, etc.). |
| - | Period-end analytics and the metrics and variance thresholds applied to those analytics are to be enhanced in order to make them more precise tools for the purpose of identifying potential errors or misstatements. |
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Changes in Internal Control Over Financial Reporting
Except as discussed above, there were no changes in the Company’s internal control over financial reporting that occurred during year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included elsewhere in this Annual Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.
None.
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PART III
Item 10. Directors, Executive Officers and Control Persons.
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K/A.
Item 11. Executive Compensation.
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K/A.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K/A.
Item 13. Certain Relationships and Related Transactions and Director Independence.
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K/A.
Item 14. Principal Accounting Fees and Services.
The information required by this Item will be provided in an amendment to this Annual Report on Form 10-K/A.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) Financial Statements and Schedules:
1. Financial Statements
The following consolidated financial statements and reports of independent registered public accounting firm are included herein:
Report of Independent Registered Public Accounting Firm | F-2 |
Consolidated Balance Sheets | F-4 |
Consolidated Statements of Operations and Comprehensive Loss | F-5 |
Consolidated Statements of Changes in Stockholders’ Equity | F-6 |
Consolidated Statements of Cash Flows | F-7 |
Notes to Consolidated Financial Statements | F-8 |
2. Financial Statement Schedules
Not applicable.
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3. List of Exhibits
Exhibit | |
|
No. |
| Description |
3.1 |
| Second Amended and Restated Certificate of Incorporation, dated June 12, 2019 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 13, 2019) |
|
|
|
3.2 |
| Second Amended and Restated Bylaws of CytoSorbents Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 6, 2024) |
|
|
|
4.1 |
| Description of Capital Stock of CytoSorbents Corporation (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 10, 2022). |
|
|
|
4.2 | | Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 11, 2023). |
| | |
4.3 | | Form of Subscription Right Warrant Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). |
| | |
4.4 | | Form of Series A Right Warrant Certificate (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). |
| | |
4.5 | | Form of Series B Right Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). |
| | |
10.1+ |
| Amended and Restated Employment Agreement, dated as of July 30, 2019, by and between CytoSorbents Medical, Inc. and Phillip P. Chan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 5, 2019) |
|
|
|
10.2+ |
| Amended and Restated Employment Agreement, dated as of July 30 2019, by and between CytoSorbents Medical, Inc. and Vincent J. Capponi (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on August 5, 2019) |
|
|
|
10.3+ |
| Amended and Restated Employment Agreement, dated as of July 30, 2019, by and between CytoSorbents Medical, Inc. and Kathleen P. Bloch (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on August 5, 2019) |
|
|
|
10.4+ | | Employment Agreement by and between the Company and Efthymios Deliargyris, M.D., dated April 12, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 27, 2020). |
| | |
10.5+† | | Consulting Agreement, dated March 31, 2023, by and between the Company and Ms. Kathleen P. Bloch (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 6, 2023). |
| | |
10.6+ | | Employment Agreement, dated September 18, 2023, by and between the Company and Ms. Kathleen Bloch (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2023). |
| | |
10.7 | | Consulting Agreement, dated August 13, 2024, by and between the Company and Kathleen P. Bloch (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). |
| | |
10.8+ |
| Employment Agreement, dated August 14, 2024, by and between the Company and Mr. Peter J. Mariani (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). |
| | |
10.9+ | | Form of Payment Reduction Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2024). |
| | |
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10.10+ |
| Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2024). |
| | |
10.11 | | Restricted Stock Unit Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). |
| | |
10.12 | | Nonstatutory Option Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). |
| | |
10.13 | | Nonstatutory Option Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). |
| | |
10.14 |
| Royalty Agreement between Guillermina Vega Montiel and the Registrant dated as of August 11, 2003 (incorporated by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). |
| | |
10.15 | | Assignment and Assumption of Certain Royalty Rights, dated as of November 22, 2022, by and among Robert Shipley Living Trust, ROKK, LLC, and CytoSorbents Medical, Inc (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 9,2023). |
|
|
|
10.16 |
| Stipulated Order and Settlement Agreement between Bro-Tech Corporation, dated as of August 7, 2006, by and between Bio-Tech Corporation, and Purolite International Ltd., and MedaSorb Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 8, 2006) |
|
|
|
10.17† |
| Distribution Agreement between Biocon Biologics Limited and the Registrant dated as of September 20, 2013 (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). |
|
|
|
10.18† |
| First Amendment to the Distribution Agreement between Biocon Biologics Limited and the Registrant, dated October 30, 2014 (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). |
|
|
|
10.19+ |
| CytoSorbents Corporation 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed on July 6, 2006) |
| | |
10.20+ |
| Amendment No. 1 to the CytoSorbents Corporation 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s registration statement on Form S-8 filed with the SEC on November 4, 2014). |
|
|
|
10.21 | | Amended and Restated CytoSorbents Corporation 2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-8 filed with the SEC on August 26, 2019). |
| | |
10.22 |
| Amended and Restated Loan and Security Agreement, dated as of March 29, 2018, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 4, 2018) |
|
|
|
10.23 |
| First Amendment to Amended and Restated Loan and Security Agreement, dated as of July 30, 2019, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 5, 2019) |
|
|
|
10.24 | | Third Amendment to Amended and Restated Loan and Security Agreement, dated as of December 4, 2020, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 10, 2020). |
| | |
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10.25 |
| Fourth Amendment to the Amended and Restated Loan and Security Agreement, dated as of January 19, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 20, 2022). |
| | |
10.26 | | Fifth Amendment to the Amended and Restated Loan and Security Agreement, dated as of December 28, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 29, 2022). |
| | |
10.27 | | Sixth Amendment to the Amended and Restated Loan and Security Agreement, dated as of March 8, 2023, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 9, 2023). |
| | |
10.28 | | Seventh Amendment to the Amended and Restated Loan and Security Agreement, dated as of May 16, 2023, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 1, 2023). |
| | |
10.29† | | Loan and Security Agreement, dated as of June 28, 2024, by and among CytoSorbents Corporation, the lenders, and the administrative and collateral agent party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). |
| | |
10.30† | | Supplement to the Loan and Security Agreement, dated as of June 28, 2024, by and among CytoSorbents Corporation, the lenders, and the administrative and collateral agent party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). |
| | |
10.31 | | Form of Warrant, by and between CytoSorbents Corporation and Avenue Venture Opportunities Fund, LP (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). |
|
|
|
10.32 | | Success Fee Letter, dated as of March 29, 2018, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2018). |
| | |
10.33 |
| Success Fee Letter, dated as of January 19, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 20, 2022). |
| | |
10.34 | | First Amendment to Loan Documents, dated November 13, 2025, by and among CytoSorbents Corporation, the lenders, and the administrative and collateral agent party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 13, 2025). |
| | |
10.35 | | Form of Warrant to Purchase Shares of Stock of CytoSorbents Corporation by and between the Company and Avenue Venture Opportunities Fund, L.P., dated November 13, 2025 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 13, 2025). |
| | |
10.36 | | Form of Warrant to Purchase Shares of Stock of CytoSorbents Corporation by and between the Company and Avenue Venture Opportunities Fund II, L.P. dated November 13, 2025 (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 13, 2025). |
|
|
|
10.37† |
| Exclusive Distribution Agreement, dated as of September 26, 2014, by and between CytoSorbents Europe GmbH and Aferetica s.r.l. (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 7, 2019). |
|
|
|
10.38† |
| Amendment to Exclusive Distribution Agreement, dated December 15, 2014, by and between CytoSorbents Europe GmbH and Aferetica s.r.l (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 7, 2019). |
| | |
51
Table of Contents
10.39 | | Open Market Sale Agreement SM, dated as of December 30, 2021, by and between CytoSorbents Corporation and Jefferies LLC (incorporated by reference from Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 30, 2021). |
| | |
10.40 | | Marketing Agreement, dated as of August 1, 2022, by and between CytoSorbents Corporation and Fresenius Medical Care Deutschlancd GmbH (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2022). |
|
|
|
10.41 | | Lease, dated as of March 26, 2021, by and between 300 CR LLC and CytoSorbents Medical, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 31, 2021). |
| | |
10.42† | | Securities Purchase Agreement, dated as of December 11, 2023, by and among CytoSorbents Corporation and the investors party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 11, 2023). |
| | |
| Insider Trading Policy. | |
| | |
21.1* | | List of Subsidiaries. |
| | |
23.1* |
| Consent of WithumSmith+Brown, PC. |
|
|
|
24.1* | | Power of Attorney |
| | |
31.1* |
| Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2* |
| Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1* |
| Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2* |
| Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
97 | | Compensation Recoupment Policy (incorporated by reference to Exhibit 97 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 15, 2024). |
| | |
101 |
| The following materials from CytoSorbents Form 10-K for the fiscal year ended December 31, 2025, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets at December 31, 2025 and December 31, 2024, (iii) Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025, and 2024, (iii) Consolidated Statements of Changes in Stockholders’ Equity/(Deficit) for the years ended December 31, 2025, and 2024, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024, and (v) Notes to the Consolidated Financial Statements. |
| | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed or furnished herewith. |
+ | Management contract or compensatory plan or arrangement of the Registrant required to be filed as an exhibit to this Annual Report. |
† | Confidential treatment has been requested for certain portions of this exhibit. The confidential portions of this exhibit have been omitted and filed separately with Securities and Exchange Commission. |
In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.
52
Table of Contents
Item 16. Form 10-K Summary.
None.
53
Table of Contents
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, CytoSorbents Corporation has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 29th day of March, 2026.
| CYTOSORBENTS CORPORATION | |
|
|
|
| By: | /s/ Dr. Phillip P. Chan |
|
| Dr. Phillip P. Chan |
|
| Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | | Title | | Date |
|
|
|
|
|
/s/ Dr. Phillip P. Chan |
| Chief Executive Officer (Principal |
| March 29, 2026 |
Dr. Phillip P. Chan |
| Executive Officer) and Director |
| |
|
|
| | |
/s/ Peter J. Mariani |
| Chief Financial Officer |
| March 29, 2026 |
Peter J. Mariani |
| (Principal Financial and Accounting Officer) |
| |
|
|
| | |
/s/ Michael G. Bator |
| Chairman of the Board |
| March 29, 2026 |
Michael G. Bator |
|
|
| |
|
|
| | |
/s/ Alan D. Sobel |
| Director |
| March 29, 2026 |
Alan D. Sobel |
|
|
| |
|
|
| | |
/s/ Edward R. Jones |
| Director |
| March 29, 2026 |
Edward R. Jones |
|
|
| |
|
|
| | |
/s/Jiny Kim |
| Director |
| March 29, 2026 |
Jiny Kim |
|
|
|
|
54
Table of Contents
FINANCIAL STATEMENTS
| Page |
Report of Independent Registered Public Accounting Firm | F-2 |
|
|
Consolidated Balance Sheets at December 31, 2025 and 2024 | F-4 |
|
|
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025, and 2024 | F-5 |
|
|
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, and 2024 | F-6 |
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | F-7 |
|
|
Notes to Consolidated Financial Statements | F-8 |
F-1
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
CytoSorbents Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of CytoSorbents Corporation (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of CytoSorbents Corporation as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the period ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt Regarding Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the entity has suffered recurring losses from operations, has experienced negative cash flows from operations, and has an accumulated deficit, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to CytoSorbents Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. CytoSorbents Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-2
Table of Contents
Accounting For Warrants Associated with January 2025 Rights Offering
Description of the Matter
The Company issued warrants in connection with the January 2025 Rights Offering. The accounting for the issuance of these warrants involves evaluation of complex accounting guidance to be performed by management as it relates to determining the accounting classification of the warrants. It also involved management’s estimates and judgements in determining the fair value of the warrants.
This matter was identified as a critical audit matter due to the complexity in accounting for the warrants and the potential significant impact of these conclusions to the Company’s consolidated financial statements and related disclosures.
How We Addressed the Matter in Our Audit
Our principal audit procedures performed to address this critical audit matter included the following:
· | Reviewed the executed Rights Offering and associated warrant agreements. |
· | Reviewed management’s technical accounting memo evaluating the terms and conditions of the warrant agreements to determine the appropriate classification of the instruments. |
· | Utilized personnel with specialized knowledge and skills in technical accounting to assist in: (i) evaluating the terms of the warrants in relation to the relevant accounting literature, and (ii) assessing the appropriateness of conclusions reached by the Company. |
· | Utilized personnel with specialized knowledge and skills in valuation to assist in: (i) reviewing the valuation provided by management’s valuation specialist. |
/s/
We have served as CytoSorbents Corporation’s auditor since 2004.
March 29, 2026
PCAOB ID Number
F-3
Table of Contents
CYTOSORBENTS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| | | | | | |
| | At December 31, | ||||
| | 2025 | | 2024 | ||
ASSETS | | | |
| | |
Current Assets: | | | |
| | |
Cash and cash equivalents | | $ | | | $ | |
Restricted cash, current | | | — | | | |
Accounts receivable, net of allowances of $ | |
| | |
| |
Inventories - net | |
| | |
| |
Prepaid expenses and other current assets | |
| | |
| |
Total current assets | |
| | |
| |
| |
| | |
| |
Property and equipment - net | |
| | |
| |
Restricted cash | | | | | | |
Right-of-use asset | | | | | | |
Patents - net | | | | | | |
Other assets | |
| | |
| |
Total Assets | | $ | | | $ | |
| |
| | |
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | |
| |
Current Liabilities: | |
| | |
| |
Accounts payable | | $ | | | $ | |
Accrued expenses and other current liabilities | |
| | |
| |
Lease liability – current portion | | | | | | |
Total current liabilities | |
| | |
| |
Lease liability, net of current portion | | | | | | |
Long-term debt, net of debt discount | |
| | |
| |
Total Liabilities | |
| | |
| |
| |
| | |
| |
Commitments and Contingencies | |
| | |
| |
Stockholders’ Equity: | |
| | |
| |
Preferred Stock, Par Value $ | | | — | | | — |
Common Stock, Par Value $ | |
| | |
| |
Additional paid-in capital | |
| | | | |
Accumulated other comprehensive income (loss) | |
| ( | | | |
Accumulated deficit | |
| ( | | | ( |
Total Stockholders’ Equity | |
| | | | |
Total Liabilities and Stockholders’ Equity | | $ | | | $ | |
The Notes to Consolidated Financial Statements are an integral part of these statements.
F-4
Table of Contents
CYTOSORBENTS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
| | | | | | |
| | Year ended | | Year ended | ||
| | December 31, | | December 31, | ||
| | 2025 | | 2024 | ||
Revenue, net | | $ | | | $ | |
Cost of goods sold | | | | | | |
Gross profit | | | | | | |
Operating expenses: | |
| | | | |
Research and development, net of grant income | | | | | | |
Selling, general and administrative | | | | | | |
Restructuring | | | | | | — |
Total operating expenses | | | | | | |
Loss from operations | | | ( | | | ( |
Other income (expense): | |
| | | | |
Interest expense, net | | | ( | | | ( |
Gain (loss) on foreign currency transactions | | | | | | ( |
Loss on abandoned patents | | | ( | | | ( |
Total other income (expense), net | | | | | | ( |
| |
| | | | |
Loss before benefit from income taxes | | | ( | | | ( |
| | | | | | |
Benefit from income taxes | |
| | | | |
| |
| | |
| |
Net loss | | $ | ( | | $ | ( |
| | | | | | |
Basic and diluted net loss per common share | | $ | ( | | $ | ( |
| | | | | | |
Weighted average number of shares of common stock outstanding | | | | | | |
| | | | | | |
Comprehensive loss: | | | | | | |
Net loss | | $ | ( | | $ | ( |
Other comprehensive income (loss): | | | | | | |
Foreign currency translation adjustment, net of tax | | | ( | | | |
Comprehensive loss | | $ | ( | | $ | ( |
The Notes to Consolidated Financial Statements are an integral part of these statements.
F-5
Table of Contents
CYTOSORBENTS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY
(in thousands, except share data)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | Accumulated | | | | | | | |
| | | | | | | Additional | | Other | | | | | | | ||
| | Common Stock | | Paid-In | | Comprehensive | | Accumulated | | Stockholders’ | |||||||
| | Shares | | Par value | | Capital | | Income (Loss) | | Deficit | | Equity | |||||
| | | | | | | | | | | | | | | | | |
Balance at December 31, 2023 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Stock-based compensation |
| — | |
| — | |
| | |
| — | |
| — | |
| |
Issuance of common stock offerings, net of fees incurred | | | | | | | | | | | — | | | — | | | |
Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes | | | | | — | | | ( | | | — | | | — | | | ( |
Issuance of warrants | | — | | | — | | | | | | — | | | — | | | |
Foreign currency translation adjustment | | — | | | — | | | — | | | | | | — | | | |
Net loss |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance at December 31, 2024 |
| | |
| | |
| | |
| | |
| ( | |
| |
Stock-based compensation | | — | | | — | | | | | | — | | | — | | | |
Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes | | | | | — | | | — | | | — | | | — | | | — |
Shares issued for exercise of stock options | | | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock and warrants from rights offerings, net of fees incurred | | | | | | | | | | | — | | | — | | | |
Issuance of common stock from exercise of warrants |
| | |
| | |
| | |
| — | |
| — | |
| |
Issuance of warrants |
| — | |
| — | |
| | |
| — | |
| — | |
| |
Foreign currency translation adjustment | | — | | | — | | | — | | | ( | | | — | | | ( |
Net loss |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance at December 31, 2025 |
| | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
The Notes to Consolidated Financial Statements are an integral part of these statements.
F-6
Table of Contents
CYTOSORBENTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | | | | | |
| | Year ended | | Year ended | ||
| | December 31, | | December 31, | ||
| | 2025 | | 2024 | ||
Cash flows from operating activities: | | | |
| | |
Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | |
| |
Accrued final fee | | | — | | | |
Amortization of debt discount | | | | | | |
Amortization of loan costs | | | — | | | |
Amortization of patents | | | | | | |
Depreciation and amortization | |
| | | | |
Amortization of right-of-use asset | | | | | | |
Write off of inventory | | | | | | — |
Bad debt expense | |
| | | | |
Loss on abandoned patents | |
| | | | |
Write off of fixed assets | | | | | | — |
Foreign currency transaction (gains) losses | |
| ( | | | |
Stock-based compensation | | | | | | |
Changes in operating assets and liabilities: | |
| | |
| |
Grants and accounts receivable | |
| | | | ( |
Inventories | |
| ( | | | |
Prepaid expenses and other current assets | |
| | | | ( |
Other assets | |
| | | | |
Accounts payable and accrued expenses | |
| ( | | | ( |
Net cash used in operating activities | |
| ( | | | ( |
| | | | | | |
Cash flows from investing activities: | |
| | |
| |
Purchases of property and equipment | |
| ( | | | ( |
Disposal of property and equipment | | | | | | — |
Patent costs | |
| ( | | | ( |
Net cash used in investing activities | |
| ( | | | ( |
| | | | | | |
Cash flows from financing activities: | |
| | |
| |
Proceeds from long-term debt | |
| | |
| |
Repayment of long-term debt | |
| — | |
| ( |
Payment of final fee | | | — | | | ( |
Payment of loan costs | | | — | | | ( |
Proceeds from rights offering, net | |
| | |
| — |
Cash for exercise of warrants, net | | | | | | — |
Equity contributions - net of fees incurred | |
| — | | | |
Net cash provided by financing activities | |
| | | | |
Effect of exchange rates on cash | |
| | | | ( |
Net change in cash, cash equivalents, and restricted cash | |
| ( | | | ( |
| | | | | | |
Cash, cash equivalents, and restricted cash at beginning of year | |
| | | | |
Cash, cash equivalents, and restricted cash at end of year | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of cash flow information: | |
| | |
| |
Cash paid during the year for interest | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of non-cash financing activities: | |
| | |
| |
Warrants issued in connection with modification of long-term debt | | $ | | | $ | |
Capital expenditures included in accounts payable | | $ | — | | $ | |
Settlement of accrued bonuses with restricted stock units | | $ | — | | $ | |
The Notes to Consolidated Financial Statements are an integral part of these statements.
F-7
Table of Contents
CYTOSORBENTS CORPORATION
Notes to Consolidated Financial Statements
December 31, 2025
1. PRINCIPAL BUSINESS ACTIVITY
Nature of Business
The Company is a leader in the treatment of life-threatening conditions in intensive care and cardiac surgery using blood purification. The Company, through its subsidiary CytoSorbents Medical, Inc. based in New Jersey, is engaged in the research, development and commercialization of medical devices with its blood purification technology platform which incorporates a proprietary adsorbent, porous polymer technology. The Company, through its wholly-owned European subsidiary, CytoSorbents Europe GmbH, based in Berlin, Germany, its wholly-owned Indian subsidiary, CytoSorbents India Private Limited, based in Kasavanahalli, India, and its wholly-owned Dubai entity, CytoSorbents MEA FZCO, based in CommerCity, Dubai, conducts sales and marketing related operations for the CytoSorb device outside of the United States.
Going Concern
As of December 31, 2025, the Company’s total cash and cash equivalents and restricted cash was approximately $
The Company’s expected future capital requirements may depend on many factors including expanding the Company’s 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 would allow for the opportunity to receive Tranche 2b of the Amended Avenue Capital Commitment by December 31, 2026, and receive an additional 6-month extension of the interest-only period on the credit facility. Additional sources of liquidity available to the Company include the 2024 Shelf (see Note 9, Stockholders’ Equity), other public or private equity offerings, debt financings, or from other sources. The sale of additional equity may result in dilution to shareholders. There is no assurance that the Company will be able to secure funding on terms acceptable, or at all. Although the Company has taken actions to achieve cash flow breakeven, if it does not achieve this goal, the potential need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available as needed, the Company may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount. 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.
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation and Foreign Currency Translation
The accompanying consolidated financial statements include the results of CytoSorbents Corporation (the “Parent”), CytoSorbents Medical Inc., its wholly owned operating subsidiary (the “Subsidiary”), and CytoSorbents Europe GmbH, its wholly owned European subsidiary (the “European Subsidiary”). In addition, the consolidated financial statements include CytoSorbents Switzerland, CytoSorbents Poland Sp. z.o.o., CytoSorbents Medical UK Limited, and CytoSorbents France SAS, the wholly owned subsidiaries of CytoSorbents Europe GmbH, and CytoSorbents UK Limited, CytoSorbents India Private Limited, CytoSorbents Medical Canada, Inc., and CytoSorbents MEA FZCO, wholly-owned subsidiaries of CytoSorbents Medical, Inc. These entities are collectively referred to as the “Company”. All significant intercompany transactions and balances have been eliminated in consolidation.
Sales and expenses denominated in foreign currencies are translated at average exchange rates in effect throughout the year. Assets and liabilities of foreign operations are translated at period-end exchange rates with the impacts of foreign currency translation recorded in cumulative translation adjustment, a component of accumulated other comprehensive income. Foreign currency transaction gains and losses are included in other income (loss), net in the consolidated statements of operations and comprehensive loss.
F-8
Table of Contents
Segment Information
The Company operates and manages its business as
Cash, Cash Equivalents, and Restricted Cash
The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s restricted includes amounts held as collateral for a letter of credit with Bridge Bank, securing the College Road facility lease.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the consolidated balance sheets and consolidated statements of cash flows:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Cash and cash equivalents | | $ | | | $ | |
Restricted cash, current | | | — | | | |
Restricted cash | |
| | |
| |
Total cash, cash equivalents and restricted cash | | $ | | | $ | |
Accounts Receivable (Net of Allowance for Credit Losses)
Trade accounts receivable consist of amounts due from direct customers, distributors and agencies of the U.S. government and are presented at net realizable value. At each balance sheet date, the Company estimates an expected allowance for credit losses inherent in the Company’s accounts receivable portfolio based on historical experience, specific allowances for known troubled accounts, and other available evidence. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. The Company has identified the following portfolio segments: direct customers, distributors/strategic partners and the U.S. government.
A fixed reserve percentage for each pool is derived from a review of the Company’s historical losses in relation to the total pool. This estimate is adjusted quarterly for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s portfolio segments have remained constant over the Company’s historical evaluation period.
The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they are recognized as an offset to credit loss expense in the year of recovery. The total amount of write-offs was immaterial to the financial statements as a whole for the years ended December 31, 2025 and 2024.
The allowance for credit losses reflects accounts receivable balances that are written off when management determines they are uncollectible.
The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist, and measures the allowance for credit losses using the following methods:
Direct Customers—The Company measures expected credit losses on direct customer receivables using an aging methodology. The risk of loss for direct customer receivables is low based on the Company’s historical experience. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.
F-9
Table of Contents
Distributors/Strategic Partners—The Company measures expected credit losses on distributor receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers the past payment history of each distributor.
U.S. Government- These receivables are related to the Company’s government grants. The Company measures expected credit losses on these receivables using an individual reserve methodology. The risk of loss in this portfolio is very low based on the Company’s historical experience, as these receivables are supported by approved grant award contracts.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost is determined based upon standard cost, which approximates actual cost, using a first-in first-out (“FIFO”) basis. Devices used in clinical trials or for research and development purposes are removed from inventory and charged to research and development expenses at the time of their use. Donated devices are removed from inventory and charged to selling, general and administrative expenses. The Company regularly reviews inventory quantities on hand and records inventory reserves for excess, obsolete, expired, and slow moving inventory based upon historical usage, product shelf life, forecasted demand, regulatory considerations, and other relevant factors. Inventory that is determined to be obsolete or expired is written off in the period such determination is made.
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment is provided for by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the lesser of their economic useful lives or the term of the related leases. Gains and losses on depreciable assets retired or sold are recognized in the statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.
Patents
Legal costs incurred to establish patents are capitalized. When patents are issued, capitalized costs are amortized on the straight-line method over the related patent term. In the event a patent is abandoned, the net book value of the patent is written off.
Impairment or Disposal of Long-Lived Assets
The Company assesses the impairment of patents and other long-lived assets under accounting standards for the impairment or disposal of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value.
Leases
The Company accounts for leases in accordance with FASB Accounting Standards Update (“ASU”) 2016-02, Leases, Topic 842 (“ASC 842”). Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The Company determines if a contract contains a lease at the inception date and determines the lease classification, recognition, and measurement at commencement date. ROU assets also include adjustments related to prepaid or deferred lease payments. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Options to extend a lease are included in the lease term when it is reasonably certain that the Company will exercise such options. Certain of the Company’s lease agreements include provisions for the Company to pay the lessor for common area maintenance, real estate taxes, and insurance, which the Company accounts for as variable lease costs.
Revenue Recognition
The Company recognizes revenue in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services transferred to its customers. To do this, the Company applies the following five-step model, to determine this amount: (i) identify the contract with a customer: (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when, or as, the Company satisfies the performance obligation.
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Revenue is typically recognized when the Company ships its products to its direct customers and distributors/strategic partners. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for the products shipped or the services provided under their grant contracts.
The Company’s contracts with its direct customers are generally in the form of a purchase order. The Company has formal written contracts with each of its distributors/strategic partners that define their respective territories and minimum purchase commitments which must be met in order to maintain exclusivity in their territory. Distributors/strategic partner customers also submit purchase orders with each order that define the terms of shipment and transaction price.
The performance obligations in contracts with direct customers and distributors/strategic partners are for the shipment of the CytoSorb device and related accessory parts.
The price charged is based on the Company’s price list for the CytoSorb device and related accessory parts for both direct customers and distributor/strategic partners. The Company does not permit returns for product sales. The Company also provides for certain rebates and discounts to direct customers for sales of its product that are earned based upon sales volume. These amounts, which are earned based on calendar year sales volume, are recorded as a reduction of sales as earned.
The transaction price for the performance obligation is based on the purchase orders received for both direct customers and on the type of contract and are outlined in each contract.
The Company satisfies its performance obligation to direct customers and distributors/strategic partners generally upon shipment of the products.
Research and Development, Net of Grant Income
All research and development costs, payments to laboratories, research consultants and costs related to clinical trials and studies are expensed when incurred.
Currently, accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development, and no products or services are transferred to the grantor. The Company records grant income, net of expenses, as a reduction of research and development expenses. Refer to the “Effect of Recent Accounting Pronouncements” section below for additional information.
Advertising Expenses
Advertising costs are charged to activities when incurred. Advertising expense amounted to approximately $
Income Taxes
Income taxes are accounted for under the asset and liability method prescribed by accounting standards for accounting for income taxes. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax asset will not be realized. Under Section 382 of the Internal Revenue Code, the net operating losses generated prior to the previously completed reverse merger may be limited due to the change in ownership. Additionally, net operating losses generated subsequent to the reverse merger may be limited in the event of changes in ownership.
The Company follows the accounting standards associated with uncertain tax provisions. The Company had unrecognized tax benefits of $
The Company utilizes the Technology Business Tax Certificate Transfer Program to sell a portion of its New Jersey Net Operating Loss tax carryforwards and Research and Development credits to an industrial company.
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CytoSorbents Europe GmbH, CytoSorbents Switzerland GmbH, CytoSorbents Poland Sp. z.o.o., CytoSorbents UK Limited, CytoSorbents Medical UK Limited, CytoSorbents France SAS, CytoSorbents India Private Limited, and CytoSorbents MEA FZCO file an annual corporate tax return, a VAT return and a trade tax return in Germany, Switzerland, Poland, the United Kingdom, France, India, and Dubai, respectively.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The valuation of options and warrants granted, allowance for credit losses and recoverability of patents are significant estimates in these consolidated financial statements.
Concentration of Credit Risk
The Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a $250,000 limit. At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts. Through the IntraFi Network, the Company maintains an Insured Cash Sweep account whereby all cash held in the Company’s money market account is swept daily in increments of less than the FDIC insurance limit and deposited in a number of IntraFi’s network of
A significant portion of the Company’s revenues are from product sales in Germany. See Note 3, “Revenue” for further information relating to the Company’s revenue.
The Company does not have any significant concentration of risk with respect to any one particular supplier.
As of December 31, 2025,
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, prepaid expense and other current assets, right-of-use assets, accounts payable and accrued expenses, lease liability – current portion, other current liabilities, and lease liability, net of current portion approximate their fair values due to their short-term nature.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815 “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company estimates the fair value of warrants using the Black-Scholes option pricing model or the Monte Carlo pricing model. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
The warrants issued upon the closing of the Company’s December 13, 2023, offering, the closing of the Company’s June 2024 debt financing, the rights offering on January 10, 2025, and the execution of the debt amendment on November 13, 2025 all met the criteria for equity classification under ASC 815. Accordingly, these warrants have been classified as equity as of December 31, 2025 and December 31, 2024.
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Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, including stock options, restricted shares (“RSUs”), based on estimated fair values at the award grant date. The fair value of stock-based awards is amortized over the vesting period of the award using a straight-line method.
Stock-based compensation expense for awards with performance conditions is recognized when it is probable that the performance condition will be achieved and is then recognized over the requisite service period. Any changes in the probability assessment are accounted for as a cumulative adjustment to the current period compensation cost.
To estimate the fair value of an award, the Company uses the Black-Scholes option pricing model. This model requires inputs such as expected life, expected volatility, expected dividend yield of stock and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. While estimates of expected life and volatility are derived primarily from the Company’s historical data, the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected life assumption. The Company accounts for forfeitures in the period they occur.
The Company also follows the guidance of accounting standards for accounting for equity instruments that are issued to non-employees for acquiring, or in conjunction with selling, goods or services for equity instruments issued to consultants.
Net Loss per Common Share
Net income or loss per common share is calculated as basic net income or loss per share and diluted net income per share, in the case of recognizing net income. Basic net income per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share is computed in the same manner as basic net income after assuming issuance of common stock for all potentially dilutive equivalent shares, which includes the potential dilution that could occur: (i) if the RSUs with service conditions were fully vested (using the treasury stock method); (ii) if all of the Company’s outstanding stock options that are in-the-money were exercised (using the treasury stock method); (iii) if the RSUs with service and market conditions were considered contingently issuable; (iv) if the RSUs with service and performance conditions were considered contingently issuable; (v) if outstanding warrants were exercised; and (vi) if convertible debt was converted to common stock. The computation of diluted net loss per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings.
The following table presents the calculation of net loss per share:
| | | | | | |
| | Years Ended December 31, | ||||
| | 2025 | | 2024 | ||
Basic and Diluted: | | (amounts, in thousands, except share and per share data) | ||||
Numerator: |
| | |
| | |
Net loss | | $ | ( | | $ | ( |
Denominator: | |
| | |
| |
Basic and diluted weighted average common shares outstanding | |
| | |
| |
| | | | | | |
Basic and diluted earnings per common share | | $ | ( | | $ | ( |
The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock attributable to common stockholders, because their effect was anti-dilutive:
| | | | |
| | As of December 31, | ||
| | 2025 | | 2024 |
Stock options outstanding |
| |
| |
Warrants for common stock |
| |
| |
RSUs* |
| |
| |
Convertible securities |
| |
| |
* Total number of RSUs include
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Shipping and Handling Costs
The cost of shipping products to customers and distributors is typically borne by the customer or distributor. The Company records shipping and handling costs in cost of goods sold. Total freight costs amounted to approximately $
Effect of Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09 entitled “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU provides guidance related to additional disclosures related to income taxes. The updated guidance is effective for public entities for fiscal years beginning after December 15, 2024. The Company implemented the updated guidance as of January 1, 2025 using a prospective method. This ASU resulted in additional disclosures in the Company’s consolidated financial statements related to income taxes in 2025. Refer to Note 7, Income Taxes, for additional information.
In December 2025, the FASB issued ASU No. 2025-10 entitled “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities.” This ASU provides guidance related to business entities that receive a government grant. The updated guidance requires grants related to income presented separately under a general heading such as other income or as a deduction from the related expense and is effective for annual reporting periods beginning after December 15, 2028. The Company has early adopted this guidance and records grant income, net of expenses, as a reduction of research and development expenses for the years ended December 31, 2025 and 2024.
Recent Accounting Pronouncements Not Yet Effective
In November 2024, the FASB issued ASU 2024-03 entitled, “Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities (“PBEs”) to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements, including disclosing the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization in each relevant expense caption. It also requires PBEs to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and to disclose the total amount of selling expenses, and in the annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05 entitled, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” This ASU provides all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments are effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. The Company is currently evaluating this standard and its impact on its consolidated financial statements.
Reclassifications
Certain amounts included in prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications did not have a material impact on the Company’s previously reported financial statements.
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3. REVENUE
The following table disaggregates the Company’s revenue by customer type and geographic area for the year ended December 31, 2025:
| | | | | | | | | |
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Product revenue: |
| | |
| | |
| | |
United States | | $ | | | $ | | | $ | |
Germany | |
| | | | | | | |
All other countries | |
| | |
| | |
| |
| |
| | |
| | |
| |
Product revenue | | $ | | | $ | | | $ | |
The following table disaggregates the Company’s revenue by customer type and geographic area for the year ended December 31, 2024:
| | | | | | | | | |
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Product revenue: |
| | |
| | |
| | |
United States | | $ | | | $ | | | $ | |
Germany | |
| | | | | | | |
All other countries | |
| | | | | | | |
| |
| | | | | | | |
Product revenue | | $ | | | $ | | | $ | |
CytoSorb Sales
The Company sells its CytoSorb device using both its own sales force (direct sales) and through the use of distributors and/or strategic partners. CytoSorb is not yet approved for commercial sale in the United States. The Company’s U.S. sales relate to its VetResQ related products for emergency and critical care in animals. Direct sales outside the United States relate to sales to hospitals located in Germany, Switzerland, Austria, Belgium, Luxembourg, Poland, the Netherlands, Sweden, Denmark, Norway, India, Dubai, and the United Kingdom and others. Direct sales are fulfilled from the Company’s warehouse facility in Berlin, Germany. There are no formal sales contracts with any direct customers relating to product price or minimum purchase requirements. However, there are agreements in place with certain direct customers that provide for either free of charge product or rebate credits based upon achieving minimum purchase levels. The Company records the value of these items earned as a reduction of revenue. These customers submit purchase orders and the order is fulfilled and shipped directly to the customer. Prices to all direct customers are based on a standard price list based on the packaged quantity.
Distributor and strategic partner sales make up the remaining product sales. These distributors are located in various countries throughout the world. The Company has a formal written contract with each distributor/strategic partner. These contracts have terms ranging from
Most distributor/strategic partner’s contracts have minimum annual purchase requirements in order to maintain exclusivity in their respective territories.
There is no additional consideration or monetary penalty that would be required to be paid to CytoSorbents if a distributor does not meet the minimum purchase commitments included in the contract, however, at the discretion of the Company, the distributor may lose its exclusive rights in the territory if such commitments are not met.
In summary, the contracts the Company has with customers are the distributor/strategic partner contracts related to CytoSorb product sales, agreements with direct customers related to free-of-charge product and credit rebates based upon achieving minimum purchase levels. The Company does not currently incur any outside/third-party incremental costs to obtain any of these contracts.
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The following table provides information about receivables and contract liabilities from contracts with customers:
| | | | | | |
| | December 31, 2025 | | December 31, 2024 | ||
| | (amounts in thousands) | ||||
Contract receivables, which are included in accounts receivable | | $ | | | $ | |
Contract liabilities, which are included in accrued expenses and other current liabilities | | $ | | | $ | |
Contract receivables represent unconditional rights to consideration for goods delivered or services performed under contracts with customers, including purchase orders. These amounts, which are included in accounts receivable on the consolidated balance sheets, were approximately $
Contract liabilities, which are included in accrued expenses and other current liabilities on the consolidated balance sheets, represent the value of free of charge goods and credit rebates earned in accordance with the terms of certain direct customer agreements, which amounted to $
4. BALANCE SHEET COMPONENTS
Inventories - net
The Company had the following major classes of inventory:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts in thousands) | ||||
Raw Materials | | $ | | | $ | |
Work in Process | |
| | |
| |
Finished Goods | |
| | |
| |
Inventories | | $ | | | $ | |
Less reserve | | | ( | | | — |
Inventories – net | | $ | | | $ | |
Property and equipment - net
The Company’s Property and equipment - net, consist of the following:
| | | | | | | | |
| | December 31 | | Depreciation | ||||
| | 2025 | | 2024 | | Period | ||
| | (amounts in thousands) | | | ||||
Furniture and fixtures | | $ | | | $ | |
| |
Equipment and computers | |
| | |
| |
| |
Leasehold improvements | |
| | |
| |
| Lesser of term of lease or estimated useful life |
| |
| | |
| |
| |
Less accumulated depreciation | |
| ( | |
| ( |
| |
Property and Equipment, Net | | $ | | | $ | |
| |
Depreciation expense for the years ended December 31, 2025 and 2024, amounted to $
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Patents - net
Patents consist of the following:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts in thousands) | ||||
Patent applications pending | | $ | | | $ | |
Patents issued | | | | | | |
Less accumulated amortization of patents issued | |
| ( | |
| ( |
Patents - net | |
| | |
| |
Patent amortization expense amounted to $
Patent amortization expense for the next five years and thereafter is scheduled as follows:
| | | |
| | (amounts, in thousands) | |
2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | | | |
Scheduled amortization of patents issued | | $ | |
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Accrued salaries and commissions | | $ | | | $ | |
Professional fees | | | | | | |
Clinical studies | |
| | |
| |
Deferred revenue | |
| | |
| |
Royalties | | | | | | |
Goods received not invoiced | | | | | | |
Other | |
| | |
| |
Accrued expenses and other current liabilities | | $ | | | $ | |
5. LONG-TERM DEBT
Loan and Security Agreement
June 28, 2024 Loan:
On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with Avenue Capital Group (“Loan”). Avenue Capital Group agreed to loan the Company up to an aggregate of $
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disbursed at the Company’s request between July 1, 2025 and December 31, 2025, if the Company received FDA marketing approval of its DrugSorb-ATR application, which it did not. The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and were additionally used for working capital purposes and to fund general business requirements. Amounts borrowed under the Avenue Capital Commitment bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (
As additional consideration for the Commitment, on June 28, 2024, the Company also issued Avenue Capital Group with warrants with a fair value of $
The loan required interest-only payments for the first
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 allowed for the $
The Lenders were also granted the right while the Commitment is outstanding to convert up to an aggregate amount of $
The obligations under the Loan and Security Agreement are secured by a first priority security interest in favor of the Lenders with respect to the Company’s Shares (as defined in the Loan and Security Agreement) and the Company’s Collateral (as defined in the Loan and Security Agreement), which includes the Company’s intellectual property, pursuant to that certain Intellectual Property Security Agreement, dated as of June 28, 2024, by and between the Company and the Administrative Collateral Agent.
November 13, 2025 Amended Loan and Security Agreement
On November 13, 2025, the Company and Avenue Capital Group entered into the First Amendment to Loan Documents (the “Amended Loan and Security Agreement”), amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement funded an additional aggregate $
Upon a prepayment, the Company would incur a fee ranging from
The Loan and Security Agreement includes customary loan conditions, company representations and warranties, company affirmative covenants and company negative covenants for secured transactions of this type. As of December 31, 2025, the Company was in compliance with these covenants.
The Company evaluated the amendment in accordance with applicable accounting guidance and determined that the amendment should be accounted for as a debt modification. As a result of the debt amendment, there were no write-offs of existing unamortized deferred financing costs. The Company recorded new deferred financing costs of approximately $
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fair value of warrants issued in connection with the debt amendment. The Company incurred approximately $
The Company’s obligations under the Amended Loan and Security Agreement are joint and several (see June 28, 2024 Loan for obligation under original loan agreement).
Under the terms of the Amended Loan and Security Agreement, the Company issued additional warrants to Avenue Capital Group to purchase
Debt Discounts Related to Avenue Capital Group Agreements
In connection with the long-term debt transactions, the Company recorded the following discounts:
| | | |
| | (amounts, in thousands) | |
Fair value of warrants issued to Avenue Capital Group - 2024 | | $ | |
Fair value of warrants issued to Avenue Capital Group - 2025 | | | |
Final fee | | | |
Debt issuance cost | |
| |
Commitment fee paid on the Closing Date ( | |
| |
Total discounts recorded at inception against Avenue Capital Group Long Term Debt | | $ | |
The Company amortizes debt discounts as interest expense using the interest method through the maturity date. The loan and security agreement included a final payment upon maturity of $
The Company’s obligations under the Amended Loan and Security Agreement are joint and several. The obligations under the Loan and Security Agreement are secured by a first priority security interest in favor of the Lenders with respect to the Company’s Shares (as defined in the Loan and Security Agreement) and the Company’s Collateral (as defined in the Loan and Security Agreement), which includes the Company’s intellectual property, pursuant to that certain Intellectual Property Security Agreement, dated as of June 28, 2024, by and between the Company and the Administrative and Collateral Agent.
Long - term debt as of December 31, 2025, and 2024 consists of the following:
| | | | | | |
| | As of December 31, 2025 | | | As of December 31, 2024 | |
| | (amounts in thousands) | ||||
Principal amount | | $ | | | | |
Plus: final payment upon maturity | | | | | | |
Less unamortized debt discount | |
| ( | | | ( |
Subtotal | |
| | | | |
Less current maturities | |
| — | | | — |
Long-term debt net of current maturities | | $ | | | | |
As of December 31, 2025, principal payments of long-term debt, including the final payment, are due as follows:
| | | |
| | (amounts, in thousands) | |
2026 | | $ | — |
2027 | |
| |
Total | | $ | |
Bridge Bank
On June 28, 2024, concurrent with the closing of the Avenue Capital Group financing discussed above, the Company paid off its existing outstanding debt with Bridge Bank.
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As of December 31, 2025, the following commitments survive after the termination of the Bridge Bank Amended and Restated Loan and Security Agreement and related amendments:
2022 Success Fee Letter
Pursuant to the 2022 Success Fee Letter, the Company will pay to Bridge Bank a success fee equal to (i)
6. LEASES
The Company has operating leases that primarily relate to operating facilities in both the United States and Germany. The Company leases its operating facilities under operating lease arrangements with varying expiration dates through March 2037. As of December 31, 2025, the remaining lease term of the Company’s operating leases ranges from six to
Supplemental statement of operations and cash flows related to operating leases is as follows:
| | | | | | |
| | For the year ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Cash paid in connection with operating leases | | $ | | | $ | |
Supplemental balance sheet information related to operating leases is as follows:
| | | | | | | |
| | December 31, |
| ||||
| | 2025 | | 2024 |
| ||
| | (amounts, in thousands) | | ||||
Right-of-use asset | | $ | | | $ | | |
Lease liability – current portion | | $ | | | | | |
Lease liability – net of current portion | |
| | | | | |
Total lease liability | | $ | | | $ | | |
Weighted average discount rate | | | % | | % | ||
Weighted average remaining lease term | | | | | | ||
Lease Expense
The components of lease expense were as follows:
| | | | | | |
| | For the year ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Operating lease cost | | $ | | | $ | |
Variable lease cost | |
| | |
| |
Total lease cost | | $ | | | $ | |
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As of December 31, 2025, the maturities of the lease liabilities are as follows:
| | | |
2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Future operating lease payments | | | |
Imputed interest | | | ( |
Total lease liability | | $ | |
7. INCOME TAXES
In December 2023, FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The Company adopted ASU 2023-09 for the annual period beginning January 1, 2025, using a prospective transition method in accordance with ASC 740-10-65-9. Accordingly, the Company has presented the enhanced income tax disclosures, including disaggregated effective tax rate reconciliation and disaggregated income taxes paid, beginning with the year ended December 31, 2025, and has not restated prior-period comparative disclosures. The adoption of ASU 2023-09 affected only the Company’s income tax disclosures and did not have a material impact on its consolidated financial position, results of operations, or cash flows.
The Company’s consolidated loss before income taxes for the years ended December 31, 2025 and 2024 is as follows:
| | | | | | |
| | Year Ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Domestic | | $ | ( | | $ | ( |
Foreign | |
| | |
| ( |
Total | | $ | ( | | $ | ( |
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The benefit for income taxes consists of the following:
| | | | | | |
| | December 31, | ||||
| | 2025 | | 2024 | ||
| | | (amounts, in thousands) | |||
Current: | | | | | | |
Federal | | $ | — | | $ | — |
State Tax, including sale of New Jersey losses & credits | | | | | | |
Foreign tax provision | |
| — | |
| — |
Total current | | | | | | |
| | | | | | |
Deferred | | | | | | |
Federal | | | — | | | — |
State Tax, including sale of New Jersey losses & credits | | | — | | | — |
Foreign tax provision | | | — | | | — |
Total deferred | | | — | | | — |
| | | | | | |
Total income tax provision (benefit) | | | | | | |
Federal | | | — | | | — |
State Tax, including sale of New Jersey losses & credits | | | | | | |
Foreign tax provision | | | — | | | — |
Total | | $ | | | $ | |
Income taxes paid (net of refunds received) for the years ended December 31, 2025 and 2024, consisted of the following:
| | | | | | |
| | December 31, | ||||
| | 2025 | | | 2024 | |
| | (amounts, in thousands) | ||||
Federal | | $ | — | | | |
State | |
| ( | | | ( |
Foreign | |
| — | | | |
Total | | $ | ( | | | ( |
The Company has deemed any foreign earnings will be indefinitely reinvested. Currently, foreign operations have resulted in an accumulated deficit. The Company will continue to analyze their stance if their circumstances change in the future.
As of December 31, 2025, the Company had federal net operating loss (“NOL”) carry forwards of $
The federal NOL carryforwards of $
The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The NOLs may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. In addition to the new provisions enacted under the Tax Cuts and Jobs Act, this could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will generally be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not determined whether such a change has occurred and accordingly, the utilization of the net operating loss carryforwards may be subject to certain limitations.
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Sale of NOLs
The Company may be eligible, from time to time, to receive cash from the sale of its Net Operating Losses and R&D tax credits under the State of New Jersey Technology Business Tax Certificate Transfer Program.
As of December 31, 2025, the Company has accrued a receivable $
The principal components of the Company’s deferred tax assets and liabilities are as follows:
| | | | | | |
| | Year Ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Current and long term deferred tax assets: | | | | | | |
Federal NOL | | $ | | | $ | |
Foreign NOL | | | | | | |
NJ NOL | | | | | | |
Net operating loss carryforward | | | | | | |
Stock Options | |
| | |
| |
Federal R&D Credit | | | | | | |
Research and development credit carryforward | |
| | |
| |
Other | | | | | | |
Charitable Contributions | | | | | | |
Accruals and others | |
| | |
| |
§174(b) research & experimental | |
| | |
| |
§163(j) business interest expense | | | | | | |
Lease Liability | |
| | |
| |
Gross deferred tax assets | | | | | | |
Less valuation allowance | |
| ( | |
| ( |
| | | | | | |
Deferred tax liability: | |
| | |
| |
Fixed Assets | |
| ( | |
| ( |
Right of Use Asset | |
| ( | |
| ( |
Net deferred tax assets | | $ | — | | $ | — |
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the deferred tax assets for each period because it is more likely than not that all of the deferred tax assets will not be realized.
The changes in valuation allowance for the years ended December 31, 2025 and 2024 were $
F-23
Table of Contents
A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows for the year ended December 31 2025:
| | | | | | |
| | Year Ended December 31, |
| |||
| | $ | | % |
| |
Federal statutory rate | | $ | ( |
| | % |
State and local income taxes, net of federal income tax effect | |
| ( |
| | |
Foreign tax effects | | | | | | |
Germany | | | | | | |
Foreign rate differential | |
| ( |
| | |
Foreign-exchange tax effects | |
| ( |
| | |
Change in valuation allowance | |
| |
| ( | |
Foreign deferred tax adjustments | |
| |
| ( | |
Other foreign jurisdictions | |
| |
| ( | |
Total foreign tax effects | |
| |
| ( | |
Tax credits | | | | | | |
Research and development tax credits | |
| |
| ( | |
Changes in valuation allowance | |
| |
| ( | |
Nontaxable or nondeductible items | |
| |
| | |
Incentive stock options | |
| |
| ( | |
Restricted stock units shortfall | |
| |
| ( | |
Deferred true-ups | |
| ( |
| | |
Expiring Federal NOL | |
| |
| ( | |
Other | |
| |
| ( | |
Total nontaxable or nondeductible items | |
| |
| ( | |
Changes in unrecognized tax benefits | |
| |
| | |
Federal R&D credit | |
| ( |
| | |
Other | | | | | | |
Consolidation and intercompany eliminations | | | ( | | | |
| | | | | | |
Effective income tax rate | | $ | ( |
| | % |
For the year ended December 31, 2025, state income taxes in New Jersey comprise the state and local income taxes, net of federal income tax effect category.
A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows for the year ended December 31 2024:
| | | |
| | Year Ended December 31, | |
| | 2024 | |
Federal statutory rate |
| | % |
State taxes, net of federal benefit |
| |
|
Foreign rate differential |
| |
|
Permanent items |
| ( |
|
Other rate change and true-up |
| |
|
NJ NOL and R&D credit write-off | | ( | |
True up of foreign NOLs | | ( | |
NJ Amended NOL | | | |
Uncertain tax positions | | ( | |
Change in valuation allowance |
| ( |
|
R&D credit |
| |
|
Sale of 2023 NJ R&D & NOL |
| |
|
Other | | — | |
Effective income tax rate |
| | % |
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Table of Contents
A reconciliation of the unrecognized tax benefit balances is as follows:
| | | | | | |
| | Year Ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Balance at beginning of the year | | $ | | | $ | |
Increase for tax positions of prior years | |
| ( | |
| ( |
Increase for tax positions in current year | |
| — | |
| |
Balance at end of the year | | $ | | | $ | |
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and New Jersey. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2020, although NOL carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2025, no significant adjustments have been proposed relative to our tax positions.
For year ended December 31, 2025, there are
8. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is, from time to time, subject to claims and litigation arising in the ordinary course of business. The Company intends to defend vigorously against any future claims and litigation.
On March 5, 2024, a former employee filed a complaint against us in the Superior Court of New Jersey, Law Division, Mercer County, alleging retaliatory termination in breach of the New Jersey Conscientious Employee Protection Act (“CEPA”). Following further discussion, the parties agree there was a professional misunderstanding between them and have amicably resolved the litigation.
Royalty Agreement
The Company is, at times, party to various royalty and license agreements that require the payment of royalty fees. Currently the Company records royalty expense of
401 (k) Plan
In June 2014, the Company formed the CytoSorbents 401(k) Plan. The plan is a defined contribution plan as described in section 401(k) of the Internal Revenue Code (“IRC”) covering substantially all full-time employees. Employees are eligible to participate in the plan on the first day of the calendar quarter following three full months of employment. Participants may defer up to
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Table of Contents
9. STOCKHOLDERS’ EQUITY
Preferred Stock
In June 2019, the Company amended and restated its Certificate of Incorporation. The amended and restated certificate of incorporation authorizes the issuance of up to
Common Stock
For the years ended December 31, 2025 and 2024, issuance of common stock offerings, net of fees incurred were as follows:
| | | | | | | | | | | |
| | For the year ended December 31, 2025 | | | For the year ended December 31, 2024 | ||||||
| | Shares Issued | | Proceeds, Net of Fees | | | Shares Issued | | Proceeds, Net of Fees | ||
January 10, 2025 Offering | | | | $ | | | | — | | $ | — |
Series A Rights Warrants | | | | | | | | | | | |
Open Market Sale Agreement with Jefferies LLC | | — | | | — | | | | | | |
| | | | $ | | | | | | $ | |
Shelf Registration
On July 26, 2024, the Company filed a registration statement on Form S-3 with the SEC (the “2024 Shelf”), which enables the Company to offer and sell in one or more offerings, any combination of common stock, preferred stock, senior or subordinated debt securities, warrants and units, up to a total dollar amount of $
Open Market Sale Agreement with Jefferies LLC
On December 30, 2021, the Company entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (the “Agent”), pursuant to which the Company may sell, from time to time, at its option, shares of the Company’s common stock having an aggregate offering price of up to $
Subject to the terms of the Sales Agreement, the Agent is required to use its commercially reasonable efforts consistent with their normal sales and trading practices to sell the shares of the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company is required to pay the Agent a commission of up to
F-26
Table of Contents
January 10, 2025 Rights Offering
On January 10, 2025, the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”), raising aggregate gross proceeds of $
| | | | | | | |
| | | Series A Right | | Series B Right |
| |
| | | Warrant | | Warrant |
| |
Common Stock Price as of Issuance Date | | $ | | $ | | | |
Risk-Free Rate | |
| % |
| | % | |
Dividend Rate | |
| % |
| % | ||
Volatility | |
| % |
| | % | |
Minimum Exercise Price | | $ | | $ | | | |
Maximum Exercise Price | | $ | | $ | | | |
Formula for Exercise Price | |
| | ||||
Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $
The Right Warrants were exercisable commencing on their date of issuance and the exercise price is equal to (i) in the case of the Series A Right Warrants,
Exercise of the Right Warrants required additional investment separate from the purchase of the Units.
On February 24, 2025, approximately
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Table of Contents
10. STOCK-BASED COMPENSATION
Stock Option Plans
As of December 31, 2025, the Company had
In June 2024, the Company amended and restated CytoSorbents Corporation 2014 Long-term Incentive Plan (the “Plan”). The amended and restated Plan increased the number of shares to be reserved and authorized for issuance under the Plan by
A total of
Total stock-based compensation expense for the year ended December 31, 2025 amounted to $
Stock-Based Compensation
The following non-cash stock-based compensation expense, which relates to stock options and restricted stock units (“RSUs”), is included in each of the respective line items in the Company’s consolidated statements of operations and comprehensive loss:
| | | | | | |
| | Year Ended December 31, | ||||
| | 2025 | | 2024 | ||
Stock-based compensation expense by category | | (amounts, in thousands) | ||||
Cost of goods sold | | $ | | | $ | |
Research and development, net of grant income | |
| | |
| |
Selling, general and administrative | |
| | |
| |
Total stock-based compensation expense | | $ | | | $ | |
The summary of the stock option activity for the years ended December 31, 2025 and 2024 is as follows:
| | | | | | | |
| | | | | | | Weighted |
| | | | Weighted | | Average | |
| | | | Average | | Remaining | |
| | | | Exercise | | Contractual | |
| | Shares | | per Share | | Life (Years) | |
| | | | | | | |
Outstanding, December 31, 2023 |
| | | $ | |
| |
Granted |
| | | $ | |
| |
Forfeited |
| ( | | $ | |
| — |
Expired |
| ( | | $ | |
| — |
Outstanding, December 31, 2024 |
| | $ | | | ||
Granted |
| | | $ | |
| — |
Forfeited |
| ( | | $ | |
| — |
Expired |
| ( | | $ | |
| — |
Exercised |
| ( | | $ | |
| — |
Outstanding, December 31, 2025 |
| | | $ | |
| |
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Table of Contents
The fair value of each stock option was estimated using the Black-Scholes pricing model which takes the following inputs into account.
| | | | | | | | | | | |
| | Grant Date | | Weighted Average Expected Life | | Expected | | | | Risk Free |
|
| | Exercise Price | | of the Stock | | Volatility | | Expected | | Interest Rate |
|
Year - Ended | | Range | | Option* | | Range | | Dividends | | Range | |
December 31, 2024 | | $ | | | % | — | % | % | |||
December 31, 2025 | | $ | | | % | — | % | % |
* The expected term of the options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term.
In addition, the Company recognizes forfeitures as they occur.
The intrinsic value is calculated at the difference between the market value as of December 31, 2025 of $
| | | | | | | | | | |
Options Outstanding | ||||||||||
| | Number | | Weighted | | Weighted | | | | |
Range of | | Outstanding at | | Average | | Average | | Aggregate | ||
Exercise | | December 31, | | Exercise | | Remaining | | Intrinsic | ||
Price | | 2025 | | Price | | Life (Years) | | Value | ||
$ |
| | | $ | | | $ | — | ||
| | | | | | |
Options Exercisable | ||||||
Number | | Weighted | | | | |
Exercisable at | | Average | | Aggregate | ||
December 31, | | Exercise | | Intrinsic | ||
2025 | | Price | | Value | ||
| | $ | | $ | — | |
The summary of the status of the Company’s non-vested options for the year ended December 31, 2025, is as follows:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | Shares | | Fair Value | |
| | | | | |
Non-vested, January 1, 2025 |
| | | $ | |
Granted |
| | | | |
Forfeited |
| ( | | | |
Vested |
| ( | | | |
Non-vested, December 31, 2025 |
| | | $ | |
As of December 31, 2025, the Company had approximately $
The summary of the status of the Company’s non-vested options for the year ended December 31, 2024, is as follows:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | Shares | | Fair Value | |
| | | | | |
Non-vested, January 1, 2024 |
| | | $ | |
Granted |
| | |
| |
Forfeited |
| ( | |
| |
Vested |
| ( | |
| |
Non-vested, December 31, 2024 |
| | | $ | |
F-29
Table of Contents
As of December 31, 2024, the Company had approximately $
Change in Control-Based Awards of Restricted Stock Units:
The Board of Directors has granted restricted stock units to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company. These restricted stock units will only vest upon a Change in Control of the Company, as defined in the Company’s 2014 Long-Term Incentive Plan, or upon certain life events.
The following table is a summary of the outstanding balance of these restricted stock units at the end of each of the past two calendar years:
| | | | | |
| | Total | | Weighted Average Grant Date Fair Value | |
December 31, 2023 |
| | | $ | |
Granted 2024 | | | | | |
Forfeited 2024 | | ( | | | |
December 31, 2024 | | | $ | | |
Granted 2025 |
| | |
| |
Vested | | ( | | | |
Forfeited 2025 |
| ( | |
| |
December 31, 2025 |
| | | $ | |
Due to the uncertainty over whether these restricted stock units will vest, which will only happen upon a Change in Control, or upon certain life events, the Company will only record expense only upon an actual vesting event. For the year ended December 31, 2025 the Company recorded non-cash charges totaling $
Other Restricted Stock Units:
The following table outlines the restricted stock unit activity (not related to change in control-based awards) for the year ended December 31, 2025:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | Shares | | Fair Value | |
Non-vested, January 1, 2025 |
| | | $ | |
Granted |
| | | $ | |
Forfeited |
| ( | | $ | |
Vested |
| ( | | $ | |
Non-vested, December 31, 2025 |
| | | $ | |
The following table outlines the restricted stock unit activity for the year ended December 31, 2024:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | Shares | | Fair Value | |
Non-vested, January 1, 2024 |
| | | $ | |
Granted | | | | $ | |
Forfeited |
| ( | | $ | |
Vested | | ( | | $ | |
Non-vested, December 31, 2024 | | | | $ | |
At December 31, 2025 and December 31, 2024, the remaining weighted average vesting period for restricted stock awards subject to vesting was
F-30
Table of Contents
Warrants
As of December 31, 2025, the Company had
11. SEGMENT INFORMATION
The Company operates and manages its business as
The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. All material long-lived assets are located in New Jersey, and Berlin Germany. Long-lived assets consist of property and equipment, net and operating lease right-of-use assets.
Factors used in determining the reportable segment include the nature of the Company’s operations, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. The accounting policies of the segment are the same as those described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies.
The Company operates under
The components presented in the consolidated statements of operations and comprehensive loss also present the components of the Company’s single operating segment.
F-31
Table of Contents
The CODM uses financial metrics to evaluate the Company’s spending and monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing resource allocation across the organization. The financial metrics used by the CODM in evaluating the Company’s spending and monitoring budget versus actual results are as follows:
| | | | | | | |
| | Years ended December 31, | | ||||
| | 2025 | | 2024 | | ||
| | (amounts, in thousands) | | ||||
| | | | | | | |
Revenue | | $ | | | $ | | |
Gross profit | | $ | | | $ | | |
Gross margin | | | | % |
| | % |
Total operating expenses | | $ | | | $ | | |
Loss from operations | | | ( | | | ( | |
| | | | | | | |
EBITDA and Adjusted EBITDA (both non-GAAP measures): | | | | | | | |
Net loss | | $ | ( | | $ | ( | |
Interest expense, net | |
| | |
| | |
Benefit from income taxes | | | ( | | | ( | |
Depreciation and amortization expense | | | | | | | |
Earnings (Loss) before interest expense, income taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure | | | ( | | | ( | |
| | | | | | | |
Stock-based compensation | | | | | | | |
(Gain) loss on foreign currency transactions | | | ( | | | | |
Restructuring | | | | | | — | |
Adjusted EBITDA, a non-GAAP measure | | $ | ( | | $ | ( | |
| | | | | | | |
Adjusted net loss, a non-GAAP measure: | | | | | | | |
Net loss | | $ | ( | | $ | ( | |
Stock-based compensation | | | | | | | |
Gain (loss) on foreign currency transactions | | | ( | | | | |
Restructuring | | | | | | — | |
Adjusted net loss, a non-GAAP measure | | $ | ( | | $ | ( | |
Total cash used in operating and investing activities | | $ | ( | | $ | ( | |
Total Assets | | $ | | | $ | | |
F-32
Table of Contents
Significant expense categories regularly provided to the CODM consist of the following:
| | | | | | |
| | Years ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
| | | | | | |
Research and development, net of grant income: | | | | | | |
Clinical expenses | | $ | | | $ | |
Other research and development expenses | |
| | |
| |
Total research and development, net of grant income | | $ | | | $ | |
| | | | | | |
Selling, general and administrative | |
| | |
| |
Royalty expense | |
| | |
| |
Stock-based compensation | |
| | |
| |
Legal, financial and consulting | |
| | |
| |
Other general and administrative | |
| | |
| |
Total selling, general and administrative | | $ | | | $ | |
Capital expenditures of the segment totaled $
12. RESTRUCTURING
Restructuring Plan
During the fourth quarter of 2025, the Company initiated a strategic workforce and cost reduction plan (the “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
Restructuring Charges
The following table presents the components of restructuring charges.
| | | | | | |
| | Years ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Restructuring |
| | |
| | |
Workforce reduction |
| $ | |
| $ | — |
Other restructuring costs | |
| | |
| — |
Total restructuring | | $ | | | $ | — |
F-33
Table of Contents
The table below sets forth the estimated amount of unpaid restructuring charges as of December 31, 2025 and 2024 included in accrued expenses that are expected to be paid in less than one year. Total additions to unpaid restructuring charges are limited to workforce reductions as the other components of restructuring costs do not require cash payments.
| | | | | | |
| | Year Ended December 31, | ||||
| | 2025 | | 2024 | ||
| | (amounts, in thousands) | ||||
Restructuring charges, beginning of the year | | $ | — | | $ | — |
Additions | |
| | |
| — |
Payments | | | ( | | | — |
Restructuring charges unpaid and outstanding, end of year | | $ | | | $ | — |
13. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of issuance of these consolidated financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements.
F-34
FAQ
What does CytoSorbents (CTSO) primarily do?
What is CytoSorb and where is it approved?
What is DrugSorb‑ATR and what is its regulatory status?
How large is CytoSorbents’ current market presence?
How is CytoSorbents funding its R&D programs?
What is CytoSorbents’ equity and share profile?
