CytoSorbents (Nasdaq: CTSO) flags going concern as cash falls to $5.9M
CytoSorbents Corporation reported Q2 2026 revenue of $9.6 million, essentially flat year over year, with gross margin improving to 73.2%. Loss from operations narrowed to $2.6 million, but a foreign‑currency loss and higher interest drove a net loss of $4.4 million versus prior‑year profit.
Cash, cash equivalents and restricted cash totaled $5.9 million at June 30, 2026, compared with $18.4 million of Avenue Capital term debt due in 2027. Management states that these cash levels, debt obligations and expected cash use raise substantial doubt about the company’s ability to continue as a going concern over the next 12 months.
Operating expenses declined, aided by a Strategic Workforce and Cost Reduction Plan that reduced headcount by about 23% and generated approximately $0.3 million of Q2 restructuring charges. The company continues to pursue U.S. FDA De Novo clearance for its DrugSorb‑ATR antithrombotic removal system, now targeting a new submission in early 2027.
Positive
- Loss from operations improved by 27% year over year in Q2 2026, decreasing to $2.6 million as gross profit rose and total operating expenses fell.
- Operating cash burn (company metric) for the six months ended June 30, 2026 improved to $1.8 million from $4.9 million, indicating significantly lower cash use than in the prior‑year period.
Negative
- Management disclosed that current liquidity and projected cash use raise substantial doubt about CytoSorbents’ ability to continue as a going concern within 12 months.
- Stockholders’ equity shifted to a deficit of $0.75 million at June 30, 2026 from positive equity of $5.9 million at December 31, 2025, reflecting cumulative losses.
- Avenue Capital long‑term debt totals $18.4 million payable in 2027, versus $5.9 million of cash and restricted cash, creating a tight leverage and refinancing profile.
- Expected FDA approval of DrugSorb‑ATR needed to access Tranche 2(b) of the Avenue facility is now anticipated beyond December 31, 2026, limiting potential incremental liquidity and interest‑only extensions.
Key Figures
Key Terms
going concern financial
De Novo application regulatory
Breakthrough Device Designation regulatory
rights offering financial
EBITDA financial
MDUFA review timeline regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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How are CytoSorbents’ (CTSO) operating expenses and cash burn trending?
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
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Commission file number:
(Exact name of registrant as specified in its charter)
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incorporation or organization) |
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(Address of principal executive offices) | | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☑ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of July 31, 2026, there were
Table of Contents
CytoSorbents Corporation
FORM 10-Q
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION | | |
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Item 1. Financial Statements | | 3 |
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Condensed Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025 | | 3 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) | | 4 |
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Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) | | 5 |
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 (unaudited) | | 6 |
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Notes to Condensed Consolidated Financial Statements (unaudited) | | 7 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 25 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk | | 33 |
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Item 4. Controls and Procedures | | 34 |
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PART II. OTHER INFORMATION | | |
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Item 1. Legal Proceedings | | 36 |
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Item 1A. Risk Factors | | 36 |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | | 36 |
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Item 3. Defaults Upon Senior Securities | | 36 |
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Item 4. Mine Safety Disclosures | | 36 |
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Item 5. Other Information | | 37 |
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Item 6. Exhibits | | 37 |
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Signatures | | 38 |
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,” “PuriFi,” and “HotSwap,” 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 — FINANCIAL INFORMATION
Item 1. Financial Statements.
CYTOSORBENTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| | | | | | |
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (unaudited) | | | ||
ASSETS | | | |
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Current Assets: | | | |
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Cash and cash equivalents | | $ | | | $ | |
Accounts receivable, net of allowances of $ | |
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Inventories - net | |
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Prepaid expenses and other current assets | |
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Total current assets | |
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Property and equipment - net | |
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Restricted cash | | | | | | |
Right-of-use asset | | | | | | |
Patents - net | | | | | | |
Other assets | |
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Total assets | | $ | | | $ | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |
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Current Liabilities: | |
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Accounts payable | | $ | | | $ | |
Accrued expenses and other current liabilities | | | | | | |
Lease liability – current portion | | | | | | |
Current maturities of long-term debt, net of debt discount | |
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| — |
Total current liabilities | |
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Lease liability, net of current portion | | | | | | |
Long-term debt, net of current portion and debt discount | | | | | | |
Total liabilities | |
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Commitments and Contingencies | |
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Stockholders’ equity (deficit) | |
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Preferred Stock, par value $ | | | — | | | — |
Common Stock, par value $ | |
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Additional paid-in capital | |
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Accumulated other comprehensive loss | |
| ( | |
| ( |
Accumulated deficit | |
| ( | |
| ( |
Total stockholders’ equity (deficit) | |
| ( | |
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Total liabilities and stockholders’ equity (deficit) | | $ | | | $ | |
See accompanying notes to condensed consolidated financial statements.
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CYTOSORBENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and per share data)
| | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Revenue, net |
| $ | |
| $ | |
| $ | |
| $ | |
Cost of goods sold | |
| | | | | | | | | | |
Gross profit | |
| | | | | | | | | | |
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Operating expenses | |
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Research and development, net of grant income | |
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Selling, general and administrative | |
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Restructuring | | | | | | — | | | | | | — |
Total operating expenses | |
| | |
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Loss from operations | |
| ( | |
| ( | | | ( | | | ( |
| | | | | | | | | | | | |
Other income (expense) | |
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| | |
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Interest expense, net | |
| ( | |
| ( | | | ( | | | ( |
Gain (loss) on foreign currency transactions | | | ( | | | | | ( | | | | |
Total other income (expense), net | |
| ( | |
| | | | ( | | | |
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| | |
| | |
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Net income (loss) | | $ | ( | | $ | | | $ | ( | | $ | |
| |
| | | | | | | | | | |
Basic net income (loss) per common share | | $ | ( | | $ | | $ | ( | | $ | | |
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Diluted net income (loss) per common share | | $ | ( | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | |
Weighted Average Shares of Common Stock Outstanding | | | | | | | | | | | | |
Basic | |
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Diluted | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other comprehensive income (loss): | |
| | | | | | | | | | |
Foreign currency translation adjustment, net of tax | |
| | | | ( | | | | | | ( |
Comprehensive loss | | $ | ( | | $ | ( | | $ | ( | | $ | ( |
See accompanying notes to condensed consolidated financial statements.
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CYTOSORBENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
(in thousands, except share data)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | Accumulated | | | | | | | |
| | | | | | | Additional | | Other | | | | | | | ||
| | Common Stock | | Paid-In | | Comprehensive | | Accumulated | | Stockholders’ | |||||||
| | Shares | | Par Value | | Capital | | Loss | | Deficit | | Equity (Deficit) | |||||
For the three months ended June 30, 2026 | | | | | | | | | | | | | | | | | |
Balance as of March 31, 2026 (unaudited) | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
Stock-based compensation | | — | | | — | | | | | | — | | | — | | | |
Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes | | | | | — | | | — | | | — | | | — | | | — |
Foreign translation adjustment | | — | | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | — | | | ( | | | ( |
Balance as of June 30, 2026 (unaudited) | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | |
For the six months ended June 30, 2026 | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2025 | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
Stock-based compensation |
| — | | | — | | | | | | — | | | — | | | |
Reversal of excess RSU shares issued | | ( | | | — | | | — | | | — | | | — | | | — |
Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes | | | | | — | | | — | | | — | | | — | | | — |
Foreign translation adjustment |
| — | | | — | | | — | | | | | | — | | | |
Net loss |
| — | | | — | | | — | | | — | | | ( | | | ( |
Balance as of June 30, 2026 (unaudited) |
| | | $ | | | $ | | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | Accumulated | | | | | | | |
| | | | | | | Additional | | Other | | | | | | | ||
| | Common Stock | | Paid-In | | Comprehensive | | Accumulated | | Stockholders’ | |||||||
| | Shares | | Par Value | | Capital | | Loss | | Deficit | | Equity | |||||
For the three months ended June 30, 2025 | | | | | | | | | | | | | | | | | |
Balance as of March 31, 2025 (unaudited) | | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
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 | | | | | — | | | — | | | — | | | — | | | — |
Foreign currency translation adjustment, net of tax | | — | | | — | | | — | | | ( | | | — | | | ( |
Net income | | — | | | — | | | — | | | — | | | | | | |
Balance as of June 30, 2025 (unaudited) | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | |
For the six months ended June 30, 2025 | | | | | | | | | | | | | | | | | |
Balance as of 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 | | | | | | | | | | | — | | | — | | | |
Foreign translation adjustment | | — | | | — | | | — | | | ( | | | — | | | ( |
Net income |
| — | | | — | | | — | | | — | | | | | | |
Balance as of June 30, 2025 (unaudited) |
| | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
See accompanying notes to condensed consolidated financial statements.
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CYTOSORBENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| | | | | | |
| | Six | | Six | ||
| | Months Ended | | Months Ended | ||
| | June 30, | | June 30, | ||
| | 2026 | | 2025 | ||
Cash flows from operating activities | | | |
| | |
Net income (loss) | | $ | ( | | $ | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | |
| |
Amortization of debt discount | | | | | | |
Amortization of patents | | | | |
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Depreciation and amortization | | | | |
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Amortization of right-of-use asset | | | | | | |
Loss on abandoned patents | | | | |
| — |
Write-off of inventory | | | — | | | |
Bad debt expense (recovery) | | | | | | |
Stock-based compensation | | | | | | |
Foreign currency transaction (gains) losses | | | | |
| ( |
Changes in operating assets and liabilities | | | | |
| |
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 | | | ( | |
| ( |
Disposals of property and equipment | | | | |
| — |
Payments for patent costs | | | ( | |
| ( |
Net cash used in investing activities | | | ( | |
| ( |
Cash flows from financing activities | | | | |
| |
Cash for exercise of warrants, net | | | — | | | |
Proceeds from rights offering, net | | | — | | | |
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 as of beginning of period | | | | |
| |
Cash, cash equivalents, and restricted cash as of end of period | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of cash flow information | | | | |
| |
Cash paid for interest | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of non-cash financing activities | | | | |
| |
Fair value of common stock warrants issued in connection with the rights offering | | $ | — | | $ | |
See accompanying notes to condensed consolidated financial statements.
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CYTOSORBENTS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
1. | NATURE OF BUSINESS AND BASIS OF PRESENTATION |
CytoSorbents Corporation (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.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2026 and December 31, 2025, and for the three and six months ended June 30, 2026 and 2025. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore, do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments, for a fair presentation of the Company’s consolidated financial position and results of operations for the interim periods presented. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The results for the three and six months ended June 30, 2026 and 2025, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period. The Company presents amounts in thousands unless otherwise stated. Prior periods have been adjusted accordingly for consistent presentation. Certain prior year amounts in the footnotes have been reclassified to conform to the current year presentation.
Going Concern
As of June 30, 2026, 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 the ability to continue to reduce cash burn and achieve operating cash flow breakeven in the second half of 2026, 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 United States which would allow for the opportunity to receive Tranche 2 (b) of the Amended Avenue Capital Commitment by December 31, 2026 and receive an additional
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2. | SIGNIFICANT ACCOUNTING POLICIES |
There have been no material changes to significant accounting policies disclosed in the Company’s consolidated financial statements from the Annual Report on Form 10-K for the year ended December 31, 2025.
Basis of Consolidation and Foreign Currency Translation
The condensed consolidated financial statements include the accounts of CytoSorbents Corporation and its wholly owned subsidiaries, CytoSorbents Medical, Inc. and CytoSorbents Europe GmbH. In addition, the condensed consolidated financial statements include CytoSorbents Switzerland GmbH, CytoSorbents Poland Sp. z.o.o., CytoSorbents Medical UK Limited and CytoSorbents France SAS, 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. 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 (loss). Foreign currency transactions gains and losses are included in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.
Loss on Abandoned Patents
During the three months ended June 30, 2026 and 2025, the Company recorded immaterial non-cash losses related to abandoned patents. During the six months ended June 30, 2026 and 2025, the Company recorded non-cash charges of approximately $
Income Taxes
The Company has
Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. A full valuation allowance has been established on the deferred tax asset as it is more likely than not that a future tax benefit will not be realized. In addition, future utilization of the available net operating loss carryforward may be limited under Internal Revenue Code Section 382 as a result of changes in ownership.
The Company follows accounting standards associated with uncertain tax positions. The Company files tax returns in the United States federal and state, and international jurisdictions.
The Company utilizes the New Jersey Technology Business Tax Certificate Program (the “Program”) whereby the State of New Jersey allows the Company to sell a portion of its state net operating losses and research and development (“R&D”) credits to a third party. The Company received $
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Concentration of Credit Risk
The Company maintains cash balances with financial institutions, at times, in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a $250,000 limit. Through the IntraFi Network, the Company maintains an Insured Cash Sweep account whereby all cash held in the Company’s money market accounts is swept daily in increments of less than the FDIC insurance limit and deposited in a number of IntraFi’s network of
Product sales in Germany represented approximately
The Company does not have any significant concentration of risk with respect to any one particular supplier.
As of June 30, 2026, each of distributor A, distributor B and distributor C accounted for approximately
Shipping and Handling Costs
Total freight costs amounted to approximately $
3. | BALANCE SHEET COMPONENTS |
Cash, cash equivalents, and restricted cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows:
| | | | | | |
| | June 30, 2026 | | June 30, 2025 | ||
| | (amounts, in thousands) | ||||
Cash and cash equivalents | | $ | | | $ | |
Restricted cash | |
| | |
| |
Total cash, cash equivalents, and restricted cash | | $ | | | $ | |
Inventories - net
The Company had the following major classes of inventories:
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Raw materials | | $ | | | $ | |
Work in process | |
| | |
| |
Finished goods | | | | | | |
Inventories | | | | | | |
Less reserve | |
| — | |
| ( |
Inventories - net | | $ | | | $ | |
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Property and equipment - net
The Company’s property and equipment consist of the following:
| | | | | | | | |
| | | | | | | | Depreciation/ |
| | | | | | | | Amortization |
| | June 30, 2026 | | December 31, 2025 | | Period | ||
| | (amounts, in thousands) | | | ||||
Furniture and fixtures | | $ | | | $ | |
| |
Equipment and computers | |
| | |
| |
| |
Leasehold improvements | |
| | |
| |
| Lesser of term of lease or estimated useful life |
| |
| | |
| | | |
Less accumulated depreciation and amortization | |
| ( | |
| ( |
| |
Property and equipment - net | | $ | | | $ | |
| |
Depreciation expense for each of the three months ended June 30, 2026 and 2025 amounted to $
Patents - net
Patents consist of the following:
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Patent applications pending | | $ | | | $ | |
Patents issued | |
| | |
| |
Less accumulated amortization of patents issued | |
| ( | |
| ( |
Patents - net | | $ | | | $ | |
Patent amortization expenses amounted to $
Patent amortization expense related to “patents issued” for the next five years and thereafter is scheduled as follows:
| | | |
| | (amounts, in thousands) | |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Scheduled amortization of patents issued | | $ | |
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Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following:
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Accrued salaries and commissions | | $ | | | $ | |
Clinical studies | |
| | |
| |
Deferred revenue and contract liabilities | |
| | |
| |
Professional fees | | | | | | |
Royalties | | | | | | |
Goods received not invoiced | | | | | | |
Other | |
| | |
| |
Accrued expenses and other current liabilities | | $ | | | $ | |
4. | COMMON STOCK, STOCK-BASED COMPENSATION AND WARRANTS |
Common Stock
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 Warrant | | Series B Right 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 $
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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
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 condensed consolidated statements of operations and comprehensive loss:
| | | | | | |
| | Three Months Ended June 30, | ||||
Stock-based compensation expense by category | | 2026 | | 2025 | ||
| | (amounts, in thousands) | ||||
Cost of goods sold | | $ | | | $ | |
Research and development, net of grant income | |
| | |
| |
Selling, general and administrative | |
| | |
| |
Total stock-based compensation expense | | $ | | | $ | |
| | | | | | |
| | Six Months Ended June 30, | ||||
Stock-based compensation expense by category | | 2026 | | 2025 | ||
| | (amounts, in thousands) | ||||
Cost of goods sold | | $ | | | $ | |
Research and development, net of grant income | | | | | | |
Selling, general and administrative | |
| | |
| |
Total stock-based compensation expense | | $ | | | $ | |
For the six months ended June 30, 2026 and 2025, approximately $
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Stock-options
The summary of the stock option activity for the six months ended June 30, 2026, is as follows:
| | | | | | | |
| | | | | | | Weighted |
| | | | Weighted | | Average | |
| | | | Average | | Remaining | |
| | | | Exercise Price | | Contractual | |
| | Shares | | per Share | | Life (Years) | |
Outstanding, December 31, 2025 |
| | | $ | | | |
Granted |
| | | | |
| — |
Exercised | | — | | | — | | — |
Forfeited |
| ( | | | |
| — |
Expired |
| ( | | | |
| — |
Outstanding, June 30, 2026 |
| | | $ | | | |
The Company estimated the fair value of stock options granted during the six months ended June 30, 2026, which was approximately $
| | | | |
Exercise price (per share) | | $ | | |
Expected volatility | |
| | % |
Expected term* | |
| | |
Risk-free rate | |
| % | |
Dividends | |
| | % |
*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. The simplified method is used as the Company’s employee exercise history may not be indicative for estimating future exercises. In addition, the Company recognizes forfeitures as they occur.
The intrinsic value is calculated as the difference between the market value of the shares as of June 30, 2026 of $
| | | | | | | | | | |
Options Outstanding | ||||||||||
| | Number | | Weighted | | Weighted | | Aggregate | ||
Range of | | Outstanding at | | Average | | Average | | Intrinsic | ||
Exercise | | June 30, | | Exercise | | Remaining | | Value | ||
Price | | 2026 | | Price | | Life (Years) | | (in thousands) | ||
$ | | | | $ | | | | $ | — | |
| | | | | | |
Options Exercisable | ||||||
Number | | Weighted | | Aggregate | ||
Exercisable at | | Average | | Intrinsic | ||
June 30, | | Exercise | | Value | ||
2026 | | Price | | (in thousands) | ||
| $ | | | $ | — | |
The summary of the status of the Company’s non-vested options for the six months ended June 30, 2026, is as follows:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Exercise | |
| | Shares | | Price | |
Non-vested, December 31, 2025 |
| | | $ | |
Granted |
| | | $ | |
Forfeited |
| ( | | $ | |
Vested |
| ( | | $ | |
Non-vested, June 30, 2026 |
| | | $ | |
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As of June 30, 2026, the Company had approximately $
Change in Control-Based RSUs
The Board of Directors has granted RSUs to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company. These RSUs will vest upon a Change in Control of the Company, as defined in the Amended and Restated CytoSorbents Corporation 2014 Long-Term Incentive Plan, or upon certain life events.
The following table is a summary of these restricted stock units:
| | | | |
| | | | Weighted |
| | | | Average |
| | | | Grant Date |
| | Total | | Fair Value |
| | (amounts in thousands, except share data) | ||
Outstanding, December 31, 2025 |
| |
| |
Granted |
| |
| |
Vested | | | | — |
Forfeited |
| ( |
| |
Outstanding, June 30, 2026 |
| | | |
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 upon an actual vesting event. For the six months ended June 30, 2026, the Company did not record any charges for these restricted stock units.
Other RSU Awards
The Board of Directors has granted RSUs to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company. These RSUs will vest over specified service periods and are settled in shares of common stock upon vesting. The grant-date fair value of RSUs is recognized as stock-based compensation expense over the requisite service period.
The following table outlines the restricted stock unit activity for the six months ended June 30, 2026:
| | | | | |
| | | | Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | Shares | | Fair Value | |
Non-vested, January 1, 2026 |
| | | $ | |
Granted | | | | | |
Vested |
| ( | | | |
Unvested shares forfeited | | ( | | | |
Non-vested, June 30, 2026 |
| | | $ | |
As of June 30, 2026, the remaining weighted average vesting period for restricted stock awards subject to vesting was
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Warrants related to the December 2023 equity offering and June 2024 Loan and Security Agreement
As of June 30, 2026, the Company had
5. | REVENUE |
The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended June 30, 2026:
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Revenue: |
| | |
| | |
| | |
United States | | $ | | | $ | — | | $ | |
Germany | |
| | |
| — | |
| |
All other countries | |
| | |
| | |
| |
| | | | | | | | | |
Revenue | | $ | | | $ | | | $ | |
The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended June 30, 2025:
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Revenue: |
| | |
| | |
| | |
United States | | $ | | | $ | — | | $ | |
Germany | |
| | |
| — | |
| |
All other countries | |
| | |
| | |
| |
| | | | | | | | | |
Revenue | | $ | | | $ | | | $ | |
The following table disaggregates the Company’s revenue by customer type and geographic area for the six months ended June 30, 2026:
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Revenue: |
| | |
| | |
| | |
United States | | $ | | | $ | — | | $ | |
Germany | |
| | |
| — | |
| |
All other countries | |
| | |
| | |
| |
| | | | | | | | | |
Revenue | | $ | | | $ | | | $ | |
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The following table disaggregates the Company’s revenue by customer type and geographic area for the six months ended June 30, 2025:
| | | | | | | | | |
| | | | | Distributors/ | | | | |
| | Direct | | Strategic Partners | | Total | |||
| | (amounts, in thousands) | |||||||
Revenue: | | | | | | | | | |
United States | | $ | | | $ | — | | $ | |
Germany | |
| | |
| — | |
| |
All other countries | |
| | |
| | |
| |
| | | | | | | | | |
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 United States sales relate to its VetResQ related products for emergency and critical care in animals. Direct sales outside the United States include sales to hospitals located primarily in Germany, Austria, Poland, Switzerland, the Netherlands, and the United Kingdom. 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, estimated at the time of sale. 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, including Italy, India, and other countries across Europe, Central and South America, the Middle East, and South East Asia. The Company has a formal written contract with each of its distributor/strategic partner. These contracts have terms ranging from
Most distributor’s/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.
The following table provides information about receivables and contract liabilities from contracts with customers:
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts in thousands) | ||||
Contract receivables | | $ | | | $ | |
Contract liabilities | | $ | | | $ | |
Contract receivables represent unconditional rights to consideration for goods delivered or services performed under contracts with customers, including purchase orders, and are included in accounts receivable on the condensed consolidated balance sheets.
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Contract liabilities are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, contract liabilities consisted of $
6. | 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 the Avenue Capital Group (“Loan”). Avenue Capital Group agreed to loan the Company up to an aggregate of $
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 originally 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.
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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 Amended 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 June 30, 2026, 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 additional deferred financing costs of 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 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.
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Long-term debt as of June 30, 2026 and December 31, 2025 consists of the following:
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Principal amount | | $ | | | $ | |
Plus: final payment upon maturity | | | | | | |
Total principal | | | | | | |
Less: unamortized debt discount | | | ( | | | ( |
Subtotal | |
| | | | |
Less: current maturities, net of debt discount | |
| | | | — |
Long-term debt net of current maturities and debt discount | | $ | | | $ | |
As of June 30, 2026, principal payments of long-term debt are due as follows:
| | | |
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 previously outstanding debt with Bridge Bank, a division of Western Alliance Bank (the “Bank”).
As of June 30, 2026, 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 the Bank a success fee equal to (i)
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7. | COMMITMENTS AND CONTINGENCIES |
Litigation
The Company is, from time to time, subject to claims and litigation arising in the ordinary course of business. We are not currently a party to any litigation or legal proceedings that, in the opinion of management, are likely to have a material adverse effect on the Company’s business. The Company intends to defend vigorously against any future claims and litigation.
Royalty Agreements
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
Employees are eligible to participate in the Company’s 401(k) plan on the first day of the calendar quarter following three full months of employment. Participants may defer up to
8. | 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 June 30, 2026, the remaining lease term of the Company’s operating leases ranges from six to
Supplemental statements of operations and cash flows related to the operating lease liability is as follows (excluding variable payments and expenses):
| | | | | | |
| | Six Months Ended June 30, | ||||
| | 2026 | | 2025 | ||
| | (amounts, in thousands) | ||||
Cash paid in connection with the operating leases | | $ | | | $ | |
Supplemental balance sheet information related to operating leases is as follows:
| | | | | | | |
| | June 30, | | December 31, | | ||
| | 2026 | | 2025 | | ||
| | (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 | | | | | | ||
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Lease Expense
The components of lease expense were as follows:
| | | | | | |
| | Three Months Ended June 30, | ||||
| | 2026 | | 2025 | ||
| | (amounts, in thousands) | ||||
Operating lease cost | | $ | | | $ | |
Variable lease cost | | | | | | |
Total lease cost | | $ | | | $ | |
| | | | | | |
| | Six Months Ended June 30, | ||||
| | 2026 | | 2025 | ||
| | (amounts, in thousands) | ||||
Operating lease cost | | $ | | | $ | |
Variable lease cost | | | | | | |
Total lease cost | | $ | | | $ | |
As of June 30, 2026, the maturities of the operating lease liability are as follows:
| | | |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Future operating lease payments | | | |
Imputed interest | | | ( |
Total operating lease liability | | $ | |
9. | NET INCOME (LOSS) PER SHARE |
Basic earnings (loss) per share and diluted earnings (loss) per share for the three and six months ended June 30, 2026 and 2025 have been computed by dividing the net income (loss) for each respective period by the weighted average number of shares outstanding during that period.
Net income (loss) per common share is calculated as basic net income (loss) per share and diluted net income (loss) per share, in the case of recognizing net income (loss). Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed in the same manner as basic net income (loss) 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 income (loss) per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings (loss).
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The following table summarizes earnings (loss) per share calculations:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Basic and Diluted | | (amounts, in thousands, except share and per share data) | ||||||||||
Numerator: |
| | |
| | |
| | |
| | |
Net income (loss) | | $ | ( | | $ | | | $ | ( | | $ | |
Denominator: | | | | | | | | | | | | |
Basic weighted average common shares outstanding | |
| | |
| | |
| | |
| |
Diluted weighted average common shares outstanding | |
| | |
| | |
| | |
| |
Basic and diluted earnings (loss) 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 |
| | June 30, 2026 |
Stock options outstanding |
| |
Warrants for common stock |
| |
RSUs* |
| |
Convertible securities |
| |
* Total number of RSUs include
Certain stock options and restricted stock units are not included in the diluted earnings per share calculation when the effect would be anti-dilutive. The number of anti-dilutive shares were
10. | 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 Company operates under
The components presented in the condensed consolidated statements of operations and comprehensive loss also present the components of the Company’s single operating segment.
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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:
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
|
| 2026 | | 2025 | | 2026 | | 2025 | | ||||
|
| (amounts, in thousands) | | ||||||||||
| | | | | | | | | | | | | |
Revenue | | $ | | | $ | | | $ | | | $ | | |
Gross profit | | $ | | | $ | | | $ | | | $ | | |
Gross margin | |
| | % |
| | % |
| | % |
| | % |
Total operating expenses | | $ | | | $ | | | $ | | | $ | | |
Loss from operations | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
| | | | | | | | | | | | | |
EBITDA and Adjusted EBITDA (both non-GAAP measures): | |
| | |
| | |
| | |
| | |
Net income (loss) | | $ | ( | | $ | | | $ | ( | | $ | | |
Interest expense, net | |
| | |
| | |
| | |
| | |
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 | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
| | | | | | | | | | | | | |
Operating cash burn (net change in cash, cash equivalents, and restricted cash, excluding financing activities | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
| | | | | | |
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Total assets | | $ | | | $ | |
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Table of Contents
Significant expense categories regularly provided to the CODM consist of the following:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
| | (amounts, in thousands) | | (amounts, in thousands) | ||||||||
| | | | | | | | | | | | |
Research and development: |
| | |
| | | | | | | | |
Clinical expenses | | $ | | | $ | | | $ | | | $ | |
Other research and development expenses | |
| | |
| | |
| | |
| |
Total research and development | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Selling, general and administrative | |
| | |
| | |
| | |
| |
Royalty expense | | $ | | | $ | | | $ | | | $ | |
Stock-based compensation | |
| | |
| | |
| | |
| |
Legal, financial and consulting | |
| | |
| | |
| | |
| |
Other general and administrative | |
| | |
| | |
| | |
| |
Total selling, general and administrative | | $ | | | $ | | | $ | | | $ | |
Amounts presented within research and development expenses in the table above are inclusive of stock-based compensation expense. Refer to Note 4, “Common Stock, Stock-Based Compensation and Warrants”, for additional information.
11. | RESTRUCTURING |
Restructuring Plan
During the fourth quarter of 2025 and into the second quarter of fiscal 2026, 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. These initiatives follow comprehensive review of the Company’s cost structure and operating model. As a result of the Strategic Workforce and Cost Reduction Plan and attrition, the Company has reduced its workforce by approximately
Restructuring Charges
The table below sets forth the estimated amount of unpaid restructuring charges as of June 30, 2026 and December 31, 2025 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.
| | | | | | |
| | As of | ||||
| | June 30, 2026 | | December 31, 2025 | ||
| | (amounts, in thousands) | ||||
Restructuring charges, beginning of the period | | $ | | | $ | — |
Additions | |
| | |
| |
Payments | |
| ( | |
| ( |
Restructuring charges unpaid and outstanding, end of period | | $ | | | $ | |
During each of the three and six months ended June 30, 2026, the Company recorded restructuring charges of approximately $
12. | SUBSEQUENT EVENTS |
Management has evaluated subsequent events through the date of issuance of these condensed 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 condensed consolidated financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Notes Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, 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-K 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” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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, extracorporeal membrane oxygenation or ECMO, and 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 nearly 300,000 devices used cumulatively to date. CytoSorb was originally launched in the European Union under CE mark as the first cytokine adsorber. Additional CE mark extensions were granted for bilirubin and myoglobin removal in clinical conditions such as liver disease and trauma, respectively, and for ticagrelor and rivaroxaban removal in cardiothoracic surgery procedures. CytoSorb has also received FDA EUA in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure, to reduce pro-inflammatory cytokine levels. CytoSorb is not yet approved in the United States.
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In the United States 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 United States 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 continues to actively pursue regulatory approval of DrugSorb-ATR with the 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.
The Company has numerous marketed products and products under development based upon this unique blood purification technology protected by many issued United States 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, PuriFi®, HotSwap™ and others. While not our primary means of communication, investors can learn more about us by visiting our social media channels. We encourage investors, the media, and others interested in us to review the information posted on our Facebook site and our X account, where investors, the media, and other interested parties can subscribe. The information contained in our social media accounts is incorporated into this Quarterly Report on Form 10-Q or other documents we file with or furnish to, the SEC.
Upon approval, the Company expects to rapidly commercialize DrugSorb-ATR in the United States and Canada to address this large unmet medical need, with an initial estimated total addressable market of $300 million today to over $1 billion over time as we pursue additional indications for DrugSorb-ATR to remove additional classes of blood thinners and expansion of the antithrombotic removal application beyond cardiac surgery and across other surgical specialties. We believe that DrugSorb-ATR has the potential to become an “all-in-one” countermeasure for these agents.
DrugSorb-ATR® for Brilinta®
In August 2025, we received the FDA’s decision on our appeal of the original DrugSorb-ATR application. Importantly, the FDA identified no concerns regarding device safety but upheld the prior denial of the application and requested additional analysis of real-world evidence to support the proposed indication for reducing the severity of perioperative bleeding in patients undergoing CABG surgery while on Brilinta® (ticagrelor, AstraZeneca).
Following the appeal decision and based upon feedback from FDA, we announced our intention to submit a new De Novo application incorporating additional supporting information, primarily based on real-world evidence and clinical outcomes generated through routine clinical use of the device. As part of this process, we held a formal pre-submission meeting with the FDA in late January 2026 and have continued to engage with the FDA to clarify the requirements for the new De Novo submission, including whether certain information could potentially be submitted as a post-marketing requirement rather than as part of the initial application. Based on these interactions, the FDA has requested additional mechanistic data to be included alongside the real-world evidence within the new De Novo submission.
We have scheduled a pre-submission meeting with the FDA in August 2026 to discuss the options to generate this additional mechanistic data. Following this meeting, we expect to finalize the testingprotocol, which may require an additional meeting with the FDA. Once finalized, we anticipate completing the required testing and submitting a new De Novo application in early 2027. Following submission, a regulatory decision would generally be expected within the FDA’s targeted 150-day MDUFA review timeline, although the actual review period may be shorter or longer depending on the nature and extent of interactive review questions from the FDA.
DrugSorb-ATR® for DOACs: Eliquis® and Xarelto®
The Company has previously discussed its intention, following anticipated FDA market approval of DrugSorb-ATR for Brilinta®, to expand its device label to include the removal of the direct oral anticoagulants blood thinners (DOACs) such as the market leading Eliquis® (apixaban, Pfizer/BMS) and Xarelto® (rivaroxaban, Bayer/Janssen). At the same time, we continue to observe increasing real-world adoption, clinical use, and published evidence supporting the use of our technology for DOAC removal in cardiac surgery, reinforcing the significant unmet medical need globally.
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We have scheduled a separate pre-submission meeting with the FDA to review the data currently available for the DOAC indication that include drug removal data from benchtop testing and data from real-world use and determine what, if any, additional information may be required to support a parallel De Novo submission for DOAC removal.
Having this second shot on goal is aligned with our other FDA Breakthrough Device Designation for DrugSorb-ATR, to remove DOACs during cardiac surgery. Globally, tens of millions of patients are on chronic or life-long DOAC therapy due to atrial fibrillation, deep vein thrombosis, pulmonary embolism, peripheral vascular disease, or post-surgical prophylaxis. An estimated 5-10% of emergent cardiac surgery cases involve patients who are currently therapeutic on a DOAC and risk serious or life-threatening bleeding.
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 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 have included our website address as an inactive textual reference only. The information contained on or accessible through our corporate website is not incorporated by reference in this this Quarterly Report on Form 10-Q and should not be considered part of this report.
Summary of Operational and Recent Business Highlights
| ● | Total revenue was $18.5 million for the six months ended June 30, 2026, an increase of $0.2 million, or 0.8%, compared to the prior year. For the three months ended June 30, 2026, total revenue was $9.6 million, an increase of 0.2%. |
| ● | Gross profit was $13.2 million for the six months ended June 30, 2026, an increase of $0.2 million, or 1.2%, compared to the prior year. Gross margin was 71.2% for the six months ended June 30, 2026, compared to 71.0% in the prior year. Gross profit for the three months ended June 30, 2026, was $7.0 million, an increase of $0.2 million or 3.4% compared to the prior year. Gross margin was 73.2% for the three months ended June 30, 2026, compared to 70.9% in the prior year. |
| ● | Loss from operations improved by 24% to approximately $5.7 million, from $7.5 million for the six months ended June 30, 2026, and 2025, respectively. For the three-month ended June 30, 2026 and 2025, loss from operations improved by 27% to approximately $2.6 million. |
| ● | Operating cash burn decreased to $0.4 million for the second quarter and $1.8 million for the six months ended June 30, 2026, compared to $1.4 million and $4.9 million for the three and six months ended June 30, 2025, respectively. The decrease is primarily due to improved operating margins and the impact of our strategic workforce and cost reduction plan. The Company continues to expect to achieve operating cash flow break-even in the second half of 2026. |
| ● | The U.S. and Canadian pivotal STAR-T randomized, controlled trial results have now been published in the Journal of Thoracic and Cardiovascular Surgery (2026) - the leading peer-reviewed cardiothoracic surgery journal in the U.S. The authors summarized the results in the graphical abstract and concluded in the central message of the article that, “Intraoperative DrugSorb-ATR use for ticagrelor removal is safe and can reduce the severity of bleeding after isolated CABG in patients operated within 2 days of drug discontinuation.” |
| ● | Real-World evidence from the international Safe and Timely AntiThrombotic Removal (STAR) Registry, recently published in Cardio Revascularization Medicine (2026) and the Journal of Cardiothoracic Surgery (2025), demonstrates CytoSorb’s ability to perioperative bleeding risk in patients receiving antithrombotic therapies across more than 160 patients undergoing CABG or valve surgery. |
| ● | A study titled “Impact of CytoSorb Hemoadsorption Therapy on Cost-Effectiveness and Length of Stay in Critical Care Patients: A Preliminary Study from a Swiss High-Volume Center”, was published in the journal Healthcare. This study provides additional solid real-world evidence for the cost-effectiveness of CytoSorb hemoadsorption in septic shock, showing reduced ICU and hospital length of stay, decreased duration of mechanical ventilation among survivors, and decreased nursing workload, without significantly increasing hospital treatment costs. |
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Results of Operations:
Comparison for the six months ended June 30, 2026 and 2025:
| | | | | | | | | | | |
| | Three Months Ended June 30, |
| ||||||||
| | 2026 | | 2025 |
| ||||||
| | (unaudited) | | (unaudited) | | ||||||
| | | | % of | | | | % of |
| ||
| | Amount | | Revenue | | Amount | | Revenue |
| ||
| | (in thousands) | | | | (in thousands) | | |
| ||
Revenue | | $ | 9,633 | | 100 | % | $ | 9,617 | | 100 | % |
Cost of goods sold | |
| 2,584 | | 26.8 | % | | 2,803 | | 29.1 | % |
Gross profit | |
| 7,049 | | 73.2 | % | | 6,814 | | 70.9 | % |
Operating expenses: | |
| | | | | | | | | |
Research and development | |
| 1,453 | | 15.1 | % | | 1,262 | | 13.1 | % |
Selling, general and administrative | |
| 7,964 | | 82.7 | % | | 9,167 | | 95.3 | % |
Restructuring | | | 270 | | 2.8 | % | | — | | — | |
Total operating expenses | |
| 9,687 | | 100.6 | % | | 10,429 | | 108.4 | % |
Loss from operations | |
| (2,638) | | (27.4) | % | | (3,615) | | (37.6) | % |
Other income (expense): | |
| | | | | | | | | |
Interest expense, net | |
| (868) | | (9.0) | % | | (616) | | (6.4) | % |
Gain (loss) on foreign currency transactions | |
| (911) | | (9.5) | % | | 6,178 | | 64.2 | % |
Total other income (expense), net | |
| (1,779) | | (18.5) | % | | 5,562 | | 57.8 | % |
Net income (loss) | | $ | (4,417) | | (45.9) | % | $ | 1,947 | | 20.2 | % |
Revenues
For the three months ended June 30, 2026, we generated total revenue of approximately $9.6 million, which is in line with revenues for the three months ended June 30, 2025, of $9.6. million. Revenue performance was led by increases in our distributor and strategic partner territories and direct sales outside Germany, but offset by a decline in sales in Germany attributed to a smaller bot more focused sales force. Changes in foreign currency rates positively impact revenue by approximately 4% compared to the prior year.
Gross Profit
Gross profit was approximately $7.0 million for the three months ended June 30, 2026, an increase of approximately $0.2 million, or 3.4%, as compared to gross profit of $6.8 million for the three months ended June 30, 2025. Gross margins were 73.2% and 70.9% for the three months ended June 30, 2026 and 2025, respectively. The improvement in gross margins reflects the impact of efforts to rebalance production, lower operating costs, and improve efficiencies.
Research and Development Expenses
Research and development costs were approximately $1.5 million and $1.3 million for the three months ended June 30, 2026 and 2025, respectively, an increase of approximately $0.2 million, or 15.1%. This increase was primarily driven by a charge in the quarter for a certain critical care clinical study.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses were approximately $8.0 million and $9.2 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of approximately $1.2 million, or 13%. The decrease is primarily due to lower legal, financial and consulting expenses compared to the prior year of approximately of $0.8 million as well as net lower compensation costs in the current year.
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Gain (Loss) on Foreign Currency Transactions
For the six months ended June 30, 2026, the loss on foreign currency transactions was approximately $0.9 million, as compared to a gain on foreign currency transactions of approximately $6.2 million for the three months ended June 30, 2025. The current quarter loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2026, to $1.1414 per Euro from $1.1498 per Euro as of March 31, 2026. The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2025, to $1.1789 per Euro from $1.0349 per Euro as of December 31, 2024.
Restructuring
During the fourth quarter of 2025 and through the second quarter of fiscal 2026, 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. Our restructuring expenses were approximately $0.3 million for the three months ended June 30, 2026. These costs included cash-based severance and related workforce reduction charges of $0.3 million. There were no charges for the three months ended June 30, 2025.
Loss From Operations
Our loss from operations improved by 27% to approximately $2.6 million, from $3.6 million for the three months ended June 30, 2026, and 2025, respectively. This improvement was primarily the result of improved gross margins and a 7.1% reduction in total operating expenses quarter over quarter resulting from.
| | | | | | | | | | | |
| | Six Months Ended June 30, |
| ||||||||
| | 2026 | | 2025 |
| ||||||
| | (unaudited) | | (unaudited) |
| ||||||
| | | | | % of | | | | | % of |
|
| | Amount | | Revenue | | Amount | | Revenue |
| ||
| | (in thousands) | | | | (in thousands) | | |
| ||
Revenue | | $ | 18,497 |
| 100 | % | $ | 18,344 |
| 100 | % |
Cost of goods sold | |
| 5,318 |
| 28.8 | % |
| 5,323 |
| 29.0 | % |
Gross profit | |
| 13,179 |
| 71.2 | % |
| 13,021 |
| 71.0 | % |
Operating expenses: | |
| |
| | |
| |
| | |
Research and development | |
| 2,478 |
| 13.4 | % |
| 2,924 |
| 15.9 | % |
Selling, general and administrative | |
| 16,073 |
| 86.9 | % |
| 17,599 |
| 95.9 | % |
Restructuring | | | 310 | | 1.7 | % | | — | | — | |
Total operating expenses | |
| 18,861 |
| 102.0 | % |
| 20,523 |
| 111.9 | % |
Loss from operations | |
| (5,682) |
| (30.7) | % |
| (7,502) |
| (40.9) | % |
Other income (expense): | |
| |
| | |
| |
| | |
Interest expense, net | |
| (1,726) |
| (9.3) | % |
| (1,221) |
| (6.7) | % |
Gain (loss) on foreign currency transactions | |
| (2,139) |
| (11.6) | % |
| 9,192 |
| 50.1 | % |
Total other income (expense), net | |
| (3,865) |
| (20.9) | % |
| 7,971 |
| 43.5 | % |
Net income (loss) | | $ | (9,547) |
| (51.6) | % | $ | 469 |
| 2.6 | % |
Revenues
For the six months ended June 30, 2026, we generated total revenue of approximately $18.5 million, an increase of approximately $0.2 million, or 1%, compared to revenues of approximately $18.3 million for the six months ended June 30, 2025. Revenue growth was led by strength in our distributor and strategic partner territories and direct sales outside Germany, offset by a reduction in sales in Germany. We continue to see signs of improved sale processes, account targeting and customer engagement with a smaller and more focused team in Germany and remain confident these improvements will lead to stronger execution and improved performance. Meanwhile, we expect to add bak 3-4 additional sales representatives in Germany in the second half of 2026. Changes in foreign currency rates positively impact revenue by approximately 6% compared to the prior year.
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Gross Profit
Gross profit was approximately $13.2 million for the three months ended June 30, 2026, an increase of approximately $0.2 million, or 1.2%, as compared to gross profit of $13.0 million for the six months ended June 30, 2025. Gross margins were 71.2% and 71.0% for the six months ended June 30, 2026 and 2025, respectively.
Research and Development Expenses
Research and development costs were approximately $2.5 million and $2.9 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of approximately $0.4 million, or 15.3%. This decrease was driven by a decrease in our clinical trial costs and lower grant funded projects, as well as other clinical and product development program reductions, including lower compensation costs.
Restructuring
During the fourth quarter of 2025 and into the second quarter of fiscal 2026, 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. Our restructuring expenses were approximately $0.3 million for the six months ended June 30, 2026. These costs included cash-based severance and related workforce reduction charges of $0.3 million. There were no charges for the six months ended June 30, 2025.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses were approximately $16.1 million and $17.6 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of approximately $1.5 million, or 8.5%. The decrease is primarily due to decreases in legal, financial and consulting expenses of $0.5 million, total compensation expense of $0.8 million, and a decrease in selling expenses of $0.2 million.
Gain (Loss) on Foreign Currency Transactions
For the six months ended June 30, 2026, the loss on foreign currency transactions was approximately $2.1 million, as compared to a gain on foreign currency transactions of approximately $9.2 million for the six months ended June 30, 2025. The current year loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2026, to $1.1414 per Euro from $1.1750 per Euro as of December 31, 2025. The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of June 30, 2025, to $1.1789 per Euro from $1.0349 per Euro as of December 31, 2024.
Loss From Operations
Our loss from operations decreased by 24.3% to approximately $5.7 million, from $7.5 million for the six months ended June 30, 2026, and 2025, respectively. This improvement was primarily the result of an 8.1% reduction in operating expenses compared to the prior year, resulting from our efforts to lower costs and improve operating margins and efficiencies including the Company’s Strategic Workforce and Cost Reduction Plan, which are all consistent with our goal to achieve cash flow breakeven in the second half of 2026.
Liquidity and Capital Resources
Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of June 30, 2026, we had current assets of approximately $15.7 million and current liabilities of approximately $24.0 million.
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Net change in cash, cash equivalents and restricted cash
The following summary presents the sources and uses of cash in our operating, investing, and financing activities, and the related effect of exchange rates on cash:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| ||||||||||||||||||
| | 2026 | | 2025 | | Change ($) | | Change (%) | | 2026 | | 2025 | | Change ($) | | Change (%) |
| ||||||
| | (amounts, in thousands) | | (amounts, in thousands) |
| ||||||||||||||||||
Net cash used in operating activities | | $ | (583) | | $ | (1,509) | | $ | 926 | | (61) | % | $ | (1,745) | | $ | (4,975) | | $ | 3,230 | | (65) | % |
Net cash provided by (used in) investing activities | | $ | 7 | | $ | (132) | | $ | 139 | | (105) | % | $ | (39) | | $ | (179) | | $ | 140 | | (78) | % |
Net cash provided by financing activities | | $ | — | | $ | — | | $ | — | | — | | $ | — | | $ | 6,831 | | $ | (6,831) | | (100) | % |
Effect of exchange rates on cash | | $ | 176 | | $ | 257 | | $ | (81) | | (32) | % | $ | (52) | | $ | 285 | | $ | (337) | | (118) | % |
Net change in cash, cash equivalents, and restricted cash | | $ | (400) | | $ | (1,384) | | $ | 984 | | (71) | % | $ | (1,836) | | $ | 1,962 | | $ | (3,798) | | (194) | % |
The reduction in net cash used in operating activities during the three and six months ended June 30, 2026, compared to the same periods in the prior year, of $0.9 million and $3.2 million, respectively, was primarily attributable to the initial benefits of the Company’s Strategic Workforce and Cost Reduction Plans, which are further discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations under “Resource Allocation and Path to Cash-Flow Profitability”.
Nasdaq Listing Compliance
On October 2, 2025, the Company received notice from the Staff Nasdaq that it was not in compliance with the Minimum Bid Price Requirement. The Company did not regain compliance during the initial 180-day period ended March 31, 2026, and on April 1, 2026 the Staff granted a second 180-day compliance period, until September 28, 2026, to regain compliance with the Minimum Bid Price Requirement in accordance with Nasdaq Listing Rule 5810(c)(3)(A). To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of 10 consecutive trading days prior to September 28, 2026.
On June 29, 2026, the Company received a letter from the Staff of Nasdaq that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(2) because the Company’s minimum Market Value of Listed Securities was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market (the “MVLS Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), Nasdaq has provided the Company with 180 calendar days, or until December 28, 2026, to regain compliance with the MVLS Requirement.
Management’s plans with respect to the Company’s continued listing requirements include actively monitoring the bid price and market value of the Company’s common stock, pursuing potential capital-raising transactions, and, if necessary, effecting a reverse stock split to regain compliance with the minimum bid price requirement. The Company may also seek to satisfy an alternative continued listing standard, such as by increasing its stockholders’ equity to at least $2.5 million. There can be no assurance that the Company will regain compliance with the applicable Nasdaq continued listing requirements, that any such actions will result in a sustained increase in the Company’s stock price or market value of listed securities, or that the Company’s common stock will continue to be listed on Nasdaq.
As of the date these financial statements are issued, the Company has not regained compliance with either requirement. The Company’s common stock continues to trade on The Nasdaq Capital Market under the symbol “CTSO.” If the Company does not regain compliance by the applicable compliance dates, Nasdaq will notify the Company that its securities are subject to delisting, and the Company may appeal such determination to a Nasdaq Hearings Panel.
Effective Shelf Registration
We have an effective shelf registration statement dated September 30, 2024 (the “Shelf”) with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units. Approximately $149.7 million of this amount was available as of June 30, 2026; however, the use of the Shelf is subject to a limitation of one-third of our public float in any rolling twelve-month period, when our public float is below $75 million, which is referred to as the “baby shelf” rules. We have also allocated $20 million of our total shelf amount to our ATM facility. As of June 30, 2026, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations. During the six months ended June 30, 2026, we did not raise any proceeds under the ATM facility.
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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 (“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 has accepted Company’s application for review with respect to 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 would have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group and 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, which approval is now expected beyond this time frame. Tranche 2a and Tranche 2b, in the aggregate, 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 6, “Long-Term Debt”, to our Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report on Form 10-Q.
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 were available for issuance 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.
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Technology Business Tax Certificate Program
In March 2026, we further supplemented our cash balance with the receipt of $0.4 million from the sale of our 2024 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 have strategically managed our resources with a focus on driving commercial success, investing in key areas such as our regulatory submissions of DrugSorb-ATR and the development of clinical data, while also driving improved efficiencies and operating margins. Further, during the fourth quarter of 2025 and into the second quarter of fiscal 2026, the Company initiated a Strategic Workforce and Cost Reduction Plan”) to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. These initiatives followed a comprehensive review of the Company’s cost structure and operating model. As a result of the Strategic Workforce and Cost Reduction Plan and attrition, the Company has reduced its workforce by approximately 23%, and reduced and realigned operating and production expenses. As a result, the Company has decreased its operating cash burn to approximately $0.4 million for the three months ended June 30, 2026 and remains committed to bringing the Company to operating cash flow break-even in the second half of 2026.
As of June 30, 2026, we had approximately $5.9 million in cash, including approximately $4.4 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 condensed consolidated financial statements. These cash and restricted cash balances considered with our historical and expected future 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 condensed consolidated financial statements are issued.
Our expected future capital requirements may depend on many factors, including the ability to continue to reduce cash burn and achieve operating cash flow breakeven in the second half of 2026, 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 United States. Additional sources of liquidity available to us include the 2024 Shelf, other public or private equity offerings, debt financing or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. Although the Company has taken actions to achieve cash flow breakeven, if it does not achieve this goal, the potential increased need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company routinely evaluates other financing sources, including less or non-dilutive debt financing, additional grant funding, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof. There can be no assurance that management will be successful in these endeavors.
Critical Accounting Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. Refer to “Critical Accounting Estimates” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025 for a complete discussion of our critical accounting estimates. There have been no material changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. 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.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Act of 1934. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, relating to the Company, including our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this report was being prepared. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2026 because of the material weaknesses identified in our internal controls over financial reporting, which are being actively remediated (see below).
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurances with respect to financial statement preparation and presentation. Additionally, projections of any evaluation 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.
Discussion of Material Weaknesses
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 2024
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 non-cash 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 June 30, 2026. 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 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 June 30, 2026.
Material Weakness — Newly Identified in 2025
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.
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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. |
Change in Internal Control over Financial Reporting
Except as discussed above, there have been no changes in the Company’s internal controls over financial reporting during the three and six months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with U.S. GAAP.
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PART II. OTHER INFORMATION
Item 1. 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.
Item 1A. Risk Factors.
Except for the additional risk factor set forth below, there have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2025. For a discussion of risks that affect the Company’s business, please refer to Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In addition to the other information set forth in this Quarterly Report on Form 10-Q, including the additional risk factor described below, please carefully consider the factors described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The risks described therein and below are not the only risks facing us. Additional risks and uncertainties not currently known to us, or that our management currently deems to be immaterial, also may adversely affect our business, financial condition, and results of operations.
We are not in compliance with the requirements for continued listing on The Nasdaq Capital Market. Our common stock is subject to delisting, which would decrease the liquidity of our common stock and our ability to raise additional capital.
We are required to meet specified requirements to maintain our listing on The Nasdaq Capital Market, including a minimum bid price of $1.00 per share for our common stock and standards relative to minimum stockholders’ equity, minimum market value of publicly held shares and various additional requirements.
As previously disclosed, on October 2, 2025 we received notice from the Staff of Nasdaq that we were not in compliance with the Minimum Bid Price Requirement. We did not regain compliance during the initial 180-day period ended March 31, 2026, and on April 1, 2026 the Staff granted us a second 180-day compliance period, or until September 28, 2026, under Nasdaq Listing Rule 5810(c)(3)(A). Separately, on June 29, 2026 we received notice that our Market Value of Listed Securities was below the $35 million minimum required under Nasdaq Listing Rule 5550(b)(2), the MVLS Requirement, and under Nasdaq Listing Rule 5810(c)(3)(C) we have until December 28, 2026, to regain such compliance. As of the date of this report, we have not regained compliance with either requirement.
There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement or the MVLS Requirement within the applicable compliance periods, or that we will otherwise satisfy the Nasdaq continued listing standards. We continue to actively monitor our performance with respect to the listing standards and will consider available options to resolve any deficiency and maintain compliance with the Nasdaq rules. Actions we may take to regain compliance, such as effecting a reverse stock split, may not be successful or may not result in a sustained increase in our stock price or MVLS. If we do not regain compliance, Nasdaq will notify us that our securities are subject to delisting, at which point we may appeal to a Nasdaq Hearings Panel; a hearing request would generally stay any delisting action pending the Panel’s decision, but there is no assurance the Panel would grant continued listing. A delisting would likely reduce the liquidity and market price of our common stock, cause us to trade in the over-the-counter market, potentially subject our common stock to “penny stock” rules, impair our ability to raise capital, and reduce analyst coverage and institutional interest, any of which could have a material adverse effect on us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
Insider Trading Arrangements
No director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company
Nasdaq Listing Compliance
On June 29, 2026, the Company received a letter from the Staff of Nasdaq that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(2) because the Company’s minimum MVLS was below the Nasdaq MVLS Requirement of $35 million. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), Nasdaq has provided the Company with 180 calendar days, or until December 28, 2026, to regain compliance with the MVLS Requirement.
Item 6. Exhibits.
Number | | Description |
31.1* | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002. | |
32.1** | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.* | |
32.2** | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.* | |
101* | The following materials from CytoSorbents Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, (ii) Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025, (iii) Consolidated Statement of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 and (v) Notes to Condensed Consolidated Financial Statements. | |
104* | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CYTOSORBENTS CORPORATION | |
|
| |
Dated: August 6, 2026 | By: | /s/ Phillip P. Chan |
|
| Name: Phillip P. Chan |
|
| Title: Chief Executive Officer |
|
| (Principal Executive Officer) |
| | |
Dated: August 6, 2026 | By: | /s/ Peter J. Mariani |
|
| Name: Peter J. Mariani |
|
| Title: Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |
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