Financial Data and Key Metrics Changes - In Q2 2025, the company reported product sales of $9.6 million, representing a 9% year-over-year increase and a 4% increase on a constant currency basis compared to the same period last year [8][28] - Gross margin performance remained solid at approximately 71% [9][29] - The operating loss for Q2 was approximately $3.6 million, flat year-over-year, with a net income of $1.9 million compared to a net loss of $4.3 million in the prior year [30][31] Business Line Data and Key Metrics Changes - The German commercial team saw a 22% year-over-year growth, contributing to overall positive performance [8][28] - Distributor sales were among the best ever, second only to a record second quarter last year [9][28] Market Data and Key Metrics Changes - CytoSorb, the flagship product, has been utilized in nearly 300,000 devices across more than 70 countries, driving significant sales [6] - The company is navigating the regulatory process for DrugSorb ATR, with final decisions expected this year [6][18] Company Strategy and Development Direction - The company aims to drive its core business towards near breakeven by the end of 2025 while preparing for the North American commercial launch of DrugSorb ATR [8][32] - The strategic realignment of the German commercial team is expected to lead to stronger execution and improved performance [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the appeals process for DrugSorb ATR, highlighting the strengths of their application and external expert support [39][40] - The company remains optimistic about final regulatory decisions from both the FDA and Health Canada, expected before the end of 2025 [17][18] Other Important Information - The company is actively preparing for a potential North American commercial launch of DrugSorb ATR later this year and into 2026 [32][34] - September is designated as Sepsis Awareness Month, with the company participating in initiatives to highlight the treatment of sepsis and septic shock [21][22] Q&A Session Summary Question: Can you provide more confidence regarding the regulatory submissions? - Management highlighted the positive aspects of the appeals process and the support from external cardiac surgery experts, expressing hope for a favorable FDA response soon [39] Question: Update on Germany's performance and organizational changes? - Management noted a 22% increase in the second quarter and emphasized that the reorganization is a work in progress aimed at improving efficiency [41][43] Question: Clarification on the reconsideration request in Canada? - The company clarified that the request for reconsideration is part of a formal appeals process similar to that with the FDA [48] Question: What is the rollout strategy for DrugSorb ATR in the U.S.? - The rollout will be purposeful, focusing on clinical accounts that participated in the study and a few others, with an emphasis on understanding the pace of adoption [50] Question: How does the sepsis and septic shock data affect the business model? - Management indicated that sepsis and septic shock are core applications for CytoSorb, accounting for a significant portion of critical care revenue, and emphasized the need for effective treatment strategies [51][52] Question: Expectations for gross margins in Q3 and Q4? - Management expressed that while gross margins have been stable, there are opportunities to improve efficiencies and potentially increase margins with the approval of DrugSorb ATR [55]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, highlighting a **going concern** warning - The company's cash position of approximately **$11.7 million** (including restricted cash) as of June 30, 2025, raises **substantial doubt** about its ability to continue as a **going concern**[20](index=20&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheet shows increased cash and total assets, stable liabilities, and higher stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $10,204 | $3,280 | | Total current assets | $22,987 | $21,604 | | Total assets | $47,990 | $47,372 | | **Liabilities & Equity** | | | | Total current liabilities | $9,842 | $9,825 | | Long-term debt | $14,377 | $13,996 | | Total liabilities | $36,404 | $36,265 | | Total stockholders' equity | $11,586 | $11,107 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 net income marks a turnaround from Q2 2024 loss, driven by a significant foreign currency gain Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $9,617 | $8,842 | $18,344 | $17,831 | | Gross Profit | $6,814 | $6,503 | $13,021 | $13,376 | | Loss from Operations | ($3,615) | ($3,570) | ($7,502) | ($8,227) | | Gain (loss) on foreign currency | $6,178 | ($544) | $9,192 | ($1,970) | | Net Income (Loss) | $1,947 | ($4,294) | $469 | ($10,384) | | Diluted EPS | $0.03 | ($0.08) | $0.01 | ($0.19) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved, with financing activities leading to a net increase in cash Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,975) | ($9,624) | | Net cash used in investing activities | ($179) | ($246) | | Net cash provided by financing activities | $6,831 | $9,263 | | Net change in cash, cash equivalents, and restricted cash | $1,962 | ($671) | | Cash, cash equivalents, and restricted cash – end of period | $11,726 | $14,944 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail financial statements, including business, **going concern** warning, policies, revenue, and financing - In January 2025, the company closed a **Rights Offering**, raising gross proceeds of **$6.25 million** (**$5.4 million** net). An additional **$1.6 million** in gross proceeds (**$1.4 million** net) was raised in February 2025 from the exercise of **Series A warrants**[39](index=39&type=chunk)[43](index=43&type=chunk) - The company has a **loan agreement with Avenue Capital Group** for up to **$20 million**. Tranche **1** of **$15 million** has been funded. A second tranche of up to **$5 million** is available through December 31, 2025, contingent upon receiving **FDA marketing approval** for its **DrugSorb-ATR application**[69](index=69&type=chunk) Revenue by Geography for Six Months Ended June 30, 2025 (in thousands) | Region | Direct Sales | Distributors/Partners | Total | | :--- | :--- | :--- | :--- | | United States | $124 | $0 | $124 | | Germany | $6,151 | $0 | $6,151 | | All other countries | $4,098 | $7,971 | $12,069 | | **Total** | **$10,373** | **$7,971** | **$18,344** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity challenges, and regulatory setbacks for DrugSorb-ATR - The **FDA issued a denial letter** in April 2025 for the company's **De Novo Request for DrugSorb-ATR**. The company is pursuing a **formal appeal** and expects a final regulatory decision in 2025[97](index=97&type=chunk) - **Health Canada issued a Notice of Refusal** for the company's **Medical Device License application** for DrugSorb-ATR in June 2025. The company has filed a "**Request for Reconsideration**"[98](index=98&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q2 2025 revenue increased, gross margin decreased, and a foreign currency gain drove net income for H1 Revenue and Gross Profit Comparison (in thousands) | Period | Revenue | % Change | Gross Profit | Gross Margin | | :--- | :--- | :--- | :--- | :--- | | **Q2 2025** | $9,617 | **8.8%** | $6,814 | **70.9%** | | Q2 2024 | $8,842 | - | $6,503 | **73.5%** | | **H1 2025** | $18,344 | **2.9%** | $13,021 | **71.0%** | | H1 2024 | $17,831 | - | $13,376 | **75.0%** | - The decrease in R&D expenses for the six months ended June 30, 2025, was driven by the completion of the **STAR-T clinical trial** and other cost reductions[113](index=113&type=chunk) - A **gain on foreign currency transactions** of **$9.2 million** for H1 2025 was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar during the period[115](index=115&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Cash position raises **substantial doubt** about going concern, with future capital dependent on regulatory approvals - The company's cash position of **$11.7 million** as of June 30, 2025, raises **substantial doubt** about its ability to continue as a **going concern**[122](index=122&type=chunk) - The company has an **effective shelf registration statement** to raise up to **$150 million**, with approximately **$149.7 million** available as of June 30, 2025. It also has an **ATM facility** with **$19.4 million** available[118](index=118&type=chunk) - In early 2025, the company raised a total of **$6.8 million** in **net** proceeds from a **Rights Offering** and subsequent warrant exercises, which also satisfied a **debt covenant** to **unrestrict $5 million of cash**[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is **not required to provide** market risk disclosures - As a smaller reporting company, CytoSorbents is **not required to provide** quantitative and qualitative disclosures about market risk[131](index=131&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a **material weakness** in accounting for stock-based compensation - Disclosure controls and procedures were concluded to be ineffective as of June 30, 2025, due to a **material weakness** in internal controls[132](index=132&type=chunk) - The identified **material weakness** relates to controls over the accounting for Restricted Stock Units (RSUs), specifically ensuring grants and vesting activities were recorded in the proper accounts and at the proper amounts[135](index=135&type=chunk) - Management has begun implementing a remediation plan, including redesigning control procedures and enhancing documentation, with the expectation of full implementation during the fiscal year ending December 31, 2025[136](index=136&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not currently involved** in any legal proceedings expected to have a material adverse effect - The company is **not currently involved** in any legal proceedings expected to have a material adverse effect on its business[141](index=141&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Primary risk is failing to obtain FDA or Health Canada authorization for DrugSorb-ATR, materially harming revenue - A **primary risk is the potential failure** to obtain regulatory authorization for DrugSorb-ATR in the U.S. and Canada. The **FDA issued a denial letter** on April 25, 2025, and **Health Canada issued a Notice of Refusal** on June 26, 2025[144](index=144&type=chunk)[145](index=145&type=chunk) - The company is actively pursuing an appeal with the FDA through a supervisory review process and has filed a "**Request for Reconsideration**" with Health Canada[144](index=144&type=chunk)[145](index=145&type=chunk) - An **unsuccessful appeal could significantly impact** the company's ability to generate substantial sales of its product candidates in the U.S. and Canada[146](index=146&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports **no unregistered sales** of equity securities during the period - **None**[150](index=150&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) Chief Medical Officer adopted a Rule 10b5-1 trading plan to sell incentive stock options - On June 13, 2025, the **Chief Medical Officer adopted a Rule 10b5-1 trading plan** to sell up to **157,500 incentive stock options**[153](index=153&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Exhibits include CEO and CFO certifications and XBRL interactive data files - The exhibits include **certifications from the CEO and CFO** pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act**, and **XBRL interactive data files**[158](index=158&type=chunk)

Core Viewpoint - CytoSorbents Corporation is actively pursuing regulatory approvals for its DrugSorb™-ATR device, aimed at reducing perioperative bleeding in patients undergoing CABG surgery who are on the antiplatelet drug Brilinta® [1][4] Regulatory Updates - The FDA has scheduled an appeal hearing for CytoSorbents' supervisory review of its De Novo Request, with expectations to resolve deficiencies by the end of August 2025 [2] - Health Canada issued a Notice of Refusal for the Medical Device License application, prompting the company to file a Request for Reconsideration by July 25, 2025 [3] Product Overview - DrugSorb-ATR is designed to address a significant need in cardiac surgery by mitigating bleeding risks associated with Brilinta® [4] - The device has received FDA Breakthrough Device Designation for removing ticagrelor and other direct oral anticoagulants during cardiothoracic procedures [8] Company Background - CytoSorbents specializes in blood purification therapies for critical conditions, utilizing proprietary polymer bead technology to remove toxins from blood [5] - The company's lead product, CytoSorb®, is already approved in the EU and has been used over 270,000 times globally [6]

Core Viewpoint - CytoSorbents Corporation has filed a request for supervisory review with the FDA regarding the De Novo Denial Letter for its DrugSorb-ATR Device, which aims to reduce bleeding severity in CABG surgery patients on Brilinta® [1][2][7] Group 1: Company Overview - CytoSorbents Corporation specializes in blood purification technologies for treating life-threatening conditions in intensive care and cardiac surgery [5] - The company's proprietary technologies utilize biocompatible polymer beads to remove toxic substances from blood, applicable in various medical scenarios including sepsis and organ failure [5][6] - CytoSorbents' lead product, CytoSorb®, is CE Marked in the EU and has been used over 270,000 times globally [6] Group 2: Regulatory Developments - The FDA issued a De Novo Denial Letter on April 25, 2025, citing deficiencies that must be resolved before the DrugSorb-ATR can be authorized for U.S. commercialization [2][7] - The company has engaged with the FDA to clarify these deficiencies and believes that the supervisory review process will effectively address the concerns [2][4] - The appeals process typically results in a final decision approximately 60 days after filing, with the company optimistic about receiving a regulatory decision in 2025 [3][7] Group 3: Market Context - DrugSorb-ATR is designed to mitigate perioperative bleeding in patients undergoing high-risk surgeries while on antithrombotic medications [7] - The application for DrugSorb-ATR is also under advanced review by Health Canada, with the agency committed to issuing a decision despite current delays [4][7]

Company Overview - CytoSorbents has a platform blood purification technology for removing toxins, with two main products: CytoSorb and DrugSorb-ATR[8] - CytoSorb is approved in the E U with over 250,000 devices used in 76 countries, generating approximately $34 million in trailing 12-month product sales[8] - DrugSorb-ATR, an investigational device for removing blood thinners, has been submitted to the FDA and Health Canada, with regulatory decisions expected in 2025[8] DrugSorb-ATR Opportunity - The initial U S and Canada total addressable market for Brilinta removal is estimated at ~$300 million[67] - The total addressable market potential for DrugSorb-ATR, including DOAC removal, is >$600 million in the U S and Canada[67] - In patients undergoing CABG, DrugSorb-ATR was associated with a Number Needed to Treat (NNT) of 6 to prevent a major bleed (UDPB 3 event or CTD >1 Liter)[56] CytoSorb Core Business - CytoSorb targets massive inflammation, which affects 40-60% of patients in the ICU[79] - The company's manufacturing facility has a peak capacity of $400 million in sales, with blended product gross margins >70%[83] Financial Performance - The company reported $33.7 million in trailing 12-month sales[88] - Q1-Q3 product sales reached $26.4 million, an 11% year-over-year increase[88] - The company's cash burn was reduced to approximately $2.7 million in Q3 2024, compared to $5 million in Q2 2024[90]

Financial Performance - Total revenue for Q3 2023 was $881 million, an increase of approximately 86% compared to $811 million for Q3 2022[27] - Product sales for Q3 2023 were approximately $775 million, a 20% increase compared to $646 million in Q3 2022[27] - Product gross margins for Q3 2023 were 72%, compared to 55% for Q3 2022[27] - Total YTD revenue as of September 30, 2023, was $2768 million, a 94% increase compared to $2530 million for the same period in 2022[28] - YTD product sales as of September 30, 2023, were approximately $2374 million, a 93% increase over $2172 million for the same period a year ago[28] Operational Highlights & DrugSorb-ATR - The STAR-T RCT completed in August, with follow-up on 100% of patients, at 30 centers in the US and Canada[12] - The company expects DrugSorb-ATR to have a higher ASP and product gross margin than CytoSorb and would open an expected US and Canadian TAM of $600-650 million for Brilinta alone[40] - Over 221000 cumulative human treatments delivered across 75 countries worldwide[7] Cash Flow - Cash balance as of 9/30/2023 was approximately $10 million, which included restricted cash of approximately $17 million[33] - The quarterly cash burn during the nine months in 2023 averaged approximately $46 million, down significantly from the average quarterly cash burn in the nine months of 2022 of approximately $99 million[33] Strategic Partnership - Fresenius has begun marketing CytoSorb as the "featured technology for cytokine, bilirubin, and myoglobin removal" on its critical care platforms worldwide (excluding the US)[23] - CytoSorbents benefits from the global endorsement and push on Fresenius' sales and marketing platform and has agreed to subsidize this effort with a 09% royalty to FMC on ex-US CytoSorb sales[23]

Financial Performance - Total revenue for 2023 was $36.3 million, a 5% increase compared to $34.7 million in 2022[39] - CytoSorb product sales were $31.0 million in 2023, a 9% increase from $28.6 million in 2022[39] - Q4 2023 total revenue decreased by 8% to $8.7 million compared to $9.4 million in Q4 2022[42] - Q4 2023 CytoSorb sales decreased slightly by 1% to $7.3 million compared to $7.4 million in Q4 2022[42] - The company has $15.6 million in cash as of December 31, 2023, which is expected to fund operations into the fourth quarter of 2024[43] Operational Highlights - Over 228,000 cumulative CytoSorb treatments have been delivered as of the end of 2023, a 17% increase from the end of 2022[9] - International Direct sales experienced strong growth of 27% to $6 million (19% product sales)[23] - The company expects to launch its new PuriFi pump later this year, following the expiration of the distribution agreement with Nikkiso Europe GmbH in September 2023[12] DrugSorb-ATR and STAR-T Trial - The pivotal STAR-T RCT was selected for a Breakout Presentation at the American Association of Thoracic Surgery (AATS) Annual Meeting[13, 17] - The company plans to submit for regulatory approval of DrugSorb-ATR to the U S FDA and Health Canada in the second half of 2024[13, 17] - The initial U S & Canada Total Addressable Market for Brilinta removal is estimated at $325 million, with a potential of $650 million[18, 19] Product Pipeline and Expansion - The company has received ~$50 million in grants, contracts, and other non-dilutive funds since 2003 for its technology[24] - VetResQ, bringing CytoSorb to veterinary medicine, had a limited but successful launch in 2023, with plans for an integrated all-in-one solution in 2024[33] - HemoDefend-BGA aims to create "universal plasma" and has received over $17 million in funding from the U S Department of Defense[37]

Financial Performance - Q1 2024 product sales reached approximately $9.0 million, a 14% increase from $7.9 million in Q1 2023[12, 20] - Q1 2024 product sales increased 22% sequentially from $7.3 million in Q4 2023[12] - Product gross margins for Q1 2024 were 76%, up 800 basis points from 68% in Q1 2023, excluding a one-time inventory adjustment[12, 20] - Grant revenue was $797,000 in Q1 2024, compared to $1.5 million in Q1 2023, a decrease of 48%[20] - Total revenue for Q1 2024, including product sales and grant income, was $9.8 million, compared to $9.4 million for Q1 2023, a 4% increase[20] Operational Highlights - Cumulative CytoSorb treatments exceeded 237,000 as of March 31, 2024, and are expected to reach a quarter million this year[15] - The company expects to launch the PuriFi hemoperfusion pump in select international countries in Q2 2024[15] - The company is on track to submit marketing applications for the DrugSorb-ATR system to the FDA and Health Canada in Q3 2024[12] DrugSorb-ATR and Regulatory Path - The FDA has granted two Breakthrough Device Designations for DrugSorb-ATR[30] - Regulatory experts recommend FDA submission for DrugSorb-ATR use in CABG surgery under the De Novo pathway[40] - The company is targeting parallel De Novo submission to FDA and Health Canada in Q3 2024, with FDA review potentially taking 6-12 months following submission[39, 40] STAR-T Trial - In the Isolated CABG Per Protocol group, the Severe endpoint showed a WIN Ratio of 1.59 with a p-value of 0.041[32] - Exploratory analysis of Major Bleeding showed a reduction from 22% in the control group to 6% in the DrugSorb group, with p=0.028[34]

Financial Performance - Total revenue in Q2 2024 increased by 5% to $9.9 million compared to $9.4 million in Q2 2023[10, 20] - Product sales in Q2 2024 increased by 10% to $8.8 million compared to $8.1 million in Q2 2023[10, 20] - Operating loss in Q2 2024 decreased by 48% to $3.4 million from $6.6 million[10] - For the first half of 2024, total revenue increased by 4% to $19.7 million compared to $18.9 million in the first half of 2023[21] - Product sales for the first half of 2024 increased by 12% to approximately $17.8 million compared to $16.0 million in the same period last year[21] - The company's cash balance at the end of Q2 2024 was $14.9 million, including $8.5 million in unrestricted cash and $6.5 million in restricted cash[10] Operational Highlights - Over a quarter million CytoSorb devices have been cumulatively delivered to date[10] - The company completed additional cutbacks, expected to save an additional $5 million in expenses going forward, and decreased the workforce by 17% over the past 5 months[10] - The company secured an additional $20 million credit facility with Avenue Capital Group[10] Regulatory and Clinical Developments - The company is on track to submit marketing applications for the investigational DrugSorb-ATR system to FDA as a De Novo application and Health Canada in Q3 2024[15] - Data from the STAR Registry was presented at EuroPCR 2024 and was selected as a top 5 finalist in the best scientific abstract competition[15] - Real-world data from the STAR Registry showed a 44% lower rate of severe bleeding (UDPB 3) with CytoSorb compared with the E-CABG Registry when TLD is less than 24 hours, and an 80% lower rate when TLD is between 24-72 hours[37]

Financial Performance - CytoSorbents' product revenue in Q3 2024 reached $8.6 million, showing an 11% year-over-year growth[16] - The company's operating expenses decreased by 25% year-over-year in Q3 2024[16,51] - The operating loss was reduced by 40% year-over-year[16,51] - Cash burn was reduced to $2.7 million in Q3 2024, down from $5 million in Q2 2024[16,54] - As of September 30, 2024, the company had $12.2 million in cash, including $6.5 million of restricted cash and $5.7 million in unrestricted cash[57] DrugSorb-ATR Regulatory and Clinical Updates - DrugSorb-ATR, an investigational device, has been submitted to the FDA and Health Canada, with regulatory decisions expected in 2025[12,21] - The company submitted a De Novo medical device marketing application to the FDA on September 27, 2024, which was accepted in October 2024[22] - In isolated CABG patients, the intraoperative use of DrugSorb-ATR was associated with reduced bleeding severity[20] - Real-world evidence from an additional 102 CABG patients on Brilinta suggests that the guideline-recommended washout period of a minimum of 72 hours may be substantially shortened with CytoSorb and DrugSorb-ATR[23] Market Opportunity - The company estimates an initial market opportunity of over $300 million for Ticagrelor removal in CABG in the U S and Canada[31]