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CytoSorbents(CTSO) - 2024 Q3 - Quarterly Report
CTSOCytoSorbents(CTSO)2024-11-07 21:33
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Revenue and Sales Performance - Total revenues for Q3 2024 were 9.39million,a79.39 million, a 7% increase compared to 8.81 million in Q3 2023[123] - Product sales increased by 11% to 8.61millioninQ32024,drivenbya218.61 million in Q3 2024, driven by a 21% increase in direct sales[123] - Total revenues increased by 5% to 29,071,000 for the nine months ended September 30, 2024, with product sales up 11% to 26,444,000,drivenbya1626,444,000, driven by a 16% increase in distributor sales and an 8% increase in direct sales[133] Grant Income - Grant income decreased by 26% to 777,000 in Q3 2024 due to the completion of several grants in 2023[124] - Grant income decreased by 33% to 2,627,000fortheninemonthsendedSeptember30,2024,duetothecompletionofseveralgrantsin2023[134]GrossProfitandMargins−Grossprofitdecreasedto2,627,000 for the nine months ended September 30, 2024, due to the completion of several grants in 2023[134] Gross Profit and Margins - Gross profit decreased to 5.28 million in Q3 2024 from 5.61millioninQ32023,withproductgrossmarginsdroppingto615.61 million in Q3 2023, with product gross margins dropping to 61% from 72%[126] - Gross profit increased by 1,274,000 to 18,355,000fortheninemonthsendedSeptember30,2024,despiteatemporaryproductionslowdownandmanufacturingissuesthatreducedCytoSorbdeviceoutput[135]−Inflationarypressureshaveincreasedlaborandrawmaterialcosts,impactingproductgrossmargins[122]ResearchandDevelopmentExpenses−Researchanddevelopmentexpensesdecreasedby5118,355,000 for the nine months ended September 30, 2024, despite a temporary production slowdown and manufacturing issues that reduced CytoSorb device output[135] - Inflationary pressures have increased labor and raw material costs, impacting product gross margins[122] Research and Development Expenses - Research and development expenses decreased by 51% to 1.85 million in Q3 2024, primarily due to the completion of the STAR-T clinical trial[127] - Research and development expenses decreased by 52% to 5,619,000fortheninemonthsendedSeptember30,2024,primarilyduetothecompletionoftheSTAR−TclinicaltrialinDecember2023[136]ProductandMarketPerformance−CytoSorb®hasbeenusedinover250,000devicescumulativelyandisdistributedin76countriesworldwide[115]−TheDrugSorb™−ATRsystemreceivedFDABreakthroughDeviceDesignationsandaDeNovoapplicationwassubmittedinSeptember2024[116]−TheSTAR−TclinicaltrialdemonstratedreducedperioperativebleedinginCABGsurgerypatients,representingover905,619,000 for the nine months ended September 30, 2024, primarily due to the completion of the STAR-T clinical trial in December 2023[136] Product and Market Performance - CytoSorb® has been used in over 250,000 devices cumulatively and is distributed in 76 countries worldwide[115] - The DrugSorb™-ATR system received FDA Breakthrough Device Designations and a De Novo application was submitted in September 2024[116] - The STAR-T clinical trial demonstrated reduced perioperative bleeding in CABG surgery patients, representing over 90% of the study population[119] Government-Funded Projects - The company has ongoing government-funded projects totaling 15.8 million, 4.7million,and4.7 million, and 7.7 million for HemoDefend-BGA™, HemoDefend-RBC™, and K+ontrol™, respectively[121] Selling, General, and Administrative Expenses - Selling, general and administrative expenses decreased by 1,101,000(141,101,000 (14%) to 7,003,000 for the three months ended September 30, 2024, primarily due to reductions in non-cash stock compensation, salaries, and royalty expenses[129] Interest Expense and Debt - Interest expense, net increased to 588,000forthethreemonthsendedSeptember30,2024,comparedto588,000 for the three months ended September 30, 2024, compared to 34,000 in the same period in 2023, driven by new debt from Avenue Capital Group with a principal of 15,000,000andaninterestrateof13.515,000,000 and an interest rate of 13.5%[130] - Interest expense, net increased to 775,000 for the nine months ended September 30, 2024, compared to 106,000in2023,duetotheAvenueCapitalGroupdebtfacility[139]−Thecompanycloseda106,000 in 2023, due to the Avenue Capital Group debt facility[139] - The company closed a 20 million term-loan facility with Avenue Capital Group in June 2024, with 15millioninitiallydisbursedand15 million initially disbursed and 5 million contingent on FDA approval of DrugSorb-ATR[143] Foreign Currency Transactions - Gain on foreign currency transactions was 2,650,000forthethreemonthsendedSeptember30,2024,comparedtoalossof2,650,000 for the three months ended September 30, 2024, compared to a loss of 1,810,000 in 2023, due to the Euro strengthening against the U.S. dollar from 1.07to1.07 to 1.11[131] Cash and Liquidity - As of September 30, 2024, the company had 12.2millionincash,including12.2 million in cash, including 5.7 million unrestricted and 6.5millionrestricted,withadditionalfundscontingentonachievingmilestonesrelatedtoFDAapprovalandequityfinancing[145]−AsofSeptember30,2024,thecompany′scash,cashequivalents,andrestrictedcashbalanceswereapproximately6.5 million restricted, with additional funds contingent on achieving milestones related to FDA approval and equity financing[145] - As of September 30, 2024, the company's cash, cash equivalents, and restricted cash balances were approximately 12.2 million, including 5.7millionincashandcashequivalentsand5.7 million in cash and cash equivalents and 6.5 million in restricted cash, raising substantial doubt about its ability to continue as a going concern[150] - The company is pursuing milestones related to its Avenue Capital Group debt facility, which could increase its unrestricted cash position by up to 10million,andisevaluatingothercapitalsources,includingdebtfinancing,equityfinancing,andstrategicinvestments[150]LeasingandFacilities−CytoSorbentsEuropeGmbHleasedanadditional1,068squaremetersofwarehousespacestartingApril1,2021,withmonthlybaserentof10 million, and is evaluating other capital sources, including debt financing, equity financing, and strategic investments[150] Leasing and Facilities - CytoSorbents Europe GmbH leased an additional 1,068 square meters of warehouse space starting April 1, 2021, with monthly base rent of 7,784 and other costs of approximately 239,foratermoffiveyearswithanoptiontoextendforanotherfiveyears[147]−ThecompanyextendedtwooperatingleasesforitsofficefacilityinGermanyinSeptember2021,requiringcombinedbaserentpaymentsofapproximately239, for a term of five years with an option to extend for another five years[147] - The company extended two operating leases for its office facility in Germany in September 2021, requiring combined base rent payments of approximately 12,100 per month and monthly operating expenses of approximately $3,000, with a five-year renewal option extending the lease term to August 31, 2031[148]