CytoSorbents(CTSO) - 2025 Q4 - Annual Report

Financial Performance - Total product revenue for the year ended December 31, 2025, was $37.1 million, an increase of 4.1% compared to $35.6 million in 2024[250]. - Gross profit for 2025 was approximately $26.5 million, representing a gross margin of 71.5%, up from 69.9% in 2024[256]. - Loss from operations improved by 10.4% to approximately $14.7 million in 2025, compared to $16.5 million in 2024, driven by revenue growth and gross margin improvement[260]. - Research and development expenses decreased by 33.2% to approximately $5.1 million in 2025, down from $7.6 million in 2024, due to the completion of the STAR-T clinical trial[257]. - Selling, general and administrative expenses increased by 5% to approximately $35.6 million in 2025, primarily due to higher legal and regulatory costs[258]. - Net interest expense for 2025 was approximately $2.6 million, an increase from $1.4 million in 2024, due to interest incurred on the credit facility[261]. - Benefit from income taxes was approximately $0.4 million for 2025, down from $1.7 million in 2024, due to the utilization of the New Jersey Technology Business Tax Certificate Transfer Program[265]. Strategic Initiatives - The company initiated a strategic workforce and cost reduction plan, resulting in a restructuring charge of approximately $0.5 million in 2025[259]. - The company expects to reach operating cash flow break-even in the second half of 2026 following the strategic workforce and cost reduction plan[252]. - The company plans to file a new De Novo application for DrugSorb-ATR with the FDA, following an appeal meeting that affirmed no safety-related issues with the device[250]. - The company initiated a Strategic Workforce and Cost Reduction Plan, reducing its workforce by approximately 10% and expects to reach operating cash flow break-even in the second half of 2026[275]. Financial Position - As of December 31, 2025, current assets were approximately $20.6 million and current liabilities were approximately $9.7 million[266]. - As of December 31, 2025, the company had approximately $7.8 million in cash, which may not be sufficient to fund operations beyond the next twelve months[276]. - An effective shelf registration statement allows the company to raise up to $150 million, with approximately $149.7 million available as of December 31, 2025[267]. - The company entered into a Loan and Security Agreement with Avenue Capital Group for up to $20 million, with the first tranche of $15 million disbursed under specific conditions[268]. - The Amended Loan and Security Agreement provides access to an additional $2.5 million, with an extension of the interest-only period to December 31, 2026, subject to FDA approval[281]. Capital Raising Activities - The company raised $6.25 million from a rights offering, with proceeds used to satisfy a debt covenant and release $5 million of restricted cash[273]. - The Company raised aggregate gross proceeds of $6.25 million from the Rights Offering, with $5.4 million net of fees[287]. - Participants received Units comprising one share of common stock and two Right Warrants, with the potential to issue an additional 6.25 million shares upon exercise[287]. - Approximately 1.4 million Series A Right Warrants were exercised at an exercise price of $1.13 per warrant, generating an additional $1.6 million in gross proceeds[287]. - The expiration date of the Series B Right Warrants was extended from April 10, 2025, to June 10, 2025[287]. - The Series B Right Warrants expired worthless due to the 5-day volume weighted average price of Common Stock being below the minimum required price of $2.00[287]. Tax and Valuation Considerations - The Company evaluates uncertain tax positions based on estimates and assumptions, which may differ from actual results[289]. - The fair value of warrants is estimated using the Black-Scholes or Monte Carlo pricing models, requiring significant estimates regarding inputs[295]. - Changes in assumptions used for estimating the fair value of warrants could materially affect the financial statements[298]. - The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense[291]. - Deferred tax assets are evaluated for valuation allowances based on expectations of future taxable income, which could impact financial statements[292]. Other Financial Metrics - The company reported a gain on foreign currency transactions of approximately $9.3 million in 2025, compared to a loss of $4.2 million in 2024, attributed to the increase in the Euro to U.S. dollar exchange rate[262]. - Loss on abandoned patents increased by approximately $0.2 million or 67.4%, totaling $0.6 million for the year ended December 31, 2025, compared to $0.3 million for 2024[264].