What changed in this filing

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Item 1. Financial Statements

2025-11-13 compared with 2025-08-07 · 178 added, 134 removed, 443 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

Current Assets:

1 unchanged sentence

Restricted cash, current

Grants and accounts receivable, net of allowances of $ 140 and $ 158 as of June 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowances of $ 134 and $ 158 as of September 30, 2025 and December 31, 2024, respectively

Prepaid expenses and other current assets

15 unchanged sentences

Preferred Stock, par value $ 0.001 , 5,000,000 shares authorized;

no shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common Stock, par value $ 0.001 , 100,000,000 shares authorized as of June 30, 2025 and December 31, 2024;

62,610,376 and 54,830,146 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

no shares issued and outstanding as of September 30, 2025 and December 31, 2024

Common Stock, par value $ 0.001 , 100,000,000 shares authorized as of September 30, 2025 and December 31, 2024;

62,794,305 and 54,830,146 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of goods sold

8 unchanged sentences

Total other income (expense), net

Net income (loss) attributable to common stockholders

Basic net income (loss) per common share

Diluted net income (loss) per common share

Loss before benefit from income taxes

Benefit from income taxes

Basic and diluted net loss per common share

Weighted Average Shares of Common Stock Outstanding

Basic and diluted

Other comprehensive income (loss):

8 unchanged sentences

Income (Loss)

Balance as of March 31, 2025 (unaudited)

Balance as of June 30, 2025 (unaudited)

Stock-based compensation

Foreign translation adjustment

Balance at June 30, 2025 (unaudited)

Balance at September 30, 2025 (unaudited)

Balance at December 31, 2024

3 unchanged sentences

Foreign translation adjustment

Balance as of June 30, 2025 (unaudited)

Balance as of September 30, 2025 (unaudited)

Comprehensive

Stockholders’

Balance as of March 31, 2024 (unaudited)

Balance as of June 30, 2024 (unaudited)

Stock-based compensation

Warrants issued in connection with long-term debt

Foreign translation adjustment

Issuance of restricted stock options

Balance at June 30, 2024 (unaudited)

ATM activation fees

Issuance of restricted stock units

Balance at September 30, 2024 (unaudited)

Balance at December 31, 2023

Stock-based compensation

Warrants issued in connection with long-term debt

Foreign translation adjustment

Foreign currency translation adjustment

Issuance of common stock offerings, net of fees

Warrants issued in connection with long-term debt

Issuance of restricted stock units

Balance as of June 30, 2024 (unaudited)

Balance as of September 30, 2024 (unaudited)

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

September 30,

Cash flows from operating activities

Net income (loss) attributable to common stockholders

Adjustments to reconcile net income (loss) attributable to common stockholders to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Accrued final fee

Amortization of debt discount

Amortization of loan costs

Depreciation and amortization

4 unchanged sentences

Stock-based compensation

Foreign currency transaction (gains) losses

Foreign currency transaction gains

Changes in operating assets and liabilities

Grants and accounts receivable

Accounts receivable

Prepaid expenses and other current assets

25 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

SEPTEMBER 30, 2025

NATURE OF BUSINESS AND BASIS OF PRESENTATION

3 unchanged sentences

The Company, through its wholly owned European subsidiary, CytoSorbents Europe GmbH, based in Berlin, Germany, 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, 2025 and December 31, 2024, and for the three and six months ended June 30, 2025 and 2024.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025 and 2024.

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.

3 unchanged sentences

GAAP have been condensed or omitted.

The results for the three and six months ended June 2025 and 2024, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

Beginning in the current quarter, the Company presents amounts in thousands unless otherwise stated.

The results for the three and nine months ended September 2025 and 2024, are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

Beginning in the current year, 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.

As of June 30, 2025, the Company’s total cash and cash equivalents and restricted cash was approximately $ 11.7 million, with $ 1.5 million classified as restricted, and $ 10.2 million as unrestricted and available to fund operations, which raises substantial doubt about the Company’s ability to continue as a going concern.

As of September 30, 2025, the Company had approximately $ 9.1 million in cash, including approximately $ 7.6 million in unrestricted cash and cash equivalents and $ 1.5 million of non-current restricted cash.

These cash and restricted cash balances considered with the Company’s historical cash used in operations, notwithstanding the Company’s Strategic Workforce and Cost Reduction Plan and the impact of the Amended Loan and Security Agreement both of which were announced on November 13, 2025 (see Note 10, “Subsequent Events”) 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.

The Company’s expected future capital requirements may depend on many factors, including expanding the Company’s customer base and sales force, the timing and extent of spending in obtaining regulatory approval and introduction of new products, including the potential regulatory approval and introduction of DrugSorb™-ATR, in the U.S.

and Canada, which regulatory decisions are expected in 2025, and the related opportunity to receive Tranche 2 of Avenue Capital Commitment (see Note 6.

Long-Term Debt) by December 31, 2025 and extend the principal re-payment terms of the facility beginning in the third quarter of 2026.

Additional sources of liquidity available to the Company include the 2024 Shelf (as defined in Note 4, Common Stock, Stock-Based Compensation and Warrants), other public or private equity offerings, debt financings or from other sources.

which decision is now expected in mid-2026 and the related opportunity to receive Tranche 2 (b) of the Amended Avenue Capital Commitment by December 31, 2026.

Additional sources of liquidity available to the Company 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 shareholders.

There is no assurance that the Company will be able to secure funding on terms acceptable, or at all.

The increasing need for capital could also make it more difficult to obtain funding through either equity or debt.

Although the Company has taken actions to achieve cash flow breakeven, if it does not achieve this goal, the potential need for capital could also make it more difficult to obtain funding through either equity or debt.

Should additional capital not become available as needed, the Company may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount.

As a result of these additional uncertainties, 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 available financing sources, including less or non-dilutive debt financing, additional grant funding, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof.

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.

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In addition, the 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 and CytoSorbents India Private Limited, wholly-owned subsidiaries of CytoSorbents Medical, Inc.

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.

Foreign currency transactions gains and losses are included in other income (loss), net in the consolidated statements of operations and other comprehensive loss.

Foreign currency transactions gains and losses are included in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

Impairment or Disposal of Long-Lived Assets

During the six months ended June 30, 2025, the Company did not record any impairment charges.

During the six months ended June 30, 2024, the Company recorded impairment charges of approximately $ 0.3 million, related to the impairment of certain issued patents and pending patent applications in certain specific jurisdictions and the abandonment of certain pending patent application costs in the ordinary course of business.

During the three months ended September 30, 2025 and 2024, the Company recorded impairment charges of approximately $ 0.2 million and $ 0.1 million respectively, and during the nine months ended September 30, 2025 and 2024, the Company recorded impairment charges of approximately $ 0.2 million and $ 0.3 million, respectively, related to the impairment of certain issued patents and pending patent applications in certain specific jurisdictions and the abandonment of certain pending patent application costs in the ordinary course of business.

This charge is included in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company has no t recorded income tax expense or income tax benefit for the six months ended June 30, 2025 and 2024 due to the generation of net operating losses, the benefits of which have been fully reserved.

The Company recorded an income tax benefit of $ 0.4 million for the three and nine months ended September 30, 2025.

This benefit was realized by utilizing 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 $ 1.7 million from the Program in April of 2025 resulting from the sale of 2023 and amended 2022 net operating losses and R&D credits.

The Company anticipates receiving the current benefit of $ 0.4 million in the second quarter of 2026.

The Company has no t recorded income tax expense or income tax benefit for the three and nine months ended September 30, 2024 due to the generation of net operating losses, the benefits of which have been fully reserved.

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.

3 unchanged sentences

The Company follows accounting standards associated with uncertain tax positions.

The Company had no unrecognized tax benefits as of June 30, 2025 and December 31, 2024.

The Company had no unrecognized tax benefits as of September 30, 2025 and December 31, 2024.

The Company is accounting for an uncertain tax position of approximately $ 2.2 million as of December 31, 2024.

1 unchanged sentence

federal and state jurisdictions.

The Company utilizes the Technology Business Tax Certificate Transfer Program to sell a portion of its New Jersey Net Operating Loss carryforwards to an industrial company.

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”).

The Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a $250,000 limit.

At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts.

Through the IntraFi Network, the Company maintains an Insured Cash Sweep account whereby all cash held in the Company’s money market accounts is swept daily in increments of less than the FDIC insurance limit and deposited in a number of IntraFi’s network of 3,000 financial institutions.

This arrangement provides FDIC insurance coverage for all of the cash balances held in the money market accounts, which represents all of the cash and cash equivalents held at Bridge Bank.

This arrangement provides FDIC insurance coverage for all of the cash balances held in the money market accounts.

This arrangement excludes the restricted cash balances.

1 unchanged sentence

A significant portion of the Company’s revenues is from product sales in Germany.

Substantially all of the Company’s grant and other income is from government agencies in the United States.

As of June 30, 2025, no distributor or direct customers accounted for more than 10 % of the Company’s outstanding grants and accounts receivable.

As of December 31, 2024, one distributor accounted for approximately 19 % of outstanding grants and accounts receivable.

For the three and six months ended June 30, 2025 and 2024, no distributor or direct customers accounted for more than 10 % of the Company’s total revenue.

As of September 30, 2025, two distributors accounted for approximately 28 % of the Company’s outstanding accounts receivable.

As of December 31, 2024, one distributor accounted for approximately 19 % of outstanding accounts receivable.

For the nine months ended September 30, 2025, no distributor or direct customers accounted for more than 10 % of the Company’s revenue.

For the nine months ended September 30, 2024, one distributor accounted for approximately 10 % of the Company’s revenue.

For the three months ended September 30, 2025, one distributor accounted for approximately 10 % of the Company’s revenue.

For the three months ended September 30, 2024, no distributor or direct customers accounted for more than 10 % of the Company’s revenue.

Shipping and Handling Costs

Total freight costs amounted to approximately $ 0.2 million and $ 0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 0.3 million and $ 0.2 million for the six months ended June 30, 2025 and 2024, respectively.

Total freight costs amounted to approximately $ 0.1 million for each of the three months ended September 30, 2025 and 2024, and $ 0.4 million and $ 0.3 million for the nine months ended September 30, 2025 and 2024, respectively.

BALANCE SHEET COMPONENTS

The Company had the following major classes of inventories:

June 30, 2025

September 30, 2025

December 31, 2024

6 unchanged sentences

Depreciation/

June 30, 2025

September 30, 2025

December 31, 2024

6 unchanged sentences

Property and equipment, net

Depreciation expense for the six months ended June 30, 2025 and 2024 amounted to $ 0.6 million and $ 0.8 million, respectively.

Depreciation expense for the nine months ended September 30, 2025 and 2024 amounted to $ 0.9 million and $ 1.0 million, respectively.

Depreciation expense for each of the three months ended September 30, 2025 and 2024 amounted to $ 0.3 million.

Other assets consist of the following:

June 30, 2025

September 30, 2025

December 31, 2024

3 unchanged sentences

Less accumulated amortization of patents issued

Patent amortization expenses amounted to $ 0.1 million for the six months ended June 30, 2025 and 2024.

Patent amortization expenses amounted to $ 0.2 million each for the nine months ended September 30, 2025 and 2024.

Patent amortization expense amounted to $ 0.1 million each for the three months ended September 30, 2025 and 2024.

Patent amortization expense for the next five years and thereafter is scheduled as follows:

4 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Clinical studies

Deferred revenue

Deferred revenue and contract liabilities

Professional fees

Goods received not invoiced

Accrued operating expenses

Accrued expenses and other current liabilities

5 unchanged sentences

Once the 6.25 million shares of common stock reserved for the Right Warrants are issued, the remaining outstanding and unexercised Right Warrants will expire worthless.

Management and the Board of Directors of the Company are estimated to have

subscribed for approximately 450,000 of the total Units prior to any pro rata adjustment.

Subscribers of basic subscription rights in the Rights Offering were allocated Units based upon their pro-rata share of 6.25 million Units.

The Series A Right Warrants and the Series B Right Warrants expired on February 24, 2025 and June 10, 2025, respectively.

11 unchanged sentences

90 % of the 5-day volume weighted average stock price as of the exercise date rounded down to the nearest cent, not to fall outside the range of the maximum and minimum exercise prices.

Proceeds from the closing of the subscription period satisfy a debt covenant which allows for $ 5.0 million of restricted cash on the Company’s condensed consolidated balance sheets to become unrestricted, and available for use.

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, 90 % of the 5 -day volume weighted average price of Common Stock over the last five -trading days prior to the expiration date of the Series A Right Warrants on February 24, 2025, rounded down to the nearest whole cent but (x) not lower than $ 1.00 and (y) not higher than $ 2.00 , and (ii) in the case of the Series B Right Warrants, 90 % of the 5 -day volume weighted average price of Common Stock over the last five -trading days prior to the extended expiration date of the Series B Right Warrants on June 10, 2025, rounded down to the nearest whole cent but (x) not lower than $ 2.00 and (y) not higher than $ 4.00 .

Exercise of the Right Warrants require additional investment separate from the purchase of the Units.

6.25 million shares of common stock have been reserved for exercise of the Right Warrants, after which any remaining unexercised Right Warrants will immediately expire worthless.

Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $ 5.0 million of restricted cash on the Company’s condensed consolidated balance sheets to become unrestricted, and available for use.

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, 90 % of the five -day volume weighted average price of Common Stock over the last five trading days prior to the expiration date of the Series A Right Warrants on February 24, 2025, rounded down to the nearest whole cent but (x) not lower than $ 1.00 and (y) not higher than $ 2.00 , and (ii) in the case of the Series B Right Warrants, 90 % of the five -day volume weighted average price of Common Stock over the last five trading days prior to the extended expiration date of the Series B Right Warrants on June 10, 2025, rounded down to the nearest whole cent but (x) not lower than $ 2.00 and (y) not higher than $ 4.00 .

Exercise of the Right Warrants required additional investment separate from the purchase of the Units.

6.25 million shares of common stock were reserved for exercise of the Right Warrants.

The Right Warrants were transferable until expiration.

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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,

Three Months Ended September 30,

Stock-based compensation expense by category

4 unchanged sentences

Total stock-based compensation expense

Six Months Ended June 30,

Nine Months Ended September 30,

Stock-based compensation expense by category

4 unchanged sentences

Total stock-based compensation expense

For the six months ended June 30, 2025 and 2024, approximately $ 1.1 and $ 1.5 million of stock-based compensation expense relates to stock options, and approximately $ 0.3 and $ 0.4 million relates to RSUs, respectively.

For the three months ended June 30, 2025 and 2024, approximately $ 0.4 and $ 0.8 million of stock-based compensation expense relates to stock options, and approximately $ 0.1 and $ 0.2 million relates to RSUs, respectively.

For the nine months ended September 30, 2025 and 2024, approximately $ 1.5 million and $ 2.3 million of stock-based compensation expense relates to stock options, respectively, and approximately $ 0.4 million and $ 0.5 million relates to RSUs, respectively.

For the three months ended September 30, 2025 and 2024, approximately $ 0.4 million and $ 0.8 million of stock-based compensation expense relates to stock options, respectively, and approximately $ 0.1 million relates to RSUs for each period.

Stock-options

The summary of the stock option activity for the six months ended June 30, 2025, is as follows:

The summary of the stock option activity for the nine months ended September 30, 2025, is as follows:

Exercise Price

Outstanding, December 31, 2024

Outstanding, June 30, 2025

The Company estimated the fair value of stock options granted during the six months ended June 30, 2025 using a Black-Scholes pricing model, which used the following inputs:

Outstanding, September 30, 2025

The Company estimated the fair value of stock options granted during the nine months ended September 30, 2025 using a Black-Scholes pricing model, which used the following inputs:

Exercise price (per share)

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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, 2025 of $ 1.28 and the exercise price of the shares.

The intrinsic value is calculated as the difference between the market value of the shares as of September 30, 2025 of $ 0.93 and the exercise price of the shares.

Options Outstanding

Outstanding at

September 30,

(in thousands)

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Exercisable at

September 30,

(in thousands)

The summary of the status of the Company’s non-vested options for the six months ended June 30, 2025, is as follows:

The summary of the status of the Company’s non-vested options for the nine months ended September 30, 2025, is as follows:

Non-vested, December 31, 2024

( 2,926,891 )

Non-vested, June 30, 2025

As of June 30, 2025, the Company had approximately $ 2.2 million of total unrecognized compensation cost related to stock options which will, on average, be amortized over approximately 17 months .

Non-vested, September 30, 2025

As of September 30, 2025, the Company had approximately $ 2.1 million of total unrecognized compensation cost related to stock options which will, on average, be amortized over approximately 18 months .

Change in Control-Based RSUs

The Board of Directors has granted restricted stock units to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company.

These restricted stock units will only vest upon a Change in Control of the Company, as defined in the Amended and Restated CytoSorbents Corporation 2014 Long-Term Incentive Plan.

These restricted stock units 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:

Intrinsic Value

(amounts in thousands, except share data)

Outstanding, December 31, 2024

Outstanding, June 30, 2025

Outstanding, September 30, 2025

Due to the uncertainty over whether these restricted stock units will vest, which will only happen upon a Change in Control, no charges for these restricted stock units have ever been recorded in the Company’s condensed consolidated statements of operations and comprehensive loss.

Other RSU Awards

The following table outlines the restricted stock unit activity for the six months ended June 30, 2025:

The following table outlines the restricted stock unit activity for the nine months ended September 30, 2025:

Non-vested, January 1, 2025

Unvested shares forfeited

Non-vested, June 30, 2025

As of June 30, 2025, the remaining weighted average vesting period for restricted stock awards subject to vesting was 28 months and the remaining unrecognized restricted stock unit compensation expense was $ 0.4 million.

Non-vested, September 30, 2025

As of September 30, 2025, the remaining weighted average vesting period for restricted stock awards subject to vesting was 26 months and the remaining unrecognized restricted stock unit compensation expense was $ 0.6 million.

Warrants related to the December 2023 equity offering and June 2024 Loan and Security Agreement

As of June 30, 2025, the Company had 4,352,130 warrants outstanding.

2,706,561 warrants outstanding are related to the Company’s December 13, 2023 offering, and these warrants are immediately cash exercisable at an exercise price of $ 2.00 per share and expire on December 13, 2028.

As of September 30, 2025, the Company had 4,352,130 warrants outstanding.

Of this amount, 2,706,561 warrants outstanding are related to the Company’s December 13, 2023 offering, and these warrants are immediately cash exercisable at an exercise price of $ 2.00 per share and expire on December 13, 2028.

Another 1,645,569 warrants were issued on June 28, 2024 in connection with the closing of the Company’s Loan and Security Agreement with Avenue Capital Group (see Note 6.

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REVENUE AND SEGMENT INFORMATION

The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended June 30, 2025:

The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended September 30, 2025:

Distributors/

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All other countries

The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended June 30, 2024:

The following table disaggregates the Company’s revenue by customer type and geographic area for the three months ended September 30, 2024:

Distributors/

3 unchanged sentences

All other countries

The following table disaggregates the Company’s revenue by customer type and geographic area for the six months ended June 30, 2025:

The following table disaggregates the Company’s revenue by customer type and geographic area for the nine months ended September 30, 2025:

Distributors/

3 unchanged sentences

All other countries

The following table disaggregates the Company’s revenue by customer type and geographic area for the six months ended June 30, 2024:

The following table disaggregates the Company’s revenue by customer type and geographic area for the nine months ended September 30, 2024:

Distributors/

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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.

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.

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The following table provides information about receivables and contract liabilities from contracts with customers:

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Contract liabilities

Contract receivables, which are included in grants and accounts receivable on the condensed consolidated balance sheets, represent balances due from product sales to direct and distributor customers amounting to $ 6.4 million and $ 4.2 million as of June 30, 2025 and December 31, 2024, respectively, and billed and unbilled amounts due on government contracts amounting to $ 0.2 million each as of June 30, 2025 and December 31, 2024.

Contract liabilities, which are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets, represent the value of free of charge goods and credit rebates earned in accordance with the terms of certain direct customer agreements, which amounted to $ 0.2 million each as of June 30, 2025 and December 31, 2024, and deferred grant liability related to the billing on fixed price government contracts in excess of costs incurred, which amounted to $ 0.4 million each as of June 30, 2025 and December 31, 2024.

Contract receivables, which are included in accounts receivable on the condensed consolidated balance sheets, represent balances due from product sales to direct and distributor customers amounting to $ 6.0 million and $ 4.2 million as of September 30, 2025 and December 31, 2024, respectively, and billed and unbilled amounts due on government contracts amounting to $ 0.0 million and $ 0.2 million as of September 30, 2025 and December 31, 2024, respectively.

Contract liabilities, which are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets, represent the value of free of charge goods and credit rebates earned in accordance with the terms of certain direct customer agreements, which amounted to $ 0.2 million each as of September 30, 2025 and December 31, 2024, and deferred grant liability related to the billing on fixed price government contracts in excess of costs incurred, which amounted to $ 0.2 million and $ 0.4 million as of September 30, 2025 and December 31, 2024, respectively.

Segment Information

6 unchanged sentences

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 as one reportable operating segment.

Consisting of one reportable operating segment, the components presented in the condensed consolidated statements of operations and comprehensive loss also present the components of the Company’s single operating segment.

The Company operates under one reportable business segment for which segment disclosure is consistent with the management decision making process that determines the allocation of resources and the measuring of performance.

The Company operates as one reportable segment.

Consisting of one operating segment, the components presented in the condensed consolidated statements of operations and comprehensive loss also present the components of the Company’s single operating segment.

The CODM uses financial metrics to evaluate the Company’s spending and monitor budget versus actual results.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(amounts, in thousands)

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EBITDA and Adjusted EBITDA (both non-GAAP measures):

Net income (loss) attributable to common stockholders

Interest expense, net

Benefit from income taxes

Depreciation and amortization expense

Income (loss) before interest expense, income taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure

Loss before interest expense, income taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure

Stock-based compensation

2 unchanged sentences

Adjusted net loss, a non-GAAP measure:

Net income (loss) attributable to common stockholders

Stock-based compensation

2 unchanged sentences

Total cash used in operating and investing activities

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(amounts, in thousands)

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Refer to Note 4, Common Stock, Stock-Based Compensation and Warrants, for additional information.

Capital expenditures of the segment totaled $ 0.1 million for each of the six months ended June 30, 2025 and 2024.

Capital expenditures of the segment totaled $ 0.1 million and $ 0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

LONG-TERM DEBT

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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, to be disbursed in two tranches:

(1) one tranche of $ 15 million (“Tranche 1”), of which $ 10 million was available to the Company on the Closing Date and $ 5 million constitutes restricted cash, which was released from its restriction on January 10, 2025, as the following conditions were achieved:

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 million (“Tranche 1”), consists of $ 10 million which was available to the Company on the Closing Date and $ 5 million constitutes 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 has received a minimum of $ 3 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 million and $ 5 million and (2) a second tranche of up to $ 5 million, which may be disbursed at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company receives FDA marketing approval of its DrugSorb-ATR application (“Tranche 2” and together with Tranche 1, the “Avenue Capital Commitment”).

The restriction was released on a dollar-for-dollar basis for equity raised between $ 3 million and $ 5 million.

The second tranche (“Tranche 2”) consists of $ 5 million, which may be disbursed at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company receives FDA marketing approval of its DrugSorb-ATR application.

The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and will additionally be used for working capital purposes and to fund general business requirements.

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provided, however that if the Company draws the full amount of Tranche 2 by December 31, 2025, and achieves 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 will be 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 interest only period was extended from July 1, 2026 to December 31, 2026, and the terms surrounding the access to Tranche 2 were amended.

Refer to Note 10, Subsequent Events, for additional information.

As of the Closing Date, the Company recorded the following discounts:

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The Loan and Security Agreement includes customary loan conditions, company representations and warranties, company affirmative covenants and company negative covenants for secured transactions of this type.

As of June 30, 2025, the Company was in compliance with these covenants.

As of September 30, 2025, the Company was in compliance with these covenants.

As additional consideration for the Commitment, on June 28, 2024, the Company also issued Avenue Capital Group with warrants with a fair value of $ 0.7 million to purchase an aggregate of 1,645,569 shares of the Company’s common stock for cash at the exercise price of $ 0.79 , which expire on June 30, 2029.

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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.

As of June 30, 2025, long-term debt consists of the following:

As of September 30, 2025, long-term debt, after giving consideration to the extension of the interest only period provided by the Amended Loan and Security Agreement from July 1, 2026 to December 31, 2026 (see Note 10, “Subsequent Events”), consists of the following:

(amounts, in thousands)

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Less unamortized debt discount

Less current maturities

Long-term debt

As of June 30, 2025, principal payments of long-term debt are due as follows:

As of September 30, 2025, after giving consideration to the extension of the interest only period provided by the Amended Loan and Security Agreement from July 1, 2026 to December 31, 2026, (see Note 10, “Subsequent Events”) principal payments of long-term debt are due as follows:

(amounts, in thousands)

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.

As of June 30, 2025, the following commitments survive after the termination of the Bridge Bank Amended and Restated Loan and Security Agreement and related amendments:

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 September 30, 2025, the following commitments survive after the termination of the Bridge Bank Amended and Restated Loan and Security Agreement and related amendments:

2022 Success Fee Letter

Pursuant to the 2022 Success Fee Letter, the Borrower will pay to the Bank a success fee equal to (i) 1 % of $ 5 million if the Company draws down the first tranche of the Term C Loan and is payable only if the Company’s stock price equals or exceeds $ 8 for five consecutive trading days;

Pursuant to the 2022 Success Fee Letter, the Company will pay to the Bank a success fee equal to (i) 1 % of $ 5 million if the Company draws down the first tranche of the Company’s previously outstanding term loan with the Bank(the “Term C Loan”) and is payable only if the Company’s stock price equals or exceeds $ 8 for five consecutive trading days;

(ii) 1.5 % of $ 5 million if the Company draws down the second tranche of the Term C Loan and is payable only if the Company’s stock price equals or exceeds $ 10 for five consecutive trading days;

and (iii) 2 % of $ 5.0 million if the Company draws down the third tranche of the Term C Loan and is payable only if the Company’s stock price equals or exceeds $ 12 for five consecutive trading days (together, the “Success Fee”).

Borrower may pay the Success Fee in cash or in shares of common stock, at Borrower’s sole discretion.

The right of Bank to receive the Success Fees and the obligation of the Borrower to pay the Success Fees hereunder shall terminate on the date that is fifth anniversary of the funding date of the last Term C Loans made but shall survive the termination of the Loan Agreement and any prepayment of the Term C Loans.

the Company may pay the Success Fee in cash or in shares of common stock, at the Company’s sole discretion.

The right of the Bank to receive the Success Fees and the obligation of the Company to pay the Success Fees hereunder shall terminate on the date that is fifth anniversary of the funding date of the last Term C Loans made but shall survive the termination of the Loan Agreement and any prepayment of the Term C Loans.

The termination date of the 2022 Success Fee Letter is December 27, 2027.

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Royalty Agreements

The Company is party to various royalty and license agreements that require the payment of royalty fees.

Royalty expense amounted to approximately $ 0.5 million and $ 1.2 million for the six months ended June 30, 2025, and 2024, respectively.

Royalty expense amounted to approximately $ 0.3 million and $ 0.5 million for the three months ended June 30, 2025, and 2024, respectively.

The Company is, at times, party to various royalty and license agreements that require the payment of royalty fees.

Royalty expense amounted to approximately $ 0.8 million and $ 1.6 million for the nine months ended September 30, 2025, and 2024, respectively.

Royalty expense amounted to approximately $ 0.3 million and $ 0.4 million for the three months ended September 30, 2025, and 2024, respectively.

Royalty expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

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Participants may defer up to 100 % of their eligible compensation subject to certain Internal Revenue Code limitations.

Matching contributions amounted to $ 0.2 million for each of the six months ended June 30, 2025 and 2024.

Matching contributions amounted to approximately $ 0.1 million for each of the three months ended June 30, 2025 and 2024.

Matching contributions amounted to $ 0.2 million and $ 0.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Matching contributions amounted to approximately $ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively.

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, 2025, the remaining lease term of the Company’s operating leases ranges from six to twelve years .

As of September 30, 2025, the remaining lease term of the Company’s operating leases ranges from six to twelve years .

Supplemental statement of operations and cash flows related to the operating lease liability is as follows (excluding variable payments and expenses):

September 30,

(amounts, in thousands)

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Supplemental balance sheet information related to operating leases is as follows:

September 30,

(amounts, in thousands)

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The components of lease expense were as follows:

Three Months Ended June 30,

Three Months Ended September 30,

(amounts, in thousands)

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Total lease cost

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts, in thousands)

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Total lease cost

As of June 30, 2025, the maturities of the operating lease liability are as follows:

As of September 30, 2025, the maturities of the operating lease liability are as follows:

Remainder of 2025

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Total operating lease liability

NET INCOME (LOSS) PER SHARE

Basic loss per share and diluted loss per share for the three and six months ended June 30, 2025 and 2024 have been computed by dividing the net loss for each respective period by the weighted average number of shares outstanding during that period.

NET LOSS PER SHARE

Basic loss per share and diluted loss per share for the three and nine months ended September 30, 2025 and 2024 have been computed by dividing the net loss for each respective period by the weighted average number of shares outstanding during that period.

Net income per common share is calculated as basic net income per share and diluted net income per share.

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(iii) if the RSUs with service and market conditions were considered contingently issuable;

and (iv) if the RSUs with service and performance 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 following table summarizes earnings per share calculations:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(amounts, in thousands, except share and per share data)

Basic earnings per common share:

Net income (loss) attributable to common stockholders

Basic weighted average common shares outstanding

Basic earnings per common share

Diluted earnings per common share

Net income (loss) attributable to common stockholders

Basic weighted average common shares outstanding

Effect of dilutive securities

Diluted weighted average common shares outstanding

Diluted earnings per common share

Basic and diluted earnings per common share:

Basic and diluted weighted average common shares outstanding

Basic and diluted earnings per common share

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 10,819,609 and 10,820,859 for the three and six months ended June 30, 2025, respectively.

The number of anti-dilutive shares were 11,264,903 and 11,387,763 for the three and nine months ended September 30, 2025, respectively.

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.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S.

The Company is currently evaluating the provisions of the bill and any potential impacts on its financial position and operations, but does not anticipate any material impacts to its financial statements for the year ending December 31, 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 provides for access to an additional aggregate $ 2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and for the extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027.

The Company will have access to an additional aggregate $ 2.5 million (“Tranche 2b”) from Avenue Capital Group, subject to FDA approval of DrugSorb-ATR, between January 1, 2026 and December 31, 2026.

Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the Loan.

The Amended Loan and Security Agreement requires that the Company maintain certain operating cash burn targets (as defined) prior to FDA approval of DrugSorb-ATR and provides for a further six-month extension of the interest only period to the July 1, 2027 maturity date upon FDA approval of DrugSorb-ATR.

Under the terms of the Amended Loan and Security Agreement, the Company 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.

Workforce and Cost Reduction Plan

On November 13, 2025, the Company announced it initiated a strategic workforce and cost reduction plan (the “Strategic Workforce and Cost Reduction Plan”) to reduce costs, optimize operations, and accelerate a path to cash-flow profitability.

This initiative follows a comprehensive review of the Company’s cost structure and operating model.

As part of the strategic plan, the Company reduced its workforce by approximately 10 %, and reduced and realigned operating and production expenses.

The Company expects to record a charge of up to $ 0.9 million that will include severance and other cash and non-cash charges related to the restructuring.

The estimated costs that the Company expects to incur, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially.

Continued Listing Requirements Notification

On October 2, 2025, the Company was notified by the Nasdaq Stock Market LLC (“Nasdaq”) that the Company was not in compliance with the Nasdaq’s continued listing requirements relating to the minimum average closing price per share of the Company’s common stock, because the average closing price of the Company’s common stock over a consecutive 30 trading-day period was below $1.00 per share (the “Minimum Bid Price Requirement”).

The notice does not result in the immediate delisting of the Company’s common stock from the Nasdaq.

The Company has timely notified the Nasdaq of its intent to regain compliance with the minimum price condition within a 180-day cure period provided by Nasdaq rules, or until March 31, 2026 (the “Compliance Date”).

The Company can regain compliance at any time within the cure period if, the closing bid price of the Company’s common stock meets or exceeds $1.00 per common share for a minimum of 10 consecutive business days prior to the Compliance Date, unless the Nasdaq staff exercises its discretion to require the Company to meet the Minimum Bid Price Requirement for a longer period pursuant to applicable Nasdaq rules.

If the Company fails to regain compliance with the Nasdaq’s minimum price condition by the end of the cure period, the Company would be eligible for an additional compliance period of 180 days provided it presents an acceptable plan to Nasdaq to regain compliance.

The Company intends to actively monitor the closing bid price of its common stock and will consider its options to regain compliance with the Minimum Bid Price Requirement.

There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing standards.

If the Company is unable to regain compliance with the Minimum Bid Price Requirement, the Company’s common stock will be subject to the Nasdaq’s suspension and delisting procedures.

During this time, the Company’s common stock will continue to be listed on the Nasdaq, subject to its compliance with other Nasdaq continued listing requirements.

However, there can be no assurance about the Company’s ability to regain compliance with the Nasdaq’s minimum price condition within the applicable cure periods.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements