What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-13 · 96 added, 141 removed, 92 unchanged (72% of the section changed)

23 unchanged sentences

Cartridges filled with these beads can be used with standard blood pumps already in the hospital (e.g.

dialysis, continuous renal replacement therapy or CRRT, extracorporeal membrane oxygenation or ECMO, and heart-lung machines), where blood is repeatedly recirculated outside the body, through our cartridges where toxic substances are removed, and then back into the body.

dialysis, extracorporeal membrane oxygenation or ECMO, and heart-lung machines).

CytoSorbents’ technologies are used in a number of broad applications.

Specifically, two important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding, and 2) the removal of inflammatory agents and toxins in common critical illnesses that can lead to massive inflammation, organ failure and patient death.

The breadth of these critical illnesses include, for example, sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis as well as the removal of liver toxins that accumulate in acute liver dysfunction or failure the removal of myoglobin in severe rhabdomyolysis that can otherwise lead to renal failure.

Specifically, four important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding, 2) the removal of inflammatory agents in common critical illnesses such as sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis that can lead to massive inflammation, organ failure and patient death, 3) the removal of liver toxins that accumulate in acute liver dysfunction or failure and 4) the removal of myoglobin in severe rhabdomyolysis that can otherwise lead to renal failure.

In these diseases, the risk of death can be extremely high, and there are few, if any, effective treatments.

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CytoSorb is not yet approved in the United States.

and Canada, CytoSorbents is developing the DrugSorb™-ATR antithrombotic removal system, an investigational device based on an equivalent polymer technology to CytoSorb, to reduce the severity of perioperative bleeding in high-risk surgery due to blood thinning drugs.

It has received two U.S.

Food and Drug Administration (“FDA”) Breakthrough Device Designations:

In the United States and Canada, CytoSorbents is developing the DrugSorb™-ATR antithrombotic removal system, an investigational device based on an equivalent polymer technology to CytoSorb, to reduce the severity of perioperative bleeding in high-risk surgery due to blood thinning drugs.

It has received two United States Food and Drug Administration (“FDA”) Breakthrough Device

Designations:

one for the removal of ticagrelor and another for the removal of the direct oral anticoagulants (DOAC) apixaban and rivaroxaban in a cardiopulmonary bypass circuit during urgent cardiothoracic procedures.

The Company is actively pursuing regulatory approval of DrugSorb-ATR with the FDA and will pursue regulatory approval with Health Canada with better visibility from the FDA.

DrugSorb-ATR is not yet granted or approved in either the U.S.

Upon approval, the Company expects to rapidly commercialize DrugSorb-ATR in the U.S.

and Canada to address this large unmet medical need, with an initial estimated total addressable market of $300 million today to over $1 billion over time as we pursue additional indications for DrugSorb-ATR to remove additional classes of blood thinners and expansion of the antithrombotic removal application beyond cardiac surgery and across other surgical specialties.

The Company continues to actively pursue regulatory approval of DrugSorb-ATR with the FDA and expects to pursue regulatory approval in Canada with better visibility from the FDA.

DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively.

The Company has numerous marketed products and products under development based upon this unique blood purification technology protected by many issued United States and international patents and registered trademarks, and multiple patent applications pending, including ECOS-300CY®, CytoSorb-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb™, ContrastSorb, and others.

While not our primary means of communication, investors can learn more about us by visiting our social media channels.

We encourage investors, the media, and others interested in us to review the information posted on our Facebook site and our X account, where investors, the media, and other interested parties can subscribe.

The information contained in our social media accounts is not incorporated into this Quarterly Report on Form 10-Q or other documents we file with or furnish to, the SEC.

Upon approval, the Company expects to rapidly commercialize DrugSorb-ATR in the United States and Canada to address this large unmet medical need, with an initial estimated total addressable market of $300 million today to over $1 billion over time as we pursue additional indications for DrugSorb-ATR to remove additional classes of blood thinners and expansion of the antithrombotic removal application beyond cardiac surgery and across other surgical specialties.

We believe that DrugSorb-ATR has the potential to become an “all-in-one” countermeasure for these agents.

DrugSorb-ATR® for Brilinta®

In August 2025, we received the FDA’s decision on our appeal of the original DrugSorb-ATR application.

Importantly, the Agency identified no concerns regarding device safety but upheld the prior denial of the application and requested additional information to support the proposed indication for reducing the severity of perioperative bleeding in patients undergoing CABG surgery while on Brilinta® (ticagrelor, AstraZeneca).

Following the appeal decision and based upon feedback from FDA, we announced our intention to submit a new De Novo application incorporating additional supporting information, primarily based on real-world evidence and clinical outcomes generated through routine clinical use of the device.

As part of this process, we held a formal pre-submission meeting with the FDA in late January 2026 and have continued to engage with the Agency to clarify the requirements for the new De Novo submission, including whether certain information could potentially be submitted as a post-marketing requirement rather than as part of the initial application.

Based on these interactions, the FDA has requested additional mechanistic data to be included alongside the real-world evidence within the new De Novo submission.

We are currently evaluating options to generate the additional mechanistic data on an expedited basis and expect to schedule an additional pre-submission meeting with the FDA, if needed, to discuss and align the proposed approach.

Once alignment is achieved, we anticipate completing the required work and submitting a new De Novo application in late 2026 or early 2027.

Following submission, a regulatory decision would generally be expected within the FDA’s targeted 150-day MDUFA review timeline, although the actual review period may be shorter or longer depending on the nature and extent of interactive review questions from the Agency.

DrugSorb-ATR® for DOACs:

Eliquis® and Xarelto®

The Company has previously discussed its intention, following anticipated FDA market approval of DrugSorb-ATR for Brilinta®, to expand its device label to include the removal of the direct oral anticoagulants blood thinners (DOACs) such as the market leading Eliquis® (apixaban, Pfizer/BMS) and Xarelto® (rivaroxaban, Bayer/Janssen).

At the same time, we continue to observe increasing real-world adoption, clinical use, and published evidence supporting the use of our technology for DOAC removal in cardiac surgery, reinforcing the significant unmet medical need globally.

Within the next 30 days, we plan to submit a separate pre-submission request to the Agency to review the data currently available for the DOAC indication that include drug removal data from benchtop testing and data from real-world use and determine what, if any, additional information may be required to support a parallel De Novo submission for DOAC removal.

Having this second shot on goal is aligned with our other FDA Breakthrough Device Designation for DrugSorb-ATR, to remove DOACs during cardiac surgery.

Globally, tens of millions of patients are on chronic or life-long DOAC therapy due to atrial fibrillation, deep vein thrombosis, pulmonary embolism, peripheral vascular disease, or post-surgical prophylaxis.

An estimated 5-10% of emergent cardiac surgery cases involve patients who are currently therapeutic on a DOAC and risk serious or life-threatening bleeding.

Our executive offices are located at 305 College Road East, Princeton, New Jersey 08540, and our telephone number is (732) 329-8885.

Our website address is http://www.cytosorbents.com.

We have included our website address as an inactive textual reference only.

We make available free of charge through our website our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material, or furnish it to the SEC.

We also similarly make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons.

We are not including the information contained at http://www.cytosorbents.com, or at any other website address, as part of, or incorporating it by reference into, this Quarterly Report on Form 10-Q.

We have included our website address as an inactive textual reference only.

The information contained on or accessible through our corporate website is not incorporated by reference in this this Quarterly Report on Form 10-Q and should not be considered part of this report.

Summary of Operational and Recent Business Highlights

● Total revenue was $27.8 million for the nine months ended September 30, 2025, an increase of $1.4 million, or 5.2%, compared to the prior year.

● Gross profit was $19.7 million for the nine months ended September 30, 2025, an increase of $1.1 million, or 5.7%, compared to the prior year.

Gross margin was 71% for the nine months ended September 30, 2025, compared to 71% in the prior year.

● Our loss from operations improved by 20.6% to approximately $10.4 million, from $13.1 million for the nine months ended September 30, 2025, and 2024, respectively.

This improvement was driven by a 5.2% increase in total revenue and a 5.2% reduction in total operating expense year over year.

● We strengthened our balance sheet with the completion of a shareholder Rights Offering in January 2025 that provided $5.4 million net proceeds, and then added another $1.4 million net proceeds with the exercise of the Series A Right Warrant in February 2025.

● In April 2025, we further supplemented our cash balance with the receipt of $1.7 million from the sale of our 2023 and amended 2022 Net Operating Loss (NOL) and R&D tax credits from the Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority (NJEDA).

● On May 22, 2025, a new contemporary real-world data analysis was presented at EuroPCR, highlighting the intraoperative use of the Company’s technology to significantly reduce the severity of bleeding in urgent coronary artery bypass grafting (CABG) patients on the blood thinner, ticagrelor (Brilinta®, AstraZeneca) who had not completed the recommended drug washout period.

(Storey, R.F., et al.

Early CABG with intraoperative hemadsorption in patients on ticagrelor.

Cardiovascular Revascularization Medicine.

) The information in this data analysis are referenced for general information only and are not incorporated by reference into this Report.

● Continued to see real world validation of improved clinical outcomes (reduced serious perioperative bleeding) in cardiac surgery patients on a blood thinner at several global cardiac surgery conferences including EuroPCR, ESCVS, EACTS, and TCT.

● On July 31, 2025 the Company highlighted data demonstrating the vital and evolving role of CytoSorb therapy in the treatment of sepsis and septic shock–among the deadliest challenges in critical care medicine.

Recent data demonstrate early and intensive use of CytoSorb therapy improves clinical outcomes for patients suffering from these conditions.

The Company presented a World Sepsis Day Global Webinar on September 10, 2025 in commemoration of Sepsis Awareness Month and World Sepsis Day.

See our Current Report on Form 8-K, filed with the SEC on August 1, 2025, for additional information.

● On September 16, 2025, the Company announced that it would file a new De Novo application for DrugSorb-ATR with the FDA.

This decision followed an appeal meeting and decision by the FDA that upheld its previous denial of the Company’s DrugSorb-ATR De Novo application, but affirmed that there were no safety related issues with the device, and requested additional information to support the Company’s desired label indication.

As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA on November 7, 2025.

A formal meeting with the FDA is anticipated in either late fourth quarter of 2025, or early 2026 to confirm the requirements for the new De Novo submission, followed by a formal submission in the first quarter of 2026.

A regulatory decision is expected in mid-2026 following a typical 150-day review process.

● Continued to see real world validation of improved clinical outcomes (reduced serious perioperative bleeding) in cardiac surgery patients on a blood thinner at global cardiac surgery conferences including EuroPCR, ESCVS, EACTS and TCT

● 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 original loan.

The Amended Loan and Security Agreement requires that the Company maintain certain operating cash burn targets (as defined in the Amended Loan and Security Agreement) prior to FDA approval of DrugSorb-ATR and also 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.

● 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 Workforce and Cost Reduction Plan, the Company reduced its workforce by approximately 10%, reduced and realigned operating and production expenses, and now expects that the Company will reach operating cash flow break-even in the first quarter of 2026.

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.

● Total revenue was $8.9 million for the three months ended March 31, 2026, an increase of $0.1 million, or 1.6%, compared to the prior year.

● Gross profit was $6.1 million for the three months ended March 31, 2026, a decrease of $0.1 million, or 1.2%, compared to the prior year.

Gross margin was 69% for the three months ended March 31, 2026, compared to 71% in the prior year.

● Loss from operations improved by 21.7% to approximately $3.0 million, from $3.9 million for the three months ended March 31, 2026, and 2025, respectively.

and Canadian pivotal STAR-T randomized, controlled trial results have now been published in the Journal of Thoracic and Cardiovascular Surgery (2026) - the leading peer-reviewed cardiothoracic surgery journal in the U.S.

The authors summarized the results in the graphical abstract and concluded in the central message of the article that, “ Intraoperative DrugSorb-ATR use for ticagrelor removal is safe and can reduce the severity of bleeding after isolated CABG in patients operated within 2 days of drug discontinuation.

● Real-World evidence from the international Safe and Timely AntiThrombotic Removal (STAR) Registry, recently published in Cardio Revascularization Medicine (2026) and the Journal of Cardiothoracic Surgery (2025), demonstrates CytoSorb’s ability to perioperative bleeding risk in patients receiving antithrombotic therapies across more than 160 patients undergoing CABG or valve surgery.

● A study titled ‘ Impact of CytoSorb Hemoadsorption Therapy on Cost-Effectiveness and Length of Stay in Critical Care Patients:

A Preliminary Study from a Swiss High-Volume Center , was published in the journal Healthcare .

This study provides additional solid real-world evidence for the cost-effectiveness of CytoSorb hemoadsorption in septic shock, showing reduced ICU and hospital length of stay, decreased duration of mechanical ventilation among survivors, and decreased nursing workload, without significantly increasing hospital treatment costs.

Results of Operations:

Comparison for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

(in thousands)

Cost of goods sold

Operating expenses:

Research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest expense, net

Gain (loss) on foreign currency transactions

Total other income (expense), net

Loss before benefit from income taxes

For the three months ended September 30, 2025, we generated total revenue of approximately $9.5 million, an increase of approximately $0.9 million, or 10.1%, and 3.8% on a constant currency basis, as compared to revenues of approximately $8.6 million for the three months ended September 30, 2024.

Revenue growth was led by strength in our distributor and strategic partner sales and direct sales outside of Germany, partially offset by lower revenue in our direct German market.

The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025.

We are making steady progress with this important initiative and are tracking to expectations through the third quarter of 2025, and remain confident it will lead to stronger execution and improved performance in Germany and our financial results overall into next year.

Gross profit was approximately $6.7 million for the three months ended September 30, 2025, an increase of approximately $1.4 million, or 26.8%, as compared to gross profit of $5.2 million for the three months ended September 30, 2024.

Gross margins were 70.3% and 61.0% for the three months ended September 30, 2025 and 2024, respectively.

Prior year gross margins were negatively impacted by a planned reduction in units production to rebalance inventory levels, coupled with a short-term manufacturing issue which was resolved in the third quarter of last year and resulted in significantly lower number of CytoSorb devices produced in the quarter.

Research and Development Expenses

Our research and development costs were approximately $0.9 million and $1.8 million for the three months ended September 30, 2025 and 2024, respectively, a decrease of approximately $0.9 million, or 49.7%.

This decrease was driven by a decrease in our clinical trial costs due to the completion of the STAR-T clinical trial, the reduction of grant funded projects, and other payroll and project-related cost reductions.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses were approximately $8.6 million and $8.3 million for the three months ended September 30, 2025 and 2024, respectively, an increase of approximately $0.3 million, or 4.2%.

The increase is primarily due to costs associated with the regulatory submission and anticipated commercial approval and launch of DrugSorb-ATR in North America, partially offset by lower non-cash stock comp and other compensation costs, and lower royalty expense as a result of the expiration of a 4% royalty in August of 2024.

Gain (Loss) on Foreign Currency Transactions

For the three months ended September 30, 2025, the loss on foreign currency transactions was approximately $0.1 million, as compared to a gain on foreign currency transactions of approximately $2.7 million for the three months ended September 30, 2024.

The loss was directly related to the slight decrease in the spot exchange rate of the Euro to the U.S.

dollar as of September 30, 2025 compared to June 30, 2025.

The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S.

dollar as of September 30, 2024, to $1.11 per Euro from $1.07 per Euro at June 30, 2024.

Loss From Operations

Our loss from operations decreased by 40.7% to approximately $2.9 million, from $4.8 million for the nine months ended September 30, 2025, and 2024, respectively.

This improvement was primarily the result of a 5.5% reduction in operating expenses year over year, and the increase in gross profit.

Comparison for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Comparison for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(in thousands)

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Total other income (expense), net

Loss before benefit from income taxes

For the nine months ended September 30, 2025, we generated total revenue of approximately $27.8 million, an increase of approximately $1.4 million, or 5.2%, and 2.2% on a constant currency basis, as compared to revenues of approximately $26.4 million for the nine months ended September 30, 2024.

Revenue growth was led by strength in our other direct European territories, and distributors and strategic partner sales, and partially offset by a decrease in revenue in our direct German market.

The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025.

Gross profit was approximately $19.7 million for the nine months ended September 30, 2025, an increase of approximately $1.1 million, or 5.7%, as compared to gross profit of $18.6 million for the nine months ended September 30, 2024.

Gross margins were 70.7% and 70.5% for the nine months ended September 30, 2025 and 2024, respectively.

For the three months ended March 31, 2026, we generated total revenue of approximately $8.9 million, an increase of approximately $0.2 million, or 1.6%, and down 7.4% on a constant currency basis, as compared to revenues of approximately $8.7 million for the three months ended March 31, 2025.

Revenue growth was led by double digit growth in direct sales outside of Germany, partially offset by lower revenue in our direct German market, where we continue to see signs of improved sale processes, account targeting and customer engagement with a smaller and more focused team.

We remain confident these improvements will lead to stronger execution and improved performance.

Distributor sales were flat year-over-year, as progress across several territories was offset by delayed distributor orders of approximately $0.5 million in parts of the Middle East and neighboring regions due to geopolitical and economic instability related to the U.S.-Iran war.

This unexpected disruption has slowed the anticipated growth of our recently established subsidiary in Dubai, UAE, although we expect conditions to improve as the conflict stabilizes.

Gross profit was approximately $6.1 million for the three months ended March 31, 2026, a decrease of approximately $0.1 million, or 1.2%, as compared to gross profit of $6.2 million for the three months ended March 31, 2025.

Gross margins were 69.2% and 71.1% for the three months ended March 31, 2026 and 2025, respectively.

Research and Development Expenses

Our research and development costs were approximately $3.8 million and $5.6 million for the nine months ended September 30, 2025 and 2024, respectively, a decrease of approximately $1.8 million, or 31.3%.

This decrease was driven by a decrease in our clinical trial

costs due to the completion of the STAR-T clinical trial, lower grant funded projects, and other payroll and project-related cost reductions.

Our research and development costs were approximately $1.0 million and $1.7 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of approximately $0.7 million, or 38.4%.

This decrease was driven by a decrease in our clinical trial costs due primarily to the completion of the STAR-T clinical trial, lower grant funded projects, as well as other clinical and product development program reductions.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses were approximately $26.2 million and $26.1 for the nine months ended September 30, 2025 and 2024, respectively, an increase of approximately $0.1 million, or 0.4%.

This increase was mainly due to increases in legal, regulatory, financial and consulting costs including costs associated with our 2024 audited financial statements, as well as regulatory filings and initial costs associated with the anticipated approval and commercial launch of DrugSorb-ATR in North America, partially offset by decreases in stock-based compensation expense, and royalty expenses.

The decrease in stock-based compensation expense was primarily related to the full vesting of certain stock options in earlier periods and the decrease in royalty expense was the result of the expiration of a 4% royalty in August of 2024.

Our selling, general and administrative expenses were approximately $8.1 million and $8.4 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of approximately $0.3 million, or 3.5%.

The decrease is primarily due to decreases in stock-based compensation expense of $0.2 million and a decrease in salaries and compensation expense of $0.2 million, partially offset by a reduction in benefits from government grants of $0.1 million.

The decrease in stock-based compensation expense was primarily related

to the full vesting of certain stock options in earlier periods.

The decrease in salaries and compensation was primarily related to our strategic workforce and cost reduction program initiated in the fourth quarter of 2025 which reduced our workforce by approximately 10%.

Gain (Loss) on Foreign Currency Transactions

For the nine months ended September 30, 2025, the gain on foreign currency transactions was approximately $9.1 million, as compared to a gain on foreign currency transactions of approximately $0.7 million for the nine months ended September 30, 2024.

The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S.

dollar as of September 30, 2025 to $1.17 per Euro from $1.03 per Euro at December 31, 2024.

For the three months ended March 31, 2026, the loss on foreign currency transactions was approximately $1.2 million, as compared to a gain on foreign currency transactions of approximately $3.0 million for the three months ended March 31, 2025.

The loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S.

dollar as of March 31, 2026 compared to December 31, 2025.

The current year loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S.

dollar as of March 31, 2026, to $1.15 per Euro from $1.17 per Euro at December 31, 2025.

The prior year gain was directly related to the increase in the spot exchange rate of the Euro to the U.S.

dollar as of September 30, 2024, to $1.11 per Euro from $1.10 per Euro at December 31, 2023.

dollar as of March 31, 2025, to $1.08 per Euro from $1.03 per Euro at December 31, 2024.

Loss From Operations

Our loss from operations decreased by 20.6% to approximately $10.4 million, from $13.1 million for the nine months ended September 30, 2025, and 2024, respectively.

This improvement was primarily the result of a 5.2% reduction in operating expenses year over year, and the increase in gross profit.

Our loss from operations decreased by 21.7% to approximately $3.0 million, from $3.9 million for the three months ended March 31, 2026, and 2025, respectively.

This improvement was primarily the result of a 9.1% reduction in operating expenses year over year.

Liquidity and Capital Resources

Since inception, our operations have been primarily financed through the issuance of debt and equity securities.

As of September 30, 2025, we had current assets of approximately $21.3 million and current liabilities of approximately $12.6 million.

As of March 31, 2026, we had current assets of approximately $17.8 million and current liabilities of approximately $16.3 million.

Effective Shelf Registration

We have an effective shelf registration statement dated September 30, 2024 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units.

Approximately $149.7 million of this amount was available as of September 30, 2025.

We have an effective shelf registration statement dated September 30, 2024 (the “Shelf”) with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units.

Approximately $149.7 million of this amount was available as of March 31, 2026;

however the use of the Shelf is subject to a limitation of one-third of our public float in any rolling twelve-month period, when our public float is below $75 million, which is referred to as the “baby shelf” rules.

We have also allocated $20 million of our total shelf amount to our ATM facility.

At September 30, 2025, approximately $19.4 million was available for use under the ATM facility.

During the nine months ended September 30, 2025, we did not raise any proceeds under the ATM facility.

At March 31, 2026, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations.

During the three months ended March 31, 2026, we did not raise any proceeds under the ATM facility.

Loan and Security Agreement

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Avenue Capital Group agreed to loan the Company up to an aggregate of $20 million (the “Avenue Capital Commitment”), to be disbursed in two tranches.

The first tranche of $15.0 million (“Tranche 1”), consists of $10.0 million which was available to the Company on the Closing Date and $5.0 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 $3.0 million in net proceeds from the sale of its equity securities after the Closing Date.

The first tranche of $15.0 million (“Tranche 1”), consisted of $10.0 million which was available to the Company on the Closing Date and $5.0 million constituted restricted cash, which was released from its restriction on January 10, 2025, as the following conditions were achieved:

(i) the FDA has accepted Company’s application for review with respect to DrugSorb-ATR De Novo 510(k) and (ii) the Company received a minimum of $3.0 million in net proceeds from the sale of its equity securities after the Closing Date.

The restriction was released on a dollar-for-dollar basis for equity raised between $3.0 million and $5.0 million.

The second tranche (“Tranche 2”) consists of $5.0 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.

Amounts borrowed under the Avenue Capital Commitment shall bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (5.00%) or (B) thirteen and one-half percent (13.50%).

The loan requires interest-only payments for the first 24 months through July 1, 2026, followed by equal monthly

installments of principal plus accrued and unpaid interest until maturity, on July 1, 2027;

provided, however that if the Company 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.

The second tranche (“Tranche 2”) consisted of $5.0 million, which would have been disbursed at the Company’s request between July 1, 2025 and December 31, 2025, if the Company receives FDA marketing approval of its DrugSorb-ATR application, which it did not.

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

Amounts borrowed under the Avenue Capital Commitment bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (5.00%) or (B) thirteen and one-half percent (13.50%).

The loan required interest-only payments for the first 24 months through July 1, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity, on July 1, 2027;

provided, however that if the Company had drawn the full amount of Tranche 2 by December 31, 2025, and achieved for the trailing six month period ended June 30, 2026, at least $25 million of revenue, (the Interest only Milestone as defined in the Loan), the Interest only Period would have been extended by six months to January 1, 2027, followed by equal monthly installments of principal plus accrued and unpaid interest through January 1, 2028.

On November 13, 2025, the Company and Avenue Capital Group entered into the Amended Loan and Security Agreement, amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented.

The Amended Loan and Security Agreement funded an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and provided an extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027.

The Company would have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group and receive a further six-month extension of the interest-only period to the July 1, 2027 maturity date subject to FDA approval of DrugSorb-ATR prior to December 31, 2026, which approval is now expected beyond this time frame.

Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the Avenue Capital Commitment.

On October 22, 2024, the Company announced that the FDA had accepted its application of DrugSorb-ATR, which was one of the two conditions required by the restricted cash debt covenant.

Proceeds from the Rights Offering on January 10, 2025 satisfied the second condition of the debt covenant which now allows for the $5.0 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.

Under the terms of the Amended Loan and Security Agreement, we issued additional warrants to Avenue Capital Group to purchase 1,428,571 shares of the Company’s common stock for cash at the exercise price of $0.70, which expire on November 13, 2030.

The number of warrants and exercise price are fixed.

For further discussion regarding the Loan Agreement please see Note 6, Long Term Debt, to our Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report on Form 10-Q.

Rights Offering

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Participants in the Rights Offering received Units, each Unit comprising of one share of common stock of the Company, one Series A Right Warrant to purchase one share of common stock with an expiration date of February 24, 2025, and one Series B Right Warrant to purchase one share of common stock with an expiration date of April 10, 2025.

Up to an additional 6.25 million shares of common stock may be issued upon exercise of the Right Warrants.

Proceeds from the closing of the subscription period satisfy a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to now become unrestricted, and available for use.

Up to an additional 6.25 million shares of common stock were available for issuance upon exercise of the Right Warrants.

Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.

On February 24, 2025, approximately 1.4 million Series A Right Warrants were exercised by holders, including members of management and the Board of Directors, at an exercise price of $1.13 per warrant, providing an additional $1.6 million in aggregate gross proceeds ($1.4 million net of fees).

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On June 11, 2025, the 5-day volume weighted average price of Common Stock over the last five-trading days prior to June 10, 2025 was lower than the minimum required price of $2.00 and, as a result, the Series B Right Warrants issued in connection with the previously announced Rights Offering expired worthless pursuant to their terms.

Technology Business Tax Certificate Program

In March 2026, we further supplemented our cash balance with the receipt of $0.4 million from the sale of our 2024 Net Operating Loss (NOL) and R&D tax credits from the Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority (NJEDA).

Resource Allocation and Path to Cash-Flow Profitability

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

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 we expect to incur, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially.

As of September 30, 2025, we 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 our historical cash used in operations, notwithstanding our 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, 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.

On a proforma-basis, giving effect to the impact of receiving the additional $2.5 million from Tranche 2(a) of the Amended Loan and Security Agreement, as if it had occurred on September 30, 2025, our total cash balance would have been $11.6 million, including $10.1 million in unrestricted cash and cash equivalents and $1.5 million of non-current restricted cash.

As of September 30, 2025, the total amount of debt drawn under our Loan and Security Agreement was $15.0 million.

On a proforma basis, giving effect to the impact of receiving the additional $2.5 million from Tranche 2 (a) of the Amended Loan and Security Agreement, as if it had occurred on September 30, 2025, our total debt drawn would have been $17.5 million.

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

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

As part of the Strategic Workforce and Cost Reduction Plan, the Company reduced its workforce by approximately 10%, reduced and realigned operating and production expenses in the fourth quarter of 2025, continued to make additional reductions in the first quarter of 2026, and remains committed to bringing the Company to operating cash flow break-even in the second half of 2026.

The Company recorded a charge of $0.5 million in 2025 that includes severance and other cash and non-cash charges related to the restructuring.

As of March 31, 2026, we had approximately $6.3 million in cash, including approximately $4.8 million in unrestricted cash and cash equivalents and $1.5 million of non-current restricted cash which may not be sufficient to fund the Company’s operations beyond the next twelve months from the issuance of these condensed consolidated financial statements.

These cash and restricted cash balances

considered with our historical and expected future cash used in operations, notwithstanding our Strategic Workforce and Cost Reduction Plan and the impact of the Amended Loan and Security Agreement, raises substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the accompanying condensed consolidated financial statements are issued.

Additional sources of liquidity available to us include the 2024 Shelf, other public or private equity offerings, debt financing or from other sources.

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

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 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.

On September 16, 2025, the Company announced that it would file a new De Novo application for DrugSorb-ATR with the FDA.

This decision followed an appeal meeting and decision by the FDA to uphold its previous denial of the Company’s original DrugSorb-ATR application, but affirmed that there were no safety related issues with the device, and requested additional information to support the Company’s desired label indication.

As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA on November 7, 2025.

A formal meeting with the FDA is anticipated in either late fourth quarter of 2025, or early 2026 to confirm the requirements for the new De Novo submission.

A standard regulatory decision is expected in mid-2026 following a typical 150-day review process.

For further discussion regarding the Loan and Security Agreement, and Amended Load and Security Agreement please see Note 6, “Long Term Debt” and Note 10, “Subsequent Events” to our Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S.

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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 2. Management’s Discussion and Analysis