Cytosorbents Corp 10-K

Item 9A. Controls and Procedures Management’s Evaluation of our Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including, our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective due to a material weakness, as further described below. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2024. Changes in Internal Control Over Financial Reporting Discussion of Material Weakness A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis. In connection with our preparation and the audit of our consolidated financial statements as of and for the year ended December 31, 2024, we identified a material weakness in our internal control over financial reporting related to the accounting for inventory and stock-based compensation corresponding to grants of Restricted Stock Units. Specifically, our controls were not effectively designed or operating to ensure that inventory and restricted stock unit grants or vesting activities were recorded within the proper accounts and at the proper amounts. 42 Table of Contents Remediation Activities We are actively engaged in remediating the identified material weakness. Management has begun implementing measures to strengthen our internal control over financial reporting, including redesigning internal control procedures and enhancing documentation processes related to the accounting for restricted stock unit grant and vesting events. These efforts are intended to ensure accurate and timely reporting in accordance with U.S. GAAP for both interim and annual periods. Key steps in our remediation plan include: - Developing and implementing more robust control procedures to validate that the inputs and assumptions used in stock-based compensation expense calculation models are accurate and reflect proper application of generally accepted accounting principles. - Increasing oversight and review by executive management to ensure the completeness and accuracy of restricted stock unit expense calculations and their corresponding Journal Entries. We are committed to completing the remediation of this material weakness as expeditiously as possible and expect these enhancements to be fully implemented during the fiscal year ending December 31, 2025. However, the material weakness will not be considered fully remediated until the new controls have been operational for a sufficient period of time and tested to demonstrate their effectiveness. Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included elsewhere in this Annual Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP. ​ Item 9B. Other Information. N o n e . ​ Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection. None. ​ 43 Table of Contents PART III Item 10. Directors, Executive Officers and Control Persons. Information required by this Item regarding our executive officers, Board of Directors, Section 16(a) compliance, Audit Committee, Audit Committee financial expert, Code of Business Conduct and Ethics, and other corporate governance matters is incorporated by reference from our definitive proxy statement for our 2025 annual meeting of stockholders, scheduled for June 12, 2025. This proxy statement, containing the sections “Officers and Key Employees,” “Nomination and Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” and “Board of Directors and Corporate Governance 1 Matters,” will be filed within 120 days of our fiscal year end The text of our Code of Business Conduct and Ethics, which applies to our directors and employees (including our principal executive officer, principal financial officer, and principal accounting officer or controller, and persons performing similar functions), is posted in the “Corporate Governance” section of our website, www.cytosorbents.com. A copy of the Code of Business Conduct and Ethics can be obtained free of charge on our website. We intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct and Ethics that are required to be disclosed pursuant to the rules of the Securities and Exchange Commission and The Nasdaq Stock Market. The information presented on our website is not a part of this Annual Report on Form 10-K and the reference to our website is intended to be an inactive textual reference only. ​ Item 11. Executive Compensation. Information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the sections entitled “Executive Compensation,” “Director Compensation” and “Board of Directors and Corporate Governance Matters” contained in our definitive proxy statement for our 2025 annual meeting of stockholders scheduled to be held on June 12, 2025, which we intend to file within 120 days of the end of our fiscal year. ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the sections entitled “Principal Stockholders,” “Stock Ownership of Directors, Nominees for Director, and Executive Officers” and “Equity Compensation Plan Information” contained in our definitive proxy statement for our 2025 annual meeting of stockholders scheduled to be held on June 12, 2025, which we intend to file within 120 days of the end of our fiscal year. ​ Item 13. Certain Relationships and Related Transactions and Director Independence. Information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the section(s) entitled “Certain Relationships and Related Party Transactions” and “Board of Directors and Corporate Governance Matters,” “Compensation for Executive Officers and Directors, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” contained in our definitive proxy statement for our 2025 annual meeting of stockholders scheduled to be held on June 12, 2025, which we intend to file within 120 days of the end of our fiscal year. ​ Item 14. Principal Accounting Fees and Services. This information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the section entitled “Audit and Other Fees” contained in our definitive proxy statement for our 2025 annual meeting of stockholders scheduled to be held on June 12, 2025, which we intend to file within 120 days of the end of our fiscal year. ​ ​ 44 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Financial Statements and Schedules: 1. Financial Statements The following consolidated financial statements and reports of independent registered public accounting firm are included herein: Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations and Comprehensive Loss F-5 Consolidated Statements of Changes in Stockholders’ Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-8 ​ 2. Financial Statement Schedules Not applicable. ​ 45 Table of Contents 3. List of Exhibits Exhibit No. Description 3.1 Second Amended and Restated Certificate of Incorporation, dated June 12, 2019 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8 3.2 Second Amended and Restated Bylaws of CytoSorbents Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8 4.1 Description of Capital Stock of CytoSorbents Corporation (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 10, 2022). 4.2 ​ Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 11, 2023). ​ ​ ​ 4.3 ​ Form of Subscription Right Warrant Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). ​ ​ ​ 4.4 ​ Form of Series A Right Warrant Certificate (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). ​ ​ ​ 4.5 ​ Form of Series B Right Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2024). ​ ​ ​ 10.1+ Amended and Restated Employment Agreement, dated as of July 30, 2019, by and between CytoSorbents Medical, Inc. and Phillip P. Chan (incorporated by reference to Exhibit 10.1 10.2+ Amended and Restated Employment Agreement, dated as of July 30 10.3+ Amended and Restated Employment Agreement, dated as of July 30, 2019, by and between CytoSorbents Medical, Inc. and Kathleen P. Bloch (incorporated by reference to Exhibit 10.3 10.4+ ​ Employment Agreement by and between the Company and Efthymios Deliargyris, M.D., dated April 12, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 27, 2020). ​ ​ ​ 10.5+† ​ Consulting Agreement, dated March 31, 2023, by and between the Company and Ms. Kathleen P. Bloch (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 6, 2023). ​ ​ ​ 10.6+ ​ Employment Agreement, dated September 18, 2023, by and between the Company and Ms. Kathleen Bloch (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2023). ​ ​ ​ 10.7 ​ Consulting Agreement, dated August 13, 2024, by and between the Company and Kathleen P. Bloch (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). ​ ​ ​ 10.8+ Employment Agreement, dated August 14, 2024, by and between the Company and Mr. Peter J. Mariani (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). ​ ​ ​ 10.9+ ​ Form of Payment Reduction Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2024). ​ ​ ​ 10.10+ Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2024). ​ ​ ​ 46 Table of Contents 10.11 ​ Restricted Stock Unit Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). ​ ​ ​ 10.12 ​ Nonstatutory Option Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). ​ ​ ​ 10.13 ​ Nonstatutory Option Award Agreement (Inducement Award), dated as of August 14, 2024, by and between the Registrant and Peter Mariani (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2024). ​ ​ ​ 10.14 Royalty Agreement between Guillermina Vega Montiel and the Registrant dated as of August 11, 2003 (incorporated by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). ​ ​ ​ 10.15 ​ Assignment and Assumption of Certain Royalty Rights, dated as of November 22, 2022, by and among Robert Shipley Living Trust, ROKK, LLC, and CytoSorbents Medical, Inc (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 9,2023). 10.16 Stipulated Order and Settlement Agreement between Bro-Tech Corporation, 10.17† Distribution Agreement between Biocon Biologics Limited and the Registrant dated as of September 20, 2013 (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). 10.18† First Amendment to the Distribution Agreement between Biocon Biologics Limited and the Registrant, dated October 30, 2014 (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 31, 2015). 10.19+ CytoSorbents Corporation 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form ​ ​ ​ 10.20+ Amendment No. 1 to the CytoSorbents Corporation 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s registration statement on Form S-8 filed with the SEC on November 4, 2014). 10.21 ​ Amended and Restated CytoSorbents Corporation 2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-8 filed with the SEC on August 26, 2019). ​ ​ ​ 10.22 Amended and Restated Loan and Security Agreement, dated as of March 29, 2018, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 10.23 First Amendment to Amended and Restated Loan and Security Agreement, dated as of July 30, 2019, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 10.24 ​ Third Amendment to Amended and Restated Loan and Security Agreement, dated as of December 4, 2020, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 10, 2020). ​ ​ ​ 10.25 Fourth Amendment to the Amended and Restated Loan and Security Agreement, dated as of January 19, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 20, 2022). ​ ​ ​ 10.26 ​ Fifth Amendment to the Amended and Restated Loan and Security Agreement, dated as of December 28, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 29, 2022). ​ ​ ​ 47 Table of Contents 10.27 ​ Sixth Amendment to the Amended and Restated Loan and Security Agreement, dated as of March 8, 2023, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 9, 2023). ​ ​ ​ 10.28 ​ Seventh Amendment to the Amended and Restated Loan and Security Agreement, dated as of May 16, 2023, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 1, 2023). ​ ​ ​ 10.29† ​ Loan and Security Agreement, dated as of June 28, 2024, by and among CytoSorbents Corporation, the lenders, and the administrative and collateral agent party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). ​ ​ ​ 10.30† ​ Supplement to the Loan and Security Agreement, dated as of June 28, 2024, by and among CytoSorbents Corporation, the lenders, and the administrative and collateral agent party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). ​ ​ ​ 10.31 ​ Form of Warrant, by and between CytoSorbents Corporation and Avenue Venture Opportunities Fund, LP (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 5, 2024). 10.32 ​ Success Fee Letter, dated as of March 29, 2018, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2018). ​ ​ ​ 10.33 Success Fee Letter, dated as of January 19, 2022, by and among CytoSorbents Corporation, CytoSorbents Medical, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 20, 2022). 10.34† Exclusive Distribution Agreement, dated as of September 26, 2014, by and between CytoSorbents Europe GmbH and Aferetica s.r.l. (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 7, 2019). 10.35† Amendment to Exclusive Distribution Agreement, dated December 15, 2014, by and between CytoSorbents Europe GmbH and Aferetica s.r.l (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 7, 2019). ​ ​ ​ 10.36 ​ Open Market Sale AgreementSM, dated as of December 30, 2021, by and between CytoSorbents Corporation and Jefferies LLC (incorporated by reference from Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 30, 2021). ​ ​ ​ 10.37 ​ Marketing Agreement, dated as of August 1, 2022, by and between CytoSorbents Corporation and Fresenius Medical Care Deutschland GmbH (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2022). 10.38 ​ Lease, dated as of March 26, 2021, by and between 300 CR LLC and CytoSorbents Medical, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 31, 2021). ​ ​ ​ 10.39† ​ Securities Purchase Agreement, dated as of December 11, 2023, by and among CytoSorbents Corporation and the investors party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 11, 2023). ​ ​ ​ 19.1 * ​ Insider Trading Policy. ​ ​ ​ 21.1 ​ List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 15, 2024). ​ ​ ​ 23.1* Consent of WithumSmith+Brown, PC. 48 Table of Contents 31.1* Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 ​ Compensation Recoupment Policy (incorporated by reference to Exhibit 97 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 15, 2024). ​ ​ ​ 101 The following materials from CytoSorbents Form 10-K for the fiscal year ended December 31, 2023, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets at December 31, 2023 and December 31, 2022, (iii) Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023, 2022 and 2021, (iii) Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity/(Deficit) for the years ended December 31, 2023, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021, and (v) Notes to the Consolidated Financial Statements. ​ ​ ​ 104 ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed or furnished herewith. + Management contract or compensatory plan or arrangement of the Registrant required to be filed as an exhibit to this Annual Report. † Confidential treatment has been requested for certain portions of this exhibit. The confidential portions of this exhibit have been omitted and filed separately with Securities and Exchange Commission. In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed. ​ Item 16. Form 10-K Summary. None. ​ ​ 49 Table of Contents SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, CytoSorbents Corporation has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 31st day of March, 2025. CYTOSORBENTS CORPORATION By: /s/ Dr. Phillip P. Chan Dr. Phillip P. Chan Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Dr. Phillip P. Chan Chief Executive Officer (Principal March 31, 2025 Dr. Phillip P. Chan Executive Officer) and Director ​ ​ /s/ Peter J. Mariani Chief Financial Officer March 31, 2025 Peter J. Mariani (Principal Financial and Accounting Officer) ​ ​ /s/ Michael G. Bator Chairman of the Board March 31, 2025 Michael G. Bator ​ ​ /s/ Alan D. Sobel Director March 31, 2025 Alan D. Sobel ​ ​ /s/ Edward R. Jones Director March 31, 2025 Edward R. Jones ​ ​ /s/Jiny Kim Director March 31, 2025 Jiny Kim ​ ​ ​ 50 Table of Contents FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets at December 31, 2024 and 2023 F-4 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 F-7 Notes to Consolidated Financial Statements F-8 ​ ​ ​ F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders CytoSorbents Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of CytoSorbents Corporation (the ‘Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholder’s equity, cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America. Restatement of the Previously Issued Consolidated Financial Statements As discussed in Note 12 to the consolidated financial statements, the 2023 consolidated financial statements have been restated to correct material misstatements related to stock-based compensation expense for restricted stock units and inventory. Emphasis of the Matter – Restatement of Unaudited Interim Condensed Consolidated Financial Statements As discussed in Note 12 to the consolidated financial statements, the unaudited interim condensed consolidated financial statements as of and for the three months ended March 30, 2024 and 2023, as of and for the three and six months ended June 30, 2024 and 2023, and as of and for the three and nine months ended September 30, 2024 and 2023, have been restated to correct material misstatements related to stock-based compensation expense for restricted stock units and inventory. Substantial Doubt Regarding Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the entity has suffered recurring losses from operations, has experienced cash used in operations, and has an accumulated deficit, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F-2 Table of Contents Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. Evaluation of warrants Description of the Matter As described in Note 5 to the consolidated financial statements, the Company entered into a Loan and Security Agreement in June 2024. As additional consideration for the commitment, the Company also issued the lender warrants with a fair value of $690,709 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 28, 2029. The Company determined that the warrants met all the criteria for equity classification and recorded them as a component of additional paid-in capital upon the closing of the transaction in July 2024. The principal considerations for our determination of the financial statement classification of the warrants as a critical audit matter are the existence of complexities in applying the accounting standards related to certain warrant agreement provisions, including settlement provisions and derivative elements. Auditing these elements involved especially complex auditor judgment, specialized knowledge and skills due to the terms of the applicable agreement How We Addressed the Matter in Our Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, obtaining an understanding of and evaluating the design and implementation of controls over management’s process for the accounting treatment, reading the agreements, and evaluating the accounting for the warrant issuance. Testing management’s process included (i) evaluating the internal controls and application of the accounting framework used by management; (ii) testing the mathematical accuracy of management’s calculations; (iii) testing the inputs and assumptions used and (iv) testing the completeness and accuracy of the underlying data used in the calculations. Professionals with specialized skill and knowledge were used to assist in (i) evaluating management’s application of the accounting framework and (ii) testing the mathematical accuracy of management’s calculation and evaluating the conclusion related to the accounting classification of the warrant issuance. /s/ WithumSmith+Brown, PC We have served as the Company’s auditor since 2004. East Brunswick, New Jersey March 31, 2025 PCAOB ID Number 100 ​ ​ ​ F-3 Table of Contents CYTOSORBENTS CORPORATION CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ 2024 2023 ​ ​ ​ As restated ASSETS ​ ​ ​ Current Assets: ​ ​ ​ Cash and cash equivalents ​ $ 3,279,926 ​ $ 14,131,137 Restricted cash, current ​ ​ 5,000,000 ​ ​ — Grants and accounts receivable, net of allowances of $ 157,701 and $ 49,663 at December 31, 2024 and 2023, respectively ​ 7,319,597 ​ 6,057,072 Inventories ​ 2,732,907 ​ 3,375,817 Prepaid expenses and other current assets ​ 3,270,812 ​ 1,834,485 Total current assets ​ 21,603,242 ​ 25,398,511 ​ ​ ​ ​ ​ Property and equipment - net ​ 9,002,383 ​ 10,056,354 Restricted cash ​ ​ 1,483,958 ​ ​ 1,483,958 Right-of-use asset ​ ​ 11,511,236 ​ ​ 12,058,896 Other assets ​ 3,770,681 ​ 3,958,603 Total Assets ​ $ 47,371,500 ​ $ 52,956,322 ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current Liabilities: ​ ​ Accounts payable ​ $ 3,339,885 ​ $ 3,802,170 Accrued expenses and other current liabilities ​ 6,031,670 ​ 7,359,786 Lease liability – current portion ​ ​ 452,688 ​ ​ 373,636 Current maturities of long-term debt ​ ​ — ​ ​ 2,500,000 Total current liabilities ​ 9,824,243 ​ 14,035,592 Lease liability, net of current portion ​ ​ 12,443,971 ​ ​ 12,896,659 Long-term debt, net of current maturities ​ 13,996,350 ​ 2,542,857 Total Liabilities ​ 36,264,564 ​ 29,475,108 ​ ​ ​ Commitments and Contingencies ​ ​ ​ ​ Stockholders’ Equity: ​ ​ Preferred Stock, Par Value $ 0.001 , 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and 2023 ​ ​ — ​ ​ — Common Stock, Par Value $ 0.001 , 100,000,000 shares authorized at December 31, 2024 and 2023; and 54,830,146 and 54,240,265 shares issued and outstanding at December 31, 2024 and 2023, respectively ​ 54,830 ​ 54,240 Additional paid-in capital ​ 310,808,711 ​ 306,187,314 Accumulated other comprehensive income ​ 4,252,013 ​ 529,321 Accumulated deficit ​ ( 304,008,618 ) ​ ( 283,289,661 ) Total stockholders’ equity ​ 11,106,936 ​ 23,481,214 Total Liabilities and Stockholders’ Equity ​ $ 47,371,500 ​ $ 52,956,322 ​ The Notes to Consolidated Financial Statements are an integral part of these statements. ​ F-4 Table of Contents CYTOSORBENTS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ Year ended ​ ​ December 31, ​ December 31, ​ 2024 2023 ​ ​ As restated Product revenue ​ $ 35,594,520 ​ $ 31,084,953 Cost of goods sold ​ ​ 10,468,529 ​ ​ 9,131,716 Gross profit ​ ​ 25,125,991 ​ ​ 21,953,237 Operating expenses: ​ ​ ​ ​ ​ Research and development, net of grant income ​ ​ 6,916,181 ​ ​ 15,594,442 Selling, general and administrative ​ ​ 34,995,749 ​ ​ 38,307,415 Total operating expenses ​ ​ 41,911,930 ​ ​ 53,901,857 Loss from operations ​ ​ ( 16,785,939 ) ​ ​ ( 31,948,620 ) Other income (expense): ​ ​ ​ ​ ​ Interest expense, net ​ ​ ( 1,399,092 ) ​ ​ ( 157,891 ) Gain (loss) on foreign currency transactions ​ ​ ( 4,224,721 ) ​ ​ 1,949,257 Miscellaneous income (expense) ​ ​ ( 30 ) ​ ​ 96,755 Total other income (expense), net ​ ​ ( 5,623,843 ) ​ ​ 1,888,121 ​ ​ ​ ​ ​ ​ Loss before benefit from income taxes ​ ​ ( 22,409,782 ) ​ ​ ( 30,060,499 ) ​ ​ ​ ​ ​ ​ ​ Benefit from income taxes ​ 1,690,825 ​ ​ 813,739 ​ ​ ​ ​ ​ Net loss attributable to common stockholders ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) ​ ​ ​ ​ ​ ​ ​ Basic and diluted net loss per common share ​ $ ( 0.38 ) ​ $ ( 0.65 ) ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares of common stock outstanding ​ ​ 54,434,609 ​ ​ 44,656,391 ​ ​ ​ ​ ​ ​ ​ Comprehensive loss: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ ​ 4,027,003 ​ ​ ( 1,799,874 ) Comprehensive loss ​ $ ( 16,691,953 ) ​ $ ( 31,046,634 ) ​ The Notes to Consolidated Financial Statements are an integral part of these statements. ​ F-5 Table of Contents CYTOSORBENTS CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Paid-In ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Par value Capital Income (Loss) Deficit Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2022 43,635,715 ​ $ 43,635 ​ $ 287,000,021 ​ $ 2,329,195 ​ $ ( 253,997,878 ) ​ $ 35,374,973 Cumulative effect of adjustments to beginning balance ​ — ​ ​ — ​ ​ 777,310 ​ ​ — ​ ​ ( 45,023 ) ​ ​ 732,287 Stock-based compensation (as restated) — ​ — ​ 4,155,342 ​ — ​ — ​ 4,155,342 Proceeds from the exercise of stock options for cash, net of fees incurred 84,905 ​ 85 ​ 218,193 ​ — ​ — ​ 218,278 Issuance of common stock offerings, net of fees incurred ​ 10,389,554 ​ ​ 10,390 ​ ​ 14,245,542 ​ ​ — ​ ​ — ​ ​ 14,255,932 Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes 130,091 ​ 130 ​ ( 209,094 ) ​ — ​ — ​ ( 208,964 ) Other comprehensive loss, foreign currency translation adjustment — ​ — ​ — ​ ( 1,799,874 ) ​ — ​ ( 1,799,874 ) Net loss (as restated) — ​ — ​ — ​ — ​ ( 29,246,760 ) ​ ( 29,246,760 ) Balance at December 31, 2023 (as restated) 54,240,265 ​ $ 54,240 ​ $ 306,187,314 ​ $ 529,321 ​ $ ( 283,289,661 ) ​ $ 23,481,214 Stock-based compensation — ​ — ​ 3,759,534 ​ — ​ — ​ 3,759,534 Issuance of common stock offerings, net of fees incurred ​ 382,823 ​ ​ 385 ​ ​ 178,269 ​ ​ — ​ ​ — ​ ​ 178,654 Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes 207,058 ​ 205 ​ ( 7,115 ) ​ — ​ — ​ ( 6,910 ) Issuance of warrants — ​ — ​ 690,709 ​ — ​ — ​ 690,709 Other comprehensive loss, foreign currency translation adjustment — ​ — ​ — ​ 3,722,692 ​ — ​ 3,722,692 Net loss — ​ — ​ — ​ — ​ ( 20,718,957 ) ​ ( 20,718,957 ) Balance at December 31, 2024 54,830,146 ​ $ 54,830 ​ $ 310,808,711 ​ $ 4,252,013 ​ $ ( 304,008,618 ) ​ $ 11,106,936 ​ The Notes to Consolidated Financial Statements are an integral part of these statements. ​ F-6 Table of Contents CYTOSORBENTS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended Year ended ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ As restated Cash flows from operating activities: ​ ​ ​ Net loss ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Accrued final fee ​ ​ 111,422 ​ ​ 42,857 Amortization of debt discount ​ ​ 264,702 ​ ​ — Amortization of loan costs ​ ​ 116,028 ​ ​ — Depreciation and amortization ​ 1,570,104 ​ ​ 1,459,066 Amortization of right-of-use asset ​ ​ 174,024 ​ ​ 564,356 Bad debt expense ​ 115,161 ​ ​ 14,434 Impairment of patents ​ 333,735 ​ ​ 655,685 Foreign currency transaction (gains) losses ​ 4,224,721 ​ ​ ( 1,949,257 ) Stock-based compensation ​ ​ 3,759,534 ​ ​ 4,155,342 Changes in operating assets and liabilities: ​ ​ ​ ​ Grants and accounts receivable ​ ( 1,720,419 ) ​ ​ ( 245,616 ) Inventories ​ 500,466 ​ ​ 183,273 Prepaid expenses and other current assets ​ ( 1,351,805 ) ​ ​ 1,104,167 Other assets ​ 1,050 ​ ​ ( 49 ) Accounts payable and accrued expenses ​ ( 1,807,575 ) ​ ​ 1,607,366 Net cash used in operating activities ​ ( 14,427,809 ) ​ ​ ( 21,655,136 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Purchases of property and equipment ​ ( 284,343 ) ​ ​ ( 538,115 ) Patent costs ​ ( 385,087 ) ​ ​ ( 398,121 ) Net cash used in investing activities ​ ( 669,430 ) ​ ​ ( 936,236 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ Proceeds from long-term debt ​ 15,000,000 ​ — Repayment of long-term debt ​ ( 5,000,000 ) ​ — Payment of final fee ​ ​ ( 150,000 ) ​ ​ — Payment of loan costs ​ ​ ( 697,950 ) ​ ​ — Equity contributions - net of fees incurred ​ 178,654 ​ 14,255,932 Proceeds from exercise of stock options ​ — ​ ​ 218,278 Net cash provided by financing activities ​ 9,330,704 ​ ​ 14,474,210 Effect of exchange rates on cash ​ ( 84,676 ) ​ ​ ( 99,769 ) Net change in cash, cash equivalents, and restricted cash ​ ( 5,851,211 ) ​ ​ ( 8,216,931 ) ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents, and restricted cash at beginning of year ​ 15,615,095 ​ ​ 23,832,026 Cash, cash equivalents, and restricted cash at end of year ​ $ 9,763,884 ​ $ 15,615,095 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid during the year for interest ​ $ 1,290,396 ​ $ 376,668 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash financing activities: ​ ​ ​ Warrants issued in connection with long-term debt ​ $ 690,709 ​ $ — Capital expenditures included in accounts payable ​ $ 7,968 ​ $ — Settlement of accrued bonuses with restricted stock units ​ $ 197,892 ​ $ 403,939 ​ The Notes to Consolidated Financial Statements are an integral part of these statements. ​ F-7 Table of Contents CYTOSORBENTS CORPORATION Notes to Consolidated Financial Statements December 31, 2024 1. BASIS OF PRESENTATION The accompanying consolidated financial statements include the results of CytoSorbents Corporation (the “Parent”), CytoSorbents Medical Inc., its wholly owned operating subsidiary (the “Subsidiary”), and CytoSorbents Europe GmbH, its wholly owned European subsidiary (the “European Subsidiary”). In addition, the consolidated financial statements include CytoSorbents Switzerland, CytoSorbents Poland Sp. z.o.o., CytoSorbents Medical UK Limited, and CytoSorbents France SAS, the wholly owned subsidiaries of CytoSorbents Europe GmbH, and CytoSorbents UK Limited and CytoSorbents India Private Limited, wholly-owned subsidiaries of CytoSorbents Medical, Inc. These entities are collectively referred to as the “Company”. As of December 31, 2024, the Company’s total cash and cash equivalents and restricted cash was approximately $ 9.8 million, with $ 6.5 million classified as restricted, and $ 3.3 million as unrestricted and available to fund operations. This matter raises substantial doubt about the Company’s ability to continue as a going concern. As of the issuance date of this Annual Report on Form 10-K, the Company has raised a total of $ 7.3 million, net of offering fees, through the Rights Offering (see Note 13 – Subsequent Event), and the exercise of the Series A Right Warrants (see Note 13 – Subsequent Event). The equity raises also provided for $ 5 million of restricted cash to become unrestricted. As a result, our proforma unrestricted cash and cash equivalents, a non-GAAP measure, on December 31, 2024, assuming the net proceeds from the Rights Offering and the Series A Right Warrant exercise had occurred at that date, has increased by $ 12.3 million to $ 15.6 million, compared to the as reported amount of $ 3.3 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 regulatory approval and introduction of DrugSorb-ATR in the U.S. and Canada which is expected in 2025, and the related opportunity to receive Tranche 2 of Avenue Capital Commitment (See Note 5. 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 us include issuance of additional equity securities through the Series B Right Warrant, or other public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. The increasing need for capital could also make it more difficult to obtain funding through either equity or debt. 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 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 is actively pursuing 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. ​ ​ F-8 Table of Contents ​ 2. PRINCIPAL BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company is a leader in the treatment of life-threatening conditions in intensive care and cardiac surgery using blood purification. The Company through its subsidiary CytoSorbents Medical, Inc and based in New Jersey, is engaged in the research, development and commercialization of medical devices with its blood purification technology platform which incorporates a proprietary adsorbent, porous polymer technology. 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. Basis of Consolidation and Foreign Currency Translation The consolidated financial statements include the accounts of CytoSorbents Corporation and its wholly owned subsidiaries, CytoSorbents Medical, Inc. and CytoSorbents Europe GmbH. 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. 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. Segment Information The Company manages its operations and allocates resources as a single operating segment. The Company’s chief operating decision-maker (“CODM”) is its Chief Executive Officer (“CEO”) who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s restricted includes amounts held as collateral for a letter of credit with Bridge Bank, securing the College Road facility lease. The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the consolidated balance sheets and consolidated statements of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 Cash and cash equivalents ​ $ 3,279,926 ​ $ 14,131,137 Restricted cash, current ​ ​ 5,000,000 ​ ​ — Restricted cash ​ 1,483,958 ​ 1,483,958 Total cash, cash equivalents and restricted cash* ​ $ 9,763,884 ​ $ 15,615,095 * See Note 1 – Basis of Presentation for further discussion regarding restricted cash. Grants and Accounts Receivable (Net of Allowance for Credit Losses) Trade accounts receivable consist of amounts due from direct customers, distributors and agencies of the U.S. government and are presented at net realizable value. At each balance sheet date, the Company estimates an expected allowance for credit losses inherent in the Company’s accounts receivable portfolio based on historical experience, specific allowances for known troubled accounts, and other available evidence. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. The Company has identified the following portfolio segments: direct customers, distributors/strategic partners and the U.S. government. F-9 Table of Contents A fixed reserve percentage for each pool is derived from a review of the Company’s historical losses in relation to the total pool. This estimate is adjusted quarterly for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s portfolio segments have remained constant over the Company’s historical evaluation period. The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they are recognized as an offset to credit loss expense in the year of recovery. The total amount of write-offs was immaterial to the financial statements as a whole for the year ended December 31, 2024. The allowance for credit losses reflects accounts receivable balances that are written off when management determines they are uncollectible. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist, and measures the allowance for credit losses using the following methods: Direct Customers—The Company measures expected credit losses on direct customer receivables using an aging methodology. The risk of loss for direct customer receivables is low based on the Company’s historical experience. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts. Distributors/Strategic Partners—The Company measures expected credit losses on distributor receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers the past payment history of each distributor. U.S. Government- These receivables are related to the Company’s government grants. The Company measures expected credit losses on these receivables using an individual reserve methodology. The risk of loss in this portfolio is very low based on the Company’s historical experience, as these receivables are supported by approved grant award contracts. Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined using a first-in first-out (“FIFO”) basis. Devices used in clinical trials or for research and development purposes are removed from inventory and charged to research and development expenses at the time of their use. Donated devices are removed from inventory and charged to selling, general and administrative expenses. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment is provided for by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the lesser of their economic useful lives or the term of the related leases. Gains and losses on depreciable assets retired or sold are recognized in the statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred. Patents Legal costs incurred to establish patents are capitalized. When patents are issued, capitalized costs are amortized on the straight-line method over the related patent term. In the event a patent is abandoned, the net book value of the patent is written off. Impairment or Disposal of Long-Lived Assets The Company assesses the impairment of patents and other long-lived assets under accounting standards for the impairment or disposal of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. During the years ended December 31, 2024 and 2023, the Company wrote-off patent costs of approximately $ 333,735 and $ 655,685 , respectively, related to the impairment of certain issued patents and pending patent applications in certain specific jurisdictions and the F-10 Table of Contents abandonment of certain pending patent application costs in the ordinary course of business. This charge is included in legal, financial and other consulting in the consolidated statements of operations and comprehensive loss. Leases The Company accounts for leases in accordance with FASB Accounting Standards Update (“ASU”) 2016-02, Leases, Topic 842 (“ASC 842”). Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The Company determines if a contract contains a lease at the inception date and determines the lease classification, recognition, and measurement at commencement date. ROU assets also include adjustments related to prepaid or deferred lease payments. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Options to extend a lease are included in the lease term when it is reasonably certain that the Company will exercise such options. Certain of the Company’s lease agreements include provisions for the Company to pay the lessor for common area maintenance, real estate taxes, and insurance, which the Company accounts for as variable lease costs. Revenue Recognition Revenue is recognized when the Company ships its products to its direct customers and distributors/strategic partners. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for the products shipped or the services provided under their grant contracts. To achieve this core principle, the Company applies the following five steps: 1. Identify Contracts with Customers - The Company’s contracts with its direct customers are generally in the form of a purchase order. The Company has formal written contracts with each of its distributors/strategic partners that define their respective territories and minimum purchase commitments which must be met in order to maintain exclusivity in their territory. Distributors/strategic partner customers also submit purchase orders with each order that define the terms of shipment and transaction price. 2. Identify Performance Obligations - The performance obligations in contracts with direct customers and distributors/strategic partners are for the shipment of the CytoSorb device and related accessory parts. 3. Determine Transaction Price - The price charged is based on the Company’s price list for the CytoSorb device and related accessory parts for both direct customers and distributor/strategic partners. The Company does not permit returns for product sales. The Company also provides for certain rebates and discounts to direct customers for sales of its product that are earned based upon sales volume. These amounts, which are earned based on calendar year sales volume, are recorded as a reduction of sales as earned. 4. Allocate Transaction Price to Performance Obligations - The transaction price for the performance obligation is based on the purchase orders received for both direct customers and on the type of contract and are outlined in each contract. 5. Recognize Revenue as Performance Obligations are Satisfied - The Company satisfies its performance obligation to direct customers and distributors/strategic partners generally upon shipment of the products. Research and Development, Net of Grant Income All research and development costs, payments to laboratories, research consultants and costs related to clinical trials and studies are expensed when incurred. Currently, accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development, and no products or services are transferred to the grantor. As there is no authoritative guidance under U.S. GAAP on accounting for grants to for profit business entities from government entities, the Company has adjusted its accounting policy for recording grants to analogize the guidance provided by International Accounting Standard 20 (“IAS 20”). Accordingly, the Company has retroactively, as of January 1, 2023, reclassified grant income, net of expenses, as a reduction of research and development expenses. F-11 Table of Contents Research and Development All research and development costs, payments to laboratories, research consultants and costs related to clinical trials and studies are expensed when incurred. Grant income, net of expenses, is presented as a reduction of research and development expenses. Advertising Expenses Advertising costs are charged to activities when incurred. Advertising expense amounted to approximately $ 335,284 and $ 252,686 , in 2024 and 2023, respectively, and is included in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive loss. Income Taxes Income taxes are accounted for under the asset and liability method prescribed by accounting standards for accounting for income taxes. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax asset will not be realized. Under Section 382 of the Internal Revenue Code, the net operating losses generated prior to the previously completed reverse merger may be limited due to the change in ownership. Additionally, net operating losses generated subsequent to the reverse merger may be limited in the event of changes in ownership. The Company follows the accounting standards associated with uncertain tax provisions. The Company is accounting for an uncertain tax position of approximate $ 2.2 and $ 2.1 million for the years ended December 31, 2024 and 2023, respectively. The Company had no unrecognized tax benefits as of December 31, 2024 and 2023. The Company files tax returns in the U.S. 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 tax carryforwards and Research and Development credits to an industrial company. CytoSorbents Europe GmbH, CytoSorbents Switzerland GmbH, CytoSorbents Poland Sp. z.o.o., CytoSorbents UK Limited, CytoSorbents Medical UK Limited and CytoSorbents France SAS file an annual corporate tax return, a VAT return and a trade tax return in Germany, Switzerland, Poland, France and the United Kingdom, respectively. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets, liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The valuation of options granted, allowance for credit losses and recoverability of patents are significant estimates in these consolidated financial statements. 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. Beginning in April of 2023, the Company joined the IntraFi network, and established an Insured CashSweep (“ICS”) account whereby all cash that was previously held in the Company’s money market account at Bridge Bank is swept daily in increments of less than $250,000 and deposited in a number of IntraFi’s 4,000 member banks. This arrangement provides FDIC insurance coverage for all of the cash balances previously held in the money market account, which represents all of the cash and cash equivalents held at Bridge Bank. This arrangement excludes the restricted cash balances. Management monitors the soundness of these institutions in an effort to minimize its collection risk of these balances. A significant portion of the Company’s revenues are from product sales in Germany. (See Note 3 for further information relating to the Company’s revenue.) As of December 31, 2024, and 2023 one distributor accounted for approximately 19 % of outstanding grants and accounts receivables. For the years ended December 31, 2024 and 2023, one distributor accounted for 11 % and 10 %, respectively, of the Company’s total revenue. F-12 Table of Contents Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term nature. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815 “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The warrants issued upon the closing of the Company’s December 13, 2023, offering and the closing of the Company’s June 2024 debt financing both met the criteria for equity classification under ASC 815. Accordingly, these warrants have been classified as equity as of December 31, 2024 and December 31, 2023. Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, including stock options, restricted shares (“RSUs”), based on estimated fair values at the award grant date. The fair value of stock-based awards is amortized over the vesting period of the award using a straight-line method. Stock-based compensation expense for awards with performance conditions is recognized when it is probable that the performance condition will be achieved and is then recognized over the requisite service period. Any changes in the probability assessment are accounted for as a cumulative true up to the current period compensation cost. To estimate the fair value of an award, the Company uses the Black-Scholes option pricing model. This model requires inputs such as expected life, expected volatility, expected dividend yield of stock and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. While estimates of expected life and volatility are derived primarily from the Company’s historical data, the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected life assumption. The Company accounts for forfeitures in the period they occur. The Company also follows the guidance of accounting standards for accounting for equity instruments that are issued to non-employees for acquiring, or in conjunction with selling, goods or services for equity instruments issued to consultants. Net Loss per Common Share Basic net loss per share is computed by dividing loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the treasury stock method on the basis of the weighted-average number of shares of common stock plus the dilutive effect of potential common shares outstanding during the period. Dilutive potential common shares include outstanding warrants, stock options and restricted shares. The computation of diluted net loss per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. F-13 Table of Contents The following table presents the calculation of net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2024 2023 Basic and Diluted: ​ ​ ​ As Restated * Numerator: ​ ​ Net loss attributable to common stockholders per consolidated statements of operations ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) Denominator: ​ ​ Weighted average common shares outstanding used to compute basic and diluted loss per share ​ 54,434,609 ​ 44,656,391 ​ ​ ​ ​ ​ ​ ​ Net loss per common share attributable to common stockholders, basic and diluted ​ $ ( 0.38 ) ​ $ ( 0.65 ) * See Note 12 – Restatement of Previously Issued financial information for details. ​ The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock attributable to common stockholders, because their effect was anti-dilutive, as adjusted to give effect to the Stock Split: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 2023 Stock options outstanding 12,341,914 10,548,174 Warrants for common stock 4,352,130 2,706,561 RSUs* 3,450,836 3,254,005 *Total number of RSUs include 2,809,500 units with a Change in Control-Based performance condition. ​ Shipping and Handling Costs The cost of shipping products to customers and distributors is typically borne by the customer or distributor. The Company records shipping and handling costs in cost of goods sold. Total freight costs amounted to approximately $ 409,273 and $ 464,324 for the years ended December 31, 2024 and 2023, respectively. Effect of Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company implemented the updated guidance as of January 1, 2024, and this did not have an impact on its consolidated financial statements. In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280), which will require public companies to provide more transparency in both quarterly and annual reports about the expenses they incur from revenue generating reportable business segments. In addition, the ASU requires that a public entity disclose significant segment expenses that are regularly provided to the chief operating decision maker, an amount for other segment items by reportable business segment, including a description of its composition, and the primary measures of a business segment’s profit or loss in assessing segment performance. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company implemented the updated guidance as of December 31, 2024, which resulted in the addition of new segments disclosures (see Note 11). Also, the implementation of ASU 2023-07, did not have an impact on other disclosures to the consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 entitled “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU provides guidance related to additional disclosures that will be required related to income taxes. The updated guidance is effective for public entities for fiscal years beginning after December 15, 2024. This ASU will result in additional disclosures in the Company’s consolidated financial statements related to income taxes in 2025. F-14 Table of Contents On November 19, 2024, the Financial Accounting Standards Board (the “FASB”) issued a proposed Accounting Standards Update to establish authoritative guidance for the accounting and reporting of government grants received by business entities. The FASB has decided to pursue an International Accounting Standards 20 (“IAS 20”) accounting model. Under IAS 20, a grant relating to income may be reported separately as ‘other income’ or deducted from the related expense. The Company has evaluated its accounting and reporting policy for government grants relative to this project and the requirements of IAS 20. Currently, accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development, and no products or services are transferred to the grantor. As there is no authoritative guidance under U.S. GAAP on accounting for grants to for profit business entities from government entities, the Company has adjusted its accounting policy for recording grants to analogize the guidance provided by IAS 20. Accordingly, the Company has retroactively, as of January 1, 2023, reclassified grant income, net of expenses, as a reduction of research and development expenses. Reclassification of Grant Income and Operating Expenses As noted above on Effect of Recent Accounting Pronouncements the Company has retroactively, as of January 1, 2023, reclassified grant income, net of expenses, as a reduction of research and development expenses. For the years ended December 31, 2024 and 2023, Grant Income and the related expenses were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Grant income ​ $ 3,610,759 ​ $ 5,264,426 Grant income-related expenses ​ $ ( 3,583,233 ) ​ $ ( 5,129,952 ) ​ In addition, the Company changed its accounting policy to report legal, financial and other consulting costs, which was previously its own separate line item within the Operating Expenses section of the Consolidated Statements of Operations and Comprehensive Loss to now being merged into the Selling, General and Administrative Expenses line item. These expenses previously presented within legal, financial and other consulting costs are general and administrative in nature; accordingly, the updated presentation would provide the user of the Consolidated Financial Statements a better picture of the purpose of those expenses. For the years ended December 31, 2024 and 2023, the total amount of expenses that would have been reported as Legal, financial and other consulting costs under the previous accounting policy amounted to $ 3,199,357 and $ 4,272,296 , respectively. For comparative purposes, the Company has recorded the following reclassification adjustments to the previously reported Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Previously Reported Adjustments As Reclassified* Grant income ​ $ 5,264,426 ​ $ ( 5,264,426 ) ​ $ — ​ Total revenue ​ $ 36,349,379 ​ $ ( 5,264,426 ) ​ $ 31,084,953 ​ Cost of revenues ​ $ ( 13,957,356 ) ​ $ 5,129,952 ​ $ ( 8,827,404 ) * Gross profit ​ $ 22,392,023 ​ $ ( 134,474 ) ​ $ 22,257,549 * Research and development ​ $ ( 15,728,915 ) ​ $ 134,473 ​ $ ( 15,594,442 ) ​ Legal, financial and other consulting ​ $ ( 4,272,296 ) ​ $ 4,272,296 ​ $ — ​ Selling, general and administrative ​ $ ( 33,600,065 ) ​ $ ( 4,272,296 ) ​ $ ( 37,872,361 ) * Total operating expenses ​ $ ( 53,601,276 ) ​ $ 134,474 ​ $ ( 53,466,803 ) ​ * See Note 12 – Restatement to Previously Issued Financial Information for further adjustments to these line items. For comparative purposes, the Company has recorded the following reclassification adjustments to the previously reported Consolidated Statements of Cash Flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Previously Reported Adjustments As Reclassified* Non-cash compensation ​ $ 371,397 ​ $ ( 371,397 ) ​ $ — Stock-based compensation ​ $ 3,329,307 ​ $ 371,397 ​ $ 3,700,704 * See Note 12 – Restatement to Previously Issued Financial Information for further adjustments to these line items. * These reclassification adjustments reflected in these consolidated cash flows statements line items also reflect the restatement adjustments applicable to the statements of changes to stockholders’ equity. ​ ​ F-15 Table of Contents 3. REVENUE The following table disaggregates the Company’s revenue by customer type and geographic area for the year ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributors/ ​ ​ ​ ​ Direct Strategic Partners Total Product revenue: ​ ​ ​ United States ​ $ 114,611 ​ $ 36,000 ​ $ 150,611 Germany ​ 13,049,729 ​ ​ — ​ ​ 13,049,729 All other countries ​ 7,616,123 ​ 14,778,057 ​ 22,394,180 ​ ​ ​ ​ ​ ​ ​ Product revenue ​ $ 20,780,463 ​ $ 14,814,057 ​ $ 35,594,520 ​ The following table disaggregates the Company’s revenue by customer type and geographic area for the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributors/ ​ ​ ​ ​ Direct Strategic Partners Total Product revenue: ​ ​ ​ United States ​ $ 66,773 ​ $ — ​ $ 66,773 Germany ​ 12,964,806 ​ ​ — ​ ​ 12,964,806 All other countries ​ 5,956,042 ​ ​ 12,097,332 ​ ​ 18,053,374 ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue ​ $ 18,987,621 ​ $ 12,097,332 ​ $ 31,084,953 ​ CytoSorb Sales The Company sells its CytoSorb device using both its own sales force (direct sales) and through the use of distributors and/or strategic partners. The majority of sales of the device are outside the United States, as CytoSorb is not yet approved for commercial sale in the United States. However, in April 2020, the Company was granted Emergency Use Authorization (“EUA”) of CytoSorb for use in critically-ill patients infected with COVID-19 with imminent or confirmed respiratory failure by the United States Food and Drug Administration (the “FDA”). Direct sales outside the United States relate to sales to hospitals located in Germany, Switzerland, Austria, Belgium, Luxembourg, Poland, the Netherlands, Sweden, Denmark, Norway and the United Kingdom. Direct sales are fulfilled from the Company’s warehouse facility in Berlin, Germany. There are no formal sales contracts with any direct customers relating to product price or minimum purchase requirements. 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. These customers submit purchase orders and the order is fulfilled and shipped directly to the customer. Prices to all direct customers are based on a standard price list based on the packaged quantity (6 packs versus 12 packs). Distributor and strategic partner sales make up the remaining product sales. These distributors are located in various countries throughout the world. The Company has a formal written contract with each distributor/strategic partner. These contracts have terms ranging from 1 - 5 years in length, with three years being the typical term. In addition, certain distributors are eligible for volume discount pricing if their unit sales are in excess of the base amount in the contract. Most distributor’s/strategic partner’s contracts have minimum annual purchase requirements in order to maintain exclusivity in their respective territories. There is no additional consideration or monetary penalty that would be required to be paid to CytoSorbents if a distributor does not meet the minimum purchase commitments included in the contract, however, at the discretion of the Company, the distributor may lose its exclusive rights in the territory if such commitments are not met. In summary, the contracts the Company has with customers are the distributor/strategic partner contracts related to CytoSorb product sales, agreements with direct customers related to free-of-charge product and credit rebates based upon achieving minimum purchase levels. The Company does not currently incur any outside/third-party incremental costs to obtain any of these contracts. F-16 Table of Contents The following table provides information about receivables and contract liabilities from contracts with customers: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Contract receivables, which are included in grants and accounts receivable ​ $ 4,426,890 ​ $ 3,846,271 Contract liabilities, which are included in accrued expenses and other current liabilities ​ $ 596,042 ​ $ 1,577,141 ​ Contract receivables represent balances due from product sales to distributors amounting to $ 4,233,888 and $ 3,270,724 at December 31, 2024 and 2023, respectively, and billed and unbilled amounts due on government contracts amounting to $ 193,002 and $ 575,547 at December 31, 2024 and 2023, respectively. Contract receivable amounted to $ 3,822,452 as of January 1, 2023. Contract liabilities 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 $ 176,714 and $ 196,322 at December 31, 2024 and 2023, respectively, and deferred grant liability related to the billing on fixed price government contracts in excess of costs incurred, which amounted to $ 419,328 and $ 1,376,819 at December 31, 2024 and 2023, respectively. ​ 4. BALANCE SHEET COMPONENTS Inventories The Company had the following major classes of inventory: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 ​ ​ ​ As Restated * Raw Materials ​ $ 569,824 ​ $ 685,801 Work in Process ​ 502,525 ​ 838,871 Finished Goods ​ 1,964,870 ​ 1,851,145 Inventories ​ $ 3,037,219 ​ $ 3,375,817 * See Note 12 – Restatement of Previously Issued financial information for details. ​ Property and equipment - net ​ The Company’s Property and equipment - net, consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation/ ​ ​ December 31 ​ Amortization ​ 2024 2023 Period ​ ​ ​ ​ ​ ​ ​ ​ ​ Furniture and fixtures ​ $ 1,453,623 ​ $ 1,462,778 7 years Equipment and computers ​ 5,491,048 ​ 5,404,743 3 to 7 years Leasehold improvements ​ 6,282,710 ​ 6,224,863 Lesser of term of lease or estimated useful life ​ ​ 13,227,381 ​ 13,092,384 Less accumulated depreciation and amortization ​ 4,224,998 ​ 3,036,030 Property and Equipment, Net ​ $ 9,002,383 ​ $ 10,056,354 ​ Depreciation expense for the years ended December 31, 2024 and 2023, amounted to $ 1,341,262 and $ 1,239,600 , respectively. F-17 Table of Contents Other assets ​ Other assets consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Patent applications pending ​ $ 1,612,118 ​ $ 1,945,532 Patents issued ​ ​ 3,390,768 ​ ​ 2,982,253 Less accumulated amortization of patents issued ​ ( 1,254,850 ) ​ ( 1,021,233 ) Patents, net ​ 3,748,036 ​ 3,906,552 Other ​ 22,644 ​ 52,051 Other Assets ​ $ 3,770,680 ​ $ 3,958,603 ​ Patent amortization expense amounted to $ 235,146 , and $ 222,836 for the years ended December 31, 2024 and 2023, respectively. ​ Patent amortization expense for the next five years and thereafter is scheduled as follows: ​ ​ ​ ​ ​ 2025 $ 253,622 2026 ​ 252,481 2027 ​ 246,956 2028 ​ 234,087 2029 ​ 234,087 Thereafter ​ ​ 914,685 Scheduled amortization of patents issued ​ $ 2,135,918 ​ Accrued expenses and other current liabilities ​ Accrued expenses and other current liabilities consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 ​ ​ ​ As Restated Accrued salaries and commissions ​ $ 3,387,675 ​ $ 3,344,080 Professional fees ​ ​ 769,577 ​ ​ 956,432 Clinical studies ​ 589,577 ​ 686,908 Deferred revenue ​ 419,331 ​ 1,380,821 Other ​ 865,510 ​ 991,545 Accrued expenses and other current liabilities ​ $ 6,031,670 ​ $ 7,359,786 * See Note 12 – Restatement of Previously Issued financial information for details. ​ ​ 5. LONG-TERM DEBT Avenue Capital Group: 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: (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 will be 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 proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge F-18 Table of Contents 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 )%. 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 (See note 13 – Subsequent Event) satisfied the second condition of the debt covenant which now allows for the $ 5 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use. The loan requires interest-only payments for the first 25 months, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity. All unpaid principal and accrued and unpaid interest shall be due and payable in full on July 1, 2027; provided, however that if the Company draws the full amount of Tranche 2 by December 2025, all unpaid principal and accrued and unpaid interest shall be due and payable in full by January 1, 2028. As of the Closing Date, the Company recorded the following discounts: ​ ​ ​ ​ ​ Fair value of warrants issued to Avenue Capital Group ​ $ 690,000 Debt issuance cost ​ 640,000 Commitment fee paid on the Closing Date ( 1 % of the Avenue Capital Group commitment) ​ 200,000 Total discounts recorded at inception against Avenue Capital Group Long Term Debt ​ $ 1,530,000 ​ The Company amortizes debt discounts as interest expense using the interest method through the maturity date. The loan and security agreement included a final payment upon maturity of $ 900,000 . The Company accretes the final payment as interest expense using the interest method through the maturity date. Upon a prepayment, the Company would incur a fee ranging from 1 % to 3 % of the outstanding principal, depending of the time of payment in relation to the maturity date. 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 December 31, 2024, 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 $ 690,709 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 28, 2029. The number of warrants is fixed, however, the exercise price may be adjusted down if the Company raises equity (excluding sales of equity utilizing the Company’s at-the-market equity facility) at a share price that is lower than $ 0.79 . These warrants meet the criteria for equity classification under ASC 815. The Lenders were also granted the right while the Commitment is outstanding to convert up to an aggregate amount of $ 2 million of the principal amount of the outstanding Growth Capital Loans into the Company’s common stock at a fixed conversion price of 120 % of the Closing Price (as defined in the warrant) or $ 0.95 per share (the “Conversion Option”). The Company’s obligations under the Loan and Security Agreement are joint and several. 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 December 31, 2024, long-term debt consists of the following: ​ ​ ​ ​ ​ Principal amount $ 15,000,000 Less unamortized debt discount ​ ( 1,003,650 ) Subtotal ​ 13,996,350 Less current maturities ​ — Long-term debt net of current maturities ​ $ 13,996,350 ​ F-19 Table of Contents As of December 31, 2024, principal payments of long-term debt are due as follows: ​ ​ ​ ​ ​ 2026 $ 6,250,000 2027 ​ 8,750,000 Total ​ $ 15,000,000 ​ Bridge Bank On June 28, 2024, concurrent with the closing of the Avenue Capital Group financing discussed above, the Company paid off its existing outstanding debt with Bridge Bank. As of December 31, 2023, long-term debt consists of the following amounts due to Bridge Bank: ​ ​ ​ ​ ​ Principal amount $ 5,000,000 Accrued final fee ​ ​ 42,857 Subtotal ​ 5,042,857 Less current maturities ​ 2,500,000 Long-term debt net of current maturities ​ $ 2,542,857 ​ As of December 31, 2024, 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; (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 $ 5,000,000 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 termination date of the 2022 Success Fee Letter is December 27, 2027. ​ ​ ​ 6. LEASES 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 December 31, 2024, 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 operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2024 2023 Cash paid in connection with operating leases ​ $ 1,683,461 ​ $ 2,403,025 Operating lease expense ​ $ 2,234,616 ​ $ 1,802,490 ​ F-20 Table of Contents Supplemental balance sheet information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ Right-of-use asset ​ $ 11,511,236 ​ $ 12,058,896 ​ Lease liability – current portion ​ $ 452,688 ​ ​ 373,636 ​ Lease liability – net of current portion ​ 12,443,971 ​ ​ 12,896,659 ​ Total lease liability ​ $ 12,896,659 ​ $ 13,270,295 ​ Weighted average discount rate ​ ​ 9.8 % ​ 9.8 % Weighted average remaining lease term ​ ​ 11.7 years ​ ​ 12.7 years ​ ​ As of December 31, 2024, the maturities of the lease liabilities are as follows: ​ ​ ​ ​ ​ 2025 $ 1,695,676 2026 ​ 1,735,747 2027 ​ 1,776,920 2028 ​ 1,819,224 2029 ​ 1,862,893 Thereafter ​ 13,550,383 Future operating lease payments ​ ​ 22,440,843 Imputed interest ​ ​ ( 9,544,184 ) Total lease liability ​ $ 12,896,659 ​ ​ 7. INCOME TAXES The Company accounts for income taxes under ASC 740. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company’s consolidated loss before income taxes for the years ended December 31, 2023, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Domestic ​ $ ( 11,722,734 ) ​ $ ( 21,913,297 ) Foreign ​ ( 10,687,048 ) ​ ( 8,147,202 ) Total ​ $ ( 22,409,782 ) ​ $ ( 30,060,499 ) ​ The provision for income taxes consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 State Tax, including sale of New Jersey losses & credits ​ $ ( 1,690,825 ) ​ $ ( 813,739 ) Foreign tax provision ​ — ​ — Total ​ $ ( 1,690,825 ) ​ $ ( 813,739 ) ​ The Company has deemed any foreign earnings will be indefinitely reinvested. Currently, foreign operations have resulted in an accumulated deficit. The Company will continue to analyze their stance if their circumstances change in the future. As of December 31, 2024, the Company had federal net operating loss (“NOL”) carry forwards of $ 103,299,951 , state NOL carry forwards of $ 6,449,176 , and foreign NOL carry forwards of $ 59,061,197 which are available to reduce future taxable income. Any unutilized NOL carry forwards will begin to expire at various dates starting in 2025 and some may be carried indefinitely. As of December 31, 2024 and 2023, the Company had Federal and state research and development tax credit carryforwards of $ 2,224,012 and $ 0 (net of uncertain tax benefits), respectively, available to reduce future tax liabilities which will begin to expire at various dates starting in 2026. F-21 Table of Contents The federal NOL carryforwards of $ 47.7 million, if not utilized, will expire between 2025 and 2038. The federal NOL carryforwards of $ 55.7 million generated since 2018 are subject to an 80% limitation on taxable income , do not expire and will carry forward indefinitely. The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The NOLs may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. In addition to the new provisions enacted under the Tax Cuts and Jobs Act, This could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will generally be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not determined whether such a change has occurred and accordingly, the utilization of the net operating loss carryforwards may be subject to certain limitations. Sale of NOLs The Company may be eligible, from time to time, to receive cash from the sale of its Net Operating Losses and R&D tax credits under the State of New Jersey Technology Business Tax Certificate Transfer Program. As of December 31, 2024, the Company has accrued a receivable $ 1,690,825 from the approved sale of the 2023 state NOL and research and development credits. The Company expects to collect this receivable in the first half of 2025. The principal components of the Company’s deferred tax assets and liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ As Restated Current and long term deferred tax assets: ​ ​ Federal NOL ​ $ 21,692,990 ​ $ 20,409,328 Foreign NOL ​ ​ 17,164,274 ​ ​ 15,172,966 NJ NOL ​ ​ 458,536 ​ ​ 1,253,713 Net operating loss carryforward ​ ​ 39,315,800 ​ ​ 36,836,007 Stock Options ​ 482,824 ​ 418,776 Federal R&D Credit ​ ​ 2,224,012 ​ ​ 2,113,233 NJ R&D Credit ​ ​ — ​ ​ 197,406 Research and development credit carryforward ​ 2,224,012 ​ 2,310,639 Other ​ ​ 458,013 ​ ​ 242,841 Charitable Contributions ​ ​ 5,832 ​ ​ 5,832 Accruals and others ​ 463,845 ​ 248,673 §174(b) research & experimental ​ 5,485,885 ​ 5,495,850 §163(j) business interest expense ​ ​ 255,450 ​ ​ — Lease Liability ​ 3,625,251 ​ 3,730,280 Gross deferred tax assets ​ ​ 51,853,067 ​ ​ 49,040,225 Less valuation allowance ​ ( 48,267,681 ) ​ ( 45,334,554 ) ​ ​ ​ 3,585,386 ​ ​ 3,705,671 Deferred tax liability: ​ ​ ​ ​ Fixed Assets ​ ( 349,578 ) ​ ( 315,915 ) Right of Use Asset ​ ( 3,235,808 ) ​ ( 3,389,756 ) Net deferred tax assets ​ $ — ​ $ — ​ In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the deferred tax assets for each period because it is more likely than not that all of the deferred tax assets will not be realized. F-22 Table of Contents The changes in valuation allowance for the years ended December 31, 2024 and 2023 were $ 2,933,127 and $ 6,031,103 , respectively. A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 2023 Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 2.6 5.1 Foreign rate differential 3.1 2.2 Permanent items ( 3.6 ) ( 1.9 ) Other rate change and true-up 0.3 ( 0.7 ) NJ NOL and R&D credit write-off ​ ( 8.4 ) ​ — ​ True up of foreign NOLs ​ ( 4.2 ) ​ — ​ NJ Amended NOL ​ 1.8 ​ — ​ Uncertain tax positions ​ ( 0.6 ) ​ ( 7.0 ) ​ Change in valuation allowance ( 13.1 ) ( 20.1 ) R&D credit 1.1 1.8 Sale of 2023 NJ R&D & NOL 7.6 2.7 Other ​ — ​ ( 0.4 ) ​ Effective income tax rate 7.6 % 2.7 % ​ A reconciliation of the unrecognized tax benefit balances is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Balance at beginning of the year ​ $ 2,113,233 ​ $ — Increase for tax positions of prior years ​ ( 9,276 ) ​ 1,571,431 Increase for tax positions in current year ​ 120,056 ​ 541,802 Balance at end of the year ​ $ 2,224,013 ​ $ 2,113,233 ​ The total amount of unrecognized tax benefits that could affect our effective tax rate, if recognized, was $ 2.2 million and $ 2.1 as of December 31, 2024 and 2023, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and New Jersey. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2019, although NOL carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2024, no significant adjustments have been proposed relative to our tax positions. For year ended December 31, 2024, there are no interest and penalties relating to our uncertain tax positions. ​ 8. COMMITMENTS AND CONTINGENCIES Litigation The Company is, from time to time, subject to claims and litigation arising in the ordinary course of business. The Company intends to defend vigorously against any future claims and litigation. On March 5, 2024, a former employee, filed a complaint against us in the Superior Court of New Jersey, Law Division, Mercer County, alleging breach of the New Jersey Conscientious Employee Protection Act (“CEPA”). The complaint specifically alleges that we violated the provisions of the CEPA by allegedly terminating the employee in retaliation for complaining about certain business practices. We dispute these allegations and intend to vigorously defend against them, but there can be no assurance as to the outcome of the litigation. F-23 Table of Contents Royalty Agreement The Company is party to various royalty and license agreements that require the payment of royalty fees. Royalty expense amounted to approximately $ 1.9 million and $ 2.2 million for the years ended December 31, 2024 and 2023, respectively. Royalty expense is included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. The decrease in royalty fees in 2024 was the result of the expiration of a 4 % royalty in August of 2024, net of increases in revenue applicable to royalty agreements. 401 (k) Plan In June 2014, the Company formed the CytoSorbents 401(k) Plan. The plan is a defined contribution plan as described in section 401(k) of the Internal Revenue Code (“IRC”) covering substantially all full-time employees. Employees are eligible to participate in the plan on the first day of the calendar quarter following three full months of employment. Participants may defer up to 100 % of their eligible compensation subject to certain IRC limitations. Effective January 1, 2021, the Company changed its matching contribution to 100 % of the participants contribution up to three percent of compensation plus 50 % of the participants contribution over three percent of compensation up to a maximum of five percent of compensation. Matching contributions amounted to $ 472,022 and $ 405,408 for the years ended December 31, 2024 and 2023, respectively. ​ 9. STOCKHOLDERS’ EQUITY Preferred Stock In June 2019, the Company amended and restated its Certificate of Incorporation. The amended and restated certificate of incorporation authorizes the issuance of up to 5,000,000 shares of “blank check” preferred stock, with such designation rights and preferences as may be determined from time to time by the Board of Directors. Common Stock For the years ended December 31, 2024 and 2023, issuance of common stock offerings, net of fees incurred were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024 ​ ​ For the year ended December 31, 2023 ​ Shares Issued Proceeds, Net of Fees Shares Issued Proceeds, Net of Fees December 13, 2023 Offering ​ — ​ $ — ​ ​ 7,733,090 ​ $ 9,785,000 Open Market Sale Agreement with Jefferies LLC ​ 382,823 ​ ​ 178,654 ​ ​ 2,656,464 ​ ​ 4,470,932 ​ ​ 382,823 ​ $ 178,654 ​ ​ 10,389,554 ​ $ 14,255,932 ​ December 13, 2023 Offering On December 13, 2023, the Company closed on a registered direct offering for the sale of common stock, directly to investors, which included warrants to purchase up to 2,706,561 shares of common stock (the “Offering”). Each share of common stock and accompanying warrant to purchase up to 0.35 shares of common stock, were sold together for a combined purchase price of $ 1.33 (before issuance costs). Each warrant is immediately cash exercisable at an exercise price of $ 2.00 per share and will expire on the fifth anniversary of the issue date. The Company’s executive officers, directors, and certain non-executive officer employees of the Company also participated in the Offering with a combined investment of $ 435,000 . Shelf Registration On July 14, 2021, the Company filed a registration statement on Form S-3 with the SEC, which was amended on July 20, 2021 and declared effective by the SEC on July 27, 2021 (as amended, the “2021 Shelf”). The 2021 Shelf enables the Company to offer and sell, in one or more offerings, any combination of common stock, preferred stock, senior or subordinated debt securities, warrants and units, up to a total dollar amount of $ 150 million and expires after three years. On July 26, 2024, the Company filed a registration statement on Form S-3 with the SEC (the “2024 Shelf”), which enables the Company to offer and sell in one or more offerings, any combination of common stock, preferred stock, senior or subordinated debt securities, warrants and units, up to a total dollar amount of $ 150 million. On September 26, 2024, the Company filed Amendment No. 1 to the Form S-3 with the SEC. The 2024 Shelf was declared effective by the SEC on September 30, 2024. Because the Company’s market capitalization is less than $75 million, it will be subject to baby shelf rules which limit the amount of securities sales the Company can make to one-third of its public market float over a 12-month period. F-24 Table of Contents Open Market Sale Agreement with Jefferies LLC On December 30, 2021, the Company entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (the “Agent”), pursuant to which the Company may sell, from time to time, at its option, shares of the Company’s common stock having an aggregate offering price of up to $ 25 million through the Agent, as the Company’s sales agent. However, as a result of limitations related to our market capitalization discussed above, the Company may offer and sell shares of the Company’s common stock having an aggregate offering price of up to approximately $ 19.7 million from time to time through the Agent. If the Company’s public float increases above $75 million, the Company may sell additional amounts under the Sales Agreement. All shares of the Company’s common stock offered and sold, or to be offered and sold under the Sale Agreement will be issued and sold pursuant to the Company’s 2024 Shelf by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, in block transactions or if specified by the Company, in privately negotiated transactions. Subject to the terms of the Sales Agreement, the Agent is required to use its commercially reasonable efforts consistent with their normal sales and trading practices to sell the shares of the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company is required to pay the Agent a commission of up to 3.0 % of the gross proceeds from the sale of the shares of the Company’s common stock sold thereunder, if any. ​ 10. STOCK-BASED COMPENSATION Stock Option Plans As of December 31, 2024, the Company had two Long Term Incentive Plans (the “2014 Plan” and the “2006 Plan”) to attract, retain, and provide incentives to employees, officers, directors, and consultants. The Plans generally provide for the granting of stock, stock options, stock appreciation rights, restricted shares, or any combination of the foregoing to eligible participants. In June 2024, the Company amended and restated CytoSorbents Corporation 2014 Long-term Incentive Plan (the “Plan”). The amended and restated CytoSorbents Corporation 2014 Long-term Incentive Plan (the “Plan”) increased the number of shares to be reserved and authorized for issuance under the Plan by 7,500,000 shares to 20,900,000 shares of our Common Stock. A total of 20,900,000 and 2,400,000 shares of common stock are reserved for issuance under the 2014 Plan and the 2006 Plan, respectively. As of December 31, 2023, there were approximately 647,000 and 654,000 shares of common stock remaining for issuance under the 2014 Plan and the 2006 Plan, respectively. As of December 31, 2024, there were approximately 3,700,000 and 654,000 shares of common stock remaining for issuance under the 2014 Plan and the 2006 Plan, respectively. Total stock-based compensation expense for the year ended December 31, 2024 amounted to $ 3.8 million, of which $ 3.2 million and $ 0.6 million were for stock options and restricted stock units, respectively. Total stock-based compensation expense for the year ended December 31, 2023 amounted to $ 4.2 million, of which $ 3.3 million and $ 0.9 million were for stock options and restricted stock units, respectively. These amounts are included in selling, general, and administrative expenses on the consolidated statements of operations and comprehensive loss. F-25 Table of Contents The summary of the stock option activity for the years ended December 31, 2024 and 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ ​ Exercise ​ Contractual ​ Shares per Share Life (Years) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding, December 31, 2022 9,474,824 ​ $ 4.66 7.36 Granted 2,601,880 ​ $ 3.43 9.52 Forfeited ( 974,555 ) ​ $ 2.96 — Expired ( 467,332 ) ​ $ 5.61 — Exercised ( 86,643 ) ​ $ 2.59 — Outstanding, December 31, 2023 10,548,174 ​ $ 4.49 ​ 7.01 Granted 3,982,846 ​ $ 0.97 9.32 Forfeited ( 1,391,897 ) ​ $ 2.24 — Expired ( 797,209 ) ​ $ 5.34 — Outstanding, December 31, 2024 12,341,914 ​ $ 3.55 6.81 ​ The fair value of each stock option was estimated using the Black-Scholes pricing model which takes the following inputs into account. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grant Date ​ Expected Life ​ Expected ​ ​ ​ ​ ​ Risk Free ​ ​ Exercise Price ​ of the Stock ​ Volatility ​ ​ Expected ​ ​ Interest Rate Year - Ended Range Option* Range ​ Dividends ​ Range December 31, 2023 ​ $ 1.17 - $ 3.71 per share ​ 6 years ​ 70.4 % to 75.6 % ​ — % ​ 3.50 % to 4.76 % December 31, 2024 ​ $ 0.84 - $ 1.19 per share ​ 6 years ​ 75.6 % to 80.1 % ​ — % ​ 3.60 % to 4.65 % ​ *The expected term of the options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. In addition, the Company recognizes forfeitures as they occur. The intrinsic value is calculated at the difference between the market value as of December 31, 2024 of $ 0.91 and the exercise price of the shares. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding ​ ​ Number ​ Weighted ​ Weighted ​ ​ ​ Range of ​ Outstanding at ​ Average ​ Average ​ Aggregate Exercise ​ December 31, ​ Exercise ​ Remaining ​ Intrinsic Price 2024 Price Life (Years) Value $ 0.84 - $ 13.20 12,341,914 ​ $ 3.55 ​ 6.81 ​ $ 1,000 ​ ​ ​ ​ ​ ​ ​ ​ Options Exercisable Number ​ Weighted ​ ​ Exercisable at ​ Average ​ Aggregate December 31, ​ Exercise ​ Intrinsic 2024 Price Value 6,107,366 ​ $ 5.46 ​ $ — ​ F-26 Table of Contents The summary of the status of the Company’s non-vested options for the year ended December 31, 2024, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value ​ ​ ​ ​ ​ ​ Non-vested, January 1, 2024 5,205,736 ​ $ 1.89 Granted 3,982,846 ​ ​ 0.68 Forfeited ( 1,391,897 ) ​ ​ 1.52 Vested ( 1,562,137 ) ​ ​ 2.26 Non-vested, December 31, 2024 6,234,550 ​ $ 1.09 ​ As of December 31, 2024, the Company had approximately $ 3,035,000 of total unrecognized compensation cost related to stock options which will, on average, be amortized over 32 months . The summary of the status of the Company’s non-vested options for the year ended December 31, 2023, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value ​ ​ ​ ​ ​ ​ Non-vested, January 1, 2023 4,851,739 ​ $ 1.84 Granted 2,601,880 ​ 2.35 Forfeited ( 974,555 ) ​ 1.95 Vested ( 1,273,328 ) ​ 2.59 Non-vested, December 31, 2023 5,205,736 ​ $ 1.89 ​ As of December 31, 2023, the Company had approximately $ 4,868,000 of total unrecognized compensation cost related to stock options which will, on average, be amortized over 42 months . Change in Control-Based Awards of Restricted Stock Units: 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 Company’s 2014 Long-Term Incentive Plan. The following table is a summary the outstanding balance of these restricted stock units at the end of each of the past two calendar years: ​ ​ ​ ​ ​ ​ ​ ​ Total Intrinsic Value December 31, 2022 2,890,500 ​ $ 4,480,275 Granted 2023 ​ 394,000 ​ ​ — Forfeited 2023 ​ ( 461,000 ) ​ ​ — December 31, 2023 ​ 2,823,500 ​ $ 3,134,085 Granted 2024 331,250 ​ — Forfeited 2024 ( 345,250 ) ​ — December 31, 2024 2,809,500 ​ $ 2,556,645 ​ Due to the uncertainty over whether these restricted stock units will vest, which will only happen upon a Change in Control, no charge for these restricted stock units has been recorded in the consolidated statements of operations and comprehensive loss through the year ended December 31, 2024. F-27 Table of Contents Other Restricted Stock Units: The following table outlines the restricted stock unit activity (not related to change in control-based awards) for the year ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value Non-vested, January 1, 2024 430,505 ​ $ 3.31 Granted 548,000 ​ $ 0.96 Forfeited ( 40,000 ) ​ $ 3.73 Vested ( 297,169 ) ​ $ 3.23 Non-vested, December 31, 2024 641,336 ​ $ 1.31 ​ The following table outlines the restricted stock unit activity for the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value Non-vested, January 1, 2023 312,092 ​ $ 4.42 Granted ​ 385,000 ​ $ 3.23 Forfeited ( 62,500 ) ​ $ 3.57 Vested ​ ( 204,087 ) ​ $ 4.79 Non-vested, December 31, 2023 ​ 430,505 ​ $ 3.31 ​ At December 31, 2024 and December 31, 2023, the remaining weighted average vesting period for restricted stock awards subject to vesting was 43 months and 37 months , respectively and the remaining unrecognized restricted stock unit compensation expense was $ 538,000 and $ 842,000 , respectively. Warrants As of December 31, 2024, the Company had 2,706,561 warrants outstanding related to the Company’s December 13, 2023 Offering. 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 Company’s Loan and Security Agreement with Avenue and these warrants have an exercise price of $ 0.79 and expire on June 28, 2029. The number of warrants is fixed, however, the exercise price may be adjusted down if the Company raises equity (excluding sales of equity utilizing the Company’s at-the-market equity facility) at a share price that is lower than $ 0.79 . These warrants are exercisable into the Company’s common stock. ​ ​ F-28 Table of Contents 11. SEGMENT INFORMATION The Company operates and manages its business as one reportable segment and one operating segment, which is the business of developing, testing and selling blood purification medical devices. The Company’s chief operating decision maker, or CODM, is the Company’s Chief Executive Officer. The CODM assesses performance of the segment and decides how to allocate resources based on Revenue growth, Gross Margin, Operating Expenses, adjusted net loss, adjusted EBITDA and cash burn (cash used in operating and investing activities) derived from the Company’s consolidated results of operations and cash flows and total assets of the segment. ​ The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. All material long-lived assets are located in New Jersey, and Berlin Germany. Long-lived assets consist of property and equipment, net and operating lease right-of-use assets. 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 accounting policies of the segment are the same as those described in Note 2 to the consolidated financial statements of the Company included in this Annual Report on Form 10-K. The Company operates as one reportable operating segment. Consisting of one reportable operating segment, the components presented in the consolidated statements of operations 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. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing resource allocation across the organization. The financial metrics used by the CODM in evaluating the Company’s spending and monitoring budget versus actual results are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ As Restated * ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue ​ $ 35,594,520 ​ $ 31,084,953 ​ Gross Profit ​ $ 25,125,991 ​ $ 21,953,237 ​ Gross Margin ​ ​ 71 % 71 % Total Operating Expenses ​ $ 41,911,930 ​ $ 53,901,857 ​ EBITDA and Adjusted EBITDA (both non-GAAP measures): ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) ​ Interest expense ​ 1,399,092 ​ ( 157,891 ) ​ Benefits from income taxes ​ ​ ( 1,690,825 ) ​ ​ 813,739 ​ Depreciation and amortization expense ​ ​ 1,570,104 ​ ​ 1,459,066 ​ Loss before interest expense, income taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure ​ ​ ( 19,440,586 ) ​ ​ ( 28,443,541 ) ​ Stock-based compensation ​ ​ 3,759,534 ​ ​ 4,155,342 ​ Gain (loss) on foreign currency transactions ​ ​ 4,224,721 ​ ​ ( 1,949,257 ) ​ Adjusted EBITDA, a non-GAAP measure ​ $ ( 11,456,331 ) ​ $ ( 26,237,456 ) ​ Adjusted net loss, a non-GAAP measure: ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 20,718,957 ) ​ $ ( 29,246,760 ) ​ Stock-based compensation ​ ​ 3,759,534 ​ ​ 4,155,342 ​ Gain (loss) on foreign currency transactions ​ ​ 4,224,721 ​ ​ ( 1,949,257 ) ​ Adjusted net loss, a non-GAAP measure ​ $ 12,734,702 ​ $ 27,040,675 ​ Total cash used in operating and investing activities ​ $ ( 15,097,239 ) ​ $ ( 22,591,372 ) ​ Total Assets ​ $ 47,675,811 ​ $ 52,956,322 ​ * See Note 12 – Restatement of Previously Issued financial information for details. ​ F-29 Table of Contents Significant expense categories regularly provided to the CODM consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 ​ ​ ​ As Restated* ​ ​ ​ ​ ​ ​ ​ Research and development: ​ ​ ​ ​ ​ ​ Clinical expenses ​ $ 4,482,691 ​ $ 11,329,684 Other research and development expenses ​ 2,433,490 ​ 4,264,758 Total research and development ​ $ 6,916,181 ​ $ 15,594,442 ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ ​ Commission expense ​ $ 2,903,705 ​ $ 2,289,773 Royalty expense ​ 1,869,016 ​ 2,156,323 Stock-based compensation ​ 3,759,534 ​ 4,155,341 Legal, financial and consulting ​ 3,178,787 ​ 4,272,296 Other general and administrative ​ 23,244,707 ​ 25,433,682 Total selling, general and administrative ​ $ 34,995,749 ​ $ 38,307,415 * See Note 12 – Restatement of Previously Issued financial information for details. ​ Capital expenditures of the segment totaled $ 669,430 and $ 936,236 for the years ended December 31, 2024 and 2023, respectively. ​ 12. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL INFORMATION Restatement of Previously Issued Financial Information During the year ended December 31, 2024, the Company identified and corrected the following errors, which were recorded incorrectly in previously issued financial statements included in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q: - Overstatement of Inventory due to a clerical error. - Understatement of stock-based compensation expense and related corrections of accrued liabilities, additional paid in capital, and accumulated deficit related to errors in the application of the Company’s accounting policy for RSUs. Based on the Company’s accounting policy for stock-based compensation, expense for RSUs is measured and recorded against additional paid-in-capital based on estimated fair values at the award’s grant date. The Company incorrectly adjusted compensation expense based on the fair value of the award at its vesting date. In addition, the Company recorded part of the compensation expense against accrued liabilities. The following periods were impacted by the restatement: - the audited consolidated financial statements as of and for the year ended December 31, 2023, - the interim unaudited condensed consolidated financial statements as of and for the first three quarters of the year ended December 31, 2023, and - the interim unaudited condensed consolidated financial statements as of and for the first three quarters of the year ended December 31, 2024. Summary of Effect of Restatement of Previously Issued Financial Information The tables below summarize the impact of the restated amounts on the previously reported consolidated balance sheets for the impacted periods. The Consolidated Balance Sheet adjustments in the tables below that impact the line items of additional paid-in F-30 Table of Contents capital, accumulated deficit, and total stockholders’ equity also reflecting the same amounts that those line items were impacted in the Consolidated Statements of Changes in Stockholders’ Equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ Total Current ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of March 31, 2023, as previously reported (Unaudited) ​ $ 1,725,673 ​ $ 28,164,991 ​ $ 57,462,835 ​ $ 7,329,386 ​ $ 10,435,916 ​ $ 28,507,390 ​ $ 288,514,368 ​ $ ( 261,323,761 ) ​ $ 28,955,445 ​ $ 57,462,835 Effect of restatement ​ — ​ — ​ — ​ ( 982,492 ) ​ ( 982,492 ) ​ ( 982,492 ) ​ 1,023,458 ​ ( 40,966 ) ​ 982,492 ​ — As of March 31, 2023, as restated (Unaudited) ​ $ 1,725,673 ​ $ 28,164,991 ​ $ 57,462,835 ​ $ 6,346,894 ​ $ 9,453,424 ​ $ 27,524,898 ​ $ 289,537,826 ​ $ ( 261,364,727 ) ​ $ 29,937,937 ​ $ 57,462,835 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ Total Current ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of June 30, 2023, as previously reported (Unaudited) ​ $ 2,045,985 ​ $ 23,643,953 ​ $ 52,444,767 ​ $ 7,400,735 ​ $ 10,351,130 ​ $ 28,350,071 $ 290,199,035 $ ( 267,476,845 ) ​ $ 24,094,696 ​ $ 52,444,767 Effect of restatement ​ — ​ — ​ — ​ ( 365,876 ) ​ ( 365,876 ) ​ ( 365,876 ) ​ 854,971 ​ ( 489,095 ) ​ 365,876 ​ — As of June 30, 2023, as restated (Unaudited) ​ $ 2,045,985 ​ $ 23,643,953 ​ $ 52,444,767 ​ $ 7,034,859 ​ $ 9,985,254 ​ $ 27,984,195 ​ $ 291,054,006 ​ $ ( 267,965,940 ) ​ $ 24,460,572 ​ $ 52,444,767 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ Total Current ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of September 30, 2023, as previously reported (Unaudited) ​ $ 2,977,146 ​ $ 19,260,643 ​ $ 47,575,037 ​ $ 7,580,287 ​ $ 11,972,396 ​ $ 29,063,415 ​ $ 292,153,561 ​ $ ( 276,670,365 ) ​ $ 18,511,622 ​ $ 47,575,037 Effect of restatement ​ — ​ — ​ — ​ ( 299,965 ) ​ ( 299,965 ) ​ ( 299,965 ) ​ 764,826 ​ ( 464,861 ) ​ 299,965 ​ — As of September 30, 2023, as restated (Unaudited) ​ $ 2,977,146 ​ $ 19,260,643 ​ $ 47,575,037 ​ $ 7,280,322 ​ $ 11,672,431 ​ $ 28,763,450 ​ $ 292,918,387 ​ $ ( 277,135,226 ) ​ $ 18,811,587 ​ $ 47,575,037 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ Total Current ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of December 31, 2023, as previously reported ​ $ 3,680,129 ​ $ 25,702,823 ​ $ 53,260,634 ​ $ 7,870,149 ​ $ 14,545,955 ​ $ 29,985,471 ​ $ 305,196,874 ​ $ ( 282,505,272 ) ​ $ 23,275,163 ​ $ 53,260,634 Effect of restatement ​ ( 304,312 ) ​ ( 304,312 ) ​ ( 304,312 ) ​ ( 510,363 ) ​ ( 510,363 ) ​ ( 510,363 ) ​ 990,440 ​ ( 784,389 ) ​ 206,051 ​ ( 304,312 ) As of December 31, 2023, as restated ​ $ 3,375,817 ​ $ 25,398,511 ​ $ 52,956,322 ​ $ 7,359,786 ​ $ 14,035,592 ​ $ 29,475,108 ​ $ 306,187,314 ​ $ ( 283,289,661 ) ​ $ 23,481,214 ​ $ 52,956,322 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ ​ Total Current ​ ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of March 31, 2024, as previously reported (Unaudited) ​ $ 3,738,767 ​ $ 19,992,800 ​ $ 47,070,605 ​ $ 8,132,063 ​ $ 13,424,101 ​ $ 28,142,680 ​ $ 305,984,268 ​ $ ( 288,863,133 ) ​ $ 18,927,925 ​ $ 47,070,605 Effect of restatement ​ — ​ ​ — ​ ​ — ​ ​ ( 700,457 ) ​ ​ ( 700,457 ) ​ ​ ( 700,457 ) ​ ​ 1,215,696 ​ ​ ( 515,239 ) ​ ​ 700,457 ​ ​ — As of March 31, 2024, as restated (Unaudited) ​ $ 3,738,767 ​ $ 19,992,800 ​ $ 47,070,605 ​ $ 7,431,606 ​ $ 12,723,644 ​ $ 27,442,223 ​ $ 307,199,964 ​ $ ( 289,378,372 ) ​ $ 19,628,382 ​ $ 47,070,605 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ F-31 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ ​ Total Current ​ ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of June 30, 2024, as previously reported (Unaudited) ​ $ 4,316,752 ​ $ 21,955,300 ​ $ 53,426,791 ​ $ 6,877,163 ​ $ 10,336,268 ​ $ 36,690,188 ​ $ 307,514,758 ​ $ ( 293,006,279 ) ​ $ 16,736,603 ​ $ 53,426,791 Effect of restatement ​ — ​ — ​ — ​ ( 692,020 ) ​ ( 692,020 ) ​ ( 692,020 ) ​ 1,359,220 ​ ( 667,201 ) ​ 692,019 ​ ( 1 ) As of June 30, 2024, as restated (Unaudited) ​ $ 4,316,752 ​ $ 21,955,300 ​ $ 53,426,791 ​ $ 6,185,143 ​ $ 9,644,248 ​ $ 35,998,168 ​ $ 308,873,978 ​ $ ( 293,673,480 ) ​ $ 17,428,622 ​ $ 53,426,790 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Liabilities and ​ ​ ​ ​ ​ Total Current ​ ​ ​ ​ current ​ Total Current ​ Total ​ Additional paid- ​ Accumulated ​ Stockholders’ ​ Stockholders’ ​ Inventories Assets Total Assets liabilities Liabilities Liabilities in capital* deficit* Equity* Equity As of September 30, 2024, as previously reported (Unaudited) ​ $ 3,247,756 ​ $ 16,597,368 ​ $ 47,804,011 ​ $ 5,660,051 ​ $ 8,430,191 ​ $ 34,804,921 ​ $ 308,441,887 ​ $ ( 295,340,370 ) ​ $ 12,999,090 ​ $ 47,804,011 Effect of restatement ​ — ​ — ​ — ​ ( 145,782 ) ​ ( 145,782 ) ​ ( 145,782 ) ​ 1,245,114 ​ ( 1,099,333 ) ​ 145,782 ​ ( 1 ) As of September 30, 2024, as restated (Unaudited) ​ $ 3,247,756 ​ $ 16,597,368 ​ $ 47,804,011 ​ $ 5,514,269 ​ $ 8,284,409 ​ $ 34,659,139 ​ $ 309,687,001 ​ $ ( 296,439,703 ) ​ $ 13,144,872 ​ $ 47,804,010 * The restatement adjustment reflected in these balance sheet line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. ​ F-32 Table of Contents The tables below summarize the impact of the restated and reclassified amounts on the previously reported consolidated statements of operations and comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Nine Months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ended ​ Ended ​ ​ ​ ​ ​ Three Months Ended (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ Year Ended ​ ​ March 31, June 30, September 30, June 30, September 30, December 31, ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2023 Cost of goods sold: ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 2,531,198 ​ $ 2,092,856 ​ $ 2,161,044 ​ $ 4,624,054 ​ $ 6,785,231 ​ $ 8,827,404 Effect of restatement ​ — ​ — ​ — ​ — ​ — ​ 304,312 As restated and reclassified ​ $ 2,531,198 ​ $ 2,092,856 ​ $ 2,161,044 ​ $ 4,624,054 ​ $ 6,785,231 ​ $ 9,131,716 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit: ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 5,378,841 ​ $ 5,979,556 ​ $ 5,592,972 ​ $ 11,358,396 ​ $ 16,951,369 ​ $ 22,257,549 Effect of restatement ​ — ​ — ​ — ​ — ​ — ​ ( 304,312 ) As restated and reclassified ​ $ 5,378,841 ​ $ 5,979,556 ​ $ 5,592,972 ​ $ 11,358,396 ​ $ 16,951,369 ​ $ 21,953,237 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative: ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 9,132,508 ​ $ 8,908,983 ​ $ 9,207,867 ​ $ 18,041,490 ​ $ 27,316,155 ​ $ 37,872,361 Effect of restatement ​ ( 3,453 ) ​ 448,136 ​ ( 5,261 ) ​ 444,683 ​ 439,422 ​ 435,054 As restated and reclassified ​ $ 9,129,055 ​ $ 9,357,119 ​ $ 9,202,606 ​ $ 18,486,173 ​ $ 27,755,577 ​ $ 38,307,415 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Operating Expenses: ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 13,270,437 ​ $ 12,538,793 ​ $ 12,943,170 ​ $ 25,809,228 ​ $ 38,819,197 ​ $ 53,466,803 Effect of restatement ​ ( 3,453 ) ​ 448,136 ​ ( 5,261 ) ​ 444,683 ​ 439,422 ​ 435,054 As restated and reclassified ​ $ 13,266,984 ​ $ 12,986,929 ​ $ 12,937,909 ​ $ 26,253,911 ​ $ 39,258,619 ​ $ 53,901,857 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss From Operations ​ ​ ​ ​ ​ ​ As previously reported ​ $ ( 7,891,596 ) ​ $ ( 6,559,237 ) ​ $ ( 7,350,198 ) ​ $ ( 14,450,832 ) ​ $ ( 21,867,828 ) ​ $ ( 31,209,254 ) Effect of restatement ​ 3,453 ​ ( 448,136 ) ​ 5,261 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,366 ) As restated ​ $ ( 7,888,143 ) ​ $ ( 7,007,373 ) ​ $ ( 7,344,937 ) ​ $ ( 14,895,515 ) ​ $ ( 22,307,250 ) ​ $ ( 31,948,620 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss Before Benefit From Income Taxes ​ ​ ​ ​ ​ ​ As previously reported ​ $ ( 7,325,883 ) ​ $ ( 6,153,084 ) ​ $ ( 9,193,520 ) ​ $ ( 13,478,967 ) ​ $ ( 22,672,487 ) ​ $ ( 29,321,134 ) Effect of restatement ​ 3,453 ​ ( 448,136 ) ​ 5,261 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,365 ) As restated ​ $ ( 7,322,430 ) ​ $ ( 6,601,220 ) ​ $ ( 9,188,259 ) ​ $ ( 13,923,650 ) ​ $ ( 23,111,909 ) ​ $ ( 30,060,499 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable To Common Stockholders ​ ​ ​ ​ ​ ​ As previously reported ​ $ ( 7,325,883 ) ​ $ ( 6,153,084 ) ​ $ ( 9,193,520 ) ​ $ ( 13,478,967 ) ​ $ ( 22,672,487 ) ​ $ ( 28,507,395 ) Effect of restatement ​ 3,453 ​ ( 448,136 ) ​ 5,261 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,365 ) As restated ​ $ ( 7,322,430 ) ​ $ ( 6,601,220 ) ​ $ ( 9,188,259 ) ​ $ ( 13,923,650 ) ​ $ ( 23,111,909 ) ​ $ ( 29,246,760 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic And Diluted Net Loss Per Common Share ​ ​ ​ ​ ​ ​ As previously reported ​ $ ( 0.17 ) ​ $ ( 0.14 ) ​ $ ( 0.21 ) ​ $ ( 0.31 ) ​ $ ( 0.52 ) ​ $ ( 0.64 ) Effect of restatement ​ $ 0.00 ​ $ ( 0.01 ) ​ $ 0.00 ​ $ ( 0.01 ) ​ $ ( 0.00 ) ​ $ ( 0.01 ) As restated ​ $ ( 0.17 ) ​ $ ( 0.15 ) ​ $ ( 0.21 ) ​ $ ( 0.32 ) ​ $ ( 0.52 ) ​ $ ( 0.65 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive Loss ​ ​ ​ ​ ​ ​ As previously reported ​ $ ( 7,934,091 ) ​ $ ( 6,545,758 ) ​ $ ( 7,537,846 ) ​ $ ( 14,479,849 ) ​ $ ( 22,017,695 ) ​ $ ( 30,307,269 ) Effect of restatement ​ 3,453 ​ ( 448,136 ) ​ 5,261 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,365 ) As restated ​ $ ( 7,930,638 ) ​ $ ( 6,993,894 ) ​ $ ( 7,532,585 ) ​ $ ( 14,924,532 ) ​ $ ( 22,457,117 ) ​ $ ( 31,046,634 ) ​ ​ F-33 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Nine Months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ended ​ Ended ​ ​ Three Months Ended (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ ​ March 31, June 30, September 30, June 30, September 30, ​ ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ 2024 Cost of goods sold : ​ ​ ​ ​ ​ As previously reported (Incl. reclassification) ​ $ 2,420,222 ​ $ 2,339,206 ​ $ 3,356,965 ​ $ 4,759,429 ​ $ 8,116,394 Effect of restatement ​ ( 304,312 ) ​ — ​ — ​ ( 304,312 ) ​ ( 304,312 ) As restated and reclassified ​ $ 2,115,910 ​ $ 2,339,206 ​ $ 3,356,965 ​ $ 4,455,117 ​ $ 7,812,082 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit: ​ ​ ​ ​ ​ As previously reported (Incl. reclassification) ​ $ 6,569,298 ​ $ 6,502,583 ​ $ 5,255,830 ​ $ 13,071,880 ​ $ 18,327,710 Effect of restatement ​ 304,312 ​ — ​ — ​ 304,312 ​ 304,312 As restated and reclassified ​ $ 6,873,610 ​ $ 6,502,583 ​ $ 5,255,830 ​ $ 13,376,192 ​ $ 18,632,022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative: ​ ​ ​ ​ ​ As previously reported (Incl. reclassification) ​ $ 9,247,906 ​ $ 8,401,933 ​ $ 7,826,632 ​ $ 17,649,838 ​ $ 25,476,470 Effect of restatement ​ 35,161 ​ 151,963 ​ 433,432 ​ 187,125 ​ 620,557 As restated and reclassified ​ $ 9,283,067 ​ $ 8,553,896 ​ $ 8,260,064 ​ $ 17,836,963 ​ $ 26,097,027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Operating Expenses: ​ ​ ​ ​ ​ As previously reported (Incl. reclassification) ​ $ 11,494,816 ​ $ 9,921,405 ​ $ 9,652,077 ​ $ 21,416,221 ​ $ 31,068,297 Effect of restatement ​ 35,161 ​ 151,963 ​ 433,432 ​ ( 187,125 ) ​ 620,557 As restated and reclassified ​ $ 11,529,977 ​ $ 10,073,368 ​ $ 10,085,509 ​ $ 21,603,346 ​ $ 31,688,854 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss From Operations ​ ​ ​ ​ ​ As previously reported ​ $ ( 4,925,518 ) ​ $ ( 3,418,822 ) ​ $ ( 4,396,247 ) ​ $ ( 8,344,341 ) ​ $ ( 12,740,587 ) Effect of restatement ​ 269,150 ​ ( 151,963 ) ​ ( 433,432 ) ​ 117,187 ​ ( 316,245 ) As restated ​ $ ( 4,656,368 ) ​ $ ( 3,570,785 ) ​ $ ( 4,829,679 ) ​ $ ( 8,227,154 ) ​ $ ( 13,056,832 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss Before Benefit From Income Taxes ​ ​ ​ ​ ​ As previously reported ​ $ ( 6,357,861 ) ​ $ ( 4,143,146 ) ​ $ ( 2,334,091 ) ​ $ ( 10,501,007 ) ​ $ ( 12,835,098 ) Effect of restatement ​ 269,150 ​ ( 151,963 ) ​ ( 433,432 ) ​ 117,187 ​ ( 316,245 ) As restated ​ $ ( 6,088,711 ) ​ $ ( 4,295,109 ) ​ $ ( 2,767,523 ) ​ $ ( 10,383,820 ) ​ $ ( 13,151,343 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Attributable To Common Stockholders ​ ​ ​ ​ ​ As previously reported ​ $ ( 6,357,861 ) ​ $ ( 4,143,146 ) ​ $ ( 2,334,091 ) ​ $ ( 10,501,007 ) ​ $ ( 12,835,098 ) Effect of restatement ​ 269,150 ​ ( 151,963 ) ​ ( 433,432 ) ​ 117,187 ​ ( 316,245 ) As restated ​ $ ( 6,088,711 ) ​ $ ( 4,295,109 ) ​ $ ( 2,767,523 ) ​ $ ( 10,383,820 ) ​ $ ( 13,151,343 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic And Diluted Net Loss Per Common Share ​ ​ ​ ​ ​ As previously reported ​ $ ( 0.12 ) ​ $ ( 0.08 ) ​ $ ( 0.04 ) ​ $ ( 0.19 ) ​ $ ( 0.24 ) Effect of restatement ​ $ 0.01 ​ $ 0.00 ​ $ ( 0.01 ) ​ $ ( 0.00 ) ​ $ ( 0.00 ) As restated ​ $ ( 0.11 ) ​ $ ( 0.08 ) ​ $ ( 0.05 ) ​ $ ( 0.19 ) ​ $ ( 0.24 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive Loss ​ ​ ​ ​ ​ As previously reported ​ $ ( 5,134,686 ) ​ $ ( 3,721,824 ) ​ $ ( 4,664,834 ) ​ $ ( 8,856,510 ) ​ $ ( 13,521,344 ) Effect of restatement ​ $ 269,150 ​ $ ( 151,963 ) ​ $ ( 433,432 ) ​ $ 117,187 ​ $ ( 316,245 ) As restated ​ $ ( 4,865,536 ) ​ $ ( 3,873,787 ) ​ $ ( 5,098,266 ) ​ $ ( 8,739,323 ) ​ $ ( 13,837,589 ) ​ The table below summarizes the impact of the restated amounts on the previously reported consolidated statements of cash flows. The consolidated statements of cash flows adjustments in the tables below that impact the line items of stock-based compensation F-34 Table of Contents also reflect the same amounts that the stock-based compensation line items was impacted by in the consolidated statements of changes in stockholders’ equity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three ​ ​ ​ ​ ​ ​ ​ ​ Months ​ Six Months ​ Nine Months ​ ​ ​ ​ ​ Ended ​ Ended ​ Ended ​ ​ ​ ​ ​ (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ Year Ended ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 Cash Flows From Operating Activities: ​ ​ ​ ​ Net Loss Attributable To Common Stockholders: ​ ​ ​ ​ As previously reported ​ $ ( 7,325,883 ) ​ $ ( 13,478,967 ) ​ $ ( 22,672,487 ) ​ $ ( 28,507,394 ) Effect of restatement ​ 3,453 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,366 ) As restated ​ $ ( 7,322,430 ) ​ $ ( 13,923,650 ) ​ $ ( 23,111,909 ) ​ $ ( 29,246,760 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: ​ ​ ​ ​ Stock-Based Compensation* ​ ​ ​ ​ As previously reported ​ $ 1,080,486 ​ $ 1,295,028 ​ $ 2,647,678 ​ $ 3,700,704 Effect of restatement ​ ( 3,453 ) ​ 444,683 ​ 439,422 ​ 454,638 As restated ​ $ 1,077,033 ​ $ 1,739,711 ​ $ 3,087,100 ​ $ 4,155,342 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories ​ ​ ​ ​ As previously reported ​ $ 1,747,144 ​ $ 1,449,881 ​ $ 471,822 ​ $ ( 121,039 ) Effect of restatement ​ — ​ — ​ — ​ 304,312 As restated ​ $ 1,747,144 ​ $ 1,449,881 ​ $ 471,822 ​ $ 183,273 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts Payable and accrued expenses ​ ​ ​ ​ As previously reported ​ $ 629,833 ​ $ 291,068 ​ $ 1,047,700 ​ $ 1,623,580 Cumulative effect of restatement adjustments on balance sheet (year-to-date) ​ ​ ( 250,206 ) ​ ​ 366,410 ​ ​ 432,320 ​ ​ 221,923 Non-cash reclassification to additional paid-in-capital ​ ​ 250,206 ​ ​ ( 366,410 ) ​ ​ ( 432,320 ) ​ ​ ( 238,137 ) As restated ​ $ 629,833 ​ $ 291,068 ​ $ 1,047,700 ​ $ 1,607,366 * The restatement adjustment reflected in this statements of cash flows line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. F-35 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three ​ ​ ​ ​ ​ ​ Months ​ Six Months ​ Nine Months ​ ​ Ended ​ Ended ​ Ended ​ ​ (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ ​ March 31, ​ June 30, ​ September 30, ​ ​ 2024 ​ 2024 ​ 2024 Cash Flows From Operating Activities: ​ ​ ​ Net Loss Attributable To Common Stockholders: ​ ​ ​ As previously reported ​ $ ( 6,357,861 ) ​ $ ( 10,501,007 ) ​ $ ( 12,835,098 ) Effect of restatement ​ 269,150 ​ 117,187 ​ ( 316,245 ) As restated ​ $ ( 6,088,711 ) ​ $ ( 10,383,820 ) ​ $ ( 13,151,343 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: ​ ​ ​ Stock-Based Compensation* ​ ​ ​ As previously reported ​ $ 924,304 ​ $ 1,761,888 ​ $ 2,248,403 Effect of restatement ​ 35,161 ​ 187,125 ​ 620,557 As restated ​ $ 959,465 ​ $ 1,949,013 ​ $ 2,868,960 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts Payable and accrued expenses ​ ​ ​ As previously reported ​ $ ( 1,281,724 ) ​ $ ( 2,032,014 ) ​ $ ( 3,165,684 ) Cumulative effect of restatement adjustments on balance sheet (year-to-date) ​ ​ 190,094 ​ ​ 181,657 ​ ​ ( 364,581 ) Non-cash reclassification to additional paid-in-capital ​ ​ ( 190,094 ) ​ ​ ( 181,657 ) ​ ​ 364,581 As restated ​ $ ( 1,281,724 ) ​ $ ( 2,032,014 ) ​ $ ( 3,165,684 ) * The restatement adjustment reflected in this statements of cash flows line items also reflect the restatement adjustments applicable to the statements of stockholders’ equity. The table below summarizes the impact of the restated and reclassified amounts on the previously reported consolidated statements of changes in stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months ​ Nine Months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ended ​ Ended ​ ​ ​ ​ ​ Three Months Ended (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ Year Ended ​ ​ March 31, ​ June 30, ​ September 30, ​ June 30, ​ September 30, ​ December 31, ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (row), Accumulated deficit (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ ( 7,325,883 ) ​ $ ( 6,153,084 ) ​ $ ( 9,193,520 ) ​ $ ( 13,478,967 ) ​ $ ( 22,672,487 ) ​ $ ( 28,507,394 ) Effect of restatement ​ 3,453 ​ ( 448,136 ) ​ 5,261 ​ ( 444,683 ) ​ ( 439,422 ) ​ ( 739,366 ) As restated and reclassified ​ $ ( 7,322,430 ) ​ $ ( 6,601,220 ) ​ $ ( 9,188,259 ) ​ $ ( 13,923,650 ) ​ $ ( 23,111,909 ) ​ $ ( 29,246,760 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation (row), Additional paid-in capital (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 1,080,486 ​ $ 214,542 ​ $ 1,352,650 ​ $ 1,295,028 ​ $ 2,647,678 ​ $ 3,700,704 Effect of restatement ​ ( 3,453 ) ​ 448,136 ​ ( 5,261 ) ​ 444,683 ​ 439,422 ​ 454,638 As restated and reclassified ​ $ 1,077,033 ​ $ 662,678 ​ $ 1,347,389 ​ $ 1,739,711 ​ $ 3,087,100 ​ $ 4,155,342 Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes (row), Additional paid-in capital (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ — ​ $ 183,600 ​ $ 220,211 ​ $ 260,151 ​ $ 403,811 ​ $ 403,809 Effect of restatement ​ ​ — ​ ​ ( 260,873 ) ​ ​ ( 351,293 ) ​ ​ ( 612,166 ) ​ ​ ( 612,775 ) ​ ​ ( 612,773 ) As restated and reclassified ​ $ — ​ $ ( 77,273 ) ​ $ ( 131,082 ) ​ $ ( 352,015 ) ​ $ ( 208,964 ) ​ $ ( 208,964 ) ​ F-36 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months ​ Nine Months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ended ​ Ended ​ ​ Three Months Ended (Unaudited) ​ (Unaudited) ​ (Unaudited) ​ ​ March 31, ​ June 30, ​ September 30, ​ June 30, ​ September 30, ​ ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss (row), Accumulated deficit (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ ( 6,357,861 ) ​ $ ( 4,143,146 ) ​ $ ( 2,334,091 ) ​ $ ( 10,501,007 ) ​ $ ( 12,835,099 ) Effect of restatement ​ 269,150 ​ ( 151,963 ) ​ ( 433,432 ) ​ 117,187 ​ ( 316,245 ) As restated and reclassified ​ $ ( 6,088,711 ) ​ $ ( 4,295,109 ) ​ $ ( 2,767,523 ) ​ $ ( 10,383,820 ) ​ $ ( 13,151,344 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation (row), Additional paid-in capital (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ 924,304 ​ $ 837,584 ​ $ 486,515 ​ $ 1,761,888 ​ $ 2,248,403 Effect of restatement ​ 35,161 ​ 151,963 ​ 433,432 ​ 187,125 ​ 620,557 As restated and reclassified ​ $ 959,465 ​ $ 989,547 ​ $ 919,947 ​ $ 1,949,013 ​ $ 2,868,960 Common stock issued upon vesting of restricted stock units, less shares withheld to cover taxes (row), Additional paid-in capital (column), Stockholders’ equity (column) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As previously reported (incl. reclassification) ​ $ — ​ $ 11,201 ​ $ 186,692 ​ $ 11,201 ​ $ 197,892 Effect of restatement ​ ​ — ​ ​ ( 17,428 ) ​ ​ ( 285,796 ) ​ ​ ( 17,428 ) ​ ​ ( 204,802 ) As restated and reclassified ​ $ — ​ $ ( 6,227 ) ​ $ ( 99,104 ) ​ $ ( 6,227 ) ​ $ ( 6,910 ) ​ In relation to the errors discussed above, the consolidated statements of changes in stockholders’ equity includes a cumulative effect of adjustments to the beginning balances as of January 1, 2023 of additional paid-in-capital (increase of $ 777,310 ), accumulated deficit (decrease of $ 45,023 ) and stockholders’ equity (increase of $ 732,287 ). ​ 13. SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of issuance of these 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 financial statements other than those described below. ​ Rights Offering On January 10, 2025, the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”), raising aggregate gross proceeds of $ 6.25 million ($ 5.8 million net of fees) from the sale of all 6.25 million Units reserved for the Rights Offering. 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, and one Series B Right Warrant to purchase one share of common stock. 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 allows for $ 5,000,000 of restricted cash on the Company’s consolidated balance sheets to now become unrestricted, and available for use. The Right Warrants are exercisable commencing on their date of issuance and the exercise price shall be equal to (i) in the case of the Series A Right Warrants, 90 % of the 5-day volume weighted average price of our Common Stock over the last 5 -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 our Common Stock over the last 5 -trading days prior to the expiration date of the Series B Right Warrants on April 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. The Right Warrants are transferable until they have expired. 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 ($ 1.5 million net of fees). F-37