What changed in Cytosorbents Corp's 2023 10-K compared to 2022?

Across the narrative sections we track, Cytosorbents Corp (CTSO) added 416 paragraphs, removed 337, and edited 288 between the 2022 and 2023 10-K filings. The biggest movers are Item 1. Business (+275/−226), Item 7. Management's Discussion & Analysis (+79/−54), Item 1A. Risk Factors (+54/−50).

Did Cytosorbents Corp add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 54 new/edited paragraphs and 50 removed paragraphs versus the 2022 10-K.

What changed in Cytosorbents Corp's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 79 new/edited paragraphs and 54 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Cytosorbents Corp's Legal Proceedings (Item 3) change in 2023?

Item 3 shows 4 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this CTSO 10-K diff come from?

The source filings are Cytosorbents Corp's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Cytosorbents Corp's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of Cytosorbents Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+416 added−337 removedSource: 10-K (2024-03-15) vs 10-K (2023-03-09)

Top changes in Cytosorbents Corp's 2023 10-K

416 paragraphs added · 337 removed · 288 edited across 7 sections

Item 1. Business+275 / −226 · 199 edited
Item 7. Management's Discussion & Analysis+79 / −54 · 38 edited
Item 1A. Risk Factors+54 / −50 · 46 edited
Item 3. Legal Proceedings+4 / −1 · 1 edited
Item 5. Market for Registrant's Common Equity+2 / −3 · 2 edited

Item 1. Business

Business — how the company describes what it does

199 edited+76 added−27 removed539 unchanged

2022 filing

2023 filing

Biggest changeAll shares of the Company’s common stock offered and sold, or to be offered and sold under the Sale Agreement would have been issued and sold pursuant to the Company’s 2021 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. 7 Table of Contents Subject to the terms of the Sales Agreement, the Agent is required to use their 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).

Biggest changeAll shares of the Company’s common stock offered and sold, or to be offered and sold under the Sale Agreement would have been issued and sold pursuant to the 7 Table of Contents Company’s 2021 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.

Item 1. Business. Overview We are a leader in the treatment of life-threatening conditions in the intensive care (“ICU”) and cardiac surgery using blood purification via our proprietary polymer adsorption technology. We have a number of products commercialized and in development based on this technology platform.

Item 1. Business. Overview We are a leader in the treatment of life-threatening conditions in intensive care (“ICU”) and cardiac surgery using blood purification via our proprietary polymer adsorption technology. We have a number of products commercialized and in development based on this technology platform.

Variability in the timing of registration affects the initiation of active commercialization in these countries, which affects the timing of expected CytoSorb sales. We actively support all of our distributors and strategic partners in the product registration process.

Outside of the EU, CytoSorb has distribution in Turkey, India, Sri Lanka, Australia, New Zealand, Russia, Serbia, Vietnam, Malaysia, Hong Kong, Chile, Panama, Costa Rica, Colombia, Brazil, Mexico, Argentina , Perú, Guatemala , Ecuador , Bolivia , the Dominican Republic , El Salvador , Iceland, Israel, UAE, Iran, Saudi Arabia and other Middle Eastern countries, and South Korea.

The use of low osmolar IV contrast, hydration of patients pre-procedure, orally administration of N-acetylcysteine, and other agents to prevent CIN have demonstrated modest benefit in some clinical studies, but in many cases, the results across studies have been equivocal and inconsistent.

The Marketing Agreement provides for the combined marketing and promotion of CytoSorb with Fresenius’ critical care products by Fresenius’ marketing organization worldwide, excluding the United States.

The Marketing Agreement has an initial term of three years, with an automatic renewal for an additional two years at the end of such initial term, subject to earlier termination by either of the parties (the “Term”).

Compared to the prior co-marketing agreement between the parties, the Marketing Agreement intends to increase the commitments from both parties and to ensure an ongoing and consistent level of marketing and promotional activity specifically focused around CytoSorb, where Fresenius will actively market and promote CytoSorb as the featured blood purification therapy for removal of cytokines, bilirubin, and myoglobin on its critical care platforms.

Specifically, the Marketing Agreement provides that various Fresenius-led in-person, virtual, social media, and web-based marketing programs and events will feature the CytoSorb therapy and highlight the cooperation between the two companies in the field of critical care during the Term.

To help support the increased marketing and promotional efforts of the expanded collaboration, CytoSorbents has agreed to subsidize a portion of the marketing costs through a royalty payment to Fresenius Medical Care based on CytoSorb sales in the intensive care unit on Fresenius Medical Care platforms, excluding the United States.

In addition to strengthening and expanding the global marketing of CytoSorb, the Company and Fresenius also plan to work together to bring new innovative solutions to the market. The Marketing Agreement also includes the certification of compatibility of CytoSorb for usage on Fresenius’ current critical care platforms.

In July 2021, we received full FDA approval of an Investigational Device Exemption (IDE) application to conduct a double-blind, randomized, controlled clinical study in 120 patients entitled, “ S afe and T imely A ntithrombotic R emoval – T icagrelor ( STAR-T ),” in the United States to support FDA marketing approval.

In November 2022, the first milestone was completed with the first one-third of patients enrolled, triggering the first Data Safety Monitoring Board (DSMB) meeting. The DSMB recommended to continue the study as planned without any modifications.

This was done under the previously announced 2 nd FDA Breakthrough Device Designation granted for our DrugSorb-ATR Antithrombotic Removal System. This Breakthrough Device designation covers the removal of the Direct Oral Anticoagulants (DOACs) apixaban and rivaroxaban in a cardiopulmonary bypass circuit to reduce the likelihood of serious perioperative bleeding during urgent cardiac surgery.

We cannot generally predict the timing of these registrations, and there can be no guarantee that we will ultimately achieve registration in countries where we have established distribution.

We cannot guarantee that we will generate meaningful sales in the countries where we have established registration, due to other factors such as market adoption and reimbursement. We continuously evaluate other potential distributor and strategic partner networks in other countries that accept CE Mark approval.

Through Breakthrough Designation, the FDA intends to work with CytoSorbents to expedite the development, assessment, and regulatory review of the Company’s proprietary polymer adsorption technology for the removal of ticagrelor, while maintaining statutory standards of regulatory approval (e.g., 510(k), de novo 510(k) or premarket approval) consistent with the FDA’s mission to protect and promote public health.

Through Breakthrough Device Designation, the FDA intends to work with CytoSorbents to expedite the development, assessment, and regulatory review of the Company’s proprietary polymer adsorption technology for the removal of ticagrelor, while maintaining statutory standards of regulatory approval (e.g., 510(k), de novo 510(k) or premarket approval) consistent with the FDA’s mission to protect and promote public health.

In 2020, CytoSorb was approved to remove the anti-platelet agent, ticagrelor, during cardiac surgery involving cardiopulmonary bypass via label expansion of its CE Mark. Ticagrelor (Brilinta®, Astra Zeneca) is a widely used anti-platelet agent used to decrease cardiovascular risk and risk of stroke in patients with a known history of heart disease or heart attack.

In 2020, CytoSorb was EU approved to remove the anti-platelet agent, ticagrelor, during cardiac surgery involving cardiopulmonary bypass via label expansion of its CE Mark. Ticagrelor (Brilinta®, Astra Zeneca) is a widely used anti-platelet agent used to decrease cardiovascular risk and risk of stroke in patients with a known history of heart disease or heart attack.

Air Force $3.0M Rapid Innovation Fund, the Congressionally Directed Medical Research Program Office, (“CDMRP”, $718K), the National Heart, Lung and Blood Institute and USSOCOM ($203K Phase I SBIR; $1.5M Phase II SBIR; $3.0M Bridge SBIR), the Joint Program Executive Office – Chemical and Biological Defense, (JPEO-CBD), ($150K Phase I and Phase I option, $1.0M Phase II), the U.S.

Air Force $3.1M Rapid Innovation Fund, the Congressionally Directed Medical Research Program Office, (“CDMRP”, $718K), the National Heart, Lung and Blood Institute and USSOCOM ($203K Phase I SBIR; $1.5M Phase II SBIR; $3.0M Bridge SBIR), the Joint Program Executive Office – Chemical and Biological Defense, (JPEO-CBD), ($150K Phase I and Phase I option, $1.0M Phase II), the U.S.

The time required to obtain these foreign approvals to market our products may be longer or shorter than that required in the U.S., and requirements for those approvals may differ from those required by the FDA. In Europe, our devices are classified as Class IIb, and conform to the MDD.

In addition, we are seeing improvements in market conditions, and we are focused on a return to sales growth in our existing markets. Corporate History We were originally organized as a Delaware limited liability company in August 1997 as Advanced Renal Technologies, LLC.

In addition, we are also seeing improvements in market conditions, and we are focused on a return to sales growth in our existing markets. Corporate History We were originally organized as a Delaware limited liability company in August 1997 as Advanced Renal Technologies, LLC.

CytoSorb was also approved for the removal of rivaroxaban, a widely used Factor Xa inhibitor and novel oral anticoagulant, during cardiothoracic surgery requiring cardiopulmonary bypass via label expansion of its CE Mark.

CytoSorb was also EU approved for the removal of rivaroxaban, a widely used Factor Xa inhibitor and novel oral anticoagulant, during cardiothoracic surgery requiring cardiopulmonary bypass via label expansion of its CE Mark.

CytoSorb is able to very efficiently remove ticagrelor and DOACs from blood and is approved in the EU for the removal of both ticagrelor and rivaroxaban during cardiothoracic surgery requiring cardiopulmonary bypass.

CytoSorb is able to efficiently remove ticagrelor and DOACs from blood and is approved in the EU for the removal of both ticagrelor and rivaroxaban during cardiothoracic surgery requiring cardiopulmonary bypass.

Based upon cumulative studies, VetResQ is capable of reducing a broad range of excessive inflammatory mediators and toxins that could otherwise cause direct tissue injury or serious systemic inflammation that can rapidly lead to instability, organ failure, and death. VetResQ is available in the U.S. only for veterinary animal usage and is not for human use.

Based upon cumulative studies, VetResQ is capable of reducing a broad range of excessive hydrophobic drugs, inflammatory mediators and toxins that could otherwise cause direct tissue injury or serious systemic inflammation that can rapidly lead to instability, organ failure, and death. VetResQ is available in the U.S. only for veterinary animal usage and is not for human use.

Jafron Biomedical is an integrated dialysis public company in China selling dialysis machines and hemodialysis and hemoperfusion cartridges containing a neutral microporous adsorption resin to purify blood of toxins in liver failure, critical illness, poisoning, and autoimmune diseases. According to clinicaltrials.gov, there are 5 investigator-initiated studies evaluating Jafron’s technology in sepsis, cardiac and respiratory failure and liver disease.

Jafron Biomedical is an integrated dialysis public company in China selling dialysis machines and hemodialysis and hemoperfusion cartridges containing a neutral microporous adsorption resin to purify blood of toxins in liver failure, critical illness, poisoning, and autoimmune diseases. According to clinicaltrials.gov, there are 6 investigator-initiated studies evaluating Jafron’s technology in sepsis, cardiac and respiratory failure and liver disease.

This was done under the previously announced FDA Breakthrough Device Designation granted for the removal of ticagrelor in a cardiopulmonary bypass circuit to reduce the likelihood of serious perioperative bleeding during urgent cardiac surgery. In October 2021, the first patient was enrolled, and the STAR-T study is now actively recruiting at multiple U.S. sites.

This was done under the previously announced FDA Breakthrough Device Designation granted for the removal of ticagrelor in a cardiopulmonary bypass circuit to reduce the likelihood of serious perioperative bleeding during urgent cardiac surgery. In October 2021, the first patient was enrolled and the STAR-T study was actively recruiting at multiple U.S. sites.

The Company is currently conducting the following clinical trials: Country Trial Name Indication Status United States STAR-T Ticagrelor Removal During Cardiac Surgery Enrolling United States STAR-D Direct Anticoagulants Removal During Cardiac Surgery Temporarily paused United States CTC Registry CytoSorb in COVID-19 patients on ECMO under EUA Completed Germany PROCYSS Refractory Septic Shock Patients Enrolling International STAR Registry Real world outcomes in antithrombotic removal Enrolling International COSMOS Registry Real world outcomes in multiple critical care applications Enrolling For further detailed information regarding our clinical trial strategy, see the section entitled “Clinical Studies” of this Item 1 of this Report.

The Company is currently conducting the following clinical trials: Country Trial Name Indication Status United States STAR-T Ticagrelor Removal During Cardiac Surgery Completed United States STAR-D Direct Anticoagulants Removal During Cardiac Surgery Terminated United States CTC Registry CytoSorb in COVID-19 patients on ECMO under EUA Completed Germany PROCYSS Refractory Septic Shock Patients Enrolling International STAR Registry Real world outcomes in antithrombotic removal Enrolling International COSMOS Registry Real world outcomes in multiple critical care applications Enrolling For further detailed information regarding our clinical trial strategy, see the section entitled “Clinical Studies” of this Item 1 of this Report.

If this technology is successfully developed and then incorporated into a regulatory approved product, it could have a number of important benefits, including: ● reduce the risk of transfusion reactions and improve patient outcome; ● improve the quality, or extend the shelf life of stored blood products; 21 Table of Contents ● improve the availability of blood and reduce blood shortages by reducing the limitations of donors to donate blood; and ● allow easier processing of blood. Background and Rationale: The HemoDefend technology platform was built upon our successes in designing and manufacturing porous polymer beads that can remove cytokines.

If this technology is successfully developed and then incorporated into a regulatory approved product, it could have a number of important benefits, including: ● reduce the risk of transfusion reactions and improve patient outcome; ● improve the quality, or extend the shelf life of stored blood products; ● improve the availability of blood and reduce blood shortages by reducing the limitations of donors to donate blood; and ● allow easier processing of blood. Background and Rationale: The HemoDefend technology platform was built upon our successes in designing and manufacturing porous polymer beads that can remove cytokines.

We have completed a follow-up dosing study at several clinical trial sites in Germany, supporting the safety of continuous treatment, exchanging a new device daily for up to 7 days. The only treatment that had been approved to treat sepsis in the U.S. or EU was Xigris from Eli Lilly.

We have completed a follow-up dosing study at several clinical trial sites in Germany, supporting the safety of continuous treatment, exchanging a new device daily for up to seven days. The only treatment that had been approved to treat sepsis in the U.S. or EU was Xigris from Eli Lilly.

Army Medical Research Acquisition Activity (USAMRAA), to optimize development of the HemoDefend-BGA™ adsorber (award number W81XWH20C0087). This award provides for maximum funding of approximately $1,100,000 over a two-year period. As of December 31, 2022, we received approximately $840,000 funding under this contract and have approximately $260,000 remaining under this contract.

Army Medical Research Acquisition Activity (USAMRAA), to optimize development of the HemoDefend-BGA™ adsorber (award number W81XWH20C0087). This award provides for maximum funding of approximately $1,100,000 over a two-year period. As of December 31, 2023, we received approximately $840,000 funding under this contract and have approximately $260,000 remaining under this contract.

By potentially preventing or treating organ failure, CytoSorb may improve clinical outcome, including survival, while reducing the need for costly ICU treatment, thereby potentially saving significant healthcare costs. Our CE Mark enables CytoSorb to be sold throughout the European Union and member states of the European Economic Area.

By potentially preventing or treating organ failure, CytoSorb may improve clinical outcomes, including survival, while reducing the need for costly ICU treatment, thereby potentially saving significant healthcare costs. Our CE Mark enables CytoSorb to be sold throughout the European Union and member states of the European Economic Area.

Litigation often is not ultimately resolved until an appeal process is completed and appellate courts frequently overturn lower court patent decisions. 45 Table of Contents Moreover, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties.

Litigation often is not ultimately resolved until an appeal process is completed and appellate courts frequently overturn lower court patent decisions. 46 Table of Contents Moreover, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties.

During the years ended 2022, 2021 and 2020, no agency, distributor or direct customer represented more than 10 percent of the Company’s total revenue. Orders received for product from both direct customers and distributors are fulfilled upon receipt. Accordingly, we have no significant sales backlog.

During the years ended 2023, 2022 and 2021, no agency, distributor or direct customer represented more than 10 percent of the Company’s total revenue. Orders received for product from both direct customers and distributors are fulfilled upon receipt. Accordingly, we have no significant sales backlog.

We expect to maintain and defend our various trademarks to the fullest extent possible. 46 Table of Contents Environmental Matters We believe that there are no compliance issues associated with applicable environmental laws and regulations that would have a material adverse effect on us or our business.

We expect to maintain and defend our various trademarks to the fullest extent possible. 47 Table of Contents Environmental Matters We believe that there are no compliance issues associated with applicable environmental laws and regulations that would have a material adverse effect on us or our business.

The technology is protected by 18 issued U.S. patents and multiple international patents, with applications pending both in the U.S. and internationally. We have numerous product candidates under development based upon this unique blood purification technology, including CytoSorb XL, HemoDefend, ContrastSorb, DrugSorb, DrugSorb-ATR and others.

The technology is protected by 19 issued U.S. patents and multiple international patents, with applications pending both in the U.S. and internationally. We have numerous product candidates under development based upon this unique blood purification technology, including CytoSorb XL, HemoDefend, ContrastSorb, DrugSorb, DrugSorb-ATR, and others.

If this technology is successfully developed and then incorporated into a regulatory approved product, it could have a number of important benefits, including: ● reduce the risk of transfusion reactions and improve patient outcome; ● eliminate the need to blood-type plasma, improving its availability 22 Table of Contents ● enable the use of low titer whole blood, ideal for trauma resuscitation; and ● easier processing of blood products. Background and Rationale: Plasma is the straw-colored, cell-free portion of whole blood.

If this technology is successfully developed and then incorporated into a regulatory approved product, it could have a number of important benefits, including: ● reduce the risk of transfusion reactions and improve patient outcome; ● eliminate the need to blood-type plasma, improving its availability ● enable the use of low titer whole blood, ideal for trauma resuscitation; and ● easier processing of blood products. Background and Rationale: Plasma is the straw-colored, cell-free portion of whole blood.

We believe these products represent a unique approach to disease states and health complications associated with the presence of larger toxins (often referred to as middle molecular weight toxins) and poorly dialyzable drugs in the bloodstream, including sepsis, acute respiratory distress syndrome, trauma, severe burn injury, pancreatitis, post-operative complications of cardiac surgery, damage to organs donated for transplant prior to organ harvest, renal disease and drug intoxication.

We believe these products represent a unique approach to disease states and health complications associated with the presence of larger toxins (often referred to as middle molecular weight toxins) and poorly dialyzable drugs in the bloodstream, including sepsis, acute respiratory distress syndrome, trauma, severe burn injury, pancreatitis, post-operative complications of cardiac surgery, damage to organs donated for 30 Table of Contents transplant prior to organ harvest, renal disease and drug intoxication.

Air Force program ($75K), New Jersey Technology Business Tax Certificate Program for research related expenses ($6.7M), and others to further develop our technologies for sepsis, trauma and burn injury, and blood transfusions, respectively. Some payments are based on achieving certain technology milestones.

Air Force program ($75K), New Jersey Technology Business Tax Certificate Program for research related expenses ($7.7M), and others to further develop our technologies for sepsis, trauma and burn injury, and blood transfusions, respectively. Some payments are based on achieving certain technology milestones.

Mortality was 66.6% in patients receiving oXiris treatment after 14 days from admission, and a mortality of 47.4% mortality when used earlier. In addition, Baxter also launched the Theranova mid-molecular weight cutoff or high retention onset (HRO) hemodialysis membrane outside the U.S. to improve the efficiency of hemodialysis, claiming improved mid-molecular weight substance removal.

Mortality was 66.6% in patients receiving oXiris treatment after 14 days from admission, and a mortality of 47.4% when used earlier. In addition, Baxter also launched the Theranova mid-molecular weight cutoff or high retention onset (HRO) hemodialysis membrane internationally, including in the U.S. to improve the efficiency of hemodialysis, claiming improved mid-molecular weight substance removal.

With this announcement, and the E.U. approval in January 2020 to remove ticagrelor, for the same indication, CytoSorb is providing cardiac surgeons and perfusionists an easy-to-use and rapid new treatment option to help reduce the risk of serious and potentially fatal perioperative bleeding complications caused by these two drugs, in separate categories of blood thinners.

With this announcement, and the EU approval in January 2020 to remove ticagrelor, for the same indication, CytoSorb is providing cardiac surgeons and perfusionists an easy-to-use and rapid new treatment option to help reduce the risk of serious and potentially fatal perioperative bleeding complications caused by these two drugs, in separate categories of blood thinners.

Ticagrelor (Astra Zeneca - Brilinta ® , Brilique ® ) is considered best in class and is one of the most commonly used anti-platelet drugs to reduce the risk of cardiac death, heart attacks, and strokes in patients with either a history of a heart attack, or those actively undergoing percutaneous coronary intervention (PCI) with stent placement for acute coronary syndrome or heart attack.

Ticagrelor (Astra Zeneca - Brilinta ® , Brilique ® ) is considered best in class and is one of the most commonly used anti-platelet drugs to reduce the risk of cardiac death, heart 11 Table of Contents attacks, and strokes in patients with either a history of a heart attack, or those actively undergoing percutaneous coronary intervention (PCI) with stent placement for acute coronary syndrome or heart attack.

Because there are an insufficient number of organs donated to satisfy demand, it is vital to maximize the number of viable organs donated, and optimize the probability of organ survival following transplant. 20 Table of Contents Projected Timeline: ECOS-300CY: The ECOS-300CY was approved in the E.U. for the removal of inflammatory mediators during ex vivo organ perfusion under CE Mark designation in 2020.

Because there are an insufficient number of organs donated to satisfy demand, it is vital to maximize the number of viable organs donated, and optimize the probability of organ survival following transplant. Projected Timeline: ECOS-300CY: The ECOS-300CY was approved in the E.U. for the removal of inflammatory mediators during ex vivo organ perfusion under CE Mark designation in 2020.

The total addressable market for HemoDefend-BGA in transfusion medicine in westernized countries alone is an estimated $400 million to $600 million and represents a fraction of the global market. 15 Table of Contents Radiocontrast Removal ContrastSorb is a development-stage blood purification technology that is being optimized for the removal of IV contrast from blood in order to prevent contrast -induced nephropathy (“CIN”).

The total addressable market for HemoDefend-BGA in transfusion medicine in westernized countries alone is an estimated $400 million to $600 million and represents a fraction of the global market. Radiocontrast Removal ContrastSorb is a development-stage blood purification technology that is being optimized for the removal of IV contrast from blood in order to prevent contrast -induced nephropathy (“CIN”).

CytoSorb treatment in a porcine animal model of brain death demonstrated a reduction in cytokines as well as a preservation of cardiac function compared to untreated controls. There is a shortage of donated organs worldwide, with more than 100,000 people currently on the waiting list for organ transplants in the U.S. alone.

CytoSorb treatment in a porcine animal model of brain death demonstrated a reduction in cytokines as well as a preservation of cardiac function compared to untreated controls. 20 Table of Contents There is a shortage of donated organs worldwide, with more than 100,000 people currently on the waiting list for organ transplants in the U.S. alone.

For the year ended December 31, 2022 we have recorded royalty costs of approximately $849,000. On August 1, 2022, the Company entered into the Marketing Agreement with Fresenius, which expands the Company’s strategic partnership with Fresenius by establishing a multi-stage global collaboration to combat life-threatening diseases in critical care.

For the year ended December 31, 2023 we have recorded royalty costs of approximately $923,000. On August 1, 2022, the Company entered into the Marketing Agreement with Fresenius, which expands the Company’s strategic partnership with Fresenius by establishing a multi-stage global collaboration to combat life-threatening diseases in critical care.

However, this does not ensure approval of a device in the U.S. 44 Table of Contents Sales and Marketing In 2012, we established our European subsidiary, CytoSorbents Europe GmbH, a wholly-owned subsidiary of CytoSorbents Corporation.

However, this does not ensure approval of a device in the U.S. 45 Table of Contents Sales and Marketing In 2012, we established our European subsidiary, CytoSorbents Europe GmbH, a wholly-owned subsidiary of CytoSorbents Corporation.

The international COSMOS Registry was designed to capture real world outcomes and device utilization patterns across multiple critical care indications including but not limited to sepsis, acute respiratory failure, postoperative vasoplegia, acute liver failure, and acute pancreatitis. The Registry is actively enrolling in Spain and Germany with plans to expand in more countries in 2023.

The international COSMOS Registry was designed to capture real world outcomes and device utilization patterns across multiple critical care indications including but not limited to sepsis, acute respiratory failure, postoperative vasoplegia, acute liver failure, and acute pancreatitis. The Registry is actively enrolling in Spain, Germany and Italy with plans to expand in more countries in 2024.

Under “Sub Award Agreements” with the University of Pittsburgh, we developed polymers for use in these studies. 27 Table of Contents A grant of $1 million was awarded to the University of Pittsburgh Medical Center in 2003. The project sought to improve the quantity and viability of organs donated for transplant by using CytoSorb to detoxify the donor’s blood.

Under “Sub Award Agreements” with the University of Pittsburgh, we developed polymers for use in these studies. A grant of $1 million was awarded to the University of Pittsburgh Medical Center in 2003. The project sought to improve the quantity and viability of organs donated for transplant by using CytoSorb to detoxify the donor’s blood.

CytoSorb has demonstrated the ability to safely reduce key cytokines in the blood of septic patients with multiple organ failure in our European Sepsis Trial. The ability of CytoSorb to interact safely with blood (hemocompatibility) has been demonstrated through ISO 10993 testing, which includes testing for hemocompatibility, biocompatibility, cytotoxicity, genotoxicity, acute sensitivity and complement activation.

CytoSorb has demonstrated the ability to safely reduce key cytokines in the blood of septic patients with multiple organ failure in our European Sepsis Trial. 17 Table of Contents The ability of CytoSorb to interact safely with blood (hemocompatibility) has been demonstrated through ISO 10993 testing, which includes testing for hemocompatibility, biocompatibility, cytotoxicity, genotoxicity, acute sensitivity and complement activation.

Currently, we have ongoing projects funded, in part, by the U.S. Army Medical Research Acquisition Activity (“USAMRAA”), the NHLBI, and the USAF/AFMC. 39 Table of Contents In January 2017, we were awarded a Phase II SBIR contract to continue development of CytoSorb for fungal mycotoxin blood purification.

Currently, we have ongoing projects funded, in part, by the U.S. Army Medical Research Acquisition Activity (“USAMRAA”), the NHLBI, and the USAF/AFMC. In January 2017, we were awarded a Phase II SBIR contract to continue development of CytoSorb for fungal mycotoxin blood purification.

CytoSorbents also announced a partnership with Aferetica srl to provide the ECOS-300CY cartridge under the exclusive trade name, PerSorb™, that is compatible with Aferetica’s PerLife™ ex vivo organ perfusion system, recently approved in the E.U. as well. In 2021, commercialization of PerSorb™ and Aferetica’s PerLife™ ex vivo organ perfusion system commenced in Italy.

CytoSorbents also announced a partnership with Aferetica srl to provide the ECOS-300CY cartridge under the exclusive trade name, PerSorb™, that is compatible with Aferetica’s PerLife™ ex vivo organ perfusion system, recently approved in the EU as well. In 2021, commercialization of PerSorb™ and Aferetica’s PerLife™ ex vivo organ perfusion system commenced in Italy.

The observational and dosing phases of the study, involving 30 viable donors and eight non-viable donors, respectively, have been completed. The next phase of this study, the treatment phase, was planned to involve viable donors. However, we are not currently focusing our efforts on the commercialization of CytoSorb for application in organ donors.

The observational and dosing phases of the study, involving 30 viable donors and eight non-viable donors, respectively, have been completed. The next phase of this 27 Table of Contents study, the treatment phase, was planned to involve viable donors. However, we are not currently focusing our efforts on the commercialization of CytoSorb for application in organ donors.

This subsidiary began operations during the second quarter of 2016. In 2017, we further expanded our direct sales efforts into Belgium and Luxembourg. In May 2018, the approved uses of CytoSorb in the E.U. were expanded to include the removal of bilirubin in liver disease, and the removal of myoglobin in trauma.

This subsidiary began operations during the second quarter of 2016. In 2017, we further expanded our direct sales efforts into Belgium and Luxembourg. In May 2018, the approved uses of CytoSorb in the EU were expanded to include the removal of bilirubin in liver disease, and the removal of myoglobin in trauma.

These partners include Biocon Biologics Limited, Fresenius Medical Care AG, B. Braun Avitum AG, Aferetica s.r.l., and Terumo Cardiovascular Group. For detailed information regarding these partnerships, see the section entitled “Commercial and Research Partners” in Item 1 of this Report.

These partners include Fresenius Medical Care AG, B. Braun Avitum AG, Aferetica s.r.l., and Terumo Cardiovascular Group. For detailed information regarding these partnerships, see the section entitled “Commercial and Research Partners” in Item 1 of this Report.

We are not including the information contained at http://www.cytosorbents.com , or at any other website address, as part of, or incorporating it by reference into, this Annual Report on Form 10-K. We have been engaged in research and development and product commercialization and have raised approximately $215 million from investors as of December 31, 2022.

More than 195,000 cumulative CytoSorb devices have been utilized globally as of December 31, 2022 in critical illnesses and in cardiac surgery. Our purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption.

More than 228,000 cumulative CytoSorb devices have been utilized globally as of December 31, 2023 in critical illnesses and in cardiac surgery. Our purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption.

The two leaders in the category, apixaban (Bristol Myers Squibb - Eliquis ® ) and rivaroxaban (Janssen and Bayer - Xarelto ® ) are estimated to reach 40 billion USD in sales by 2026. 11 Table of Contents There is a clear and large unmet medical need when patients on these antithrombotic agents need to undergo surgery due to the very high risk of bleeding.

The two leaders in the category, apixaban (Bristol Myers Squibb - Eliquis ® ) and rivaroxaban (Janssen and Bayer - Xarelto ® ) are estimated to reach $40 billion in sales by 2026. There is a clear and large unmet medical need when patients on these antithrombotic agents need to undergo surgery due to the very high risk of bleeding.

CytoSorb Therapy in COVID-19 (CTC) registry in the medical journal, Frontiers in Medicine, in December 2021, demonstrated that in 52 consecutive patients from 5 U.S. ECMO centers, 90-day survival was 73% in critically ill COVID-19 patients who failed mechanical ventilation and were treated with ECMO and CytoSorb under FDA Emergency Use Authorization.

The new production facility successfully passed its E.U. notified body audit in early 2022, and received ISO 13485 certification from its E.U. notified body in September 2022, clearing the way for full manufacturing of CytoSorb, DrugSorb-ATR, ECOS-300CY from this site.

The new production facility successfully passed its EU notified body audit in early 2022 and received ISO 13485 certification from its EU notified body in September 2022, clearing the way for full manufacturing of CytoSorb, DrugSorb-ATR, ECOS-300CY from this site.

We seek to out-license this technology to a potential strategic partner.

We seek to out-license this technology platform to a potential strategic partner.

See the section entitled “Government Research Grants” of this Item 1 of this Report for information regarding the specific grants. In 2023, our goal is to successfully complete the STAR-T trial, finalize our data analysis, and file for U.S. FDA and Health Canada regulatory approvals. We are preparing for commercialization of DrugSorb-ATR in the U.S.

See the section entitled “Government Research Grants” of this Item 1 of this Report for information regarding the specific grants. In 2024, our goal is to finalize our data analysis of the STAR-T trial, and file for U.S. FDA and Health Canada regulatory approvals. We are preparing for commercialization of DrugSorb-ATR in the U.S.

However, there can be no assurance that we will ever obtain regulatory approval for any other device, or that the CytoSorb device will be able to generate significant sales. 16 Table of Contents We manufacture the CytoSorb device at our facility located in Princeton, New Jersey. We purchase our raw materials from multiple vendors located primarily in the United States.

However, there can be no assurance that we will ever obtain regulatory approval for any other device, or that the CytoSorb device will be able to generate significant sales. We manufacture the CytoSorb device at our facility located in Princeton, New Jersey. We purchase our raw materials from multiple vendors located primarily in the United States.

This could potentially increase the effectiveness of CytoSorb in sepsis and septic shock caused by Gram negative bacteria. Projected Timeline : CytoSorb-XL is in advanced pre-clinical development as a potential next generation polymer to CytoSorb. It is expected to follow a similar path to E.U. approval as CytoSorb, expected within 4 to 5 years.

It is widely understood by the medical community that dialysis has inherent limitations in that its ability to remove toxic substances from blood drops precipitously as the size of toxins increases. Our hemocompatible adsorbent technology helps to address this shortcoming by removing toxins and toxic compounds largely untouched by dialysis technology.

There is a severe shortage of donor organs. Currently, there are more than 100,000 individuals on transplant waiting lists in the United States. Cytokine storm is common in these organ donors, resulting in reduced viability of potential donor organs.

Currently, there are more than 100,000 individuals on transplant waiting lists in the United States. Cytokine storm is common in these organ donors, resulting in reduced viability of potential donor organs.

Employees As of March 7, 2023, we had 198 full-time and part-time employees. We also utilize consultants and temporary service providers who are not our employees, as necessary. None of our employees are represented by a labor union or are subject to collective-bargaining agreements and we believe we have good relationships with our employees.

Employees As of March 7, 2024, we had 186 full-time and part-time employees. We also utilize consultants and temporary service providers who are not our employees, as necessary. None of our employees are represented by a labor union or are subject to collective-bargaining agreements and we believe we have good relationships with our employees.

CytoSorb use has been considered safe and well-tolerated in more than 195,000 devices utilized as of December 31, 2022. CytoSorb has been designed to achieve broad-spectrum removal of both pro- and anti-inflammatory cytokines, preventing or reducing the accumulation of high concentrations in the bloodstream.

CytoSorb use has been considered safe and well-tolerated in more than 228,000 devices utilized as of December 31, 2023. CytoSorb has been designed to achieve broad-spectrum removal of both pro- and anti-inflammatory cytokines, preventing or reducing the accumulation of high concentrations in the bloodstream.

This eight-month award, which is valued at $281,835, will allow CytoSorbents to test the ability of its novel and existing polymers to remove cytokines and lipopolysaccharide (LPS) endotoxin, a well-known potent and deadly trigger of sepsis and septic shock, from septic porcine plasma.

This eight-month award, which is valued at $288,335, will allow CytoSorbents to test the ability of its novel and existing polymers to remove cytokines and lipopolysaccharide (LPS) endotoxin, a well-known potent and deadly trigger of sepsis and septic shock, from septic porcine plasma.

We incur waste removal costs in connection with both our solid and liquid wastes which are byproducts of our manufacturing process. We utilize the services of various qualified contractors to dispose of these waste products. These waste removal costs amounted to approximately $384,000 for the year ended December 31, 2022.

It received EU CE-Mark approval in July 2019, and established distribution in Germany, Italy and Benelux. In 2020, Seraph received FDA Emergency Use Authorization for use in adult critically ill COVID-19 patients to reduce pathogens and inflammatory mediators from the bloodstream.

An example is a patient who develops respiratory failure due to a severe pneumonia and requires mechanical ventilation in the ICU. Severe sepsis has a mortality rate of approximately 20% to 25% despite the use of antibiotics and the highest level of available care.

Severe sepsis is sepsis with evidence of organ dysfunction. An example is a patient who develops respiratory failure due to a severe pneumonia and requires mechanical ventilation in the ICU. Severe sepsis has a mortality rate of approximately 20% to 25% despite the use of antibiotics and the highest level of available care.

We have established direct sales or distribution of CytoSorb in approximately 75 countries worldwide. 10 Table of Contents We estimate that the market potential in Europe for CytoSorb is larger than that in the U.S.

We have established direct sales or distribution of CytoSorb in approximately 75 countries worldwide. We estimate that the market potential in Europe for CytoSorb is larger than that in the U.S.

In addition to our direct and distributor commercial channels, we have a number of strategic partners to market and distribute CytoSorb. These partners include Biocon Biologics Limited, Fresenius Medical Care AG, B. Braun Avitum AG, Aferetica s.r.l. and Terumo Cardiovascular Group. In August 2022, we expanded our partnership with Fresenius Medical Care to a global marketing collaboration.

In addition to our direct and distributor commercial channels, we have a number of strategic partners to market and distribute CytoSorb. These partners include Fresenius Medical Care AG, B. Braun Avitum AG, Eris LifeSciences, Aferetica s.r.l. and Terumo Cardiovascular Group. In August 2022, we expanded our partnership with Fresenius Medical Care to a global marketing collaboration.

The following table provides a brief description of our patents that have been issued in the U.S.: Product Patent Patent Patent Group Description/Indications Term Expiration Type CytoSorb Hemocompatible Polymer Systems and Related Devices 20 Years 7/6/2023 Standard CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Method of Treating Inflammation 20 Years 3/31/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/30/2031 Standard CytoSorb Polymer Modification 20 Years 12/31/2031 Standard CytoSorb Method of Removal of Impurities from Whole Blood 20 Years 1/6/2032 Standard CytoSorb Use of Polymeric Sorbent Polymers 20 Years 8/10/2032 Standard CytoSorb Hemocompatible Modifiers 20 Years 3/31/2034 Standard CytoSorb Method of Treating Acute Radiation Syndrome 20 Years 10/22/2035 Standard CytoSorb Use of Gastrointestinally Administered Porous Sorbent Polymers 20 Years 10/22/2035 Standard CytoSorb Hemocompatible Porous Beads 20 Years 10/21/2036 Standard CytoSorb Removal of Endotoxemia 20 Years 5/17/2037 Standard CytoSorb Method of Removing Toxins From Blood 20 Years 7/30/2038 Standard There can be no assurance that pending patent applications will result in issued patents, that patents issued to us will not be challenged or circumvented by competitors, or that such patents will be found to be valid or sufficiently broad to protect our technology or to provide us with a competitive advantage.

The following table provides a brief description of our patents that have been issued in the U.S.: Product Patent Patent Patent Group Description/Indications Term Expiration Type CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Size-Selective Hemoperfusion Polymeric Adsorbents 20 Years 11/20/2026 Standard CytoSorb Method of Treating Inflammation 20 Years 3/31/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/1/2031 Standard CytoSorb Method of Treating Inflammation 20 Years 4/30/2031 Standard CytoSorb Polymer Modification 20 Years 12/31/2031 Standard CytoSorb Method of Removal of Impurities from Whole Blood 20 Years 1/6/2032 Standard CytoSorb Use of Polymeric Sorbent Polymers 20 Years 8/10/2032 Standard CytoSorb Hemocompatible Modifiers 20 Years 3/31/2034 Standard CytoSorb Methods of Reducing Contamination in a Biological Substance 20 Years 6/3/2034 Standard CytoSorb Removing Protein Based Toxins and Potassium from Biological Fluids 20 Years 10/22/2035 Standard CytoSorb Method of Treating Acute Radiation Syndrome 20 Years 10/22/2035 Standard CytoSorb Use of Gastrointestinally Administered Porous Sorbent Polymers 20 Years 10/22/2035 Standard CytoSorb Hemocompatible Porous Beads 20 Years 10/21/2036 Standard CytoSorb Removal of Endotoxemia 20 Years 5/17/2037 Standard CytoSorb Method of Removing Toxins From Blood 20 Years 7/30/2038 Standard There can be no assurance that pending patent applications will result in issued patents, that patents issued to us will not be challenged or circumvented by competitors, or that such patents will be found to be valid or sufficiently broad to protect our technology or to provide us with a competitive advantage.

In the U.S. and Canada, the Company is currently conducting the pivotal, randomized, controlled STAR-T trial to evaluate the potential ability of the DrugSorb-ATR antithrombotic removal system, which uses an equivalent polymer technology to CytoSorb, to reduce perioperative bleeding risk in patients undergoing cardiothoracic surgery in the presence of ticagrelor.

In the U.S. and Canada, the Company has completed the pivotal, randomized, controlled STAR-T trial to evaluate the potential ability of the DrugSorb-ATR antithrombotic removal system, which uses an equivalent polymer technology to CytoSorb, to reduce perioperative bleeding risk in patients undergoing cardiothoracic surgery in the presence of ticagrelor.

Because of concerns of cost, limited efficacy, and potentially dangerous side effects including the increased risk of fatal bleeding events such as intracranial bleeding for those at risk, and also because of problems with reimbursement, worldwide sales of Xigris decreased from $160M in 2009 to $104M in 2010.

It is a development stage technology that is not yet approved in any markets, but is comprised of our highly advanced, biocompatible, polymer bead technology.

It is a development stage technology that is not yet approved in any markets, 21 Table of Contents but is comprised of our highly advanced, biocompatible, polymer bead technology.

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. There were no sales pursuant to the Sale Agreement during the years ended December 31, 2022 and 2021.

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. There were no sales pursuant to the Amended Sale Agreement during the year ended December 31, 2022.

The filter itself has not changed. However, Baxter has expanded the label to now include reduction of cytokines based on a set of in vitro experiments evaluating cytokine reduction from recirculating plasma over two hours. As of February 2022, clinicaltrials.gov currently lists 12 small studies recruiting, evaluating oXiris in the fields of sepsis and cardiac surgery.

However, Baxter has expanded the label to now include reduction of cytokines based on a set of in vitro experiments evaluating cytokine reduction from recirculating plasma over two hours. As of February 2022, clinicaltrials.gov currently lists 6 small studies recruiting, evaluating oXiris in the fields of sepsis and cardiac surgery.

As of March 9, 2023, our patent portfolio includes 18 issued United States patents as well as multiple issued foreign patents and pending patent applications both in the U.S. and internationally, directed to various compositions and methods of use related to our blood purification technologies, which are expected to expire between 2023 and 2038 absent any patent term extensions.

As of March 9, 2024, our patent portfolio includes19 issued United States patents as well as multiple issued foreign patents and pending patent applications both in the U.S. and internationally, directed to various compositions and methods of use related to our blood purification technologies, which are expected to expire between 2026 and 2038 absent any patent term extensions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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2022 filing

2023 filing

Biggest changePursuant to the Sale Agreement we may offer to sell, from time to time, shares of our common stock, up to a maximum of $25,000,000. There were no sales pursuant to the Sale Agreement during the year ended December 31, 2022.

Biggest changeOn December 30, 2021, we entered into an Open Market Sale Agreement with Jefferies LLC (the “Sale Agreement”). Pursuant to the Sale Agreement we may offer to sell, from time to time, shares of our common stock, up to a maximum of $25,000,000.

We cannot predict whether Germany’s economy will continue to grow or decline consistent with the overall global economy, which decline would negatively impact the demand for medical devices and healthcare technologies generally and lead to reduced spending on the products we provide.

Furthermore, we cannot predict whether Germany’s economy will continue to grow or decline consistent with the overall global economy, which decline would negatively impact the demand for medical devices and healthcare technologies generally and lead to reduced spending on the products we provide.

The Fifth Amendment extends the draw period under the Fourth Amendment to the earlier of (i) March 1, 2023 and (ii) the occurrence of an Event of Default. On March 9, 2023, the Company entered into the Sixth Amendment of its Amended Loan and Security Agreement. The Sixth Amendment further extends the draw period to March 24, 2023.

For example, these provisions: ● authorize the issuance of “blank check” preferred stock without any need for action by stockholders; ● eliminate the ability of stockholders to call special meetings of stockholders; ● prohibit stockholder action by written consent; and ● establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. 60 Table of Contents Compliance with changing corporate governance and public disclosure regulations may result in additional expense.

For example, these provisions: ● authorize the issuance of “blank check” preferred stock without any need for action by stockholders; ● eliminate the ability of stockholders to call special meetings of stockholders; ● prohibit stockholder action by written consent; and ● establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. 61 Table of Contents Compliance with changing corporate governance and public disclosure regulations may result in additional expense.

Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. 54 Table of Contents Clinical study results for our CytoSorb and/or DrugSorb-ATR device may not be indicative of our future clinical study results, and we cannot assure you that any clinical study results will lead to results sufficient for necessary regulatory clearances or product sales.

Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. 55 Table of Contents Clinical study results for our CytoSorb and/or DrugSorb-ATR device may not be indicative of our future clinical study results, and we cannot assure you that any clinical study results will lead to results sufficient for necessary regulatory clearances or product sales.

See “A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.” As a result, seasonality has had, and we expect it to continue to have, an impact on our results of operations. 49 Table of Contents Although historically we have been a research and development company, we are in the process of commercializing our products.

See “A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.” As a result, seasonality has had, and we expect it to continue to have, an impact on our results of operations. 50 Table of Contents Although historically we have been a research and development company, we are in the process of commercializing our products.

If we are unable to obtain regulatory approval or commercialize and market our products when planned, we may not achieve any market acceptance or generate revenue. 51 Table of Contents If we are unable to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and product candidates similar or identical to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.

If we are unable to obtain regulatory approval or commercialize and market our products when planned, we may not achieve any market acceptance or generate revenue. 52 Table of Contents If we are unable to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and product candidates similar or identical to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.

Their association with these institutions may currently or in the future involve conflicting interests in the event they or these institutions enter into consulting or other arrangements with competitors of ours. 55 Table of Contents We have limited manufacturing experience and capabilities, we may not be able to manufacture sufficient quantities at an acceptable cost or quality, or without shut-downs or delays.

Their association with these institutions may currently or in the future involve conflicting interests in the event they or these institutions enter into consulting or other arrangements with competitors of ours. 56 Table of Contents We have limited manufacturing experience and capabilities, we may not be able to manufacture sufficient quantities at an acceptable cost or quality, or without shut-downs or delays.

Although these global problems transcend our company and afflict companies across industries and borders, these and similar events could adversely affect us, or our business partners or customers. 57 Table of Contents Our business may be negatively affected if the United States and/or the countries in which we sell our products participate in wars, military actions or are otherwise the target of international terrorism.

Although these global problems transcend our company and afflict companies across industries and borders, these and similar events could adversely affect us, or our business partners or customers. 58 Table of Contents Our business may be negatively affected if the United States and/or the countries in which we sell our products participate in wars, military actions or are otherwise the target of international terrorism.

In addition, our existing patents are scheduled to expire between 2023 and 2038. Failure to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects. We may face litigation from third parties claiming that our products infringe on their intellectual property rights, or seek to challenge the validity of our patents.

In addition, our existing patents are scheduled to expire between 2026 and 2038. Failure to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects. We may face litigation from third parties claiming that our products infringe on their intellectual property rights, or seek to challenge the validity of our patents.

Some of the factors leading to this volatility include, but are not limited to: ● fluctuations in our operating results; ● announcements of product releases by us or our competitors; ● announcements of clinical data, analyst or media reports; ● announcements of acquisitions and/or partnerships by us and our competitors; and ● general market conditions. There is no assurance that the price of our common stock will not continue to be volatile.

Some of the factors leading to this volatility include, but are not limited to: ● fluctuations in our operating results; ● announcements of product releases by us or our competitors; ● announcements of clinical data, analyst or media reports; ● financial status: ● announcements of acquisitions and/or partnerships by us and our competitors; and ● general market conditions. There is no assurance that the price of our common stock will not continue to be volatile.

We believe that these disclosures, while necessary for our business, have resulted in the attempt by potential suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating manufacturing rights. 52 Table of Contents We previously engaged in discussions with the Brotech Corporation and its affiliate, Purolite International, Inc.

We believe that these disclosures, while necessary for our business, have resulted in the attempt by potential suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating manufacturing rights. 53 Table of Contents We previously engaged in discussions with the Brotech Corporation and its affiliate, Purolite International, Inc.

We cannot predict the effect of future exchange rate fluctuations on our operating results. 56 Table of Contents If we are unable to convince physicians and other health care providers as to the benefits of our products, we may incur delays or additional expense in our attempt to establish market acceptance.

We cannot predict the effect of future exchange rate fluctuations on our operating results. 57 Table of Contents If we are unable to convince physicians and other health care providers as to the benefits of our products, we may incur delays or additional expense in our attempt to establish market acceptance.

Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business, financial condition and results of operations. 58 Table of Contents Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation.

Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business, financial condition and results of operations. 59 Table of Contents Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation.

There can be no assurances that reimbursement will be granted or that additional clinical data will be required to establish reimbursement. 53 Table of Contents If we fail to maintain the CE Mark in the European Union, we will not be able to commercially sell and market CytoSorb.

There can be no assurances that reimbursement will be granted or that additional clinical data will be required to establish reimbursement. 54 Table of Contents If we fail to maintain the CE Mark in the European Union, we will not be able to commercially sell and market CytoSorb.

It remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. 59 Table of Contents Risks Connected to Our Securities The price of our common stock has been highly volatile due to factors that will continue to affect the price of our stock.

It remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. 60 Table of Contents Risks Connected to Our Securities The price of our common stock has been highly volatile due to factors that will continue to affect the price of our stock.

Our failure with respect to any or all of these matters would have a material adverse effect on our business, operating results, financial condition and prospects. We may require additional capital in the future to fund our operations.

Our failure with respect to any or all of these matters would have a material adverse effect on our business, operating results, financial condition and prospects. We will require additional capital in the future to fund our operations.

Interruptions in international relationships such as the recent exit by the U.K. from the EU, or the rapidly evolving conflict between Russia and Ukraine, and trade disputes such as the current trade negotiations between the U.S. and China, could result in changes to regulations governing our products and our intellectual property, disruption of our manufacturing or commercial operations, our inability to timely engage with and collect payment from customers in Russia and other affected regions, or otherwise affect our ability to do business.

Interruptions in international relationships such as the recent exit by the U.K. from the EU, or the war between Russia and Ukraine, and trade disputes such as the current trade negotiations between the U.S. and China, could result in changes to regulations governing our products and our intellectual property, disruption of our manufacturing or commercial operations, our inability to timely engage with and collect payment from customers in Russia and other affected regions, or otherwise affect our ability to do business.

Patents covering our products and product candidates normally provide market exclusivity, which is important in order for our products and product candidates to become profitable. Our existing patents are scheduled to expire between 2023 and 2038.

These conditions are expected to persist into 2023 and may lead to higher labor costs. If we fail to attract and retain qualified personnel, or if we experience labor shortages, we may experience higher costs and other difficulties.

These conditions are expected to persist into 2024 and may lead to higher labor costs. If we fail to attract and retain qualified personnel, or if we experience labor shortages, we may experience higher costs and other difficulties.

For example, in April 2021 we stopped the TISORB single arm study due to continued delays and poor enrollment caused by the COVID-19 pandemic in the U.K., in favor of redirecting those resources to the U.S. STAR-T randomized, controlled trial and in November 2022, we temporarily paused the STAR-D trial for business reasons.

For example, in April 2021 we stopped the TISORB single arm study due to continued delays and poor enrollment caused by the COVID-19 pandemic in the U.K., in favor of redirecting those resources to the U.S. STAR-T randomized, controlled trial and in November 2022 and recently, we terminated the STAR-D trial for business reasons.

The amount of long-term capital needed is expected to depend on many factors, including but not limited to: ● rate of sales growth and adoption of our products in the marketplace; ● product gross margin; ● continued progress and cost of our research and development programs; ● progress and costs associated with pre-clinical studies and clinical studies; ● the time and costs involved in obtaining regulatory clearance in other countries and/or for other indications; ● costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims; ● costs related to business development activities; ● costs of developing sales, marketing and distribution channels; 47 Table of Contents ● market acceptance and reimbursement of our products; and ● cost for training physicians and other health care personnel. We have an effective shelf registration statement dated July 14, 2021 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units.

The amount of long-term capital needed is expected to depend on many factors, including: ● rate of sales growth and adoption of the Company’s products in the marketplace; ● product gross margin; ● continued progress and cost of the Company’s research and development programs; ● progress with and cost of the Company’s pre-clinical studies and clinical studies; 48 Table of Contents ● the time and costs involved in obtaining regulatory clearance in other countries and/or for other indications; ● costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims; ● costs of developing sales, marketing and distribution channels; ● market acceptance and reimbursement of the Company’s products; and cost for training physicians and other health care personnel. We have an effective shelf registration statement dated July 14, 2021 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units.

The successful completion of this audit CE-certifies CytoSorb under the current Medical Device Directive (93/42/EEC) until May 2024. Prior to the expiration of such certificate, we will apply for certification under the new Medical Devices Regulation (MDR).

The successful completion of this audit CE-certifies CytoSorb under the current Medical Device Directive (93/42/EEC) until December 2028. Prior to the expiration of such certificate, we will apply for certification under the new Medical Devices Regulation (MDR).

After the expiration of the initial terms, the employment agreements automatically renew for additional terms of one year unless either party provides written notice of non-renewal at least 60 days prior to a renewal. The employment agreements for the Named Executive Officers above have automatically renewed for another year term. On September 30, 2022, Ms.

Our products are subject to international regulation as medical devices under the Medical Devices Directive and, once our CE Mark under MDD expires in May 2024 will be subject to the new European Union Medical Device Regulation (“MDR”).

Our products are subject to international regulation as medical devices under the Medical Devices Directive and, once our CE Mark under MDD expires in December 2028 will be subject to the new European Union Medical Device Regulation (“MDR”).

Additionally, global events such as the current COVID-19 coronavirus pandemic and the conflict in Ukraine, that have or could, slow worldwide economies, disrupt travel and trade, and destabilize financial markets, may interfere with our ability to raise capital, sell and market our products, obtain reimbursement and payment of our products, or reduce the ability of our customers to pay for our product.

Additionally, global events such as the current COVID-19 coronavirus pandemic, war between Russia and Ukraine, and the Israel-Hamas war, that have or could, slow worldwide economies, disrupt travel and trade, and destabilize financial markets, may interfere with our ability to raise capital, sell and market our products, obtain reimbursement and payment of our products, or reduce the ability of our customers to pay for our product.

Currently, our certificate of incorporation, as amended and restated, which was effective June 12, 2019, authorizes the issuance of up to 100,000,000 shares of common stock, of which approximately 56,364,000 shares remain available for issuance as of December 31, 2022 and may be issued by us without stockholder approval.

Currently, our certificate of incorporation, as amended and restated, which was effective June 12, 2019, authorizes the issuance of up to 100,000,000 shares of common stock, of which approximately 45,760,000 shares remain available for issuance as of December 31, 2023 and may be issued by us without stockholder approval.

For year ended December 31, 2022, our cash burn, which we define as the total of cash used in operating and investing activities from our statement of cash flows, was approximately $35 million, which included approximately $6.3 million of capital spending and improvements related to our new manufacturing facility and corporate headquarters.

For year ended December 31, 2023, our cash burn, which we define as the total of cash used in operating and investing activities from our statement of cash flows, was approximately $22.6 million, which included approximately $0.5 million of capital spending and improvements related to our new manufacturing facility and corporate headquarters.

The COVID-19 pandemic is affecting the United States and global economies and is likely to continue to affect our operations and those of third parties on which we rely, including by causing disruptions in our global supply chain, our ability to obtain raw materials, the manufacturing of and short-term demand for our lead product, CytoSorb, the commercialization of CytoSorb, our research and development activities, and the conduct of current and future clinical trials.

The COVID-19 pandemic affected the United States and global economies with lingering effects that can continue to affect our operations and those of third parties on which we rely, including by causing disruptions in our global supply chain, our ability to obtain raw materials, the manufacturing of and short-term demand for our lead product, CytoSorb, the commercialization of CytoSorb, our research and development activities, and the conduct of current and future clinical trials.

There can be no assurance when, or if, this additional reimbursement might be approved. 50 Table of Contents We depend upon key personnel who may terminate their employment with us at any time. As of March 7, 2023, we had 198 full-time and part-time employees as well as several consultants and temporary employees.

There can be no assurance when, or if, this additional reimbursement might be approved. 51 Table of Contents We depend upon key personnel who may terminate their employment with us at any time. As of March 5, 2024, we had 186 full-time and part-time employees as well as several consultants and temporary employees.

As of December 31, 2022, we had an accumulated deficit of approximately $253,998,000, which included net losses of approximately $32,813,000, $24,559,000 and $7,837,000 for the years ended December 31, 2022, 2021 and 2020, respectively. Our losses have resulted principally from costs incurred in the research and development of our polymer technology, clinical studies and general and administrative expenses.

As of December 31, 2023, we had an accumulated deficit of approximately $282,505,000, which included net losses of approximately $28,507,000, $32,813,000 and $24,559,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Our losses have resulted principally from costs incurred in the research and development of our polymer technology, clinical studies and general and administrative expenses.

The evolving COVID-19 pandemic has impacted and is likely to continue to directly or indirectly impact our clinical trials, including but not limited to, the anticipated completion date of these trials and the pace of enrollment in our clinical trials for at least the next several months and possibly longer as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get to the clinic.

The evolving COVID-19 pandemic has impacted and may continue to directly or indirectly impact our clinical trials, including but not limited to, the anticipated completion date of these trials and the pace of enrollment in our clinical trials nts may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get to the clinic.

The Company estimated that approximately $0.3 million and $6.3 million of its 2022 and 2021 product sales, respectively, were related to the treatment of COVID-19 patients.

The Company did not have any COVID-19 related sales in 2023. The Company estimated that approximately $0.3 million and $6.3 million of its 2022 and 2021 product sales, respectively, were related to the treatment of COVID-19 patients.

Our common stock closed as high as $4.23 and as low as $1.03 per share between January 1, 2022 and December 31, 2022 on Nasdaq. On March 7, 2023, the closing price of our common stock, as reported on Nasdaq, was $3.80. Historically, medical device company securities such as our common stock have experienced extreme price fluctuations.

Our common stock closed as high as $4.17 and as low as $1.09 per share between January 1, 2023 and December 31, 2023 on Nasdaq. On March 13, 2024, the closing price of our common stock, as reported on Nasdaq, was $1.01. Historically, medical device company securities such as our common stock have experienced extreme price fluctuations.

Our business could be harmed by adverse economic conditions in Germany, our primary geographical market, or by economic and/or political instability in the EU or elsewhere caused by Brexit, trade conflicts, or other factors. For the year ended December 31, 2022, we derived a majority of our net product sales from sales in Germany.

Our business could be harmed by adverse economic conditions in Germany, our primary geographical market, or by economic and/or political instability in Germany, the EU or elsewhere caused by various factors. For the year ended December 31, 2023, we derived approximately 42% of our net product sales from sales in Germany.

As of December 31, 2022, two shareholders hold 10.4% of our shares and our directors and officers hold 6.7% of our shares on a fully diluted basis.

As of December 31, 2023, two shareholders hold 11.5% of our shares and our directors and officers hold 6.4% of our shares on a fully diluted basis.

Such events may have a material adverse effect on our business, operating results, financial condition and prospects. 48 Table of Contents A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations. The outbreak of COVID-19 originated in Wuhan, China in December 2019 and has since spread around the globe.

Such events may have a material adverse effect on the Company’s business, operating results, financial condition and prospects. 49 Table of Contents A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.

Despite the foregoing, we will require additional financing in the future. Should the financing we require be unavailable to us, or on terms unacceptable to us when we require it, the consequences could have a material adverse effect on our business, operating results, financial condition and prospects.

Should the financing the Company requires be unavailable to the Company, or on terms unacceptable to the Company when the Company requires it, the consequences could have a material adverse effect on the Company’s business, operating results, financial condition and prospects.

While the existing sanctions do not currently prohibit the distribution of CytoSorb in Russia, additional sanctions may be imposed in the future that could prevent us from selling CytoSorb in this or other affected regions. Additionally, further escalation of geopolitical tensions could have a broader impact that extends into other markets where we do business.

Our current and historical cash burn is not necessarily indicative of our future use of cash and cash equivalents. We are currently adequately capitalized but will require additional financing in the future in order to complete additional clinical studies and to support the commercialization of our proposed products.

Our current and historical cash burn is not necessarily indicative of our future use of cash and cash equivalents. The Company will require additional financing in the future to support the commercialization of its products and proposed products, to initiate and complete new additional clinical studies, and for general working capital purposes.

As of December 31, 2022, we had current assets of approximately $33.8 million, including cash, cash equivalents and restricted cash on hand of approximately $23.8 million and current liabilities of approximately $9.7 million.

As of December 31, 2023, we had current assets of approximately $25.7 million, including cash, cash equivalents and restricted cash on hand of approximately $15.6 million and current liabilities of approximately $14.5 million.

All of this amount is available as we have not utilized the existing shelf. All of the $25 million of our total shelf amount allocated to our ATM facility was available as of December 31, 2022.

Approximately $135.0 million of this amount was available as of December 31, 2023. We have also allocated $25 million of our total shelf amount to our ATM facility. As of December 31, 2023, approximately $20.3 million was available for use under the ATM facility.

In addition, in the event that additional funds are obtained through arrangements with collaborative partners or other non-dilutive sources, we may have to relinquish economic and/or proprietary rights to some of our technologies or products under development that we would otherwise seek to develop or commercialize by ourselves.

While there can be no assurance that the Company will be successful in obtaining alternative non-equity financing, if such financing is obtained through arrangements with collaborative partners or other non-dilutive sources, such as royalty financing, the Company may have to relinquish economic and/or proprietary rights to some of its technologies or products under development that it would otherwise seek to develop or commercialize itself.

In addition, the German government, insurance companies, health maintenance organizations and other payers of healthcare costs continue to focus on healthcare reform and containment of healthcare costs. For example, German state and federal governments are considering hospital reforms which would de-emphasize the direct related group payment systems and instead emphasize base payments focused on quality measures and appropriate patient care.

On March 11, 2020, the World Health Organization declared the outbreak a pandemic.

As an example, outbreak of COVID-19 originated in Wuhan, China in December 2019 and has since spread around the globe. On March 11, 2020, the World Health Organization declared the outbreak a pandemic.

There can be no assurance that we will be successful in our capital raising efforts.

If the Company were to obtain such additional financing through equity financing, the current ownership interest of its stockholders would be diluted and there can be no assurance that the Company will be successful in its capital raising efforts.

Removed

On July 24, 2020, the Company closed on the Offering of 6,052,631 shares of its common stock at a public offering price of $9.50 per share.

Added

On December 13, 2023, the Company closed on a registered direct offering for the sale, directly to investors, of 7,733,090 registered shares of common stock and warrants to purchase up to 2,706,561 shares of common stock (the “Offering”).

Removed

The Company completed the Offering pursuant to the terms of an Underwriting Agreement, dated as of July 21, 2020, by and among the Company and Cowen and Company, LLC and SVB Leerink LLC, as representatives of the several underwriters named therein. The Company received gross proceeds of approximately $57.5 million from the Offering.

Added

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, for an aggregate purchase price of approximately $10,285,000.

Removed

After deducting the underwriting discounts and commissions and fees and expenses payable by the Company in connection with the Offering, the Company received net proceeds of approximately $53.8 million. On December 30, 2021, we entered into an Open Market Sale Agreement with Jefferies LLC (the “Sale Agreement”).

Added

After deducting transaction fees and expenses payable by the Company in connection with the Offering, the Company received net proceeds of approximately $9,785,000, excluding any proceeds that may be received upon the exercise of the warrants.

Removed

Bloch notified the Company of her intention to retire effective March 31, 2023. A search has been initiated for Ms. Bloch’s replacement. Ms. Bloch and the Company expect to enter into a consulting arrangement under which Ms. Bloch will continue to provide services to the Company in a limited capacity following the effective date of her retirement.

Added

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.

Added

During the year ended December 31, 2023, the Company sold 2,656,464 shares pursuant to the Sale Agreement, at an average selling price of $1.76 per share, generating net proceeds of approximately $4,532,000. There were no sales pursuant to the Sale Agreement during the year ended December 31, 2022.

Added

Therefore, no further draws are available as of the date of this filing. The Company is currently evaluating various financing alternatives, including debt financing, strategic partnerships and other non-equity financing arrangements, including royalty financing.

Added

These discussions are preliminary, and because the ultimate scope, implementation and timing of these reforms remains uncertain, we cannot accurately predict the impact that such reforms may have on our business or our results of operations.

Added

Additionally, further escalation of geopolitical tensions or new conflicts, such as the evolving conflict between Israel and Gaza and the surrounding areas, could have a broader impact that extends into other markets where we do business.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed4 unchanged

2022 filing

2023 filing

Biggest changeThe lease commenced in April 2021 and expires in March 2037. As of February 2023, our monthly rent payment is approximately $114,000. 2. Our office facility leases in Berlin, Germany requires combined base rent payments amounting to approximately $12,100 per month. The initial lease term of both leases ends August 31, 2026.

Biggest changeThe lease commenced in April 2021 and expires in March 2037. As of February 2023, our monthly rent payment is approximately $117,000. 2. Our office facility leases in Berlin, Germany requires combined base rent payments amounting to approximately $12,100 per month. The initial lease term of both leases ends August 31, 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+3 added−0 removed0 unchanged

2022 filing

2023 filing

Biggest changeItem 3. Legal Proceedings. We are from time to time subject to claims and litigation arising in the ordinary course of business. We intend to defend vigorously against any future claims and litigation. We are not currently a party to any legal proceedings. 61 Table of Contents Item 4. Mine Safety Disclosures. Not applicable. PART II

Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of business. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.

Added

Regardless of outcome, litigation can have an adverse impact because of defense and settlement costs, diversion of management resources and other factors. On March 5, 2024, Danielle Greene, 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”).

Added

The complaint specifically alleges that we violated the provisions of the CEPA by allegedly terminating Ms. Greene 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. Item 4. Mine Safety Disclosures.

Added

Not applicable. 63 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−1 removed1 unchanged

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2023 filing

Biggest changeRecent Sales of Unregistered Securities We had no sales of unregistered securities in 2022 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Item 6. [Reserved] 62 Table of Contents

Biggest changeIssuer Purchases of Securities There were no repurchases of the Company’s securities during the year ended December 31, 2023. Recent Sales of Unregistered Securities We had no sales of unregistered securities in 2023 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Item 6. [Reserved]

Approximate Number of Equity Security Holders As of February 13, 2023, there were approximately 11,200 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is larger than the number of stockholders of record.

Approximate Number of Equity Security Holders As of February 22, 2024, there were approximately 11,100 stockholders of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is larger than the number of stockholders of record.

Removed

Issuer Purchases of Securities There were no repurchases of the Company’s securities during the year ended December 31, 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

38 edited+41 added−16 removed50 unchanged

2022 filing

2023 filing

Biggest changeThis increase is related to an increase in salaries, commissions and related costs of approximately $4,476,000, an increase in non-cash restricted stock expense of approximately $989,000 related to restricted stock units granted to the Company’s executive officers, an increase in non-cash stock option compensation expense of approximately $507,000, an increase in commercial insurance of approximately $280,000, an increase in sales and marketing costs, which include advertising and conference attendance of approximately $1,152,000 and an increase in travel and entertainment costs of approximately $121,000.

Biggest changeThis decrease was due to a decrease in sales and marketing costs, which include advertising and conference attendance, of approximately $839,000, a decrease in royalty expense of approximately $109,000, a decrease in non-cash stock compensation expense (which includes both stock options and restricted stock units) of approximately $115,000, a decrease in commercial insurance of approximately $165,000 and a decrease in public relations costs of approximately $135,000.

Overview We are a leader in the treatment of life-threatening conditions in the intensive care (“ICU”) and cardiac surgery using blood purification via our proprietary polymer adsorption technology. We have a number of products commercialized and in development based on this technology platform.

Overview We are a leader in the treatment of life-threatening conditions in intensive care (“ICU”) and cardiac surgery using blood purification via our proprietary polymer adsorption technology. We have a number of products commercialized and in development based on this technology platform.

VetResQ is being commercialized in the United States. ● HemoDefend-RBC—a development-stage blood purification technology designed to remove non-infectious contaminants in blood transfusion products, with the goal of reducing transfusion reactions and improving the quality and safety of blood. ● HemoDefend-BGA—a development-stage purification technology that can remove anti-A and anti-B antibodies from plasma and whole blood, to enable “universal plasma,” and safer whole blood transfusions, respectively. ● K + ontrol—a development-stage blood purification technology designed to reduce excessive levels of potassium in the blood that can be fatal in severe hyperkalemia. ● ContrastSorb—a development-stage extracorporeal hemoperfusion cartridge designed to remove IV contrast from the blood of high-risk patients undergoing radiological imaging with contrast, or interventional radiology procedures such as cardiac catheterization and angioplasty.

VetResQ is being commercialized in the United States. ● HemoDefend-RBC—a development-stage blood purification technology designed to remove non-infectious contaminants in blood transfusion products, with the goal of reducing transfusion reactions and improving the quality and safety of blood. ● HemoDefend-BGA—a development-stage purification technology that can remove anti-A and anti-B antibodies from plasma and whole blood, to enable “universal plasma,” and safer whole blood transfusions, respectively. ● K + ontrol—a development-stage blood purification technology designed to reduce excessive levels of potassium in the blood that can be fatal in severe hyperkalemia. 65 Table of Contents ● ContrastSorb—a development-stage extracorporeal hemoperfusion cartridge designed to remove IV contrast from the blood of high-risk patients undergoing radiological imaging with contrast, or interventional radiology procedures such as cardiac catheterization and angioplasty.

Our purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. The technology is protected by 18 issued U.S. patents and multiple international patents, with applications pending both in the U.S. and internationally.

Our purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. The technology is protected by 19 issued U.S. patents and multiple international patents, with applications pending both in the U.S. and internationally.

We believe CytoSorb has the potential to be used in many other inflammatory conditions, including the treatment of autoimmune disease flares, cytokine release syndrome in cancer immunotherapy, and other applications in cancer, such as cancer cachexia. CytoSorb has been used globally in more than 195,000 human treatments to date in critical illnesses and in cardiac surgery.

We believe CytoSorb has the potential to be used in many other inflammatory conditions, including the treatment of autoimmune disease flares, cytokine release syndrome in cancer immunotherapy, and other applications in cancer, such as cancer cachexia. CytoSorb has been used globally in more than 228,000 human treatments to date in critical illnesses and in cardiac surgery.

The Fifth Amendment extended the draw period under the Fourth Amendment to the earlier of (i) March 1, 2023 and (ii) the occurrence of an Event of Default. On March 9, 2023, the Company entered into the Sixth Amendment of its Amended Loan and Security Agreement. The Sixth Amendment further extended the draw period to March 24, 2023.

Some of our products and product candidates include: ● CytoSorb — an extracorporeal hemoperfusion cartridge approved in the EU for cytokine removal, with the goal of reducing SIRS and sepsis and preventing or treating organ failure. 63 Table of Contents ● DrugSorb-ATR — an investigational extracorporeal antithrombotic removal system based on the same polymer technology as CytoSorb that is being evaluated in the U.S.

Some of our products and product candidates include: ● CytoSorb — an extracorporeal hemoperfusion cartridge approved in the EU for cytokine removal, with the goal of reducing SIRS and sepsis and preventing or treating organ failure. ● DrugSorb-ATR — an investigational extracorporeal antithrombotic removal system based on the same polymer technology as CytoSorb that is being evaluated in the U.S.

Under these accounting standards, the fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. 69 Table of Contents We also follow the guidance of accounting standards for accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling, goods or services for equity instruments issued to consultants.

Under these accounting standards, the fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. We also follow the guidance of accounting standards for accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling, goods or services for equity instruments issued to consultants.

This decrease was due to a decrease of salary and commission costs of approximately $594,000 due to a reduction in commissions due to lower sales, a decrease in royalty expense of approximately $915,000 due to lower sales, a decrease in non-cash restricted stock expense of approximately $1,771,000 related to restricted stock units granted to the Company’s executive officers, a decrease in non-cash stock compensation expense of approximately $597,000 and a decrease in other general and administrative expenses of approximately $324,000.

This decrease was due to a decrease of 68 Table of Contents salary and commission costs of approximately $594,000 due to a reduction in commissions due to lower sales, a decrease in royalty expense of approximately $915,000 due to lower sales, a decrease in non-cash restricted stock expense of approximately $1,771,000 related to restricted stock units granted to the Company’s executive officers, a decrease in non-cash stock compensation expense of approximately $597,000 and a decrease in other general and administrative expenses of approximately $324,000.

In the event a patent is abandoned, the net book value of the patent is written off. Revenue Recognition Product Sales: Revenues from sales of products to both direct and distributor/strategic partner customers are recognized at the time when control passes to the customer, in accordance with the terms of their respective contracts.

In the event a patent is abandoned, the net book value of the patent is written off. 71 Table of Contents Revenue Recognition Product Sales: Revenues from sales of products to both direct and distributor/strategic partner customers are recognized at the time when control passes to the customer, in accordance with the terms of their respective contracts.

The goal of BetaSorb is to improve the efficacy of dialysis or hemofiltration. We have been successful in obtaining technology development contracts from governmental agencies such as the National Institutes of Health and the U.S. Department of Defense, including the Defense Advanced Research Projects Agency, or DARPA, the U.S. Army, the U.S. Air Force, U.S.

The lease commenced in April 2021 and expires in March 2037. As of February 2023, our monthly base rent is approximately $114,000. ● Our office facility leases in Berlin, Germany requires combined base rent payments amounting to approximately $12,100 per month. The initial lease term of both leases ends August 31, 2026.

The lease commenced in April 2021 and expires in March 2037. As of February 2024, our monthly base rent is approximately $117,000. ● Our office facility leases in Berlin, Germany requires combined base rent payments amounting to approximately $12,100 per month. The initial lease term of both leases ends August 31, 2026.

Revenue from product sales was approximately $29,360,000 for the year ended December 31, 2022, as compared to approximately $40,109,000 in the year ended December 31, 2021, a decrease of approximately $10,749,000 or 27%.

Revenue from product sales was approximately $29,360,000 for the year ended December 31, 67 Table of Contents 2022, as compared to approximately $40,109,000 in the year ended December 31, 2021, a decrease of approximately $10,749,000 or 27%.

The Company has initiated a pivotal randomized, controlled clinical trial in the U.S. and Canada, called the STAR-T trial, evaluating the use of DrugSorb-ATR during cardiothoracic surgery to remove ticagrelor to prevent or reduce perioperative bleeding complications in pursuit of U.S. FDA and Health Canada marketing approval.

The Company has completed its pivotal randomized, controlled clinical trial in the U.S. and Canada, called the STAR-T trial, evaluating the use of DrugSorb-ATR during cardiothoracic surgery to prevent or reduce perioperative bleeding complications in pursuit of U.S. FDA and Health Canada marketing approval.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of the results of operations and financial condition for the fiscal years ended December 31, 2022, 2021 and 2020 should be read in conjunction with our financial statements, and the notes to those financial statements that are included elsewhere in this Report.

The following discussion and analysis of the results of operations and financial condition for the fiscal years ended December 31, 2023, 2022 and 2021 should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Report.

The 2021 loss is directly related to the decrease of the exchange rate of the Euro at December 31, 2021 as compared to December 31, 2020. The exchange rate of the Euro to the U.S. dollar was $1.14 per Euro at December 31, 2021 as compared to $1.22 per Euro at December 31, 2020.

The 2022 loss is directly related to the decrease in the exchange rate of the Euro as of December 31, 2022, as compared to December 31, 2021. The exchange rate of the Euro to the U.S. dollar was $1.07 per Euro as of December 31, 2022, as compared to $1.14 per Euro at December 31, 2021.

Special Operations Command, and others. 64 Table of Contents Results of Operations Comparison of the year ended December 31, 2022 and 2021 Revenues: For the year ended December 31, 2022, we generated total revenue, which includes product revenue and grant income, of approximately $34,689,000 as compared to revenues of approximately $43,166,000 for the year ended December 31, 2021, a decrease of approximately $8,477,000, or 20%.

Comparison of the year ended December 31, 2022 and 2021 Revenues: For the year ended December 31, 2022, we generated total revenue, which includes product revenue and grant income, of approximately $34,689,000 as compared to revenues of approximately $43,166,000 for the year ended December 31, 2021, a decrease of approximately $8,477,000, or 20%.

These benefits were realized by utilizing the New Jersey Technology Business Tax Certificate Transfer Program whereby the State of New Jersey allows us to sell a portion of our state net operating losses to a third party.

STAR-T and future STAR-D pivotal randomized, controlled trials to reduce the level of antithrombotic drugs, ticagrelor, apixaban and rivaroxaban to reduce bleeding complications in patients undergoing cardiothoracic surgery while on these drugs. ● ECOS-300CY — an adsorption cartridge approved in the E.U. for use with ex vivo organ perfusion systems to remove cytokines and other inflammatory mediators in the organ perfusate, with the goal of maintaining or improving solid organ function prior to transplant.

STAR-T pivotal randomized, controlled trial to reduce the level of the antithrombotic drug, ticagrelor, to reduce bleeding complications in patients undergoing cardiothoracic surgery while on this drug. ● ECOS-300CY — an adsorption cartridge approved in the EU for use with ex vivo organ perfusion systems to remove cytokines and other inflammatory mediators in the organ perfusate, with the goal of maintaining or improving solid organ function prior to transplant.

For further discussion regarding the Loan Agreement and the Term C Loan, please see Note 7 – Long Term Debt to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.

Therefore, no further draws are available as of the date of this filing. For further discussion regarding the Loan Agreement please see Note 7 – Long Term Debt to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.

The 2020 gain is directly related to the increase in the exchange rate of the Euro at December 31, 2020, as compared to December 31, 2019. The exchange rate of the Euro to the U.S. dollar was $1.22 per Euro at December 31, 2019 as compared to $1.12 per Euro at December 31, 2019.

The 2023 gain is directly related to the increase of the exchange rate of the Euro as of December 31, 2023, as compared to December 31, 2022. The exchange rate of the Euro to the U.S. dollar was $1.11 per Euro as of December 31, 2023, as compared to $1.07 per Euro at December 31, 2022.

Benefit from Income Taxes: Our benefit from income taxes was approximately $736,000 and $1,127,000 for the years ended December 31, 2021 and 2020, respectively.

Benefit from Income Taxes: Our benefit from income taxes was approximately $814,000 and $1,093,000 for the years ended December 31, 2023 and 2022, respectively.

Legal, Financial and Other Consulting Expenses: Our legal, financial and other consulting costs were approximately $2,732,000 and $3,048,000 for the years ended December 31, 2021 and 2020, respectively, a decrease of approximately $316,000, or 10%.

Legal, Financial and Other Consulting Expenses: Our legal, financial and other consulting costs were approximately $2,848,000 and $2,732,000 for the years ended December 31, 2022 and 2021, respectively, an increase of approximately $116,000, or 4%.

These decreases were offset by an increase in salaries related to our clinical trial activities of approximately $1,694,000 due to the hiring of additional clinical expertise and an increase in other research and development labor costs of approximately $364,000 related to the hiring of additional scientific expertise. 65 Table of Contents Legal, Financial and Other Consulting Expenses: Our legal, financial and other consulting costs were approximately $2,848,000 and $2,732,000 for the years ended December 31, 2022 and 2021, respectively, an increase of approximately $116,000, or 4%.

Comparison of the year ended December 31, 2021 and 2020 Revenues: For the year ended December 31, 2021, we generated total revenue, which includes product revenue and grant income, of approximately $43,166,000 as compared to revenues of approximately $41,005,000 for the year ended December 31, 2020, an increase of approximately $2,161,000, or 5%.

Results of Operations Comparison of the year ended December 31, 2023 and 2022 Revenues: For the year ended December 31, 2023, we generated total revenue, which includes product revenue and grant income, of approximately $36,349,000 as compared to revenues of approximately $34,689,000 for the year ended December 31, 2022, an increase of approximately $1,660,000, or 5%.

Revenue from product sales was approximately $40,109,000 for the year ended December 31, 2021, as compared to approximately $39,453,000 in the year ended December 31, 2020, an increase of approximately $656,000 or 2%.

Revenue from CytoSorb product sales was approximately $31,015,000 for the year ended December 31, 2023, as compared to approximately $28,573,000 in the year ended December 31, 2022, an increase of approximately $2,442,000, or 9%.

CytoSorb is used during and after cardiac surgery to remove inflammatory mediators, such as cytokines, activated complement, and free hemoglobin that can lead to post-operative complications such as acute kidney injury, lung injury, shock, and stroke.

We believe that the safety and efficacy results of the STAR-T trial will support regulatory submissions for marketing approval by the FDA and Health Canada. 64 Table of Contents CytoSorb is used during and after cardiac surgery to remove inflammatory mediators, such as cytokines, activated complement, and free hemoglobin that can lead to post-operative complications such as acute kidney injury, lung injury, shock, and stroke.

This benefit was realized by utilizing the New Jersey Technology Business Tax Certificate Transfer Program whereby the State of New Jersey allows us to sell a portion of our state net operating losses to a third party. Liquidity and Capital Resources Since inception, our operations have been primarily financed through the issuance of debt and equity securities.

Also, we expect to receive approximately $1,093,000 in cash from the approved sale of our net operating losses and research and development credits from the State of New Jersey in the first half of 2023. As of December 31, 2022, cash, cash equivalents and restricted cash were $23.8 million compared to $53.8 million as of December 31, 2021.

In April of 2023, we received approximately $1,000,000 in cash from the approved sale of our net operating losses and research and development credits from the State of New Jersey. In March of 2024, we received approximately $880,000 in cash from the approved sale of our net operating losses and research and development credits from the State of New Jersey.

Selling, General and Administrative Expenses: Our selling, general and administrative expenses were approximately $35,750,000 and $28,464,000 for the years ended December 31, 2021 and 2020, respectively, an increase of approximately $7,286,000, or 26%.

Selling, General and Administrative Expenses: Our selling, general and administrative expenses were approximately $33,600,000 and $34,288,000 for the years ended December 31, 2023 and 2022, respectively, a decrease of approximately $688,000, or 2%.

For the year ended December 31, 2021, the average exchange rate of the Euro to the U.S. dollar was $1.18 as compared to an average exchange rate of $1.14 for the year ended December 31, 2020. 66 Table of Contents Cost of Revenue: For the years ended December 31, 2021 and 2020, cost of revenue was approximately $11,047,000 and $11,052,000, respectively, a decrease of approximately $5,000.

For the year ended December 31, 2023, the average exchange rate of the Euro to the U.S. dollar was $1.08 as compared to an average exchange rate of $1.05 for the year ended December 31, 2022.

This decrease in net interest expense of approximately $1,229,000 was the result of the payoff of our outstanding term loans with Bridge Bank in December of 2020. 67 Table of Contents Gain (Loss) on Foreign Currency Transactions: For the year ended December 31, 2021, the loss on foreign currency transactions was approximately $2,578,000, as compared to a gain on foreign currency transactions of approximately $2,607,000 for the year ended December 31, 2020.

Gain (Loss) on Foreign Currency Transactions: For the year ended December 31, 2023, the gain on foreign currency transactions was approximately $1,949,000, as compared to a loss on foreign currency transactions of approximately $2,449,000 for the year ended December 31, 2022.

Research and Development Expenses: Our research and development costs were approximately $16,381,000 and $8,811,000 for the years ended December 31, 2021 and 2020, respectively, an increase of approximately $7,570,000, or 86%.

Legal, Financial and Other Consulting Expenses: Our legal, financial and other consulting costs were approximately $4,272,000 and $2,848,000 for the years ended December 31, 2023 and 2022, respectively, an increase of approximately $1,424,000, or 50%.

In addition, as a result of the increase in the average exchange rate of the Euro to the U.S. dollar, sales were positively impacted by approximately $1,207,000.

Direct sales increased by approximately $928,000, or 5% and distributor sales increased by approximately $797,000, or 7% during the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase in the average exchange rate of the Euro to the U.S. dollar also positively impacted 2023 product sales by approximately $780,000.

Product gross margins were approximately 80% for the year ended December 31, 2021 and approximately 76% for the year ended December 31, 2020. Gross Profit: Gross profit was approximately $32,118,000 for the year ended December 31, 2021, an increase of approximately $2,166,000 or 7%, over gross profit of $29,952,000 in 2020. This increase is attributed to the reasons discussed above.

This increase is attributed to increased sales and the increase in product gross margin percentage as discussed above. Research and Development Expenses: Our research and development costs were approximately $15,729,000 and $15,119,000 for the years ended December 31, 2023 and 2022, respectively, an increase of approximately $610,000, or 4%.

Direct sales increased by approximately $361,000 and distributor sales increased by approximately $295,000 during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

Grant cost of revenue increased approximately $41,000 during the year ended December 31, 2023, as compared to the year ended December 31, 2022. Product cost of revenues decreased approximately $39,000 during the year ended December 31, 2023, as compared to the year ended December 31, 2022.

These increases were offset by a decrease in contracted public relations costs of approximately $210,000 and a decrease in other general and administrative expenses of approximately $29,000. Interest Expense, Net: For the year ended December 31, 2021, interest income, net was approximately $28,000, as compared to interest expense, net of approximately $1,201,000 for the year ended December 31, 2020.

Other product revenue was approximately $70,000 for the year ended December 31, 2023, as compared to $787,000 for the year ended December 31, 2022, a decrease of approximately $717,000. Covid-19 product sales were -0- in 2023 and approximately $300,000 in 2022.

All of the $25 million of our total shelf amount allocated to our ATM facility was available as of December 31, 2022. On December 27, 2022, we drew down the first $5 million tranche of the Term C loans available under the terms of our Amended Loan and Security Agreement with Bridge Bank (see below).

As of December 31, 2023, we had current assets of approximately $25.7 million and current liabilities of approximately $14.5 million. As of December 31, 2023, $25 million of our total shelf amount was allocated to our ATM facility, of which approximately $20.3 million remained available.

Removed

Sales to hospitals in the United States under the EUA granted by the FDA amounted to approximately $1,690,000 for the year ended December 31, 2021, as compared to approximately $1,341,000 in 2020.

Added

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Removed

Though difficult to quantify, we estimate that approximately $6.3 million and $9.4 million of total product sales during the years ended December 31, 2021 and 2020 was due to the demand for CytoSorb to treat COVID-19 patients.

Added

Impact of Inflation and Other Issues: The current high inflationary environment has impacted us in various ways. Due to the current competitive labor market and rising inflation, our labor costs have risen significantly in order to attract and retain qualified employees throughout our organization.

Removed

Product cost of revenues decreased approximately $1,447,000 during the year ended December 31, 2021 as compared to the year ended December 31, 2020. This decrease was related to certain costs associated with the rapid ramp-up of production during the year ended December 31, 2020 that did not recur during the year ended December 31, 2021.

Added

In addition, we have experienced raw material price increases primarily related to the oil-based chemicals used in the polymer manufacturing process as well additional requests for higher fuel surcharges from most suppliers. Rising energy costs, including electricity and fossil fuels, have also made it more expensive to support our operations, manufacturing, and commercial activities.

Removed

These decreases were offset by the negative impact of non-recurring costs related to prior years tariffs as a result of an audit by the German Customs Authorities of approximately $732,000 and the offsetting non-recurring positive impact of the Employee Retention Tax Credit of approximately $388,000, both of which were recorded in the first quarter of 2021.

Added

We have also experienced increases in our transportation costs; however, we have been able to substantially mitigate these cost increases by implementing bulk shipping methods. In addition, we have been able to mitigate most supply chain issues that existed during the COVID-19 pandemic by ordering larger quantities of inventory as they were available.

Removed

This increase was due to an increase in clinical trial and related costs of approximately $4,670,000, due primarily to the start-up of our STAR-T and STAR-D clinical trials in the U.S. and our PROCYSS and Hep-On-Fire clinical trials in Germany, an increase in salaries related to our clinical trial activities of approximately $1,620,000 due to the hiring of additional clinical expertise, an increase in rent expense of approximately $943,000 related to rent expense on our new facility, an increase in other research and development labor costs of approximately $294,000 related to the hiring of additional scientific expertise and an increase in other research and development costs of approximately $43,000.

Added

Inflationary pressures may continue to impact our product gross margins in the future.

Removed

This decrease was due to due to a decrease in hiring fees of approximately $319,000, a decrease in legal fees of approximately $263,000, and a decrease in accounting fees of approximately $28,000. These increases were offset by an increase in consulting fees of approximately $294,000 related to certain corporate initiatives.

Added

Grant income was approximately $5,264,000 for the year ended December 31, 2023, as compared to approximately $5,329,000 for the year ended December 31, 2022, a decrease of approximately $65,000, or 1%. Cost of Revenue: For the years ended December 31, 2023 and 2022, cost of revenue was approximately $13,957,000 and $13,956,000, respectively.

Removed

Liquidity and Capital Resources Since inception, our operations have been primarily financed through the private and public placement of our debt and equity securities. At December 31, 2022, we had current assets of approximately $33,760,000 including cash, cash equivalents and restricted cash on hand of approximately $23,832,000 and had current liabilities of approximately $9,715,000.

Added

Product gross margins were approximately 72% for the year ended December 31, 2023, and approximately 70% for the year ended December 31, 2022.

Removed

After taking into account the $5 million related to our debt drawdown, our 2022 cash burn was approximately $35.0 million.

Added

This increase was primarily due to inefficiencies related to the relocation of our production activities to our new manufacturing facility in Princeton, New Jersey during the year ended December 31, 2022, that did not recur in 2023. 66 Table of Contents Gross Profit: Gross profit was approximately $22,392,000 for the year ended December 31, 2023, an increase of approximately $1,659,000 or 8%, versus gross profit of $20,733,000 in 2022.

Removed

This cash burn was due to lower-than-expected sales volumes, product gross margins that were lower due to decreased production volumes, and operating efficiencies associated with the move to our new manufacturing facility, capital expenditures of approximately $6.3 million related to our new facility and other factors (e.g. a delay in realizing savings from cost cutting due to notice periods and labor laws in Europe).

Added

This increase was related to approximately $850,000 of costs incurred related to pre-production manufacturing activities required to bring the new manufacturing plant to a state of commercial readiness and approximately $720,000 of costs related to pre-commercialization activities related to DrugSorb ATR.

Removed

A reduction in product gross margins from 80% in 2021 to 70% in 2022, unfavorably impacted our cash burn by approximately $2.9 million.

Added

These increases were offset by a decrease in clinical trial related costs of approximately $940,000, due primarily to the termination of our STAR-D clinical trial in the U.S., and other non-grant related research and development costs of approximately $20,000.

Removed

We expect product gross margins to return to previous levels as we transition production fully to the new facility by the end of this year, end the lease at our Deer Park Drive facility, and begin to capture anticipated manufacturing efficiencies driven by expected improvement in market conditions and increased product demand.

Added

This increase was due to an increase in legal fees of approximately $1,010,000 due to the abandonment of certain issued patents and patent applications, fees related to Company’s equity transactions and the settlement of a litigation matter; an increase in employment agency fees of approximately $178,000 related to the hiring of certain management personnel, an increase in consulting fees of approximately $179,000 related to regulatory matters on DrugSorb-ATR and an increase in accounting fees of approximately $57,000.

Removed

We are also managing our resources proactively, continuing to invest in key areas such as our U.S. clinical program. while driving cost-cutting throughout our Company. At the beginning of Q2 2022, we began instituting tighter cost controls and have reduced our headcount (including full and part-time employees and consultants) internationally by 10%, with the goal of reducing our cash burn.

Added

These decreases were offset by an increase in salaries, commissions, and related costs of approximately $532,000 and an increase in other general and administrative costs of approximately $143,000.

Removed

In addition, we have shifted our R&D headcount to funded grant programs, where we have an $11.5 million backlog as of December 31, 2022. Some of our costs savings of our headcount reduction are not yet visible in our results due to notice periods and labor laws in Europe but will be reflected in our 2023 operating budget.

Added

Removed

Meanwhile, we are working diligently to prioritize activities that we believe have a near-term return on investment and advance our strategic priorities, which cutting non-core or non-essential activities and spend.

Added

Removed

Our goal is, through a combination of driving an increase in sales and gross margin, and cutting costs, to significantly reduce our cash burn and to extend our operating runway with the resources we have.

Added

Removed

Based upon the foregoing, we believe that we have sufficient cash to fund the Company’s operations beyond twelve months from the issuance of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 68 Table of Contents Loan and Security Agreement The Company and its wholly-owned subsidiary, CytoSorbents Medical, Inc.

Added

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.

Added

We are also managing our resources proactively, continuing to invest in key areas such as our U.S. pivotal STAR-T trial, which includes the detailed analysis of trial data and the preparation of our application for marketing approval to the U.S. FDA. We have also instituted and continue to maintain tight control over expenditures.

Added

As of December 31, 2023, 2023, we have approximately $15.6 million in cash, including approximately $14.1 million and $1.5 million in unrestricted and restricted cash, respectively. We believe this is sufficient to fund the Company’s operations into the fourth quarter of 2024.

Added

We will need to raise additional capital to support our ongoing operations in the future, and the Company is actively pursuing financing sources, including less or non-dilutive debt financing, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof.

Added

There can be no assurance that management will be successful in these endeavors. 69 Table of Contents Loan and Security Agreement The Company and its wholly-owned subsidiary, CytoSorbents Medical, Inc.

Added

In the event a patent is abandoned, the net book value of the patent is written off. Revenue Recognition Revenue is recognized when the Company ships its products to its direct customers and distributors/strategic partners. Revenue is recognized on its grant awards with agencies of U.S. government in accordance with the terms of the award contract.

Added

See Note 3 to our consolidated financial statements for a description of the types of government contracts. 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.

Added

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.

Added

Distributors/strategic partner customers also submit purchase orders with each order that define the terms of shipment and transaction price. The Company has a contract for each grant award with various agencies of the U.S. government. 2.

Added

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. The performance obligations for government contracts are dependent on the contract type, however, these are generally based on the costs incurred related to each government contract. 3.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−1 removed4 unchanged

2022 filing

2023 filing

Biggest changeWe believe that the market risks associated with these financial instruments are immaterial, although there can be no guarantee that these market risks will be immaterial to us in the future. Item 8. Financial Statements and Supplementary Data. Our Financial Statements and notes thereto are included elsewhere in this Annual Report on Form 10-K and incorporated herein by reference.

Removed

See Item 15 of Part IV. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.

Top changes in Cytosorbents Corp's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other CTSO 10-K year-over-year comparisons