UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36792

CYTOSORBENTS CORPORATION

(Exact name of registrant as specified in its charter)




Delaware		98-0373793
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

7 Deer Park Drive, Suite K
Monmouth Junction, New Jersey		08852
(Address of principal executive offices)		(Zip Code)

(732) 329-8885

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CTSO	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

As of May 1, 2021, there were 43,319,297 shares of the issuer’s common stock outstanding.

Table of Contents

CytoSorbents Corporation

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020		3
Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2021 and 2020 (unaudited)		4
Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2021 and 2020 (unaudited)		5
Consolidated Statements of Cash Flows for the Three Months ended March 31, 2021 and 2020 (unaudited)		6

Notes to Consolidated Financial Statements (unaudited)		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 3. Quantitative and Qualitative Disclosures about Market Risk		31

Item 4. Controls and Procedures		31

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		31

Item 1A. Risk Factors		31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		32

Item 3. Defaults Upon Senior Securities		32

Item 4. Mine Safety Disclosures		32

Item 5. Other Information		32

Item 6. Exhibits		33

This Quarterly Report on Form 10-Q includes our trademarks and trade names, such as “CytoSorb,” “CytoSorb XL,” “BetaSorb,” “ContrastSorb,” “DrugSorb,” “HemoDefend,” “K⁺ontrol^”and “VetResQ,” which are protected under applicable intellectual property laws and are the property of CytoSorbents Corporation and our subsidiaries. This Quarterly Report on Form 10-Q also contains the trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this Quarterly Report on Form 10-Q may appear without the ™, ®, or ^SMsymbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CYTOSORBENTS CORPORATION

CONSOLIDATED BALANCE SHEETS


	March 31,
	2021		December 31,
	(Unaudited)		2020

ASSETS
Current Assets:
Cash and cash equivalents	$	68,468,285	$	71,421,601
Grants and accounts receivable, net of allowance for doubtful accounts of $65,026 at March 31, 2021 and $46,851 at December 31, 2020		5,018,506		5,159,275
Inventories		3,108,201		2,673,799
Prepaid expenses and other current assets		3,039,722		3,198,460
Total current assets		79,634,714		82,453,135

Property and equipment, net		2,404,958		2,119,927
Right of use assets		923,960		1,029,123
Other assets		4,515,420		4,348,286
Total Assets	$	87,479,052	$	89,950,471

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	1,677,565	$	1,835,082
Lease liability – current portion		462,896		447,485
Accrued expenses and other current liabilities		7,618,726		7,870,687
Total current liabilities		9,759,187		10,153,254
Lease liability, net of current portion		461,064		581,638
Total Liabilities		10,220,251		10,734,892

Commitments and Contingencies (Note 6)
Stockholders’ Equity:
Preferred Stock, Par Value $0.001, 5,000,000 shares authorized; -0- shares issued and outstanding at March 31, 2021 and December 31, 2020		—		—
Common Stock, Par Value $0.001, 100,000,000 shares authorized; 43,272,372 and 43,221,999 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		43,272		43,222
Additional paid-in capital		278,586,339		277,533,082
Accumulated other comprehensive loss		(576,342)		(1,734,078)
Accumulated deficit		(200,794,468)		(196,626,647)
Total Stockholders' Equity		77,258,801		79,215,579
Total Liabilities and Stockholders’ Equity	$	87,479,052	$	89,950,471

See accompanying notes to consolidated financial statements.

Table of Contents

CYTOSORBENTS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


	Three Months Ended March 31,
	2021		2020
	(Unaudited)		(Unaudited)
Revenue:
CytoSorb sales	$	10,143,356	$	8,155,969
Grant income		455,491		551,341
Total revenue		10,598,847		8,707,310
Cost of revenue		2,751,444		2,384,842
Gross margin		7,847,403		6,322,468
Other expenses:
Research and development		2,282,052		1,965,286
Legal, financial and other consulting		707,839		519,002
Selling, general and administrative		7,709,703		6,316,934
Total expenses		10,699,594		8,801,222
Loss from operations		(2,852,191)		(2,478,754)
Other expense:
Interest expense, net		(10,124)		(305,537)
Loss on foreign currency transactions		(1,305,506)		(668,488)
Total other expense, net		(1,315,630)		(974,025)

Loss before benefit from income taxes		(4,167,821)		(3,452,779)

Benefit from income taxes		—		—

Net loss attributable to common shareholders	$	(4,167,821)	$	(3,452,779)

Basic and diluted net loss per common share	$	(0.10)	$	(0.10)

Weighted average number of shares of common stock outstanding		43,242,791		33,981,262

Net loss	$	(4,167,821)	$	(3,452,779)
Other comprehensive income:
Currency translation adjustment		1,157,736		609,828
Comprehensive loss	$	(3,010,085)	$	(2,842,951)

See accompanying notes to consolidated financial statements.

Table of Contents

CYTOSORBENTS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the three months ended March 31, 2021 and 2020 (Unaudited):


						Accumulated
				Additional		Other
	Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Par value		Capital		Income (Loss)		Deficit		Equity
Balance at December 31, 2020	43,221,999	$	43,222	$	277,533,082	$	(1,734,078)	$	(196,626,647)	$	79,215,579
Stock-based compensation - employees, consultants and directors	—		—		667,193		—		—		667,193
Other comprehensive income: foreign translation adjustment	—		—		—		1,157,736		—		1,157,736
Proceeds from exercise of stock options	15,257		15		76,538		—		—		76,553
Cashless exercise of stock options	1,774		2		(2)		—		—		—
Issuance of restricted stock units	33,342		33

SEC Form 10-Q filed by Cytosorbents Corporation