To The Moon

• Fourth Quarter Product Revenue: $9.2 million, a 25% increase compared to the prior year.
• Full Year Product Revenue: $35.6 million, representing 15% year-over-year growth.
• Core Product Sales: $35.6 million in 2024.
• Gross Margin: 71% for both the quarter and the full year.
• Operating Expenses: Decreased 30% year-over-year to $10.2 million in Q4.
• Operating Loss: Improved 61% year-over-year to $3.7 million in Q4.
• Adjusted EBITDA Loss: Improved by 70% to $2.4 million in Q4.
• Net Loss: $7.5 million or $0.14 per share in Q4.
• Adjusted Net Loss: Improved to $1.7 million or $0.03 per share in Q4.
• Cash and Cash Equivalents: $9.8 million as of December 31, 2024; pro forma cash position approximately $17 million.
• Debt Facility: $20 million with Avenue Capital Group, consummated in June 2024.
• Shareholder Rights Offering: Raised total net proceeds of $7.3 million.

• Warning! GuruFocus has detected 5 Warning Signs with CTSO.

Release Date: March 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CytoSorbents Corp (NASDAQ:CTSO) reported a 25% increase in fourth-quarter product revenue, reaching $9.2 million, and a 15% year-over-year growth in full-year product revenue for 2024.
• The company's core product, CytoSorb, has been utilized in over 270,000 devices across more than 70 countries, driving significant international sales.
• CytoSorbents Corp (NASDAQ:CTSO) maintained a healthy product gross margin of 71%, reflecting the strength of their business model.
• The company strengthened its financial position with a $20 million debt facility and a successful shareholder rights offering, increasing liquidity by $12.3 million.
• CytoSorbents Corp (NASDAQ:CTSO) is actively preparing for the potential commercial launch of DrugSorb-ATR in the US and Canada, with a total addressable market opportunity of $300 million, potentially growing to over a billion dollars.

Negative Points

• CytoSorbents Corp (NASDAQ:CTSO) experienced flat growth in direct sales in Germany, which is their largest market, for the second consecutive year.
• The company identified misstatements in inventory and non-cash stock compensation, leading to a restatement of their 2023 and 2024 financial reports.
• There is a material weakness in CytoSorbents Corp (NASDAQ:CTSO)'s internal controls over financial reporting, which they aim to remediate during the current calendar year.
• The reorganization of the sales team in Germany is expected to cause short-term disruption, resulting in modestly lower product sales in the first quarter of 2025.
• CytoSorbents Corp (NASDAQ:CTSO) anticipates that the DrugSorb-ATR business will not be immediately profitable upon launch due to initial investments in commercial capabilities.

Q & A Highlights

Q: Have you seen any impacts from the new US administration on the regulatory process for DrugSorb, and what gives you confidence in clearance by year-end? A: Although there have been cuts to HHS, including the FDA, these cuts are not targeting review personnel. This gives us confidence in the timeline for clearance by year-end. - Phillip Chan, CEO

Q: What are the key things you'll be looking for during the controlled launch of DrugSorb before a full commercial launch? A: We aim to learn how to get into hospitals, get onto their lists, and get ordered. We want to understand how quickly we can get through VA committees and how surgeons integrate the product into their usage patterns. This will help us titrate the launch effectively. - Peter Mariani, CFO

Q: What kind of commercial organization size might you need to fully commercialize in the US? A: We anticipate a sales force of 15 to 25, potentially larger over time. We aim to establish sticky accounts early and grow usage across multiple surgeons. We may also use distributors in certain regions. - Peter Mariani, CFO

Q: What were the main growth drivers for sales outside Germany, and why did they not apply to the German market? A: Growth outside Germany was driven by strong adoption in specific applications and successful reimbursement strategies. In Germany, issues like post-COVID challenges and hospital reforms have impacted growth. We are reorganizing our sales approach to address these challenges. - Phillip Chan, CEO

Q: What metrics do you need to hit to reach near cash break-even in the core business by the end of the year? A: We need continued revenue growth and maintaining 70%+ gross margins. Driving efficiencies and reducing cash burn are also crucial to achieving cash flow break-even in the core business, allowing investment in DrugSorb's launch. - Peter Mariani, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.