Cytosorbents (CTSO) risk factors, FY2024 10-K

Risks Related to our Business and our Industry

1. 01We have a history of losses and expect to incur substantial future losses
2. 02We will require additional capital in the future to fund our operations
3. 03Proceeds from the Rights Offering satisfied the second condition of a debt covenant which now allows for the $5.0 million of restricted cash on our consolidated balance sheet to become unrestricted, and available for use
4. 04On February 24, 2025, approximately 1.4 million Series A Right Warrants were exercised by holders, including members of management and the Board of Directors, at an exercise price of $1.13 per warrant, providing an additional $1.6 Million in aggregate gross proceeds
5. 05A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations
6. 06Our operating results are subject to seasonal fluctuation
7. 07Although historically we have been a research and development company, we are in the process of commercializing our products. There can be no assurance that we will be successful in developing and expanding commercial operations or balancing our research and development activities with our commercialization activities
8. 08If users of our products are unable to obtain adequate reimbursement from third-party payers, or if reimbursement is not available in specific countries, or if new restrictive legislation is adopted, market acceptance of our products may be limited and we may not achieve anticipated revenues
9. 09We depend upon key personnel who may terminate their employment with us at any time
10. 10Acceptance of our medical devices in the marketplace is uncertain, and failure to achieve market acceptance will prevent or delay our ability to generate revenues
11. 11from commercializing competitive products or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner
12. 12We 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
13. 13The expiration or loss of patent protection may adversely affect our future revenues and operating earnings
14. 14If we fail to maintain the CE Mark in the European Union, we will not be able to commercially sell and market CytoSorb
15. 15We may pursue various indications for our product candidates, and they may be subject to different FDA regulatory pathways for marketing authorization, and under the jurisdiction of different FDA review divisions within the FDA’s Office of Device Evaluation
16. 16Our business could be negatively impacted by changes in the domestic and global political environment
17. 17We are and will be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon us should we be sued
18. 18Certain university and other relationships are important to our business and may potentially result in conflicts of interests
19. 19We 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
20. 20Due to our limited marketing, sales and distribution experience, we may be unsuccessful in our efforts to sell our products
21. 21Weakness in the global economy, and in particular in the United States and Europe, could negatively impact our revenue and operating results
22. 22Our results of operations can be significantly affected by foreign currency fluctuations and regulations
23. 23If 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
24. 24The market for our products is rapidly changing and competitive, and new devices and drugs, which may be developed by others, could impair our ability to maintain and grow our business and remain competitive
25. 25Our 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
26. 26Significant economic downturns or international trade disruptions or disputes could adversely affect our business and operating results
27. 27Our 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
28. 28We could be adversely affected by violations of the Foreign Corrupt Practices Act and similar worldwide anti-bribery laws
29. 29We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws
30. 30Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation
31. 31Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results
32. 32The price of our common stock has been highly volatile due to factors that will continue to affect the price of our stock
33. 33Directors, executive officers and principal stockholders own a significant percentage of the shares of common stock, which will limit your ability to influence corporate matters
34. 34Our Board of Directors may, without stockholder approval, issue and fix the terms of shares of preferred stock and issue additional shares of common stock adversely affecting the rights of holders of our common stock
35. 35Anti-takeover provisions in our charter documents and under Delaware law could prevent or delay transactions that our stockholders may favor and may prevent stockholders from changing the direction of our business or our management
36. 36Compliance with changing corporate governance and public disclosure regulations may result in additional expense
37. 37Our common stock is thinly traded on The Nasdaq Capital Market exchange and no assurances can be made about stock performance, liquidity, or maintenance of our Nasdaq listing
38. 38Future sales of our common stock may cause our share price to fall