CytoSorbents Corporation (NASDAQ:CTSO), a medical device company, has initiated an "at the market" equity offering that could raise up to $20 million, according to a filing with the U.S. Securities and Exchange Commission (SEC) on Tuesday. The offering will be conducted under a previously filed Registration Statement on Form S-3 and an Open Market Sale AgreementSM with Jefferies LLC, dated December 30, 2021.
The offering is based on a Registration Statement filed on July 26, 2024, and amended on September 26, 2024, which received effective status from the SEC on September 30, 2024. The company will offer its common stock, $0.001 par value per share, with the goal of raising capital to fund its operations and growth initiatives.
Morgan, Lewis & Bockius LLP, the legal counsel for CytoSorbents, has provided a legal opinion on the issuance and sale of the offered shares, which has been included as an exhibit in the filing.
CytoSorbents, headquartered in Princeton, New Jersey, specializes in surgical and medical instruments and apparatus. The company's decision to utilize an "at the market" offering allows for the sale of shares over time, aligning with market conditions and the company's capital needs.
In other recent news, CytoSorbents Corporation has been making significant strides in its operations. The company has recently submitted a DrugSorb-ATR De Novo marketing application to the U.S. Food and Drug Administration (FDA) for reducing perioperative bleeding in patients undergoing coronary artery bypass graft surgery. This move comes on the heels of the STAR-T trial, which evaluated the safety and efficacy of DrugSorb-ATR.
In addition to the FDA application, CytoSorbents is also preparing to submit a Medical Device License application to Health Canada. Despite a temporary production slowdown and a manufacturing issue, the company projects a 7% to 10% growth in their Q3 2024 product sales compared to the same quarter in the previous year. They expect to resolve these issues and return to normal production levels and margins in Q4 2024.
CytoSorbents has also amended its royalty agreement with ROKK, LLC, modifying the original contract concerning the perpetual royalty payments for the company's CytoSorb device. The company has reported a 5% increase in total revenue to $9.9 million in the second quarter of 2024, and a 10% rise in product sales to $8.8 million. The operating loss has also decreased by 48% to $3.4 million compared to the same period last year.
Lastly, CytoSorbents has appointed Peter J. Mariani as their new CFO and implemented cost-cutting measures that resulted in $5 million in annual savings. These are among the recent developments contributing to the company's steady financial progress and product development pipeline.
InvestingPro Insights
CytoSorbents Corporation's recent move to initiate an "at the market" equity offering for up to $20 million comes at a time when the company is facing financial challenges, as revealed by InvestingPro data. The company's market capitalization stands at $73.48 million, with a revenue of $37.16 million for the last twelve months as of Q2 2024. However, CytoSorbents is currently not profitable, with an operating income of -$24.21 million over the same period.
InvestingPro Tips highlight that CytoSorbents is "quickly burning through cash," which aligns with the company's decision to raise additional capital through this offering. This cash burn rate underscores the importance of the new equity offering in bolstering the company's financial position.
On a positive note, CytoSorbents has seen strong returns over the last month and three months, with price total returns of 42.86% and 114.29% respectively. This recent stock performance might make the timing of the equity offering more favorable for the company.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for CytoSorbents, providing deeper insights into the company's financial health and market position.
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