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COMMON STOCK, STOCK-BASED COMPENSATION AND WARRANTS | 9 Months Ended
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Sep. 30, 2025
COMMON STOCK, STOCK-BASED COMPENSATION AND WARRANTS |
COMMON STOCK, STOCK-BASED COMPENSATION AND WARRANTS |
| 4. | COMMON STOCK, STOCK-BASED COMPENSATION AND WARRANTS
Common Stock Rights Offering On January 10, 2025, the Company closed the subscription period of its previously announced rights offering (the “Rights Offering”), raising aggregate gross proceeds of $6.25 million ($5.4 million net of fees) from the sale of all 6.25 million Units reserved for the Rights Offering. Participants in the Rights Offering received Units, each Unit comprising of one share of common stock of the Company, one Series A Right Warrant to purchase one share of common stock, and one Series B Right Warrant to purchase one share of common stock (collectively, the “Rights Warrants”). Up to an additional 6.25 million shares of common stock may be issued upon exercise of the Right Warrants. Once the 6.25 million shares of common stock reserved for the Right Warrants are issued, the remaining outstanding and unexercised Right Warrants will expire worthless. Management and the Board of Directors of the Company are estimated to have subscribed for approximately 450,000 of the total Units prior to any pro rata adjustment. Subscribers of basic subscription rights in the Rights Offering were allocated Units based upon their pro-rata share of 6.25 million Units. The Series A Right Warrants and the Series B Right Warrants expired on February 24, 2025 and June 10, 2025, respectively. The warrants do not have a redemption feature and are classified as equity instruments. A fair value of approximately $0.3 million and approximately $0.1 million has been allocated to the Series A Right Warrant and the Series B Right Warrant, respectively, and recorded within additional paid-in capital. The warrants were valued on the date of issuance using the Monte Carlo pricing model with the following assumptions: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Series A Right Warrant |  | Series B Right Warrant | ​
Common Stock Price as of Issuance Date | ​ | $ | 0.94 | ​ | $ | 0.94 | ​
Risk-Free Rate | ​ | ​ | 4.31 | % |  | 4.27 | %
Dividend Rate | ​ | ​ | 0.00 | % |  | 0.00 | %
Volatility | ​ | ​ | 88.90 | % |  | 97.19 | %
Minimum Exercise Price | ​ | $ | 1.00 | ​ | $ | 2.00 | ​
Maximum Exercise Price | ​ | $ | 2.00 | ​ | $ | 4.00 | ​
Formula for Exercise Price | ​ | ​ | 90% of the 5-day volume weighted average stock price as of the exercise date rounded down to the nearest cent, not to fall outside the range of the maximum and minimum exercise prices. | ​
​ Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $5.0 million of restricted cash on the Company’s condensed consolidated balance sheets to become unrestricted, and available for use. The Right Warrants were exercisable commencing on their date of issuance and the exercise price is equal to (i) in the case of the Series A Right Warrants, 90% of the five-day volume weighted average price of Common Stock over the last five trading days prior to the expiration date of the Series A Right Warrants on February 24, 2025, rounded down to the nearest whole cent but (x) not lower than $1.00 and (y) not higher than $2.00, and (ii) in the case of the Series B Right Warrants, 90% of the five-day volume weighted average price of Common Stock over the last five trading days prior to the extended expiration date of the Series B Right Warrants on June 10, 2025, rounded down to the nearest whole cent but (x) not lower than $2.00 and (y) not higher than $4.00. Exercise of the Right Warrants required additional investment separate from the purchase of the Units. 6.25 million shares of common stock were reserved for exercise of the Right Warrants. The Right Warrants were transferable until expiration. On 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 ($1.4 million net of fees). All of the remaining 4.85 million Series A Right Warrants expired on February 24, 2025. On April 4, 2025, the Board of Directors extended the expiration date of the Series B Right Warrants from April 10, 2025 to June 10, 2025. On June 11, 2025, the five-day volume weighted average price of Common Stock over the last five - trading days prior to June 10, 2025 was lower than the minimum required price of $2.00 and, as a result, the Series B Right Warrants issued in connection with the previously announced Rights Offering expired worthless pursuant to their terms. Shelf Registration On July 26, 2024, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission (the “2024 Shelf”), which enables the Company to offer and sell in one or more offerings, any combination of common stock, preferred stock, senior or subordinated debt securities, warrants and units, up to a total dollar amount of $150 million. On September 26, 2024, the Company filed Amendment No. 1 to Form S-3 with the Securities and Exchange Commission (the “SEC”). The 2024 Shelf was declared effective by the SEC on September 30, 2024. Because the Company’s market capitalization is less than $75 million, it will be subject to baby shelf rules which limit the amount of securities sales the Company can make to one-third of its public market float over a 12-month period. ​ Stock-Based Compensation The following non-cash stock-based compensation expense, which relates to stock options and restricted stock units (“RSUs”), is included in each of the respective line items in the Company’s condensed consolidated statements of operations and comprehensive loss: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30,
Stock-based compensation expense by category | ​ | 2025 | ​ | 2024
​ | ​ | (amounts, in thousands)
Cost of goods sold | ​ | $ | 29 | ​ | $ | 48
Research and development, net of grant income | ​ |  | 83 | ​ |  | —
Selling, general and administrative | ​ |  | 376 | ​ | ​ | 843
Total stock-based compensation expense | ​ | $ | 488 | ​ | $ | 891
​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30,
Stock-based compensation expense by category | ​ | 2025 |  | 2024
​ | ​ | (amounts, in thousands)
Cost of goods sold | ​ | $ | 114 | ​ | $ | 48
Research and development, net of grant income | ​ | ​ | 330 | ​ | ​ | —
Selling, general and administrative | ​ |  | 1,435 | ​ |  | 2,792
Total stock-based compensation expense | ​ | $ | 1,879 | ​ | $ | 2,840
​ For the nine months ended September 30, 2025 and 2024, approximately $1.5 million and $2.3 million of stock-based compensation expense relates to stock options, respectively, and approximately $0.4 million and $0.5 million relates to RSUs, respectively. For the three months ended September 30, 2025 and 2024, approximately $0.4 million and $0.8 million of stock-based compensation expense relates to stock options, respectively, and approximately $0.1 million relates to RSUs for each period. ​ Stock-options The summary of the stock option activity for the nine months ended September 30, 2025, is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | Weighted | ​ | Average
​ | ​ | ​ | ​ | Average | ​ | Remaining
​ | ​ | ​ | ​ | Exercise Price | ​ | Contractual
​ |  | Shares |  | per Share |  | Life (Years)
Outstanding, December 31, 2024 |  | 12,341,907 | ​ | $ | 3.55 | ​ | 6.81
Granted |  | 787,000 | ​ | ​ | 1.00 |  | —
Exercised | ​ | (11,650) | ​ | ​ | 0.96 | ​ | —
Forfeited |  | (110,985) | ​ | ​ | 2.09 |  | —
Expired |  | (255,552) | ​ | ​ | 6.15 |  | —
Outstanding, September 30, 2025 |  | 12,750,720 | ​ | $ | 3.36 |  | 6.37
​ The Company estimated the fair value of stock options granted during the nine months ended September 30, 2025 using a Black-Scholes pricing model, which used the following inputs: ​
​ | ​ | ​ | ​ | ​
Exercise price (per share) | ​ | $ | 0.82 - $1.30 | ​
Expected volatility | ​ |  | 80.7 - 81.7 | %
Expected term* | ​ |  | 6.3 years | ​
Risk-free rate | ​ |  | 3.89% - 4.40 | %
Dividends | ​ |  | 0 | %
​ *The expected term of the options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The simplified method is used as the Company’s employee exercise history may not be indicative for estimating future exercises. In addition, the Company recognizes forfeitures as they occur. ​ The intrinsic value is calculated as the difference between the market value of the shares as of September 30, 2025 of $0.93 and the exercise price of the shares. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options Outstanding
​ | ​ | Number | ​ | Weighted | ​ | Weighted | ​ | Aggregate
Range of | ​ | Outstanding at | ​ | Average | ​ | Average | ​ | Intrinsic
Exercise | ​ | September 30, | ​ | Exercise | ​ | Remaining | ​ | Value
Price |  | 2025 |  | Price |  | Life (Years) |  | (in thousands)
$0.82 - $13.20 |  | 12,750,720 | ​ | $ | 3.36 | ​ | 6.37 | ​ | $ | 4
​
​ | ​ | ​ | ​ | ​ | ​ | ​
Options Exercisable
Number | ​ | Weighted | ​ | Aggregate
Exercisable at | ​ | Average | ​ | Intrinsic
September 30, | ​ | Exercise | ​ | Value
2025 |  | Price |  | (in thousands)
8,767,055 | ​ | $ | 4.14 | ​ | $ | 2
​ The summary of the status of the Company’s non-vested options for the nine months ended September 30, 2025, is as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | Exercise
​ |  | Shares |  | Price
Non-vested, December 31, 2024 |  | 6,234,550 | ​ | $ | 1.09
Granted |  | 787,000 | ​ | $ | 1.00
Forfeited |  | (110,985) | ​ | $ | 2.09
Vested |  | (2,926,891) | ​ | $ | 1.55
Non-vested, September 30, 2025 |  | 3,983,674 | ​ | $ | 1.63
​ As of September 30, 2025, the Company had approximately $2.1 million of total unrecognized compensation cost related to stock options which will, on average, be amortized over approximately 18 months. Change in Control-Based RSUs The Board of Directors has granted restricted stock units to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company. These restricted stock units will vest upon a Change in Control of the Company, as defined in the Amended and Restated CytoSorbents Corporation 2014 Long-Term Incentive Plan, or upon certain life events. The following table is a summary of these restricted stock units: ​
​ | ​ | ​
​ | ​ | Total
​ | ​ | (amounts in thousands, except share data)
Outstanding, December 31, 2024 |  | 2,809,500
Granted |  | 121,500
Vested | ​ | (35,000)
Forfeited |  | (49,000)
Outstanding, September 30, 2025 |  | 2,847,000
​ Due to the uncertainty over whether these restricted stock units will vest, which will only happen upon a Change in Control, no charges for these restricted stock units have ever been recorded in the Company’s condensed consolidated statements of operations and comprehensive loss. Other RSU Awards The following table outlines the restricted stock unit activity for the nine months ended September 30, 2025: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | Grant Date
​ |  | Shares |  | Fair Value
Non-vested, January 1, 2025 |  | 641,335 | ​ | $ | 1.31
Granted | ​ | 498,800 | ​ | ​ | 1.01
Vested |  | (264,835) | ​ | ​ | 1.81
Unvested shares forfeited | ​ | (65,000) | ​ | ​ | 0.96
Non-vested, September 30, 2025 |  | 810,300 | ​ | $ | 0.99
​ As of September 30, 2025, the remaining weighted average vesting period for restricted stock awards subject to vesting was 26 months and the remaining unrecognized restricted stock unit compensation expense was $0.6 million. ​ Warrants related to the December 2023 equity offering and June 2024 Loan and Security Agreement As of September 30, 2025, the Company had 4,352,130 warrants outstanding. Of this amount, 2,706,561 warrants outstanding are related to the Company’s December 13, 2023 offering, and these warrants are immediately cash exercisable at an exercise price of $2.00 per share and expire on December 13, 2028. Another 1,645,569 warrants were issued on June 28, 2024 in connection with the closing of the Company’s Loan and Security Agreement with Avenue Capital Group (see Note 6. Long-Term Debt). These warrants have an exercise price of $0.79 and expire on June 30, 2029. The number of warrants is fixed; however, the exercise price may be adjusted down if the Company raises equity (excluding sales of equity utilizing the Company’s at-the-market equity facility) at a share price that is lower than $0.79. These warrants can be exercised into common stock.

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