PRINCETON, N.J. - CytoSorbents Corporation (NASDAQ: CTSO), a medical technology company with a current market capitalization of $49.9 million, has announced the terms of its upcoming Rights Offering. According to InvestingPro data, the stock has experienced a significant decline of 28.7% over the past year, highlighting the importance of this capital raise. Stockholders as of December 16, 2024, will receive a dividend of one non-transferable Subscription Right Warrant for each share owned, with the Rights Offering set to close on January 10, 2025.
To participate in the Rights Offering, investors must hold or purchase CTSO common stock by the close of Nasdaq trading on Friday, December 13, 2024. The Rights Offering includes the opportunity to buy Units at $1.00 each, consisting of one share of common stock and two Right Warrants, allowing the purchase of up to two additional shares at predetermined prices.
The company aims to raise between $3.0 million and $5.0 million through the Rights Offering, which would release an equal amount of restricted cash from the balance sheet, potentially doubling the liquidity for CytoSorbents. This fundraising comes at a crucial time, as InvestingPro analysis indicates the company is quickly burning through cash, with a negative free cash flow of $18.8 million in the last twelve months. The proceeds are intended for general corporate purposes and to support operations through important regulatory decisions on the company's DrugSorb-ATR marketing applications expected in 2025.
The Rights Offering is limited to 6.25 million Units, with an equal number of common shares reserved for the Right Warrants. If the Units are oversubscribed, they will be allocated pro-rata among stockholders. Subscription Rights certificates and the prospectus will be mailed to eligible stockholders around December 16, 2024. Shareholders with shares in street name must instruct their brokers on the exercise of Rights.
CytoSorbents' blood purification technology is used in various medical applications, including reducing the risk of bleeding during surgery and managing inflammatory conditions. The company maintains a healthy gross profit margin of 62.7%, though InvestingPro research suggests it remains undervalued despite current challenges. While its flagship product, CytoSorb, is approved in the European Union, the company is awaiting decisions from the FDA and Health Canada regarding its DrugSorb-ATR system. For deeper insights into CTSO's valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
This press release does not constitute an offer to sell securities and is based on a press release statement. The Rights Offering will be conducted through a prospectus and related prospectus supplement filed with the SEC. Eligible stockholders can obtain these documents free of charge from the SEC's website or the offering's information agent.
In other recent news, CytoSorbents Corporation reported a year-over-year increase in product sales of 11% in the third quarter of 2024, reaching $8.6 million. The company's flagship product, CytoSorb, has generated nearly $34 million in sales over the past year. CytoSorbents also reported progress in its blood purification technology, particularly in critical care and cardiac surgery applications.
The company is preparing for the launch of DrugSorb ATR, a device aimed at reducing perioperative bleeding. This investigational device has earned two FDA breakthrough device designations. In recent developments, CytoSorbents has managed to decrease its operating expenses by 25% and reduced its cash burn to $2.7 million.
The company anticipates a total addressable market that could exceed $1 billion. CytoSorbents has also achieved MDSAP certification, which facilitates medical device licensing in Canada and the U.S. Decisions from the FDA and Health Canada on DrugSorb ATR are expected to be made in 2025.
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