On October 12, 2021, the Company issued a press release announcing the full FDA approval of the Company’s Investigational Device
Exemption (IDE) application to conduct the pivotal STAR-D (Safe and Timely Antithrombotic Removal - Direct Oral Anticoagulants [DOAC])
double-blind, randomized, controlled trial in the United States to support FDA marketing approval. A copy of the press release is furnished
herewith as Exhibit 99.2 and incorporated by reference herein.
Risk Factor Update
The following risk factors are provided to update
and supplement the risk factors of the Company previously disclosed under the heading “Risk Factors” in
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in the Company’s Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021.
A pandemic, epidemic
or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.
The outbreak of COVID-19 originated
in Wuhan, China in December 2019 and has since spread around the globe. On March 11, 2020, the World Health Organization declared
the outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and is likely to continue to affect
our operations and those of third parties on which we rely, including by causing disruptions in our raw material supply, the manufacturing
of and short-term demand for our lead product, CytoSorb, the commercialization of CytoSorb, and the conduct of current and future clinical
trials. In addition, the COVID-19 pandemic has affected and is likely to continue to affect the operations of the U.S. Food and Drug Administration
and other health authorities, which could result in delays of reviews and approvals, including with respect to CytoSorb and our product
candidates. The evolving COVID-19 pandemic has impacted and is likely to continue to directly or indirectly impact our clinical trials,
including but not limited to, the anticipated completion date of these trials and the pace of enrollment in our clinical trials for at
least the next several months and possibly longer as patients may avoid or may not be able to travel to healthcare facilities and physicians’
offices unless due to a health emergency and clinical trial staff can no longer get to the clinic. Such facilities and offices have and
may continue to be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients, and may
not be available, in whole or in part, for clinical trial services. There may be further delays in patient enrollment in the REFRESH 2,
CYTATION and STAR clinical trials. For example, we have stopped the TISORB single arm study due to continued delays and poor enrollment
caused by the COVID-19 pandemic in the U.K., in favor of redirecting those resources to the U.S. STAR-T randomized, controlled trial.
In addition, employee disruptions and remote working environments related to the COVID-19 pandemic and the federal, state and local responses
to such virus, could materially impact the efficiency and pace with which we work and develop our product candidates, our ability to execute
and invoice upon government grants and contracts, and the manufacturing of CytoSorb. As of the date of this filing, our manufacturing
facilities remain operational and we have resumed certain research and development activities that were temporarily suspended as a result
of the COVID-19 pandemic. Further, while the potential economic impact brought on by, and the duration of, the COVID-19 pandemic is difficult
to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which
could negatively impact our short-term and long-term liquidity. Additionally, the stock market has been unusually volatile during the
COVID-19 outbreak and such volatility may continue. Macro factors have impacted, and may continue to negatively impact, our critical care
and cardiac surgery markets, including in certain geographies such as Germany, resulting in lower-than-expected sales of CytoSorb. To
date, during certain periods of the COVID-19 pandemic, our stock price fluctuated significantly, and such fluctuation will likely continue
to occur. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of
potential delays or impacts on our business, financing or clinical trial activities or on healthcare systems or the global economy as
a whole. However, these effects could have a material impact on our liquidity, capital resources, operations and business and those of
the third parties on which we rely. The Company estimated that approximately $9.4 million of its 2020 product sales, and preliminarily
estimates that approximately $1.1 million and $4.6 million of its product sales in the three and nine months ended September 30,
2021, respectively, were related to the treatment of COVID-19 patients. As the pandemic continues to ease, it is uncertain whether the
Company will be able to replace some or all of this revenue in the future.
Our operating results
are subject to seasonal fluctuation.
Our total revenue and product sales are subject
to seasonal fluctuation. Our sales seasonality is affected by a number of factors, including but not limited to, hospital budgets and buying patterns, customer
and healthcare worker vacation schedules, religious, national, and state holidays, scientific and medical conference schedules, seasonal
illnesses such as influenza, seasonal or weather-related differences in hospital admissions and the timing of insurance benefits, among
others. Our normal seasonality cycle has
also been impacted by the COVID-19 pandemic and related events, making it more difficult to predict and determine a more consistent seasonality
trend. See “A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect
our business and operations.” As a result, seasonality has had, and we expect it to continue to have, an impact on our results
of operations.
(d) Exhibits
* The information in Item 2.02 of this Form 8-K shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.