Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the results of operations and financial condition for the fiscal years ended December 31, 2025 and 2024 should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Report.

Overview

We are a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery through blood purification. CytoSorbents’ proprietary blood purification technologies are based on biocompatible, highly porous polymer beads that can actively remove toxic substances from blood and other bodily fluids by pore capture and surface adsorption. Cartridges filled with these beads can be used with standard blood pumps already in the hospital (e.g. dialysis, ECMO, heart-lung machines). CytoSorbents’ technologies are used in a number of broad applications. Specifically, four important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding 2) the removal of inflammatory agents in common critical illnesses such as sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis that can lead to massive inflammation, organ failure and patient death 3) the removal of liver toxins that accumulate in acute liver dysfunction or failure and 4) the removal of myoglobin in severe rhabdomyolysis that can otherwise lead to renal failure. In these diseases, the risk of death can be extremely high, and there are few, if any, effective treatments.

CytoSorbents’ lead product, CytoSorb®, is approved in the European Union and distributed in more than 70 countries worldwide, with more than 300,000 devices used cumulatively to date. CytoSorb was originally launched in the European Union under CE mark as the first cytokine adsorber. Additional CE mark extensions were granted for bilirubin and myoglobin removal in clinical conditions such as liver disease and trauma, respectively, and for ticagrelor and rivaroxaban removal in cardiothoracic surgery procedures. CytoSorb has also received FDA EUA in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure, to reduce pro-inflammatory cytokine levels. CytoSorb is not yet approved in the United States.

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In the U.S. and Canada, CytoSorbents is developing the DrugSorb®TM-ATR antithrombotic removal system, an investigational device based on an equivalent polymer technology to CytoSorb, to reduce the severity of perioperative bleeding in high-risk surgery due to blood thinning drugs. It has received two FDA Breakthrough Device Designations: one for the removal of ticagrelor and another for the removal of the direct oral anticoagulants (DOAC) apixaban and rivaroxaban in a cardiopulmonary bypass circuit during urgent cardiothoracic procedures.

The Company continues to actively pursue regulatory approval of DrugSorb-ATR with the U.S. FDA and expects to pursue regulatory approval in Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in the United States and Canada, respectively. See further discussion in ‘Cardiac Surgery’ below.

The Company has numerous marketed products and products under development based upon this unique blood purification technology protected by many issued U.S. and international patents and registered trademarks, and multiple patent applications pending, including ECOS-300CY®, CytoSorb-XLTM, HemoDefend-RBCTM, HemoDefend-BGATM, VetResQ®, K+ontrolTM, DrugSorbTM, ContrastSorb, and others. For more information, please visit the Company’s website at www.cytosorbents.com or follow us on Facebook and X.

Summary of Operational and Business Highlights

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Impact of Inflation and Other Issues:

The recent high inflationary environment impacted us in various ways. Due to the competitive labor market and rising inflation, our labor costs have risen significantly in order to attract and retain qualified employees throughout our organization. In addition, we have experienced raw material price increases primarily related to the oil-based chemicals used in the polymer manufacturing process as well as additional requests for higher fuel surcharges from most suppliers. Rising energy costs, including electricity and fossil fuels, have also made it more expensive to support our operations, manufacturing, and commercial activities. We have also experienced increases in our transportation costs; however, we have been able to substantially mitigate these cost increases by implementing bulk shipping methods. Inflationary pressures may continue to impact our product gross margins and other costs in the future.

Results of Operations

Comparison of the year ended December 31, 2025 and 2024

For the Year Ended December 31,

% of % of

Amount Revenue Amount Revenue

(in thousands) (in thousands)

Operating expenses:

Restructuring 510 1.4 % — — %

Other income (expense):

Loss on abandoned patents (559) (1.5) % (334) (0.9) %

Benefit from income taxes 401 1.1 % 1,691 4.8 %

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Revenue

For the year ended December 31, 2025, we generated total revenue of approximately $37.1 million as compared to revenues of approximately $35.6 million for the year ended December 31, 2024, an increase of approximately $1.5 million, or 4.1%, and down 0.4% on a constant currency basis. Revenue growth was led by strength in our distributor and strategic partner sales and direct sales outside of Germany, partially offset by lower revenue in our direct German market. The Company began a proactive reorganization and strategic realignment of our German commercial team and sales approach in the first quarter of 2025. We are making progress with this important initiative, and remain confident it will lead to stronger execution and improved performance.

Gross Profit

Gross profit was approximately $26.5 million for the year ended December 31, 2025, an increase of approximately $1.6 million or 6.4%, as compared to gross profit of $24.9 million for the year ended December 31, 2024. Gross margins were 71.5% and 69.9% for the years ended December 31, 2025 and 2024, respectively.

Research and Development Expenses

Our research and development costs were approximately $5.1 million and $7.6 million for the years ended December 31, 2025 and 2024, respectively, a decrease of approximately $2.5 million, or 33.2%. This decrease was driven by a decrease in our clinical trial costs due primarily to the completion of the STAR-T clinical trial, lower grant funded projects, as well as other clinical and product development program reductions.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses were approximately $35.6 million and $33.7 million for the years ended December 31, 2025 and 2024, respectively, an increase of approximately $1.9 million, or 5%. This increase was mainly due to increases in legal, regulatory, financial and consulting costs including costs associated with our 2024 audited financial statements, as well as regulatory filings and initial costs associated with the anticipated approval and commercial launch of DrugSorb-ATR in North America, partially offset by decreases in stock-based compensation expense, and royalty expenses. The decrease in stock-based compensation expense was primarily related to the full vesting of certain stock options in earlier periods and the decrease in royalty expense was the result of the expiration of a 4% royalty in August of 2024.

Restructuring Expenses

During the fourth quarter of 2025, we initiated a strategic workforce and cost reduction plan (the “Strategic Workforce and Cost Reduction Plan”) to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. Our restructuring expenses were $0.5 million for the year ended December 31, 2025. These costs primarily included cash-based severance and related workforce reduction charges of $0.4 million and other non-cash costs of $0.1 million.

Loss From Operations

Our loss from operations (including the impact of the $0.5 million restructuring charge) decreased by 10.4% to approximately $14.7 million, from $16.5 million for the years ended December 31, 2025 and 2024 respectively. This improvement was the result of revenue growth and gross margin improvement.

Interest Expense, Net

For the year ended December 31, 2025, net interest expense was approximately $2.6 million, as compared to $1.4 million for the year ended December 31, 2024. The increase was due to interest incurred on our credit facility for the full year of 2025, which began in the third quarter of 2024. Additionally, we amended our credit facility which increased the principal balance outstanding under the credit facility by $2.5 million effective November 13, 2025.

Gain (Loss) on Foreign Currency Transactions

For the year ended December 31, 2025, the gain on foreign currency transactions was approximately $9.3 million, compared to a loss on foreign currency transactions of approximately $4.2 million for the year ended December 31, 2024. The gain was directly related to the increase in the spot exchange rate of the Euro to the U.S. dollar as of December 31, 2025, as compared to December 31,

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2024. The exchange rate of the Euro to the U.S. dollar was $1.17 per Euro as of December 31, 2025, as compared to $1.03 per Euro at December 31, 2024. The 2024 loss is directly related to the decrease of the exchange rate of the Euro as of December 31, 2024, as compared to December 31, 2023. The exchange rate of the Euro to the U.S. dollar was $1.03 per Euro as of December 31, 2024, as compared to $1.11 per Euro as of December 31, 2023.

Loss on Abandoned Patents

Loss on abandoned patents was approximately $0.6 million for the year ended December 31, 2025, an increase of approximately $0.2 million or 67.4%, as compared to loss on abandoned patents of $0.3 million for the year ended December 31, 2024.

Benefit from Income Taxes

Our benefit from income taxes was approximately $0.4 million and $1.7 million for the years ended December 31, 2025, and 2024, respectively. This benefit was realized by utilizing the New Jersey Technology Business Tax Certificate Transfer Program whereby the State of New Jersey allows us to sell a portion of our state net operating losses and R&D credits to a third party.

Liquidity and Capital Resources

Since inception, our operations have been primarily financed through the issuance of debt and equity securities. As of December 31, 2025, we had current assets of approximately $20.6 million and current liabilities of approximately $9.7 million.

Effective Shelf Registration

We have an effective shelf registration statement dated September 30, 2024 with the SEC which enables us to raise up to $150 million in one or more offerings, through the issuance and sale of any combination of equity securities, debt securities, warrants and units. Approximately $149.7 million of this amount was available as of December 31, 2025. We have also allocated $20 million of our total shelf amount to our ATM facility. At December 31, 2025, approximately $19.4 million was available for use under the ATM facility, subject to certain limitations. For the year ended December 31, 2025, we did not raise any proceeds under the ATM facility.

Loan and Security Agreement

On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with Avenue Capital Group (“Loan”). Avenue Capital Group agreed to loan the Company up to an aggregate of $20 million (the “Avenue Capital Commitment”), to be disbursed in two tranches. The first tranche of $15.0 million (“Tranche 1”), consisted of $10.0 million which was available to the Company on the Closing Date and $5.0 million constituted restricted cash, which was released from its restriction on January 10, 2025, as the following conditions were achieved: (i) the FDA accepted the Company’s application for review with respect to its DrugSorb-ATR De Novo 510(k) and (ii) the Company received a minimum of $3.0 million in net proceeds from the sale of its equity securities after the Closing Date. The restriction was released on a dollar-for-dollar basis for equity raised between $3.0 million and $5.0 million. The second tranche (“Tranche 2”) consisted of $5.0 million, which would have been disbursed at the Company’s request between July 1, 2025 and December 31, 2025, if the Company received FDA marketing approval of its DrugSorb-ATR application, which it did not. The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and were additionally used for working capital purposes and to fund general business requirements. Amounts borrowed under the Avenue Capital Commitment bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (5.00%) or (B) thirteen and one-half percent (13.50%). The loan required interest-only payments for the first 24 months through July 1, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity, on July 1, 2027; provided, however that if the Company had drawn the full amount of Tranche 2 by December 31, 2025, and achieved for the trailing six month period ended June 30, 2026, at least $25 million of revenue, (the Interest only Milestone as defined in the Loan), the Interest only Period would have been extended by six months to January 1, 2027, followed by equal monthly installments of principal plus accrued and unpaid interest through January 1, 2028.

On November 13, 2025, the Company and Avenue Capital Group entered into the Amended Loan and Security Agreement, amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement funded an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and provided an extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. The Company will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group and also receive a further six-month extension of the interest-only period to the July 1, 2027 maturity date subject to FDA approval of DrugSorb-ATR prior to December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate,

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replace Tranche 2 of the Avenue Capital Commitment. The Amended Loan and Security Agreement requires that the Company maintain certain operating cash burn targets (as defined in the Amended Loan and Security Agreement) prior to FDA approval of DrugSorb-ATR.

Under the terms of the Amended Loan and Security Agreement, we issued additional warrants to Avenue Capital Group to purchase 1,428,571 shares of the Company’s common stock for cash at the exercise price of $0.70, which expire on November 13, 2030. The number of warrants and exercise price are fixed.

For further discussion regarding the Loan Agreement please see Note 5, Long Term Debt, to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.

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 with an expiration date of February 24, 2025, and one Series B Right Warrant to purchase one share of common stock with an expiration date of April 10, 2025. Up to an additional 6.25 million shares of common stock may have been issued upon exercise of the Right Warrants. Proceeds from the closing of the subscription period satisfied a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use. 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). 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 5-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.

Technology Business Tax Certificate Transfer Program

In April 2025, we further supplemented our cash balance with the receipt of $1.7 million from the sale of our 2023 and amended 2022 Net Operating Loss (NOL) and R&D tax credits from the Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority (NJEDA).

Resource Allocation and Path to Cash-Flow Profitability

We proactively manage our resources with a focus on driving commercial success, investing in key areas such as our regulatory submissions of DrugSorb-ATR to the FDA and Health Canada and the development of clinical data. We have instituted and continue to maintain tight control over expenditures and have lowered our spending over the past year. Further, on November 13, 2025, the Company announced it initiated a Strategic Workforce and Cost Reduction Plan to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. This initiative followed a comprehensive review of the Company’s cost structure and operating model. As part of the Strategic Workforce and Cost Reduction Plan, the Company reduced its workforce by approximately 10%, reduced and realigned operating and production expenses, and now expects that the Company will reach operating cash flow break-even in the second half of 2026. The Company recorded a charge of $0.5 million that includes severance and other cash and non-cash charges related to the restructuring.

As of December 31, 2025, we have approximately $7.8 million in cash (a non-GAAP measure), including approximately $6.3 million in unrestricted cash and cash equivalents, and $1.5 million of non-current restricted cash which may not be sufficient to fund the Company’s operations beyond the next twelve months from the issuance of these consolidated financial statements. These cash and restricted cash balances considered with our historical cash used in operations, notwithstanding our Strategic Workforce and Cost Reduction Plan and the impact of the Amended Loan and Security Agreement, raises substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the accompanying consolidated financial statements are issued.

Our expected future capital requirements may depend on many factors, including expanding our customer base and sales force, the timing and extent of spending in obtaining regulatory approval and introduction of new products, including the potential regulatory approval and introduction of DrugSorb-ATR in the U.S. which would allow for the opportunity to receive Tranche 2b of the Amended Credit Facility, and receive an additional 6-month extension of the interest-only period on the credit facility. Additional sources of liquidity available to us include the 2024 Shelf, other public or private equity offerings, debt financing or from other sources. The sale

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of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. Although the Company has taken actions to achieve cash flow breakeven, if it does not achieve this goal, the potential increased need for capital could also make it more difficult to obtain funding through either equity or debt. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying further regulatory approvals, or reducing headcount. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company routinely evaluates other financing sources, including less or non-dilutive debt financing, additional grant funding, royalty financing, strategic or direct investments, equity financing, and/or combinations thereof. There can be no assurance that management will be successful in these endeavors.

On September 16, 2025, the Company announced that it would file a new De Novo application for DrugSorb-ATR with the FDA. This decision followed an appeal meeting and decision by the FDA to uphold its previous denial of the Company’s original DrugSorb-ATR application, but affirmed that there were no safety related issues with the device, and requested additional information to support the Company’s desired label indication. As part of the resubmission process, the Company filed a pre-submission meeting request with supporting documentation to the FDA on November 7, 2025. The Company conducted a formal pre-submission meeting with the FDA in late January 2026 and continues to engage with the FDA to clarify and confirm the requirements for the new De Novo submission. The interactive discussions regarding the information to be included in the new submission are ongoing, and the Company expects to provide an update of the anticipated timing for the new submission once these interactive discussions with the FDA on the final requirements are complete. Following the new De Novo submission, a regulatory decision would be expected following a typical 150-day review process but may be accelerated or extended depending on interactive discussions with the FDA related to submission questions.

Loan and Security Agreement

On June 28, 2024 (the “Closing Date”), the Company entered into a Loan and Security Agreement with the Avenue Capital Group. Avenue Capital Group agreed to loan the Company up to an aggregate of $20 million, to be disbursed in two tranches: (1) one tranche of $15 million (“Tranche 1”), of which $10 million is available to the Company on the Closing Date and $5 million which remained classified as restricted cash through January 10, 2025, when it was released from its restriction as the following conditions were met: (i) the FDA has accepted Company’s application for review with respect to DrugSorb-ATR De Novo 510(k) and (ii) the Company has received a minimum of $3 million in net proceeds from the sale of its equity securities after the Closing Date. A second tranche of up to $5 million, may be disbursed at the Company’s request between July 1, 2025 and December 31, 2025, provided that the Company receives FDA marketing approval of its DrugSorb-ATR application (“Tranche 2” and together with Tranche 1, the “Avenue Capital Commitment”). All unpaid principal and accrued and unpaid interest shall be due and payable in full by the maturity date. If the 2nd tranche is fully funded by December 2025, the maturity date is January 1, 2028; otherwise, the maturity date is July 1, 2027. Commencing on August 1, 2024, the Company shall make monthly interest only payments during the initial 25-month period following the Closing Date, followed by equal monthly installments through the maturity date consisting of principal plus accrued and unpaid interest.

On November 13, 2025, we and Avenue Capital Group entered into the First Amendment to Loan Documents (the “Amended Loan and Security Agreement”), amending our Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement provides for access to an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and for the extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. We will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group, subject to FDA approval of DrugSorb-ATR, between January 1, 2026 and December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the Loan. The Amended Loan and Security Agreement requires that we maintain certain operating cash burn targets (as defined) prior to FDA approval of DrugSorb-ATR and provides for a further six-month extension of the interest only period to the July 1, 2027 maturity date upon FDA approval of DrugSorb-ATR.

On October 22, 2024, the Company announced that the FDA had accepted its application of for DrugSorb-ATR, which was one of the two conditions required by the restricted cash debt covenant. Proceeds from the Rights Offering on January 10, 2025 satisfied the second condition of the debt covenant which now allows for the $5.0 million of restricted cash on the Company’s consolidated balance sheets to become unrestricted, and available for use.

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The proceeds from the Avenue Capital Commitment were used to pay off the existing outstanding debt with Bridge Bank and will additionally be used for working capital purposes and to fund general business requirements. Amounts borrowed under the Avenue Capital Commitment shall bear interest at a variable rate per annum equal to the greater of (A) the Prime Rate plus five percent (5.00%) or (B) thirteen and one-half percent (13.50)%.

For further discussion regarding the Loan Agreement please see Note 5, Long Term Debt, to our Consolidated Financial Statements, included elsewhere in this Annual Report on Form 10-K.

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 with an expiration date of February 24, 2025, and one Series B Right Warrant to purchase one share of common stock with an expiration date of April 10, 2025. Up to an additional 6.25 million shares of common stock may be issued upon exercise of the Right Warrants. Proceeds from the closing of the subscription period satisfy a debt covenant which allowed for $5 million of restricted cash on the Company’s consolidated balance sheets to now become unrestricted, and available for use. 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). 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 5-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.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting estimates have significant effect in the preparation of our consolidated financial statements.

Uncertain tax positions and valuation allowances:

The Company records income tax expense and related liabilities based on estimates of amounts expected to be taxable or deductible in tax returns filed in various jurisdictions. These tax returns are subject to examination by taxing authorities, which may occur several years after the date of the financial statements. During such examinations, disputes may arise regarding the timing or validity of certain items, including the recognition of taxable income or deductions, and the resolution of these matters may take an extended period of time.

The Company evaluates uncertain tax positions related to income taxes in accordance with FIN 48, which establishes the recognition threshold and measurement guidance for financial statement recognition of tax positions taken or expected to be taken in a tax return. Under this guidance, the Company assesses whether the tax position is more likely than not to be sustained upon examination by the relevant taxing authority based on the technical merits of the position. For positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. For positions that do not meet this threshold, no tax benefit is recognized in the financial statements.

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. In addition, the Company offsets liabilities for unrecognized tax benefits against deferred tax assets associated with net operating loss or tax credit carryforwards when the uncertain tax position would be settled for the presumed amount at the balance sheet date.

The Company also evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, the Company considers available positive and negative evidence, including expectations of future taxable income. If the Company determines that it will be able to realize deferred tax assets in excess of the amount currently recorded, an adjustment would be made to increase income in the period such determination is made. Conversely, if the Company determines that it will not be able to realize all or a portion of its deferred tax assets, the deferred

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tax asset would be reduced and the resulting adjustment would be recognized as an expense in the period of determination. Either determination could have a material impact on the Company’s financial statements.

Fair Value of Warrants

The Company issues warrants in connection with certain financing transactions. The fair value of these warrants is estimated using the Black-Scholes option pricing model or the Monte Carlo pricing model, which requires management to make significant estimates and assumptions regarding inputs that are not directly observable in the market. These estimates include, among other things, the expected volatility of the Company’s common stock, the expected term of the warrants, the risk-free interest rate, and the expected dividend yield.

Expected volatility is generally based on the historical volatility of the Company’s common stock and, when appropriate, comparable publicly traded companies. The expected term represents the period of time the warrants are expected to remain outstanding, which may differ from the contractual term depending on the specific features of the warrants. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities consistent with the expected term of the warrants, and the dividend yield is based on the Company’s historical and expected dividend policy.

Because the valuation relies on significant assumptions, changes in these inputs could materially affect the estimated fair value of the warrants and the related amounts recorded in the Company’s financial statements. If the warrants are classified as liabilities, the Company remeasures the fair value of the warrants at each reporting date, and changes in fair value are recognized in the consolidated statements of operations. Accordingly, fluctuations in the underlying assumptions used in the valuation model, particularly expected volatility and the Company’s stock price, may result in significant non-cash gains or losses in future periods.

Management believes the assumptions used in estimating the fair value of the warrants are reasonable; however, actual results and future changes in these assumptions could differ materially from those estimates and could have a material impact on the Company’s financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 8. Financial Statements and Supplementary Data.

Our Consolidated Financial Statements and notes thereto are included elsewhere in this Annual Report on Form 10-K and incorporated herein by reference. See Item 15 of Part IV.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures

Management’s Evaluation of our Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including, our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective due to a material weakness, as further described below.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025.

Material Weakness in Internal Control Over Financial Reporting

A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis.

Material Weakness — Continuing from Prior Year

The Company previously disclosed a material weakness in internal control over financial reporting as of December 31, 2024 in our Annual Report on Form 10-K for the year ended December 31, 2024 related to the accounting for stock-based compensation corresponding to grants of Restricted Stock Units. Specifically, our controls were not effectively designed or operating to ensure that restricted stock unit grants or vesting activities were recorded within the proper accounts and at the proper amounts. As described below, while management has developed and implemented certain remediation actions to address the material weakness, further actions are still ongoing or have not been implemented for a sufficient amount of time to test and conclude on the effectiveness of the remediation actions as of December 31, 2025. Although most of our remediation efforts have been in place and functioning properly for much of the year, in connection with our preparation of our consolidated financial statements as of and for the year ended December 31, 2025, we

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identified two transactions related to unique RSU vesting events that required adjustment. As a result, the material weakness related to the accounting for stock-based compensation corresponding to Restricted Stock Units continues to be present as of December 31, 2025.

Material Weakness — Newly Identified in Current Year

During the year ended December 31, 2025, management identified a new material weakness related to the Company’s financial statement consolidation and reporting, as controls over the consolidation and monthly close processes were deemed not to be operating effectively, a determination which is at least partially attributable to the significant volume of manual procedures involved in these processes. Specifically, deficiencies in the review and reconciliation of intercompany balances resulted in (i) losses not being appropriately allocated to the correct jurisdiction when preparing the income tax provision and (ii) foreign currency transaction gains related to an intercompany balance being recorded incorrectly during the fourth quarter of 2025. As a result, net operating losses were not initially reflected properly in the income tax disclosures, and foreign currency transaction gains were materially misstated in the Company’s consolidated financial statements prior to being corrected.

Discussion of Remediation Activities

Remediation of the identified material weaknesses and strengthening our internal control environment is an identified priority for us and will continue to be a priority in 2026. We are committed to completing the remediation of these material weaknesses as expeditiously as possible and expect these enhancements to be fully implemented during the fiscal year ending December 31, 2026. However, the material weaknesses will not be considered fully remediated until the new controls have been operational for a sufficient period of time and tested to demonstrate their effectiveness.

With continued oversight from the Audit Committee, the Company’s management has begun to design and implement changes in processes and controls to remediate the material weaknesses described above. These internal control enhancements include, but are not limited to, the following:

Accounting for Stock-Based Compensation Corresponding to Grants of Restricted Stock Units

Management intends to continue implementing measures to strengthen our internal control over the accounting for restricted stock unit grant and vesting events. These efforts are intended to ensure accurate and timely reporting in accordance with U.S. GAAP for both interim and annual periods. Key steps in our remediation plan include:

Financial Statement Consolidation and Reporting

Actions to address this material weakness are currently being developed, with the following primary solutions having been identified:

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Changes in Internal Control Over Financial Reporting

Except as discussed above, there were no changes in the Company’s internal control over financial reporting that occurred during year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included elsewhere in this Annual Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.

None.

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PART III