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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Chief Executive Officer - Phillip Chan Executive Vice President and Chief Financial Officer - Peter Mariani Chief Medical Officer - Efthymios Deliargyris Operator: Good afternoon, ladies and gentlemen, and welcome to CytoSorbents' Second Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Pete Mariani. Please go ahead. Peter Mariani: Thank you, Matthew, and good afternoon, everyone. Welcome to CytoSorbents' Second Quarter 2026 Conference Call. Joining me today is Dr. Phillip Chan, our Chief Executive Officer, and Dr. Makis Deliargyris, our Chief Medical Officer. During today's call, we will have an overview presentation covering the operating and financial highlights for the second quarter of 2026 and a review of our four key drivers of value creation, including a regulatory update on our process to obtain U.S. marketing approval for DrugSorb-ATR. Following the presentation, we will open the lines to analysts for questions. Before I turn the call over to Phil, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions. Therefore, the company claims protection under the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today. The forward-looking statements we make today may reflect our views and estimates as of today, August 6, 2026, and we assume no obligation to update these obligations in the future as market conditions change. We encourage investors to review the risks discussed in our annual report on Form 10-K, filed with the SEC on March 30, 2026, and as updated by risks reported in our quarterly reports on Form 10-Q and in press releases and other communications to shareholders issued from time to time. In addition, for a reconciliation of non-GAAP measures, please refer to today's press release and the corporate presentation on the investor section of the company's website. And now I'll turn the call over to Phil. Phil? Phillip Chan: Thank you very much, Peter, and thank you very much everyone for joining today. Turning to our operational update, when I think about the second quarter, one word comes to mind, progress. While we recognize that our share price continues to reflect skepticism regarding our ability to execute, we believe the company today is materially stronger than it was just 1 year ago. Over the past year, we have fundamentally reshaped our organization. We've significantly reduced our operating cost structure, improved manufacturing efficiency, strengthened our commercial organization, advanced our regulatory programs and substantially reduced our operating cash burn. Importantly, these improvements are not theoretical. They are now being reflected in our financial performance. Before discussing the quarter, I'd like to remind investors what CytoSorbents has become. We've built a proprietary blood purification platform based on our highly engineered polymer technology. Today, this platform supports 2 major franchises. First is our commercial CytoSorb business, which has now generated over 300,000 treatments in more than 70 countries and continues to produce high-margin recurring revenue. Second is DrugSorb-ATR, our investigational cardiovascular device, which we believe has the potential to open an entirely new U.S. growth engine. Together these businesses provide us with both a growing commercial presence around the world. I believe this slide summarizes the quarter very well. Revenue remains stable at approximately $9.6 million. Gross margins improved to 73%, representing continued manufacturing excellence. Most importantly, operating cash burn declined to approximately $200,000, excluding restructuring costs, bringing us substantially closer to our objective of achieving operating cash flow breakeven. These improvements did not occur by chance. They reflect disciplined execution across manufacturing, commercial operations, expense management and cash management. Collectively, they positioned the company significantly better than we were 12 months ago. Although we're pleased with our operational progress, we recognize that investors ultimately care about value creation. We believe CytoSorbents now has 4 largely independent opportunities to create meaningful shareholder value over the next 6 to 18 months. The first is to achieve operating cash flow breakeven. Second is to return our core CytoSorb business to sustainable revenue growth. Third is opening the U.S. market through DrugSorb-ATR. And finally, unlocking the strategic value of our HemoDefend-BGA franchise. Each of these initiatives can independently create value, but together they represent a compelling pathway to fundamentally strengthening our company. I'd like to now turn the call over to Pete Mariani to discuss our progress towards operating cash flow breakeven. Pete? Peter Mariani: Thanks, Phil. Achieving operating cash flow breakeven has been a key objective for us and we're pleased with the continued progress toward this goal in the quarter, including an increase in gross margins to 73%, a 27% reduction in operating loss and a 38% improvement in adjusted EBITDA loss, and, importantly, a reduction in our operating cash burn to $200,000, excluding restructuring payments. These gains reflect disciplined execution across our organization, including manufacturing optimization, improved working capital management, commercial execution and tighter cost controls. As a result, we remain on track toward our objective of achieving operating cash flow breakeven in the second half of this year. This slide shows the positive 12-quarter trend line, noting the improvement in negative free cash flow, which we defined as total cash used in operating activities plus cash used in investing activities, and demonstrates the meaningful progress towards this important objective. We believe that achieving cash flow profitability is important because it fundamentally changes the company's financial profile. Every dollar of operating cash burn eliminated reduces future financing needs, strengthens our balance sheet, increases strategic flexibility and allows a greater proportion of future growth to accrue to shareholders. Although important work remains. We believe that progress achieved over the past year demonstrates that this strategy is working and that we remain on path to achieving our goal of becoming operating cash flow breakeven in the second half of this year. Phil? Phillip Chan: Thanks, Pete. Now we get to our value driver number two, which is returning the CytoSorb business back to growth. Our commercial strategy remains focused on returning CytoSorb to consistent growth. This quarter, growth was driven primarily by our distributor network, which is up 16% year-over-year and direct sales outside of Germany, which was up 9% year-over-year. Germany remained challenged following our restructuring due to headcount restrictions. However, the smaller organization is becoming increasingly productive. We've strengthened leadership, improved execution and intend to selectively hire 3 to 5 additional sales representatives through early 2027 to restore country coverage. Outside Germany, we're encouraged by continued momentum. Although geopolitical instability temporarily affected our Middle East business, physician interest remains strong and we continue to believe that this region represents meaningful future upside. Commercial success ultimately depends upon consistent physician education. Our strategy continues emphasizing the right patient at the right time with the right dose. We're also seeing growing physician interest across multiple critical care and cardiac surgery applications, while continuing to introduce our HotSwap technology, which further expands our platform capabilities by enabling the switch out of the device more frequently. In addition, the feedback on our PuriFi platform continues to be very positive, and the placement of these machines continues to grow. This is a platform that is intended to help centers use our therapy earlier, and in doing so, collectively, be able to drive the treatment of the right patient at the right time with the right dose. With that, I'd like to now turn it over to Dr. Makis Deliargyris to talk about the third value driver, which is opening the U.S. market through DrugSorb-ATR. Makis? Efthymios Deliargyris: Thank you, Phil, and good afternoon to everyone on the call. Before we get into the update about DrugSorb-ATR, it's important to once again set the stage about the opportunity for DrugSorb-ATR to solve a major clinical need. Tens of millions of patients around the world are on blood thinners. These include the class of direct oral anticoagulants with blockbusters like Eliquis and Xarelto, and also platelet blockers like Brilinta. These patients are on these drugs for a long time, many of them for the rest of their lives, with the intent of reducing the risk of having thrombotic complications as more heart attacks, strokes. However, these patients on these blood thinners have an estimated annual risk of approximately 10% that they will require an emergent or urgent operation that often includes cardiac surgery. In fact, 5% to 10% of emergency cardiac procedures do take place in patients on chronic antithrombotic therapy. And among heart attack patients, approximately 5% to 10% of them, they do require an urgent CABG operation to treat the ongoing heart attack. The problem arises by the fact that the presence of blood thinners greatly increases the risk for bleeding around surgery. The only option available for these patients right now is a delay of surgery for multiple days until the drug washes out of their system. There is therefore a major unmet need that we're trying to solve with DrugSorb-ATR. First, many of these patients cannot afford to wait for surgery. They're simply too sick, too critical. Secondly, for those who can wait, they can suffer recurrent complications, meaning another heart attack, potentially a stroke, heart failure or even death while they're sitting in a hospital bed waiting for the operation that they need. DrugSorb-ATR has received 2 FDA Breakthrough designations highlighting the lack of available effective therapies for this problem. And we believe that DrugSorb-ATR has the potential to address this pervasive and serious unmet medical need. Over the past few months, we have heard from a few of our investors that they'd like to understand our clinical story and our clinical data better. So with the opportunity of the publication of the main results of the STAR-T study, we would like today to discuss in more detail the results of our pivotal trial. On this slide, you see the front page of the publication in the leading American cardiac surgery journal, the Journal of Thoracic and Cardiovascular Surgery. To the right-hand side of the slide, you will see what the editor selected as the central message from this trial, which we will discuss in more detail later in the presentation. Next slide, please. A very brief overview of the design of the trial. The trial was designed to enroll 140 patients that would require an urgent operation while on Brilinta. These are patients that did not have the benefit of washing out for over 3 to 5 days as the current guidelines recommend. Once the decision was made to proceed to surgery, these patients were randomized in a double-blind fashion to either receive the device or to receive a sham device which is the control arm. The only study-related intervention took place during the operation, meaning for the patients who received the device, the DrugSorb-ATR device was inserted within the heart-lung circuit, as you see on the top right of the slide, while the control patients received the sham device. The rest of the care of these patients was according to the standard of care at the leading institutions that participated in this trial. The follow-up of the trial extended out to 30 days. So this trial was intended to assess the safety and the efficacy of the device. The safety was assessed by good clinical practice level assessment of adverse events that occurred in both study groups during the trial that was independently reviewed and assessed by a data safety monitoring board comprising experts in the field. The efficacy was assessed through a composite of 3 types of events, either a fatal bleed, a clinical bleed according to a standard definition, or by the volume of blood loss within 24 hours after surgery that was collected in the chest tubes that these patients routinely have after open heart surgery. There were 29 sites that participated, 22 in the U.S. and 7 in Canada and we're very lucky to have a trial leadership comprising some of the luminaries in the field, including Dr. Michael Mack, cardiac surgeon from Baylor Scott & White; Dr. Michael Gibson, interventional cardiologist from Harvard University; and Dr. Richard Whitlock, who is the head of the Cardiovascular Research Organization up in Canada from McMaster University. Next slide, please. So, let's discuss the population within the study. There were 140 patients, as we discussed, that were randomized. That constitutes the intent-to-treat population. And those 140 patients were balanced between the DrugSorb arm and the control arm with 70 patients in each group. However, as the protocol outlined, the analysis and the trial were performed only among patients that received an actual device, study device, and underwent a cardiac operation. 8 of the 140 patients did not meet that criteria and were excluded from the modified intention-to-treat population, which was again the primary analysis population of the trial and included 132 participants. Once again, this was balanced between the 2 groups, and therefore within the mITT, there were 66 patients in each of the study groups. However, as you also see on the slide, there were 2 other important categories within the mITT population that were not balanced between the 2 study groups. First was the amount of protocol deviations that basically represented that the trial procedures were not properly followed in the trial, specifically relating to a technique called acute normovolemic hemodilution, or ANH, which represents a practice in some institutions where the patient's own blood is removed at the beginning of surgery, replaced by crystalloid solutions and then given back to the patient at the end of the operation. As you can imagine, such a practice would redose the patient with a drug that was present in the blood entering the surgery and therefore negate any effect of the DrugSorb-ATR device. This was a major deviation, and we tried to protect and educate the sites from doing it, but still there were some of those cases observed, which were more frequent in the DrugSorb-ATR arm. The second important consideration was the type of cardiac operation. The STAR-T trial was primarily a CABG trial, coronary artery bypass grafting. And as you see on this slide, 92% of all surgeries were CABG. Only 8% of the surgeries included in the trial were different other surgeries than CABG, including aortic surgery, valve surgery or combination operations. However, once again, this occurrence was imbalanced between the 2 arms. Therefore, if you look at the combination of major deviations and other surgeries, we ended up with a significant number -- significant difference between the 2 groups of 15 versus 6. We have accounted for those imbalances in our analysis in the CABG per protocol population that we will focus on later. Next slide. The safety results of the trial are very straightforward. The study met the primary safety endpoint as assessed by the independent DSMB, which concluded that there were no safety concerns and no additional risks associated with the use of the device. In this table, we have summarized the actual event rates as listed in the published paper. And you will see that there's an absolute balance between the 2 arms in any type of adverse events. More importantly, I'd like to highlight that there were no serious adverse events related to the device. There were no unanticipated adverse events related to the device and there were no adverse events leading to discontinuation from the study related to the device. There was one death in each arm, which represents a fairly low rate, which we believe is a reflection of the high-quality sites participating in this trial. Next slide. The picture on the efficacy side requires additional explanation. So the primary analysis of the trial was done on the mITT population that we discussed previously, which comprised 132 patients. We looked at the clinical events of bleeding, fatal bleeding and blood volume and chest tube drainage in 2 different ways. In the first composite efficacy endpoint, we included both the occurrence of moderate and severe bleeding events. The second composite endpoint solely focused on the presence of severe bleeding events. We analyzed these events in a hierarchical manner using a statistical method called the win ratio. Just to give you a headline around the win ratio, when the ratio is above 1, that favors the intervention. So what you see in the primary population, although the win ratio for both endpoints was above one, statistical significance was not achieved. However, if you recall the imbalances that were reviewed previously, then we should focus on the second analysis that accounted for those imbalances, which is the CABG per protocol population analysis in 111 patients. And the first thing that you will see is that for both endpoints, the one including moderate bleeding and the one only focused on severe bleeding, the win ratio values are higher compared to the overall population. And in fact, in the endpoint that limits the analysis to severe bleeding events, we now have a statistically significant increase, significant reduction and a win ratio of 1.59. Next slide, please. One of the highlights of the study was the ability to track in a very quantitative fashion the amount of blood loss suffered by the patients in the trial. And the way to do that is by measuring on an hourly basis the blood loss collected in the chest tubes. What you see here is all the data related to chest tube drainage within the trial. On the left-hand side, you see the hourly measurements and the cumulative accumulation out to 24 hours between the 2 arms. In the gray arm -- in the gray bars is the control arm and in the blue arms is the DrugSorb arm. You can see, even though it's probably small on your screen, that from the first hour after surgery, there was less bleeding in the blue group compared to the gray group. In fact, that reduction achieved statistical significance within the first 4 hours and was maintained throughout the duration of observation, up to 24 hours. However, what's more important probably and more clinically meaningful is the analysis on the right. There's always blood loss after cardiac surgery. It's expected and that is why every patient walks away with his chest tubes. What is not expected is excessive blood loss, which is driven by the blood thinners. So the intent of the DrugSorb-ATR device is not to eliminate blood loss because that's just simply part of surgery. The intent is to reduce the occurrence of severe bleeding events, severe cases of severe blood loss. So the way we analyzed the data is we took the actual blood volume observed in the trial, chest tube drainage blood volumes, and separated them into 4 quartiles. The first quartile represented the patients who had the least amount of blood loss, as you see on the graph, less than 0.5 liter. And then on the fourth quartile was patients who had more than 945 ml. And again, these are the observed data. These are not arbitrary breakdowns. This is the actual quartiles of blood volumes observed in the trial. And there are 2 important observations in this analysis. First of all, the distribution is different between the 2 groups. There's the clustering of lower blood volumes in the quartiles with lower blood volumes for the blue group and there is more -- higher frequency of bigger blood loss in the gray group. In fact, the statistical test, which is called p for the trend lines between the 2 groups was significant. But most importantly, if we just focus on those patients who experienced significant blood loss, they were in the fourth quartile, they were the worst of the worst, there was a highly significant reduction, approximately 60% of the risk of having such a major bleed if the device was used. Next slide, please. This slide shows what the study investigators and the journal's editors considered to be the central message of the trial. This is a traditional composite analysis of severe bleeding events according to the standard definition that we use or the occurrence of chest tube drainage greater than 1 liter. Just to give you some context, each of us, a normal average-weight adult has approximately 5 liters of blood. So losing 1 liter represents approximately 20% of the total blood volume for a patient. This is also a cutoff that's considered highly clinically meaningful by surgeons. So when we combine the risk of having either a major, severe bleeding event or losing more than 1 liter of blood after surgery, there was a 58% risk reduction with the use of the device. In fact, it was an absolute risk reduction of 16.3%, 13.7% with treatment, 30% with control, that translates to a number needed to treat of 6. More simply put, you can prevent one major bleed from happening for every 6 patients that are treated with the device. This is a highly favorable number. And just as a comparison, it's significantly lower than NNTs that are accepted in standard clinical practice, which are between 50 and 100 for traditional therapies like blood pressure medication or cholesterol-lowering medication. Next slide, please. So what we discussed previously was that when moderate bleeding was included within the composite endpoint analysis, we were not able to demonstrate a significant effect. However, when the analysis was limited to severe bleeding, that's when the p-values became significant. Obviously this raised some questions for us. Why would the device not reduce moderate bleeding but only severe bleeding? Well, it turns out this was likely a definition problem, not -- a study definition problem, not a device problem. The UDPB definition for moderate bleeding frequently allowed a single unit of blood product transfused to account for a moderate event. So we dove a little deeper, and we actually went and looked at these moderate bleeding events to see if they were the same between the 2 groups. And what we saw was when these events did occur, according to the definition, patients treated with the device required 50% less blood products to manage these events compared to the control patients when they suffered these events. And that observation was consistent regardless if the transfusions were red blood cells, platelets, fresh frozen plasma or cryoprecipitate. This is important because that we believe shows that the device works across the spectrum of bleeding, but the sensitivity of the definition was not high enough to be able to uncover this effect. Next slide, please. So we hope that you now have better understanding and also understand why we believe our clinical data are strong. But what is important also is our progress that we're making with the FDA. A little bit of review of the history with the regulatory path for DrugSorb. Because the primary endpoint of the STAR-T trial was missed, the FDA denied our original de novo application based on the approval standard that requires the probable benefit outweighs probable risk and subsequently upheld that denial during the appeal process. However, there were 3 very important and we believe positive outcomes that occurred during the appeal process. First, the FDA agreed that there were no major issues associated with device use. That's a key to the benefit-to-risk evaluation for all de novo devices. FDA also stated that a new clinical trial is not needed and that additional information that can be provided may support the company's desired label claim. Finally, FDA indicated that upon a new submission, a focused review of the remaining open items was possible. As we have previously disclosed, we've had follow-up discussions with the FDA, and we have now obtained clarity on the additional information that will be required to support the probable benefit. This includes additional mechanistic data that would likely be generated from a small experimental study and real-world evidence analysis based on existing data from the increasing use of the device in the everyday practice in Europe. We have a pre-submission meeting scheduled later this month with FDA to discuss the option for generating the additional mechanistic data, which have already identified the appropriate data to support the real-world evidence analysis. And in fact, preliminary results will be presented at the end of this month at the European Society of Cardiology Conference. Once all the additional information is available, we will then file the new de novo application as soon as possible with obviously a lot of the work already in progress. Next slide. However, we're also excited about the potential second shot on goal for DrugSorb-ATR to open the U.S. market. That is in relation to the removal of DOACs, or direct oral anticoagulants. Among all patients with anti-thrombotics, the DOACs are the leading category. In fact, the market leaders within that category, which is Eliquis and Xarelto, as listed on this slide, rank among the top blockbuster pharmaceuticals in the world, generating annual sales in close to $20 billion in 2025. We have also previously discussed that DrugSorb-ATR has already received a second Breakthrough Device designation from FDA for the removal of Eliquis or Xarelto during cardiac surgery. And we have also previously discussed that it is our intent following initial marketing approval to expand the label for DrugSorb-ATR to include the removal of DOACs during cardiac surgery. Therefore, given the delays in ticagrelor submission, we have now scheduled a separate presubmission meeting with FDA, which will also occur later this month to review with the agency the available data for the DOAC indication and determine, in a collaborative manner, what, if any, additional information will be required to support a parallel de novo submission for DOAC removal. Meanwhile, as the regulatory process is ongoing, we are seeing that the evidence base for antithrombotic removal with our device continues to grow. Earlier this year at EuroPCR in Paris, which is the world-leading course in interventional cardiovascular medicine, we had 2 key presentations. One, in relation to urgent CABG in patients with acute coronary syndromes, demonstrating that choosing Brilinta over Plavix and using our device results in significantly less bleeding after surgery. That was a rigorous analysis utilizing propensity score matching to adequately compare the intervention and control arms. We also presented an interim report from the STAR registry highlighting some of the patients that were actually on DOAC, not Brilinta, during CABG, where the device also was used and it appeared to result in low bleeding rates. Later this month in Munich at the European Society of Cardiology, which is the world's largest cardiovascular conference, 2 additional analyses will be presented. A matched comparison of patient-level data in patients on Brilinta undergoing urgent CABG. This is the type of data that the FDA is also expecting us to include in the new submission. We have identified an adequate control group, and we're utilizing our data from the STAR registry for these comparative analysis. Obviously, I cannot go into the results as the data are embargoed. The second analysis includes the German experience that is increasingly now highlighting the protocolized use in operations in major heart surgery centers in Germany where the device now is becoming standard of care. So there's a sample of over 200 patients treated just in the German institutions and these investigators are very enthusiastic about presenting the results. This rigorous real-world analysis highlight the increasing adoption of our technology as part of the operating protocols at leading European heart centers and the bleeding reductions that are associated with the use of our device. And now to my final slide. As we have communicated previously, we believe that DrugSorb-ATR represents a win-win-win innovation. First for patients. It minimizes the delays to definitive surgery. These patients are very critically ill and they do not wait for their surgeries. Once they get operated, it reduces the serious bleeding risk. Having a serious bleeding event is associated with a complicated hospital stay and has been highlighted in the literature as driving increased morbidity and mortality after cardiac surgery. It's also a win for surgeons. Our device is very easily integrated into the heart-lung machine. Therefore, it does not increase the workload of these surgeons. It reduces perioperative bleeding complications. Not only does it protect the outcome of the procedure, but it also protects the surgeon's reputation and their quality rating, since blood product transfusions and postoperative bleeding are part of the rating system for cardiac surgeons. It allows for faster disposition of patients, increased throughput, reduces the expense and time consumption regarding exploratory surgery. Many times when patients suffer a major bleeding after cardiac surgery, they have to return to the operating room for a second operation. And then finally, DrugSorb is a win for hospital administrators because it reduces cost and resource utilization in their hospitals. It avoids the cost associated with a 3- to 5-day delay for drug washout that can be up to $30,000 in the intensive care unit or up to $10,000 in a planned cardiac managed bed. It also reduces the adverse events and protects the hospital's CMS and star rating. What you also don't see on the slide, it also has a potential to increase the volume in these hospitals because more open beds means that they can do more surgeries. Especially for CABG, it's a profit maker for the hospital. It's a very attractive value proposition. And with that, I'd like to thank you for your attention. I will turn it back to Phil. Phillip Chan: Thanks very much, Makis. That was really helpful. Greatly appreciate it. Well, I'm pleased to now have the opportunity to discuss really for the first time our fourth value driver, which is to realize the strategic value of HemoDefend-BGA, a technology we've been working on for many years and that we believe is not at all reflected in today's valuation. But before I do that, let's talk about the importance of universal plasma. Plasma is the life-saving, acellular portion of blood that contains coagulation factors, antibodies and other things that are vital for blood clotting, immunity and other functions used widely in trauma and critical care. But it's blood-type specific due to the presence of anti-A and anti-B blood group antibodies. Universal plasma, on the other hand, can be given to anyone, regardless of blood type and is generated artificially by removing the anti-A and anti-B antibodies, making it readily available. However, to date, the technology has been very expensive and very difficult to scale. The wide availability of universal plasma would significantly simplify the logistics of plasma collection and usage at the hospital level, dramatically lower complexity of plasma administration in mass casualty and emergency situations without the need to blood type the patient. Think about earthquakes. Think about rad-nuke events. Think about mass trauma from serious explosions and other things. Think about all the people who would be using this, like first responders, medics, paramedics, people in an emergency room and others. When coupled with freeze-dried plasma technology, it would enable the Holy Grail of lightweight, portable, non-refrigerated freeze-dried universal plasma, which enables the product to be stockpiled and have broad availability on ambulances, first responder vehicles, medic packs and others. In addition, the ability to remove anti-A and anti-B antibodies is important in the multi-billion-dollar plasma processing industry dominated by names like Grifols, CSL Plasma, Takeda, Baxter and others, who make IVIG, albumin, clotting factors and many other blood products from plasma. HemoDefend-BGA can remove anti-A and anti-B antibodies to easily and cost-effectively create universal plasma and other blood products. Which brings us to HemoDefend, which is enabling universal plasma and blood products. HemoDefend is a simple gravity-driven filter that removes anti-A and anti-B blood group antibodies to enable universal blood products. And it turns out that the same filter can be used to generate not only universal plasma, but universal platelets as well, as well as increase the donor pool of whole blood low titer donors. It addresses critical needs in trauma, emergency, military and civilian transfusion as well as in the plasma processing industry that we just mentioned. And it was developed with more than $16 million in non-dilutive Department of Defense and government funding and supported by leading experts and partners. We have now de-risked this product concept with a path to U.S. FDA and EU clearance and potential additional non-dilutive funding from the Department of Defense or other government agencies. What we have been able to accomplish is a scalable platform technology targeting a multi-billion-dollar market opportunity with multiple potential exits through acquisition by plasma, trauma or other blood tech leaders or other strategic alternatives. Importantly, this is a pre-commercial non-revenue generating asset today and not part of CytoSorbents' core operating or cash-producing businesses. While strategically important, HemoDefend is not generating revenue and not reflected in CytoSorbents' current valuation. But let me tell you quickly how this works. A single cartridge can convert a unit of plasma in 15 minutes to a universal plasma unit with no equipment needed. You take a unit of plasma, you filter it with the HemoDefend-BGA cartridge, plasma flows by gravity through a small filter, the beads inside remove the antibodies, and safe universal plasma is then collected in a new sterile bag. This is a fast process where universal plasma can be generated in under 15 minutes. It's safe, preserving clotting factors, and is biocompatible. It's simple, does not require power, does not require training and is held in a closed sterile system without the need for any type of electricity or machines. And it has an expected shelf life of more than a year with scalable manufacturing. Where we are today is actually in a very good place for HemoDefend-BGA and over the past year, we've made tremendous progress. HemoDefend-BGA development is now complete and has been tested and validated by multiple blood centers and government and industry players. It is currently undergoing device validation for human clinical studies. And in July 2026, along these lines, we've now received constructive FDA feedback regarding an anticipated clinical pathway following a pre-IDE submission to FDA with plans to begin clinical trial testing in the future. We also are in continued discussions with U.S. government agencies regarding potential non-dilutive funding of the full clinical trial process through approval. And importantly, it's important to note that universal fresh frozen plasma could greatly simplify blood logistics in a hospital, which is a multibillion-dollar market. Also importantly, the first freeze-dried plasma Biologics License Application has been now granted, paving the way for the Holy Grail of freeze-dried universal plasma, again, plasma that can be on any emergency room shelf or first responder vehicle or military vehicle to treat trauma and severe hemorrhage. And we would be providing the universal plasma component for that potentially. Because of this HemoDefend-BGA is a valuable asset with multiple potential pathways to create shareholder value including commercial partnerships, licensing opportunities, government funding and other strategic alternatives. And with that, I'd like to turn it over to Pete to cover the financial highlights. Pete? Peter Mariani: Thank you, Phil. I'll take a few minutes to review the high-level financial results for the quarter and provide some additional context for improved operating margins and the path towards operating cash flow breakeven. Next slide. First of all, first quarter (sic) [ second quarter ] revenue was $9.6 million, consistent with the prior year and up 9% sequentially from the first quarter. As Phil noted, year-over-year revenue performance was driven by growth in our distributor and strategic partner territories as well as direct sales outside of Germany, which was offset by lower sales in Germany. The decline in Germany reflects a smaller, more focused sales team as we continue to restructure the team's sales process and leadership. We're encouraged by the progress of this streamlined team and now expect to add 3 to 5 sales representatives through early 2027, which we believe will improve territory coverage and revenue growth. Revenue in our distributor and strategic partner territories increased 16% year-over-year and 18% sequentially. While revenue in our recently established presence in Middle East remains below expectations in the first half of the year due to disruptions related to the Iran war, we remain encouraged by our team's progress in the region and expect this important geography to contribute to future revenue growth. Changes in foreign currency rates positively impacted revenue by approximately 4% compared to the prior year. Next slide. Gross margins improved to 73% in the second quarter of '26, up from 69% in Q1 of this year and 71% in Q2 of the prior year. The improvement was driven through manufacturing optimization, improved sourcing and production efficiencies and disciplined cost management. We believe these gains are sustainable and provide an opportunity to further margin expansion as volumes increase. Operating expenses decreased 7% to $9.7 million for the quarter, compared to $10.4 million for the prior year period. Excluding the $270,000 restructuring charge recorded during the quarter, total operating expenses would have declined 13% year-over-year. The restructuring charge reflects severance and related costs associated with an additional reduction in force and other cost-saving initiatives implemented during the quarter. As a result of these actions, we are now a much leaner, more focused organization and total headcount reduced by approximately 23% since September of last year. Improved gross margins and lower operating expenses drove a 27% improvement in our operating loss, which narrowed to $2.6 million from $3.6 million in the prior year period. Net loss for the quarter was $4.4 million, or $0.07 per share, compared to net income of $1.9 million, or $0.03 per share, in the prior year period. The large year-over-year change was primarily driven by the non-cash impact of foreign currency gains and losses. However, adjusted net loss, which excludes the noncash impact of foreign currency gains and losses, as well as noncash compensation and restructuring charges, improved 22% to $2.9 million, or $0.05 per share, compared to an adjusted net loss of $3.7 million, or $0.06 per share, in the prior year period. Now adjusted EBITDA loss, which also excludes the noncash impact of foreign currency gains and losses, noncash stock compensation, and restructuring charges improved 38% to $1.6 million from $2.6 million in the prior year. We use adjusted EBITDA as a key measure of overall profitability and expect continued improvement in the second half of the year as the full impact of our cost reduction initiatives are realized. And finally, our total cash, cash equivalents and restricted cash was approximately $5.9 million on June 30, 2026, compared to $6.3 million at the end of the first quarter. Cash burn improved to $400,000 for the quarter, including approximately $200,000 in restructuring-related payments, resulting in a net operating cash burn of approximately $200,000. As we noted earlier, this improvement reflects the benefits of our cost reduction program, operating efficiencies, improved working capital dynamics and disciplined cost management, and we continue to expect to achieve operating cash flow breakeven in the second half of the year. Now I'll turn the call over to Phil. Phillip Chan: Thanks, Pete. Looking ahead, we believe our 4 independent value drivers drive one uncommon value. Taken together, these four value drivers represent multiple independent opportunities to create value over the next 16 to 18 months. The first reduces financial risk by expanding operating margins and achieving operating cash flow breakeven. The second returns our core CytoSorb business to consistent, profitable growth. The third opens the U.S. market and establishes what we believe can become a second major commercial franchise. And the fourth unlocks the value of a highly differentiated blood purification platform with meaningful strategic optionality. We believe each of these initiatives has the potential to independently strengthen our business and increase shareholder value. Together, they have the potential to fundamentally transform CytoSorbents into a stronger, more profitable and more diversified medical technology company. Although more work remains, we believe our accomplishments over the past several quarters have stabilized the company and have positioned it for this next phase, where our entire organization remains intensely focused on disciplined execution. In the near future, we intend to regain compliance with our NASDAQ listing requirements, broaden the awareness of our company and our 4 separate value drivers, and importantly, secure the company financially. We appreciate our shareholder support and look forward to updating all of you as we continue to make progress on each of these important objectives. With that, operator, we'd now be pleased to open the line for questions. Operator: [Operator Instructions] And your first question comes from Tom Kerr of Zacks SCR. Thomas Kerr: Two quick ones. Can you clarify the timing of the submissions if you do a -- the DrugSorb-ATR submissions if you do a parallel? Like if you just do one and you expected January, now you have to do a parallel submission for DOAC. Does that drag it on an extra 2 or 3, 4 months before the parallel submission can be submitted. I hope that made sense. Phillip Chan: Yes, no, I -- Makis, do you want to address that? Efthymios Deliargyris: Sure, sure. No, I think we truly mean parallel. I don't, I don't -- we don't think that one submission will necessarily impact the timing of the other one. We are on the FDA's review clock basically. So a lot of the time required here is basically for the FDA to grant us these meetings and to provide us with the feedback. In terms of the ticagrelor submission, it will come down to collecting the additional information and having it available as we discussed, but that submission is already a long way in progress since we have obviously a lot of the materials already in place. For the DOAC removal submission, a lot will depend on our initial interaction with FDA. As we disclosed earlier today, that meeting will take place also late this month. So that will give us a better bit of understanding because that will kind of hopefully lay out some sort of a path forward of what we need to include in the new submission. But once these paths are clear, and we believe that for the ticagrelor one, we have a lot of clarity already, they plan to proceed truly in a parallel fashion, those 2 applications. Thomas Kerr: Got it. That makes sense. Just a quick one for Pete. On the gross margins, were you implying that there's still operational efficiencies on the cost of goods sold side where maybe the second half of the year could get above the 73%, 73.1% gross margin? Or is that a steady state, do you think, for a while? Peter Mariani: Yes, I think it depends on volume. I think the comment I made was that as volumes increase, I think it gives us the opportunity to see expansion. Operator: And your next question comes from Sean Lee of H.C. Wainwright. Phillip Chan: Sean, we can't hear you. You may be on mute. Xun Lee: Oh, my bad. Sorry about that. For Germany, do you expect to come... sorry, do you expect to -- how long do you expect these new reps to become accretive to the revenues, and do you think they'll be sufficient to return the country to growth? Phillip Chan: Yes, Germany has a population of about 80 million to 90 million people, and so for a small sales force to be able to cover that entire country is difficult. We have a lot of centers, in fact, that have been our customers where we just can't visit them because we've been limited by the number of folks that we have on the street. And so the good part about it is that what we've seen is that it doesn't take a lot for an experienced sales rep to get up to speed. It can be as quick as 3 months, as long as 6 months, but typically that's when they're starting in a new territory that has not already been developed. What we're saying is that they would be basically going into territories where hospitals were customers or are customers but just haven't been detailed in a long time. And we think that they can begin to become productive actually very quickly. And so we've been asked before about, well, doesn't 3 to 5 sales reps cost a lot? And we have a compensation mechanism common to other companies in the space where it's a lower fixed, higher variable commission compensation scheme where basically if they don't produce, they don't make as much money as they could if they were very productive. And so it helps us limit our initial costs and helps get them to become very productive reps very quickly. Pete, I don't know if you had any... Peter Mariani: Yes, no, I guess I'd say a couple things. One, we're actually really pleased with some of the improvements that this core -- this smaller core group is doing. And we see increased productivity out of that group, and we think that in the back half of the year, that core group in and of itself will see some additional sequential growth. But your question is, as we're going to add 3 to 5 reps through the end of -- or through the early part of '27, it will take each of them probably 3 to 6 months to come up to speed. So I think that we'll get some initial revenue growth just through improved execution of the current team right now, and then as you get into the middle part of next year, I think we'll begin to see contributions from the ads that we're planning in the second half. Xun Lee: Great. My next question is on the DrugSorb-ATR. It's good to see that all the real-world evidence is coming in that could support the next submission. So I was just wondering whether you've discussed it with the FDA or they've pre-agreed to the data source for these data -- for these real-world evidence, and also the comparator and the statistical analysis to be used. Phillip Chan: Makis? Efthymios Deliargyris: Sure, sure. No, thanks. That's a great question. So the FDA late last year, in December, they issued a guidance dedicated to real-world evidence. So they have already kind of laid out in large extent kind of their expectations of what the data sources should look like. So -- and obviously, during our previous discussion, we had the opportunity to discuss with them. So we believe we have appropriate and adequate data sources. Obviously, our own internal company data, the collection of our data is high fidelity and we're adhering to all the regulatory requirements. But it's been a little more challenging to find the adequate control groups, but we think we have found them from external data sets. In applying the guidance that the FDA provided, reviewing it and applying it to these data, we believe will constitute the kind of data the FDA is expecting to see. Now, at the end of the day, as you know, it will all come down to the review of the data. The FDA frequently has questions on the data that they will not be able to voice those questions until they actually see the data. So we have had the initial interactions. We understand what the expectations are. We believe we have good data. And we believe that the analysis -- statistical analysis plan that we have put forth is a rigorous one, including leveraging independent expert statistical groups. So, it will come down to what the FDA's question will be after they review the data. But we have a pretty good roadmap of what we should be submitting to them. Xun Lee: I see. That's very helpful. My last question is on HemoDefend-BGA. So with the development complete on that, are there any plans to start a clinical study by yourself, or is it more a case of waiting for the right partner or the government grant? Phillip Chan: Yes, we -- currently our focus as a company is on CytoSorb and DrugSorb-ATR and we believe, however, that blood and blood products are a priority for the U.S. government and the Department of Defense. They've already funded this program amongst different institutions in the U.S. government to the tune of $16 million. And we believe that we've been able to execute upon those grants and contracts extremely well and believe that -- and hope that we will be able to gain the financial support of other agencies to bring this home to an approved product through clinical trials. So we are currently looking at all strategic options related to HemoDefend-BGA. We are not looking to fund that out of our financial resources from CytoSorbents at the current time, but should we be able to obtain this non-dilutive government funding or partner this with a strategic partner, we would accelerate our plans to get this into clinic. And again, one of the great things that we've now received is now FDA feedback on what that clinical program should look like, and so giving us clarity for helping to design those studies. So, more to come, and in fact, hopefully a lot more to come on the HemoDefend-BGA program, and we look forward to informing shareholders about that progress. Operator: And there are no further questions at this time. I would now like to turn the call back over to Phil Chan for closing comments. Phillip Chan: Thank you. And thank you, everyone, for attending the call this evening and for your continued support. We look forward to updating you on our progress on a more regular basis in the future. Thank you, everyone, and have a great night. Operator: Ladies and gentlemen, this concludes today's conference. We thank you for participating, and ask that you please disconnect your lines. Before you buy stock in Cytosorbents, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cytosorbents wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cytosorbents (CTSO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes the quarter as a period of 'progress,' having fundamentally reshaped the organization to reduce operating cost structures and manufacturing inefficiencies. Performance was driven by a 16% year-over-year increase in distributor network sales and 9% growth in direct sales outside of Germany, offsetting headcount-related challenges in the German market. Gross margins expanded to 73% through manufacturing optimization and disciplined sourcing, which management believes is sustainable and provides a foundation for further expansion as volumes scale. The company significantly reduced its operating cash burn to approximately $200,000 (excluding restructuring), moving closer to its primary goal of achieving operating cash flow breakeven. Strategic focus is now divided into four value drivers: achieving cash flow breakeven, returning CytoSorb to growth, opening the U.S. market via DrugSorb-ATR, and unlocking the value of HemoDefend-BGA. Management attributes the stability of $9.6 million in revenue to disciplined execution across commercial operations despite geopolitical instability affecting the Middle East region. Management reiterates the objective of achieving operating cash flow breakeven in the second half of 2026, supported by the full impact of recent cost-reduction initiatives. The company plans to selectively hire 3 to 5 additional sales representatives in Germany through early 2027 to restore country coverage and drive revenue growth in that core market. Regulatory strategy for DrugSorb-ATR involves a new de novo application supported by additional mechanistic data and real-world evidence from European clinical use, rather than a new large-scale trial. A parallel regulatory path is being explored for a DOAC (Direct Oral Anticoagulant) removal indication, with a pre-submission meeting scheduled for late August 2026 to determine data requirements. Future development of the HemoDefend-BGA franchise is contingent upon securing non-dilutive government funding or strategic partnerships, as the company will not fund clinical trials from core cash reserves. A $270,000 restructuring charge was recorded in Q2 related to a reduction in force that has decreased total headcount by 23% since September of the previous year. The FDA's original denial of the DrugSorb-ATR de novo application was upheld on appeal, but management highlighted that the agency agreed there were no major safety issues and a new trial is not required. Geopolitical instability in the Middle East, specifically related to the Iran war, has temporarily disrupted business in that region, though physician interest remains reported as strong. The HemoDefend-BGA platform, developed with $16 million in Department of Defense funding, is identified as a pre-commercial asset not currently reflected in the company's valuation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the two submissions will proceed in a parallel fashion and one will not necessarily delay the other. The ticagrelor submission is well-advanced, while the DOAC path depends on feedback from an upcoming late-August FDA meeting. Management indicated that while current gains are sustainable, further expansion is primarily dependent on future volume increases. The 73% margin reflects successful manufacturing optimization and production efficiencies achieved during the restructuring. New hires are expected to become productive within 3 to 6 months, as they will be targeting established hospital accounts that have lacked recent detailing. The company is utilizing a lower-fixed, higher-variable commission structure to limit initial costs while incentivizing high productivity. Management believes they have identified adequate external data sets to serve as control groups, adhering to the FDA's December guidance on real-world evidence. The company is leveraging independent expert statistical groups to ensure the analysis plan is rigorous enough to meet FDA expectations.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Operating cash burn significantly reduced to approximately $200,000, nearing breakeven. Gross margins improved to 73%, reflecting manufacturing efficiency gains. Distributor network revenue grew 16% year-over-year, with direct sales outside Germany up 9%. Drugsorb ATR clinical data showed a 58% risk reduction in severe bleeding events in the CABG per-protocol population. Hemodefen BGA received constructive FDA feedback on a clinical pathway, with potential for non-dilutive government funding. Germany revenue remains challenged due to headcount restrictions post-restructuring. Primary efficacy endpoint of the STAR-T trial was missed, leading to FDA denial of the original de novo application. Middle East business was temporarily affected by geopolitical instability, impacting revenue. Cash position remains low at $5.9 million, with ongoing need for financing. Regulatory approval for Drugsorb ATR is delayed, requiring additional data and a new submission. Warning! GuruFocus has detected 5 Warning Signs with CTSO. Is CTSO fairly valued? Test your thesis with our free DCF calculator. Q: Can you clarify the timing of the submissions if you do a parallel submission for the DOAC indication? Does that drag it on an extra two, three, four months before the parallel submission can be submitted? A: Dr. Micus Deleagaris, Chief Medical Officer, clarified that the company truly intends to proceed with parallel submissions for the Brilinta and DOAC indications. He noted that the timing is largely dependent on the FDA's review clock and the collection of additional information. For the DOAC submission, a pre-submission meeting with the FDA is scheduled for later this month to clarify the path forward. Once the paths are clear, the company plans to proceed with both applications in a parallel fashion, with one submission not necessarily impacting the timing of the other. Q: On the gross margins, were you implying that there's still operational efficiencies on the cost of goods sold side where maybe the second-half of the year could get above the 73.1% gross margin? Or is that a steady state, do you think, for a while? A: Pete Mariani, CFO, responded that the potential for further gross margin expansion depends on volume. He indicated that as volumes increase, there is an opportunity to see additional margin expansion beyond the current 73% level. Q: For Germany, do you expect these new reps to become accretive to the revenues? And do you think they'll be sufficient to return the country to growth? A: Phil Chan, CEO, explained that Germany has a large population and the current small sales force cannot cover the entire country. The new hires will be placed in territories where hospitals were or are customers but haven't been detailed in a long time, allowing them to become productive quickly. He also noted the compensation structure is lower fixed and higher variable, limiting initial costs. Pete Mariani, CFO, added that the current smaller core group is showing increased productivity and expects sequential growth in the back half of the year, with contributions from new hires beginning in the middle of next year. Q: It's good to see that all the real-world evidence is coming in that could support the next submission. So I was just wondering whether you've discussed with the FDA or other pre-agreed to the data source for these real-world evidence. And also the comparator and the statistical analysis to be used. A: Dr. Micus Deleagaris, Chief Medical Officer, stated that the FDA issued a guidance dedicated to real-world evidence in December, laying out expectations for data sources. The company has had discussions with the FDA and believes it has appropriate and adequate data sources, including high-fidelity internal data and external control groups. He noted that while the FDA may have questions after reviewing the data, the company has a rigorous statistical analysis plan and a good roadmap for what to submit. Q: With the development complete on Hemodefen BGA, are there any plans to start a clinical study by yourself or is it more a case of waiting for the right partner or the government grant? A: Phil Chan, CEO, stated that the company's current focus is on Cytosorb and DrugSorb ATR. However, he noted that blood and blood products are a priority for the US government and the Department of Defense, which has already funded the program with $16 million. The company is looking at all strategic options for Hemodefen BGA and does not plan to fund it out of its own financial resources. Instead, it hopes to obtain non-dilutive government funding or partner with a strategic partner to accelerate clinical plans, especially given the recent FDA feedback on the clinical program. Q: Can you provide more detail on the STAR-T trial results, specifically the primary efficacy endpoint and the statistical significance? A: Dr. Micus Deleagaris, Chief Medical Officer, explained that the primary analysis on the modified intention-to-treat (MITT) population of 132 patients did not achieve statistical significance for the composite endpoints. However, when accounting for imbalances in the CABG per-protocol population of 111 patients, the win ratio for the endpoint limited to severe bleeding events was 1.59, which was statistically significant. He also highlighted that the device reduced the risk of major bleeding by approximately 60% in the highest quartile of blood loss, and the composite analysis of severe bleeding or chest tube drainage greater than one liter showed a 58% risk reduction, translating to a number needed to treat of six. Q: What is the current status of the regulatory process for DrugSorb ATR, and what are the next steps? A: Dr. Micus Deleagaris, Chief Medical Officer, provided an update on the regulatory path. The FDA denied the original de novo application due to the missed primary endpoint but agreed there were no major safety issues and stated a new clinical trial is not needed. The FDA indicated that additional information, including mechanistic data and real-world evidence, could support the desired label claim. The company has a pre-submission meeting scheduled later this month to discuss generating the additional mechanistic data, and preliminary real-world evidence results will be presented at the European Society of Cardiology conference. Once all additional information is available, the company will file a new de novo application as soon as possible. Q: Can you elaborate on the progress towards achieving operating cash flow breakeven and the key financial metrics for the quarter? A: Pete Mariani, CFO, reported that the company made significant progress towards operating cash flow breakeven, with operating cash burn declining to approximately $200,000 excluding restructuring costs. Gross margins improved to 73%, operating loss narrowed by 27% to $2.6 million, and adjusted EBITDA loss improved by 38% to $1.6 million. Total cash and equivalents were $5.9 million at the end of the quarter. The company remains on track to achieve operating cash flow breakeven in the second half of the year. Q: What is the strategic value of the Hemodefen BGA franchise, and how does it fit into the company's overall value creation plan? A: Phil Chan, CEO, introduced Hemodefen BGA as the fourth value driver, highlighting its potential to enable universal plasma and blood products. The technology is a simple gravity-driven filter that removes anti-A and anti-B antibodies, with applications in trauma, emergency, military, and civilian transfusion, as well as the multi-billion dollar plasma processing industry. The product concept has been de-risked with $16 million in non-dilutive government funding, and the company has received constructive FDA feedback on a clinical pathway. While it is a pre-commercial, non-revenue generating asset, it represents a valuable strategic For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Highlighting Four Independent Drivers of Shareholder Value PRINCETON, N.J., Aug. 6, 2026 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification, today reported financial results for the second quarter ended June 30, 2026, recent business highlights, and provides a regulatory update. Second Quarter 2026 Financial Results Revenue was $9.6 million, unchanged from a year ago. Gross margin improved to 73% in the quarter, up sequentially from 69% in Q1 2026 and from 71% a year ago. Operating loss improved by 27% to $2.6 million versus $3.6 million in Q2 2025. Net loss was $4.4 million or $0.07 per share, compared to net income of $1.9 million or $0.03 per share in Q2 2025, due primarily to the non-cash impact of changes in foreign currency translations year over year. Adjusted net loss, which excludes the impact of non-cash changes in foreign currency translations and non-cash stock compensation, improved by 22% to $2.8 million or $0.05 per share, compared to an adjusted net loss of $3.7 million or $0.06 per share in Q2 2025. Adjusted EBITDA loss, which also excludes the impact of non-cash changes in foreign currency translations and non-cash stock compensation improved by 38% to $1.6 million compared to a loss of $2.6 million in Q2 2025. Total cash, cash equivalents, and restricted cash was approximately $5.9 million on June 30, 2026, compared to $6.3 million at March 31, 2026. Total cash burn in the second quarter was reduced to $0.4 million, inclusive of approximately $0.2 million in restructuring-related payments. "Second quarter revenue performance was led by strong growth in our distributor and strategic partner territories, as well as direct sales outside of Germany, but offset by a decline in sales in Germany attributed to a smaller, but more focused sales force. We are encouraged by the improved productivity and sales execution of this team and expect to add three to five new sales representatives through early 2027 to restore full country coverage," stated Dr. Phillip Chan, Chief Executive Officer of CytoSorbents. "We are also pleased with the continued improvements in our operating execution in the quarter, including an increase in gross margins to 73%, a 27% reduction in operating loss, a 38% improvement in adjusted EBITDA loss, and importantly, a reduction in operating cash burn to $200,000 excluding restructuring payments. These gains reflect disciplined execution across our organization, including manufacturing optimization, improved working capital management, commercial execution, and tighter cost controls. As a result, we believe we remain on track toward our objective of achieving operating cash flow breakeven in the second half of this year. Over the past couple of years, our priorities have been clear. We have needed to strengthen the financial foundation of the Company, improve commercial and operating execution, advance our regulatory programs, and position the business for sustainable long-term growth. During the second quarter, we continued making meaningful progress against each of these objectives. While we are not yet where we want to be, we believe CytoSorbents today is better positioned for success than it was a year ago. Four Independent Value Drivers Looking ahead, we believe CytoSorbents has strong value creation opportunities. We believe we have four independent value drivers over the next six to eighteen months and that each has the potential to strengthen the business and create meaningful long-term shareholder value by reducing risk, expanding profitability, opening new markets, and unlocking strategic value. First Value Driver: Achieving Operating Cash Flow BreakevenOur first value driver is reducing financial risk by achieving sustainable operating cash flow breakeven. Over the past year, we have focused relentlessly on improving the economics of our business. Product gross margin improved to 73% during the second quarter through manufacturing optimization, improved sourcing, and production efficiencies. We also lowered our cash burn through improved commercial execution, collections, and working capital management while continuing to streamline our organization. Since September 2025, we have reduced our workforce by approximately 23%, creating a leaner and more focused company. As a result, operating cash burn declined to approximately $200,000 during the quarter, excluding restructuring charges, representing another meaningful step toward operating cash flow breakeven. We believe this milestone is important because it fundamentally changes the Company's financial profile. Every dollar of operating cash burn eliminated reduces future financing needs, strengthens our balance sheet, increases strategic flexibility, and allows a greater proportion of future growth to accrue to shareholders. Although important work remains, we believe the progress achieved over the past year demonstrates that this strategy is working." Second Value Driver: Returning the CytoSorb Business to Sustainable, Profitable GrowthOur second value driver is returning our core CytoSorb business to sustainable, profitable growth. Although overall revenue growth remains modest today, the majority of the business did well during the second quarter, with 16% growth in distributor and strategic partner sales despite geopolitical disruption in the Middle East, and 9% growth in direct sales outside of Germany, but offset by a 24% decrease in Germany sales, attributed to a smaller, but more focused sales force following our restructuring. In Germany, we have significantly improved the efficiency of our smaller commercial organization and expect to drive a return to growth in the country by regaining full territory coverage through the addition of three to five new sales representatives through early 2027. At the same time, our messaging and training of treating the "Right Patient, at the Right Time, with the Right Dose" continues to resonate with customers. This is partially evident in the increasing customer adoption of our PuriFi® pump platform and HotSwap® technology which have been received very well. These technologies simplify therapy delivery, encourage earlier and more intensive intervention, and promote more consistent utilization of CytoSorb. We believe these and other initiatives, particularly the operational investments and commercial restructuring completed over the past year, have positioned us for greater sales effectiveness that can strengthen both clinical adoption and long-term profitable growth of the franchise. Third Value Driver: Opening the U.S. Market Through DrugSorb-ATROur third value driver is obtaining FDA marketing approval for DrugSorb-ATR and opening what we believe represents one of the Company's most important long-term growth opportunities. DrugSorb-ATR addresses a significant unmet need in cardiac surgery by removing commonly prescribed blood thinners during cardiopulmonary bypass for patients requiring urgent surgery. With the positive results of the STAR-T trial in CABG patients now published and the growing body of real-world evidence using our therapies for the anti-platelet drug Brilinta® and the direct oral anticoagulants, Eliquis® and Xarelto®, we are confident in the worldwide potential of our technologies for this application. In the U.S. and Canada alone, with future approval, we believe this represents an initial market opportunity of approximately $500 million to $1 billion, with the potential to expand substantially as additional surgical indications are pursued. During August, we have two important FDA pre-submission meetings scheduled. The first is to discuss options to generate additional mechanistic data requested by FDA for our Brilinta® program. Following this meeting, we intend to finalize and confirm the testing protocol with FDA, which may require an additional meeting with the Agency. Once finalized, we anticipate completing the required testing, and submitting a new De Novo application in early 2027 that will include these data and new real-world clinical evidence analyses involving four times the number of coronary artery bypass graft (CABG) patients on Brilinta® treated with DrugSorb-ATR, compared to the original STAR-T trial. In the second scheduled meeting, we will present our data to the FDA supporting a potential parallel De Novo submission for DrugSorb-ATR in patients receiving direct oral anticoagulants, or DOACs, and discuss what additional information, if any, the Agency believes is necessary. We believe these meetings will provide additional clarity toward FDA marketing authorization. Successful marketing approval would establish a second commercial franchise alongside our international CytoSorb business, open access to the world's largest healthcare market, further validate our adsorption technology platform, increase our gross margins and potential profitability, and create opportunities for future expansion. Fourth Value Driver: Unlocking the Strategic Value of HemoDefend-BGAOur fourth value driver is realizing the strategic value of HemoDefend-BGA - a technology that we believe is not fully reflected in today's valuation. Developed with approximately $16 million of prior non-dilutive U.S. government funding, HemoDefend-BGA is a sophisticated blood filter designed to remove anti-A and anti-B antibodies from plasma and platelet products, enabling the production of 'universal' blood products that can be transfused regardless of recipient blood type - without electricity, capital equipment, or complex processing. The technology has the potential to simplify blood inventories, reduce waste, lower costs, and improve access to life-saving blood products. Leading blood centers have helped to evaluate and validate the technology, and we believe its commercial potential extends well beyond today's blood banking model. As one example, imagine the simplification and cost savings to hospital blood banks from currently maintaining 4 types of plasma (A, B, AB, O) and 4 types of platelets to now just 1 universal plasma and 1 universal platelet product. Or picture a future where every ambulance, first responder, or military vehicle around the world carries freeze-dried universal plasma on board - without refrigeration, without the need to blood type, and ready for immediate transfusion to patients suffering severe trauma and life-threatening hemorrhage. We believe HemoDefend-BGA has the potential to help make that future possible. Over the past year, we completed product development, and in July 2026 we received constructive FDA feedback regarding our anticipated clinical pathway following a pre-submission interaction with the Agency. In addition, we continue to have encouraging discussions with U.S. government agencies regarding potential non-dilutive funding for future clinical development. While our immediate priorities remain achieving operating cash flow breakeven, growing the CytoSorb franchise, and advancing DrugSorb-ATR, we believe HemoDefend-BGA represents a valuable strategic asset with multiple potential pathways to create shareholder value, including commercial partnerships, licensing opportunities, government funding, or other strategic alternatives. Looking Ahead: Four Independent Value Drivers. One Uncommon Value.Taken together, these four value drivers represent multiple independent opportunities to create value over the next 6 to 18 months. The first reduces financial risk by expanding operating margins, and achieving operating cash flow breakeven The second returns our core CytoSorb business to consistent, profitable growth, The third opens the U.S. market and establishes what we believe can become a second major commercial franchise And the fourth unlocks the value of a highly differentiated blood purification platform with meaningful strategic optionality We believe each of these initiatives has the potential to independently strengthen our business and increase shareholder value. Together, they have the potential to fundamentally transform CytoSorbents into a stronger, more profitable, and more diversified medical technology company. Dr. Chan concluded, "Although more work remains, we believe our accomplishments over the past several quarters have stabilized the company and have positioned it for this next phase, where our entire organization remains intensely focused on disciplined execution. In the near future, we intend to regain compliance with our Nasdaq listing requirements, broaden the awareness of our Company and our four separate value drivers, and secure the Company financially. We appreciate our shareholder's support and look forward to updating them as we continue to make progress on each of these important objectives." Second Quarter 2026 Earnings Conference Call CytoSorbents' management will host a live conference call, presentation webcast, and a question-and-answer session with the following information: Date: Thursday, August 6, 2026Time: 4:30 PM ETLive webcast link: https://app.webinar.net/v62381bx4na It is recommended that participants join approximately 10 minutes prior to the start of the call. An archived recording of the conference call will be available under the Investor Relations section of the Company's website at https://ir.cytosorbents.com/ About DrugSorb-ATR In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-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 U.S. Food and Drug Administration ("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 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. About Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, we use the non-GAAP financial measures of EBITDA, which measures earnings before interest, income taxes, depreciation and amortization, and Adjusted EBITDA which further excludes non-cash stock compensation expense, the gain or loss of foreign exchange translation, and restructuring charges. We also use the non-GAAP financial measures of Adjusted Net Income or Loss and Adjusted Net Income or Loss Per Share which excludes non-cash stock compensation expense, the gain or loss of foreign exchange translation, and restructuring charges from Net Loss and Net Loss Per Share, respectively. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of the non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP should be carefully evaluated. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by investors and the analyst community to help them analyze the performance of our business, the Company's cash available for operations, and the Company's ability to meet future capital expenditure and working capital requirements. For a reconciliation of non-GAAP financial measures to the most comparable GAAP measure, see the reconciliation included in the financial tables. All non-GAAP adjustments are presented pre-tax. About CytoSorbents Corporation (NASDAQ: CTSO) CytoSorbents Corporation is 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, continuous renal replacement therapy or CRRT, extracorporeal membrane oxygenation or ECMO, and heart-lung machines), where blood is repeatedly recirculated outside the body, through our cartridges where toxic substances are removed, and then back into the body. CytoSorbents' technologies are used in a number of broad applications. Specifically, two important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding, and 2) the removal of inflammatory agents and toxins in common critical illnesses that can lead to massive inflammation, organ failure and patient death. The breadth of these critical illnesses includes, for example, sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis as well as the removal of liver toxins that accumulate in acute liver dysfunction or failure, and 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 over 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 Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure. CytoSorb is not yet approved or cleared in the United States. In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-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 surgery. The Company is actively pursuing regulatory approval of DrugSorb-ATR with the U.S. FDA and will pursue regulatory approval with Health Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in either the U.S. or Canada. 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-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb™, ContrastSorb, PuriFi®, HotSwap®, and others. For more information, please visit the Company's website at https://ir.cytosorbents.com/ or follow us on Facebook and X. Forward-Looking Statements This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, representations and contentions, and the outcome of our regulatory submissions, and are not historical facts and typically are identified by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, our restructuring of our direct sales team and strategy in Germany, ability to successfully obtain U.S. FDA and Health Canada marketing authorization or approval, our ability to reduce costs, optimize operations, and achieve cash-flow break-even in the second half of 2026, our ability to appropriately finance the Company, and the risks discussed in our Annual Report on Form 10-K, filed with the SEC on March 30, 2026, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws. Please Click to Follow Us on Facebook and X U.S. Company Contact:Peter J. Mariani, Chief Financial Officer305 College Road EastPrinceton, NJ [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/cytosorbents-reports-second-quarter-2026-financial-results-recent-business-highlights-and-regulatory-update-302845431.html

PRINCETON, N.J., July 20, 2026 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification, will report second quarter 2026 financial results and recent business highlights after the market close on Thursday, August 6, 2026. CytoSorbents' management will host a live conference call, presentation webcast, and a question-and-answer session starting at 4:30PM ET the same day. Conference Call and Webcast Details:Date: Thursday, August 6, 2026Time: 4:30 PM ETLive webcast link: https://app.webinar.net/v62381bx4na It is recommended that participants dial in approximately 10 minutes prior to the start of the call. An archived recording of the conference call will be available under the Investor Relations section of the Company's website at https://ir.cytosorbents.com/ About CytoSorbents Corporation (NASDAQ: CTSO) CytoSorbents Corporation is 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, continuous renal replacement therapy or CRRT, extracorporeal membrane oxygenation or ECMO, and heart-lung machines), where blood is repeatedly recirculated outside the body, through our cartridges where toxic substances are removed, and then back into the body. CytoSorbents' technologies are used in a number of broad applications. Specifically, two important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding, and 2) the removal of inflammatory agents and toxins in common critical illnesses that can lead to massive inflammation, organ failure and patient death. The breadth of these critical illnesses includes, for example, sepsis, burn injury, trauma, lung injury, liver failure, cytokine storm and cytokine release syndrome, and pancreatitis as well as the removal of liver toxins that accumulate in acute liver dysfunction or failure, and 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 over 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 Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure. CytoSorb® is not yet approved or cleared in the United States. In the U.S. and Canada, CytoSorbents is developing the DrugSorb®-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 surgery. The Company is actively pursuing regulatory approval of DrugSorb®-ATR with the U.S. FDA and will pursue regulatory approval with Health Canada with better visibility from the FDA. DrugSorb®-ATR is not yet granted or approved in either the U.S. or Canada. 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-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb®, ContrastSorb, and others. For more information, please visit the Company's website at https://ir.cytosorbents.com/ and follow us on Facebook and X and LinkedIn. Forward-Looking Statements This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, representations and contentions, and the outcome of our regulatory submissions, and are not historical facts and typically are identified by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, our restructuring of our direct sales team and strategy in Germany, the impact of geopolitical events including the recent war in Iran, our ability to successfully obtain U.S. FDA and Health Canada regulatory approval and marketing authorization, our ability to complete our strategic workforce and cost reduction plan to reduce costs, optimize operations, and achieve operating cash-flow break-even in the second half of 2026, our ability to appropriately finance the Company, including our ability to meet our financial obligations and comply with the covenants under our existing debt agreement,, and the risks discussed in our Annual Report on Form 10-K, filed with the SEC on March 30, 2026, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws. Please Click to Follow Us on Facebook and X U.S. Company Contact:Peter J. Mariani, Chief Financial Officer305 College Road EastPrinceton, NJ [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/cytosorbents-to-report-second-quarter-2026-financial-results-and-recent-business-highlights-302829327.html

This article first appeared on GuruFocus. Release Date: May 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. CytoSorbents Corp (NASDAQ:CTSO) reported a 2% year-over-year revenue growth to $8.9 million, despite external headwinds. The company's direct international business outside Germany grew by 13% year-over-year, indicating strong market penetration. Gross margins remained robust at 69%, reflecting strategic production adjustments to improve working capital efficiency. The company has made significant operational improvements, including a strategic workforce and cost reduction initiative, which reduced headcount by 10% and lowered operating expenses. CytoSorbents Corp (NASDAQ:CTSO) has a clear regulatory path forward for DrugSorb ATR, with potential FDA approval expanding the total addressable market significantly. Sales in Germany declined year-over-year, although operational improvements are underway. Distributor sales were flat, impacted by geopolitical disruptions in the Middle East due to the U.S.-Iran war. The FDA has requested additional mechanistic data for DrugSorb ATR, potentially delaying the de novo application submission to late 2026 or early 2027. Net loss increased to $5.1 million for the quarter, primarily due to non-cash impacts of foreign currency transactions. The company's cash equivalents and restricted cash decreased to $6.4 million from $7.8 million at the end of the previous year. Warning! GuruFocus has detected 6 Warning Signs with CTSO. Is CTSO fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the FDA's request for additional mechanistic data for the new de novo submission for DrugSorb ATR? A: Dr. Micus Deliagaris, Chief Medical Officer, explained that the mechanistic data refers to supporting the device's mechanism of action rather than clinical outcomes. These are experimental designs that do not require the resources of a clinical trial. The company is working with the FDA to finalize these designs and will disclose more information once there is clarity. Q: Regarding the potential expansion of the DrugSorb ATR label to include DOAC removal, what is the best-case scenario from the FDA? A: Dr. Micus Deliagaris stated that the company plans to meet with the FDA to leverage existing real-world evidence and publications. The goal is to determine what additional information, if any, is needed for a parallel de novo submission for DOAC removal. The company seeks clarity similar to what it has for Brilinta and Ticagrelor. Q: Can you provide more details on the Middle East business and its impact from the U.S.-Iran war? A: Dr. Phillip Chan, CEO, mentioned that the Middle East, particularly Saudi Arabia, has been a leader in using their therapy. The U.S.-Iran war has caused temporary disruptions, but the company believes the conflict is temporary and plans to be ready to respond once it stabilizes. The region's wealth and high medical standards present significant opportunities. Q: Are current inventory levels where you want them to be, and will there be a continued impact on gross margins? A: Pete Mariani, CFO, indicated that inventory levels are expected to decrease slightly, and gross margins will remain in the high 60s to low 70s. The company has reorganized ordering and planning to see efficiencies that may not negatively impact margins going forward. Q: What are the primary drivers behind the 13% growth in direct sales outside Germany, and why is it different from Germany's performance? A: Dr. Phillip Chan noted that the growth is driven by strong leadership and team efforts in individual countries. The teams are proactive in market development and customer engagement, which has led to growth on a smaller revenue base compared to Germany. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PRINCETON, N.J., May 13, 2026 /PRNewswire/ -- CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening conditions in the intensive care unit and cardiac surgery using blood purification, today reported financial results for the first quarter ended March 31, 2026, recent business highlights, and provides a regulatory update. First Quarter 2026 Financial Results Revenue was $8.9 million, an increase of 2% over the prior year, from $8.7 million Gross margin was 69% in the quarter compared to 71% in Q1 2025 Operating loss was $3.0 million, compared to $3.9 million in Q1 2025 Net loss was $5.1 million or $0.08 per share, compared to a net loss of $1.5 million or $0.02 per share in Q1 2025. The increase was due primarily to the non-cash impact of changes in foreign currency transactions year-over-year Adjusted net loss, which excludes the impact of non-cash changes in foreign currency transactions and non-cash stock compensation, was $3.4 million or $0.05 per share, compared to an adjusted net loss of $3.7 million or $0.06 per share in Q1 2025 Adjusted EBITDA loss, which also excludes the impact of non-cash changes in foreign currency transactions and non-cash stock compensation was $2.2 million compared to a loss of $2.7 million in Q1 2025 Total cash, cash equivalents, and restricted cash was approximately $6.4 million, compared to $7.8 million as of December 31, 2025 Total cash burn in the quarter, excluding $0.3 million in restructuring-related payments, was approximately $1.1 million "First quarter sales were $8.9 million, driven by 13% growth in our direct sales territories outside of Germany," stated Dr. Phillip Chan, Chief Executive Officer of CytoSorbents Corporation. "Our Germany sales team also performed well, achieving sales slightly below last year, but with a smaller and more focused team – reflecting new leadership, sales execution, account targeting, productivity, and customer engagement. Given the importance of the German market, we plan to selectively expand our commercial team to improve account coverage and drive growth opportunities in both critical care and cardiac surgery. Distributor sales were flat year-over-year, as progress across several territories was offset by delayed distributor orders of approximately $500,000 in parts of the Middle East and neighboring regions due to geopolitical and economic instability related to the U.S.-Iran war. This unexpected disruption has slowed the anticipated growth of our recently established subsidiary in Dubai, UAE, although we expect conditions to improve as the conflict stabilizes. Gross margin declined marginally to 69% in the first quarter, primarily due to intentionally reduced production volumes aimed at lowering inventory levels and improving working capital. In the fourth quarter of 2025, we implemented a strategic workforce and cost reduction initiative, reducing headcount by approximately 10% while lowering operating and production expenses. The initial benefits of this program were reflected in lower expenses and improved operating margins in the first quarter. Meanwhile, we have continued to make operational improvements and cost reductions and believe these actions will continue to drive improvements in the coming quarters to support our goal of achieving operating cash flow breakeven in the second half of this year." DrugSorb-ATR® for Brilinta® "In August 2025, we received the FDA's decision on our appeal of the original DrugSorb-ATR application. Importantly, the Agency identified no concerns regarding device safety but upheld the prior denial of the application and requested additional information to support the proposed indication for reducing the severity of perioperative bleeding in patients undergoing CABG surgery while on Brilinta® (ticagrelor, AstraZeneca). Following the appeal decision and based on feedback from FDA, we announced our intention to submit a new De Novo application incorporating additional supporting information, primarily based on real-world evidence and clinical outcomes generated through routine clinical use of the device. As part of this process, we held a formal pre-submission meeting with the FDA in late January 2026 and have continued to engage with the Agency to clarify the requirements for the new De Novo submission, including whether all information would be required within the submission or as a post-marketing requirement. Based on these interactions, the FDA has requested additional mechanistic data to be included alongside the real-world evidence within the new De Novo submission. We are currently evaluating options to generate the additional mechanistic data on an expedited basis and expect to schedule an additional pre-submission meeting with the FDA, if needed, to discuss and align on the proposed approach. Once alignment is achieved, we anticipate completing the required work and submitting a new De Novo application in late 2026 or early 2027. Though delayed from our timeline, we now have clearer direction and are committed to obtaining the new information and filing a new De Novo submission as soon as possible. Following submission, a regulatory decision would generally be expected within the FDA's targeted 150-day MDUFA review timeline, although the actual review period may be shorter or longer depending on the nature and extent of interactive review questions from the Agency. Meanwhile, the U.S. and Canadian pivotal STAR-T randomized, controlled trial results are now available in PDF form from the Journal of Thoracic and Cardiovascular Surgery (2026) - the leading peer-reviewed cardiothoracic surgery journal in the U.S., highlighting "Intraoperative use of DrugSorb-ATR is safe in patients operated within 2 days of ticagrelor discontinuation [with] significant reductions in severe bleeding events in the prespecified CABG subpopulation" DrugSorb-ATR for DOACs: Eliquis® and Xarelto® "We have previously discussed our intention, following anticipated FDA marketing approval of DrugSorb-ATR for Brilinta®, to pursue an expanded indication for the removal of direct oral anticoagulants (DOACs), such as Eliquis® (apixaban, Pfizer/BMS) and Xarelto® (rivaroxaban, Bayer/Janssen). At the same time, we continue to observe increasing real-world adoption, clinical use, and published evidence supporting the use of our technology for DOAC removal in cardiac surgery, reinforcing the significant unmet medical need globally. Within the next 30 days, we plan to submit a separate pre-submission request to the Agency to review the data currently available for the DOAC indication that include drug removal data from benchtop testing and data from real-world use and to determine what, if any, additional information may be required to support a parallel De Novo submission for DOAC removal. Having this potential second shot on goal is aligned with our other FDA Breakthrough Device Designation for DrugSorb-ATR, to remove DOACs during cardiac surgery. Globally, tens of millions of patients are on chronic or life-long DOAC therapy due to atrial fibrillation, deep vein thrombosis, pulmonary embolism, peripheral vascular disease, or post-surgical prophylaxis. An estimated 5-10% of emergent cardiac surgery cases involve patients who are currently therapeutic on a DOAC and risk serious or life-threatening perioperative bleeding. In 2025, Eliquis ranked #7 among the top-selling pharmaceuticals globally, generating approximately $14.4 billion in worldwide sales and accounting for a majority share of new oral anticoagulant prescriptions. Xarelto generated approximately $5.1 billion in global sales. We estimate that the combined U.S. total addressable market for DrugSorb-ATR in cardiac surgery across Brilinta® and the DOACs is between $500 million and $1 billion annually." New Health Economic Analysis in Septic Shock "Finally, in our last earnings call update, we highlighted many key publications across critical care and cardiac surgery. Recently, an important study entitled 'Impact of CytoSorb Hemoadsorption Therapy on Cost-Effectiveness and Length of Stay in Critical Care Patients: A Preliminary Study from a Swiss High-Volume Center", was published in the peer-reviewed journal Healthcare. This study provides compelling real-world evidence for the cost-effectiveness of CytoSorb hemoadsorption in a comparative analysis of 246 ICU patients with septic shock. Compared to patients treated with standard of care alone, those additionally treated with CytoSorb showed significant reductions in ICU and hospital length of stay, duration of mechanical ventilation among survivors, and nursing workload, while total hospital treatment costs were not significantly increased. CytoSorb therapy showed a clear advantage in net case profitability (revenue minus costs), with significantly higher earnings per case compared to standard of care. These results highlight the cost-effectiveness of CytoSorb therapy and the ability to achieve clinical, operational, and economic benefits in a resource-intensive critical care setting." Dr. Chan concluded, "While we continue to navigate what we believe to be temporary headwinds in the Middle East, we remain focused on executing on our key priorities including: strengthening commercial performance, reducing operating expenses, and progressing toward our goal of achieving operating cash flow breakeven in the second half of this year. At the same time, we are advancing the substantial long-term U.S. opportunity for DrugSorb-ATR. We now have clearer regulatory direction from the FDA for our ticagrelor application and are actively evaluating a potential parallel path focused on DOACs that could significantly expand the U.S. market opportunity. We believe the actions we are taking today are building a stronger, more resilient company and positioning us to deliver meaningful long-term value for patients, clinicians, and shareholders." First Quarter 2026 Earnings Conference Call CytoSorbents' management will host a live conference call, presentation webcast, and a question-and-answer session with the following information: Date: Wednesday May 13, 2026 Time: 4:30 PM ET Live webcast link: https://app.webinar.net/KbgRLmJk8ow It is recommended that participants join approximately 10 minutes prior to the start of the call. An archived recording of the conference call will be available under the Investor Relations section of the Company's website at https://ir.cytosorbents.com/ About DrugSorb-ATR In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-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 U.S. Food and Drug Administration ("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 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. About Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, we use the non-GAAP financial measures of EBITDA, which measures earnings before interest, income taxes, depreciation and amortization, and Adjusted EBITDA which further excludes non-cash stock compensation expense, and gain or loss of foreign exchange translation. We also use the non-GAAP financial measures of Adjusted Net Income or Loss and Adjusted Net Income or Loss Per Share which excludes non-cash stock compensation expense and gain or loss of foreign exchange translation from Net Loss and Net Loss Per Share, respectively. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of the non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP should be carefully evaluated. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by investors and the analyst community to help them analyze the performance of our business, the Company's cash available for operations, and the Company's ability to meet future capital expenditure and working capital requirements. For a reconciliation of non-GAAP financial measures to the most comparable GAAP measure, see the reconciliation included in the financial tables. All non-GAAP adjustments are presented pre-tax. About CytoSorbents Corporation (NASDAQ: CTSO) CytoSorbents Corporation is 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, continuous renal replacement therapy or CRRT, extracorporeal membrane oxygenation or ECMO, and heart-lung machines), where blood is repeatedly recirculated outside the body, through our cartridges where toxic substances are removed, and then back into the body. CytoSorbents' technologies are used in a number of broad applications. Specifically, two important applications are 1) the removal of blood thinners during and after cardiothoracic surgery to reduce the risk of severe bleeding, and 2) the removal of inflammatory agents and toxins in common critical illnesses that can lead to massive inflammation, organ failure and patient death. The breadth of these critical illnesses includes, for example, sepsis, burn injury, trauma, lung injury, liver failure, cytokine release syndrome, and pancreatitis as well as the removal of liver toxins that accumulate in acute liver dysfunction or failure, and 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 over 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 Emergency Use Authorization in the United States for use in adult critically ill COVID-19 patients with impending or confirmed respiratory failure. CytoSorb is not yet approved or cleared in the United States. In the U.S. and Canada, CytoSorbents is developing the DrugSorb™-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 surgery. The Company is actively pursuing regulatory approval of DrugSorb-ATR with the U.S. FDA and will pursue regulatory approval with Health Canada with better visibility from the FDA. DrugSorb-ATR is not yet granted or approved in either the U.S. or Canada. 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-XL™, HemoDefend-RBC™, HemoDefend-BGA™, VetResQ®, K+ontrol™, DrugSorb™, ContrastSorb, PuriFi®, HotSwap®, and others. For more information, please visit the Company's website at https://ir.cytosorbents.com/ or follow us on Facebook and X. Forward-Looking Statements This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, future targets and outlooks for our business, representations and contentions, and the outcome of our regulatory submissions, and are not historical facts and typically are identified by use of terms such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements in this press release represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, our restructuring of our direct sales team and strategy in Germany, the impact of geopolitical events including the recent war in Iran, our ability to successfully obtain U.S. FDA and Health Canada regulatory approval and marketing authorization, our ability to complete our strategic workforce and cost reduction plan to reduce costs, optimize operations, and achieve operating cash-flow break-even in the second half of 2026, our ability to appropriately finance the Company, including our ability to meet our financial obligations and comply with the covenants under our existing debt agreement, and the risks discussed in our Annual Report on Form 10-K, to be filed with the SEC by March 30, 2026, as updated by the risks reported in our Quarterly Reports on Form 10-Q, and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We caution you not to place undue reliance upon any such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under the Federal securities laws. Please Click to Follow Us on Facebook and X U.S. Company Contact: Peter J. Mariani, Chief Financial Officer 305 College Road East Princeton, NJ 08540 [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/cytosorbents-reports-first-quarter-2026-financial-results-recent-business-highlights-and-regulatory-update-302771477.html

CytoSorbents (NASDAQ:CTSO) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below. This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/. View the webcast at https://app.webinar.net/KbgRLmJk8ow Cytosorbents Corp reported a 2% year-over-year revenue growth to $8.9 million for Q1 2026, despite geopolitical disruptions affecting distributor sales. The company is focusing on expanding its core Cytosorb business internationally, with notable growth outside Germany and a robust 69% gross margin, albeit slightly lower than the previous year due to strategic inventory reductions. Cytosorbents Corp is progressing towards FDA approval for DrugSorb ATR, with recent clarifications from the FDA on required mechanistic data, aiming for a new de novo submission by late 2026 or early 2027. Operational improvements and strategic cost reductions have led to a 22% improvement in operating loss, with a goal to achieve operating cash flow break-even in the second half of 2026. Management emphasized the growing clinical and economic value of Cytosorb therapy, with ongoing efforts to optimize treatment protocols and expand the sales force selectively to drive future growth. OPERATOR Good afternoon ladies and gentlemen and welcome to the Cytosorbents Corp's first quarter 2026 earnings conference call. At this time all lines are in listen only mode. After the speaker's remarks, there will be a question and answer session. If you wish to ask a question during the Q and A session, please press star one. As a reminder, this call is being recorded. And now I would like to turn the conference over to Pete Mariani, Chief Financial Officer. Please go ahead. Pete Mariani (Chief Financial Officer) Thank you, Kathleen. And good afternoon everyone. Welcome to Cytosorbents Corp's first quarter 2026 conference call. Joining me today is Dr. Philip Chan, our Chief Executive Officer and Dr. Mikas Deliagaris, our Chief Medical Officer. Before I turn the call over to Phil, I'd like to remind listeners that during the call, Management's prepared remarks may contain forward looking statements which are subject to risks and uncertainties. Management may make additional forward looking statements in response to your questions. Therefore, the company claims protection under the safe harbor for forward looking statements contained in the Private Securities Litigation Reform act of 1995. Actual results may differ from results discussed today. The forward looking statements may make, we make reflect our views and estimates as of today, May 13, 2026 and we assume no obligation to update these projections in the future. As market conditions change, we encourage investors to review the risks discussed in our annual report on Form 10K filed with the SEC on March 30, 2026 and as updated by the risks reported in our quarterly reports on Form 10Q and in press releases and other communications to shareholders issued from time to time. During today's call, we will have an overview presentation covering the operating financial results for the first quarter of 2026 and provide a regulatory update on our process to obtain US Marketing approval for DrugSorb ATR. Following the presentation, we will open the lines to analysts for questions. And now I'll turn the call over to Phil. Philip Chan (Chief Executive Officer) Thank you very much, Pete. And good afternoon everyone. Before I start, I'd like to remind everyone of the current regulatory status of our products. Cytosorb is commercially approved in the European Union and many international markets for multiple indications including cytokine removal, bilirubin and myoglobin removal, and removal of certain antithrombotic agents during cardiothoracic surgery. However, CytoSorb is not currently approved or cleared in the United States or Canada outside of its prior emergency use authorization during COVID 19. Similarly, DrugSerb ATR remains an investigational device and is not commercially approved in any geography at this time. I'll begin with an operational overview of the quarter and our continued efforts to strengthen and streamline the business while positioning the company for future growth. Cytosorbents today is built around a differentiated blood purification platform, technology designed to remove harmful substances directly from the bloodstream in critically ill and cardiac surgery patients. What continues to make this business attractive is the combination of a high value therapy with a highly scalable razor blade type recurring revenue model that integrates into the existing blood pump infrastructure in hospitals. Our core Cytosorb business continues to expand internationally, generating core product sales of more than 37 million in 2025 with over 300,000 devices used cumulatively in more than 70 countries around the world. At the same time, DrugSorb ATR represents a potentially transformational opportunity in cardiac surgery and blood thinner removal. We continue to believe the unmet need here is substantial and importantly, we now have clearer direction from FDA regarding the path forward. We will also discuss a potential parallel path to US Regulatory approval as well as. Turning to our first quarter performance. Revenue grew 2% year over year to 8.9 million despite several temporary external headwinds. One of the most encouraging developments was the continued acceleration in our direct international business outside Germany, which grew 13% year over year. We believe this reflects improving physician awareness, stronger execution and and increasing adoption in key accounts, particularly driven by an outstanding team in Germany. Sales declined mostly year over year, but operationally we are actually very encouraged by the progress we're seeing. Our smaller and more focused commercial organization is executing better, productivity has improved and customer engagement has strengthened under new leadership. As we stabilize the market, we plan to selectively rebuild portions of the sales force to expand coverage and reaccelerate growth. Distributor sales were flat overall but were negatively impacted by geopolitical disruption in the Middle east, particularly surrounding the U s Iran war, which delayed approximately half a million dollars in expected orders, primarily affecting our Dubai subsidiary and portions of the broader EMEA region. From a margin perspective, gross margins remained strong at 69%. The modest decline versus last year was intentional as we strategically slowed production level to reduce inventory and improve working capital efficiency. Importantly, we continue to make operational improvements within manufacturing that we believe will support future profitability. One of the most important areas of progress for CytoSorb globally has been the continued refinement of how physicians use the therapy in clinical practice. Increasingly, we believe successful outcomes depend on identifying the right patient, initiating therapy at the right time, and applying the appropriate treatment intensity or in other words, a dosing strategy. This evolving treatment paradigm is helping physicians optimize the use of Cytosorb across a wide variety of highly acute and often life threatening conditions. Today, cytosorb is being used in many conditions including septic shock, trauma, rhabdomyolysis, liver failure, acute respiratory distress syndrome, cytokine storm, many different types of infectious diseases, post surgical complications, transplant medicine, pancreatitis and increasingly blood thinner removal during cardiac surgery, just to name a few. Philip Chan (Chief Executive Officer) We are working to define what the right patient looks like in each of these situations. Meanwhile, we continue to teach centers that early intervention is critical to the success of our therapy. This right timing is being enabled by our standalone purify pump that enables easy treatment without a patient needing to be in renal failure on dialysis. We have placed more than 100 of these pumps internationally and believe it's an important part of our enablement strategy. Philip Chan (Chief Executive Officer) Furthermore, just like antibiotics, to have the best outcome and to fully control the out of control inflammatory response, users need to treat for the right duration and intensity. This right dosing is being facilitated by our recent launch of the Hot Swap device which enables the rapid exchange of cytosorb devices. It continues to generate excellent reviews as physicians gain more experience with the technology and treatment protocols continue to evolve. We believe this growing body of real world experience strengthens both the clinical value proposition, the clinical conviction and the commercial opportunity for the platform. In addition to the clinical performance, we continue to see growing evidence supporting the economic value proposition of our cytosorb therapy. This study from a Swiss high volume center evaluated 246 septic shock patients and demonstrated important differences in outcomes between standard of care alone and standard of care plus CytoSorb therapy. Philip Chan (Chief Executive Officer) Despite treating sicker patients at baseline, the cytosorb group demonstrated significantly shorter ICU stays, shorter overall hospital stays, and reduced ventilation times for survivors that averaged approximately each about six to seven days. Also, cytosor abuse significantly lowered nursing workload intensity. Importantly, these operational improvements translated into meaningful improved financial outcomes for the hospital system itself with significantly higher net earnings per patient case. We believe this type of data is increasingly important in today's healthcare environment where hospitals are under growing pressure to improve efficiency, optimize ICU resource utilization, reduce length of stay and manage staffing burdens. The ability to potentially improve both clinical and economic outcomes simultaneously remains an important differentiator for our technology. At this point, I'll turn the call over to Dr. Mikas Delaguaris, our Chief Medical Officer, to discuss our clinical and regulatory progress. Mikas Deliagaris (Chief Medical Officer) thank you Phil. And good afternoon to everyone joining our call. Before we move on to the regulatory updates, it's important to review once again the problem that we're trying to solve with drugsorb atr and that problem is blood thinners and cardiac surgery. As of today, tens of millions of patients worldwide are on this direct oral anticoagulants like Eliquis or Xarelto or antiplatelet agents like Brilinta that take those medications either acutely to reduce risks of heart attacks or chronically to reduce the risks of stroke, new heart attacks or serious thrombotic complications. Mikas Deliagaris (Chief Medical Officer) These patients on an average need surgery about 1 to 2% of them every year, frequently emergent surgery, which usually is cardiac surgery since they suffer from cardiovascular disease. Specifically, among all emergency cardiac procedures, about 5 to 10% of patients are on chronic DOAC therapy at the time of surgery. Similarly, among heart attack patients who are treated with antiplatelet drugs like brilinta, about 5 to 10% of them are not eligible for a stent and do require also urgent cabinet surgery. Mikas Deliagaris (Chief Medical Officer) The problem arises by the fact that these blood thinners, when present during surgery, this significantly and substantially increase the risk for severe, frequently life threatening bleeding. Currently, the only option for these patients is to delay surgery for multiple days and to allow for drug clearance out of the body. However, this is far from a perfect solution. First of all, many patients simply cannot wait. Their situation is too acute, too critical, and they cannot afford multiple day delays and need to proceed for emergency surgery. Mikas Deliagaris (Chief Medical Officer) Second, even among those who can wait, they are exposed to potentially additional complications during this waiting period, severe complications, including death. And at the same time they're consuming valuable hospital resources like intensive care beds simply waiting for a drug to wash out. And this is where DrugSorb ATR, a twice designated FDA breakthrough device, has the potential to address this pervasive and serious unmet medical need. Next slide please. In terms of our FDA Regulatory update for Drugs or ATR and Berlinta, it is important to remind our audience that In August of 2025 we received the FDA decision or appeal of the original De Novo submission. FDA upheld the prior denial decision and required additional information primarily related to real world evidence on clinical outcomes to support the company's desired label claim that would have to be included in a new De Novo submission. However, there were two very important and very positive outcomes of the appeal process and outlined in the appeal decisions. First of all, FDA did not identify any issues with device safety, which is a key to the benefit risk ratio that FDA uses to judge for De Novo approval. Second is our understanding that FDA agreed that the upcoming submission would be focused only on the remaining open items, potentially giving the opportunity for a focus on expedited review. In January 2026 we held a formal pre submission meeting with FDA and have since continued to have interactive discussions with FDA to confirm the requirements for the new De Novo submission, including whether all the requested information would be needed in the submission itself or whether it could be a post marketing requirement. During these discussions, FDA has requested that additional mechanistic data be included together with the real world evidence within the new De Novo submission. Accordingly, we are evaluating the options to generate the additional mechanistic data which we plan to discuss with FDA and incorporate their feedback before completing the required work. This will likely delay the new De Novo application submission to late 2026 or early 2027. However, we now have a clear direction from FDA and we plan to file as soon as possible following submission. A regulatory decision is typically expected within a 150 day review period, although timelines may be accelerated or extended based on the nature and scope of FDA interactions during the review process. Next slide Meanwhile, the main results of the START T randomized clinical trial are now published and available online. In the paper that you see on the slide, the front page, the principal investigators of the study together with the executive committee and the top enrollers summarize the main observation from the START T trial. The paper is available online open access, which means you can feel free to download it for free and we urge you to do so and read it in great detail. However, we'd like to highlight the central message as the authors and the editors of the journal selected by the way, it is important to note that the journal that published the paper is the most read journal by American Cardiac Surgeons, the Journal of Thoracic Cardiovascular Surgery and in the central message the authors concluded that intraoperative drugs or ATR used for tachagal removal is safe and can reduce the severity of bleeding after isolated CABG in patients operated within two days of drug discontinuation and what you see on the graph is a more than 50% reduction in the composite of severe bleeding events either defined by a standardized bleeding definition or via the volume of blood lost after surgery with the use of the device. Next slide Today we would also like to share an additional regulatory update and a potential check on goal specifically relating to the removal of doac. We have previously discussed our intention to pursue an expanded label for drugs or ATR to include the removal of direct oral anticoagulations anticoagulants following initial marketing approval for Ticaglo removal. However, meanwhile real world evidence and publications continue to grow for the DOAC removal indications. As such, within the next 30 days we plan to submit a separate pre submission request to FDA to review the data that is currently available for the DOAC indication and determine what, if any additional information may be required to support support a parallel De Novo submission for DOAC removal. This strategy is consistent with the already received second FDA Breakthrough Device designation for Drug Drug ATR to remove DOACs during cardiac surgery. As we previously stated, tens of millions of these patients are on chronic or lifelong DOAC for diseases such as atrial fibrillation, deep venous thrombosis or pulmonary embolism. In fact, Eliquis is the number seven pharmaceutical in the world with $14.4 billion in global sales in 2025, while Xarelto is also a blockbuster with 5.1 billion in sales in 2025 and they are the market leaders of the category. Therefore, potential FDA marketing approval for both Brilinta and DOAC removal in cardiac surgery could expand the total addressable market for drugs or ATR to 500 million, up to 1 billion in the US alone. Next slide please. Finally like to share some exciting news about some upcoming presentations in two very important cardiovascular conferences. The evidence base for antithrombotic removal in cardiac surgery continues to grow and as such we have been submitting original analysis to some of the most attended conferences worldwide. Specifically at the Europe PCR meeting that is taking place next week in Paris, which happens to be the world leading course in interventional cardiology, we have two key presentations will be made on antithrombotic removal. The first one titled Urgent CABG in ACS Impact of PTY12 Inhibitor Choice and intraoperative hemoadsorption on perioperative bleeding. A propensity score matched analysis of real world data. This is a comparison of strategies employed today in everyday practice. We're comparing outcomes from hospitals that use routinely Ticagrelor and our device during urgent surgery versus the outcomes observed among hospitals who opt for a different antiplatelet drug like Clopidogrel or Plavix and they do not use the device. Using sophisticated statistical methods to ensure that the populations are comparable, we're able to see the difference between that the choice of P2Y12 and device use can make when it comes to bleeding. The second presentation, specifically on DOAC removal during cabg. This is going to be the first data we present to this audience and these are data that are coming from the STAR registry, again showing that it's not just Brilinta but also Eliquis and Xarelto that are frequently on board in patients requiring urgent CABG. Later this year, in Munich, at ESC 2026, which is taking place at the end of August, which happens to be the world's largest cardiovascular conference, we have two additional analyses being presented on antithrombotic removal during cardiac surgery. Again, we're talking about the Ticaglo removal during urgent cabg, but we're comparing to hospitals who also use Ticagrelor but do not use the device. Again, very sophisticated statistical methods are being employed on patient level data to ensure these populations are appropriate for comparison. And then finally, a very exciting analysis from a collection of German heart centers who have incorporated their device as part of their routine care to treat multiple different types of blood thinners. So this analysis is not specific on any one blood thinner, but simply the strategy of using the device whenever patients with blood thinners require urgent cabg. Now, these analysis and these data are embargoed until the date of release at the conference, so we cannot go into more details, but obviously we're very excited about this release of this new data that we believe highlight the increasing adoption of our technology by leading heart centers in Europe and their enthusiasm around the reductions in bleeding, their experience with the use of our device as part of their protocols for patients on blood tears. It's important to note that it's very difficult to get any analysis except that these are very competitive conferences. So I think that also shows the enthusiasm among the broader cardiovascular community, even among those who do not have access to the device, about learning the potential benefit of this novel solution in their everyday practice. So thank you for your attention and with that I will turn it over to Pete now. Pete Mariani (Chief Financial Officer) Thank you Mikus and good afternoon everyone. Today I'll be reviewing the first quarter 2026 financial performance and important updates that continue to strengthen our business. First quarter revenue, as Phil noted, was 8.9 million, an increase of 2% over prior year and down 7% on a constant currency basis. As Phil noted, first quarter revenue includes approximately 13% growth of our international direct markets, partially offset by lower revenue in our direct German market. Although our direct German sales were down over the prior year, we continue to see signs of improved leadership and sales processes, account targeting and customer engagement with a smaller and more focused team and plan to selectively expand this team to improve account coverage and drive growth across cardiac surgery and critical care. And distributor sales were flat year over year as progress across several territories was offset by delayed distributor orders of approximately $500,000 in parts of the Middle east and neighboring regions due to geopolitical and economic instability related to the U S Iran war. This unexpected disruption has slowed the anticipated growth of our recently established subsidiary in Dubai, although we expect conditions to improve as the conflict stabilizes. Gross margins for Q1 was 69% compared to 71% in the prior year. The lower gross margin reflects a planned reduction in unit production in the quarter which allowed us to improve working capital and cash burn by lowering inventory levels to 4.8 million at the end of the quarter compared to 5.3 million at the end of the year. Operating expenses were 9.2 million for the quarter compared to 10.1 million a year ago. The year over year decrease reflects lower research and development and clinical project spend and other compensation costs reflecting initial benefits of our strategic headcount and cost reduction program implemented in the fourth quarter of last year. We expect the cost will continue to decrease sequentially as full benefit of our cost reduction program develops across the next few quarters. Our operating loss improved approximately 22% in Q1 to $3 million compared to 3.9 million in the prior year, reflecting the lower operating expenses. Net loss increased to 5.1 million for the quarter or $0.08 per share compared to a net loss of 1.5 million or $0.02 per share in the prior year, and it's primarily due to the non cash impact of changes in foreign currency transactions over the year or year over year. However, adjusted net loss for the quarter which removes the non cash impact of foreign currency gains and losses and non cash stock Compensation improved to 3.4 million or $0.05 per share compared to an adjusted net loss of 3.7 million or $0.06 per share in the prior year. Adjusted EBITDA loss for the quarter, which also removes the non cash impact of foreign currency gains and losses and non cash stock compensation improved to 2.2 million compared to an adjusted EBITDA loss of 2.7 million in the prior year. Our total cash cash equivalents and restricted cash was approximately 6.4 million on March 31 compared to 7.8 million at the end of the year. Total cash burn in the quarter improved to 1.1 million excluding 300,000 of restructuring related payments in the quarter. The improvement reflects the initial benefit of our cost reduction program and improved working capital dynamics. In the quarter. Fourth quarter of 2025, we implemented the Strategic Workforce and Cost Reduction Initiative, reducing headcount by approximately 10% while lowering operating and production expenses. The initial benefits of this program were reflected in lower operating expenses and improved margins in the first quarter and we have continued to make additional operational improvements and taken further steps to reduce costs in the first quarter and believe these actions will continue to drive improvements in the coming quarters in support of our goal of achieving operating cash flow break even in the second half of the year. Now I'll turn the call back over to Phil. Philip Chan (Chief Executive Officer) Thanks, Pete. Overall, while the first quarter included both macroeconomic and geopolitical challenges related to the U. S. Iran war, we believe the company continues to make meaningful progress across multiple fronts. Operationally, we are improving efficiency and stabilizing key markets. Clinically, the evidence base supporting both CytoSorb and DrugSorb ATR continues to strengthen and strategically we now have greater clarity regarding the FDA pathway moving forward with a dual pathway potentially possible. Overall, we believe cytosorbens today represents a compelling combination of an established commercial platform business together with a potentially transformative regulatory growth opportunity. The core cytosor business continues generating recurring high margin revenue globally across critical care and cardiac surgery. Meanwhile, DrugSorb ATR provides potential long term upside through two FDA breakthrough device designations targeting large unmet needs in cardiac surgery patients on blood thinners. At the same time, we are remaining disciplined financially and operationally. And as we work towards achieving operating cash flow break even in the second half of this year, we believe the company is becoming leaner, more focused, operationally stronger and better positioned for long term sustainable growth and shareholder value creation. With that, thank you again for joining us today and for your continued support of situsorbins Operator. We are now ready to begin the question and answer session. OPERATOR Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have any question, please press star followed by the number one. On your touchstone phone you will hear a prompt that your hand has been raised. If you wish to decline from the polling, please press star followed by two. We'll pause for just a moment to compile the Q and A roster. Your first question comes from the line of Michael Sarcon of Jefferies. Please go ahead. Michael Sarcon (Equity Analyst) Hey, good afternoon and thanks for taking our questions. Phil, thanks for the update around DrugSorb and the regulatory environment. Was wondering if you could elaborate more. You talked about the FDA is requesting additional mechanistic data be included in your new de novo submission. Can you maybe just talk about, you know, what are the various scenarios or forms that that data could take and you know, what would be the kind of requisite investment required on the part of cytosorbins? Mikas Deliagaris (Chief Medical Officer) Yeah, thanks Mike. Let me actually turn it over to Mikus to answer that question I can provide some additional color after that. Mikus. Yeah, thanks Phil and Michael, thank you for the question. So basically the term mechanistic data refers to the fact that we're moving. These are not clinical outcome data that we're looking for, and these are data to, you know, support the mechanism of action of the device. Now these data are, in general do not require the resourcing of running a clinical trial. And I think that's why we wanted to make that distinction. These are not clinical studies we've been asked to run. It's more of experimental designs that will provide this additional information. So we are assessing the options that we have right now. And exactly what type of experiments can we generate the information? We're working together with FDA to finalize those designs. We don't have them finalized yet and as such we can't comment with any more detail about what that data would look like. However, I just want to make sure that it's clear that these are not clinical studies that require a long duration of follow up, multiple patients or multiple sites working together, therefore heavy resources to support them. So once we have more clarity and we're able to come to an alignment with fda, I think at that time we would potentially disclose more information around the design of these experiments. Okay. I mean, but I guess from my own understanding, could that include something like real world evidence or data from a single site? Is that something that could address something like this? Yeah, I think it's important to understand that these are not clinical outcomes we're looking for. Right. So this is not necessarily to, you know, expand on the existing real world evidence that we have. This is supplementary information around the mechanism of action of the device. So these are not clinical outcome trials or experiments that we're talking about. Okay. And then I guess, you know, my second question or third technically on the potential for, you know, expanding the label, the doac, you know, I guess what is your hope? You know, you submitted for kind of a pre submission meeting with the FDA to review some of the data. In a best case scenario, you know, what do you hope the FDA kind of comes back with in terms of, you know, the easiest pathway or the most efficient pathway towards getting this expanded label. I think that's an excellent question, Michael. But I think to be able to truly give you, you know, an answer that's meaningful, that would have to happen after we actually meet with the fda. What we're saying today on the update is that we believe we have enough information to go ahead in front of them and basically Leverage some of the, you know, real world experience with the device and some of the accumulating, you know, publications and data that are out there and see what they would need in addition to what we already have. They may not even need much more. We just don't know how they're going to view the DOAC application in comparison. We do have clarity with Ticagrelor and Brilinta, but we want to gain similar clarity with doac and we want to have that alignment early on. And that's why now that we believe there's a substantial body of evidence already collected, we want to be able to present to them so we can move forward in a fashion to be able to compile the necessary information and proceed with the parallel submission for DOAC removal. Okay, great. Thanks a lot, Mike. Thank you, Michael. OPERATOR And your next question comes from the line of Tom Kerr, please go ahead. Tom Kerr Good afternoon, guys. A couple business questions. We don't talk much about the Middle east business. Can you expand on that? You know, which countries? Is it all distributor business or is there any direct sales in the Middle Eastern region? Just any more color on the. Philip Chan (Chief Executive Officer) Yeah, you know, last year we established our subsidiary in Dubai, UAE and talked about the exciting opportunities in the middle east, you know, particularly in large countries like Saudi Arabia, where if you look at the historical publications coming out of the middle East, Saudi Arabia, for example, has been one of the thought leaders in the use of our therapy in Covid and initially, but also in other applications. But you know, the ua, the Middle east is a broad territory and we believe that there's actually a lot of opportunity given the general wealth in the region and the high quality and standards of medical care. Now, obviously the U. S. Iran war was unexpected and I think, as you've seen, has many, many implications across the world economy and in particular the middle east where, you know, there's been a lot of near term uncertainty. However, you know, despite some of the back and forth that has gone on on a daily basis in that region, we do feel that this conflict is temporary and that ultimately a resolution to these issues will be found. And we are planning to be ready to respond in that case. And I would also note that, you know, a lot of the conflict creates lot of injury to a lot of unfortunately to a lot of people. And you know, that is exactly what our therapy is designed to help with. And so, you know, we believe that everything that's happening right now just makes it even more compelling of what our technology can help do. Tom Kerr Got it. All right, that makes sense. One More finance question on the gross margins in inventory. Sorry if I missed this, but are the inventory levels where you want to be or will there be continued sort of drag on gross margin this quarter or next quarter? Pete Mariani (Chief Financial Officer) Yes, Tom, we have inventory levels I think will continue to come down a little bit. So I think that instead of accelerating gross margins, I think they'll be in that. You know, we did 69 this quarter. I mean, we could be in that high 60s, low 70s here until we balance this out a bit more. But we have that opportunity to do so before we have to really accelerate revenue or inventory production again. But the organization along with that has taken out significant amount of costs and really reorganized the way they're doing ordering and planning. And I think that we have an ability to see efficiencies through this time that may not negatively impact margins going forward. Got it, thanks. I'll get back in the queue. OPERATOR Again, if you wish to ask a question, please press Star one to join the queue. And your next question comes from the line of Shan Lee. Please go ahead. Shan Lee Hey, good afternoon guys and thanks for taking my questions. I just have a couple. On the commercial side to Germany, you mentioned that you're seeing good signs of a turnaround and expects to grow in the south force there again. So I was wondering, when do you expect the overall German market to inflect back to growth and what's the expected cost of the sales expansion that you're looking at? Philip Chan (Chief Executive Officer) Yeah, I think that, you know, what we saw in the first quarter was very encouraging progress across the German organization. And again, we nearly matched sales from a year ago with a smaller, more focused sales force. The way that we have sourced our headcount in Germany and in many other countries is that it is typically a lower variable. I mean, a lower fixed salary coupled with an opportunity to earn quite a lot of money on the upside with a higher variable component. In fact, many most medical device companies do this across the board. But it's a way to be able to control that initial spend as the sales team gets up to speed and becomes productive. So we believe that out of the gate those sales reps will be able to pay for themselves with just the initial business that they're doing. And as they become much more productive, they'll help to contribute to the overall growth of the organization. You know, Germany is an 87 million population country. It's huge. And you know, it has many hospitals, around 1900 hospitals within the country. And it's a lot of work for a small sales team to cover and so I think we truly believe that there's a lot of opportunity as we begin to reshape our commercial organization in Germany, to really just get beyond treading water and staying even to actually returning to growth. But I think that's what a lot of this operational efficiency, you know, driving performance by metrics and, you know, strong leadership is all about. And that's what we're encouraged by the recent progress that we've made. Shan Lee Great, thanks for that. My second question is on the. Well, the direct sales outside Germany seem to grow really well with 13% this quarter. So maybe you could elaborate a bit on what's the primary drivers behind this growth and why it's so different from what we see in Germany, at least in the previous quarters. Philip Chan (Chief Executive Officer) Well, I think that the first of all, I think that we have a lot of avid users in our direct territories, right. So historically it's been Germany, Austria, Switzerland, but you know, it has continued to progress to other countries like Poland and Netherlands and countries in the UK such that, you know, we consider all the time about looking to increase the number of direct territories that we're actually selling into. But I think that, you know, they benefit from growing on a smaller base of revenue. But I do believe that it's really based upon the leadership as well as the individual team effort in individual countries that is driving that growth. And they're just very scrappy about how they approach market development. They are very hands on, very in touch with their customers, looking to exploit, not exploit, but actually really teach all the different strategies and all the different applications that are well known to more developed countries like Germany, Austria and Switzerland. And so I think, you know, the teams are doing well and we continue to work to try to improve operational efficiency even in these teams. And we think that will also have paid dividends in the future. Shan Lee That's very helpful. My last question is on the Middle East. So you mentioned that there were half a million dollars of delayed distributor orders. I was wondering whether you feel that that's still Recoverable either in Q2 or later this year. And do you expect to see continued impact in the region as well? Philip Chan (Chief Executive Officer) Yeah, Sean, the answer to that is yes. I think we've had orders that were, you know, we had orders that were submitted and needed to be canceled at the last minute. And orders under development that did not come in during the month of March. Those are all reflective of the development work our team is doing in the Middle east to get those, you know, in some cases new distributors and another existing distributors up and running. And focused on the business. We've seen a lot of increased activity at conferences across the Middle East, a lot of excitement of physicians across the Middle east in these conferences. And there's just a growing amount of interest in this region. And we are confident that, although I don't expect a snap back when things settle down, but, you know, over the months following stability in the Middle East, I think those distributors are going to be ready to move and take inventory and start distributing again. Shan Lee Great. Thank you for the additional clarity on that. And that's all I have. Thanks again for taking questions. Philip Chan (Chief Executive Officer) Sure. Thanks for the question. OPERATOR There are no further questions at this time. I will now turn the call back over to Phil Chen for the closing remarks. Philip Chan (Chief Executive Officer) Well, again, everyone, we appreciate your support of the company and look forward to updating you on our continued progress throughout the year. We look forward to giving you an update, hopefully, on the regulatory process in the near future. Thank you again. And if you have any questions, please, please feel free to reach out to [email protected] and we'll try to answer those questions as best we can. Thank you so much. Have a good night. OPERATOR Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice. UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga: CYTOSORBENTS (CTSO): Free Stock Analysis Report This article Transcript: CytoSorbents Q1 2026 Earnings Conference Call originally appeared on Benzinga.com ﾩ 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.