Jeremy Feffer - Investor Relations Phillip Chan - Chief Executive Officer and President Kathleen Bloch - Chief Financial Officer Chris Cramer - VP of Business Development Vincent Capponi - Chief Operating Officer Eric Mortensen - Chief Medical Officer Christian Steiner - Vice President of Sales and Marketing, Germany.

Joshua Jennings - Cowen & Co. Michael Okunewitch - Maxim Group Sean Lee - H.C. Wainwright Brian Marckx - Zacks Investment Research Andrew D'Silva - B. Riley FBR.

Good afternoon and welcome to the Cytosorbents' First Quarter 2018 financial and operating results conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the Company's request.

At this time, I'd like to turn the call over to our moderator, Jeremy Feffer. Please go ahead..

Thank you, Ashley. Thank you and good afternoon. Welcome to Cytosorbents' first quarter 2018 financial and operating results call. Joining me today from the Company are Dr. Phillip Chan, Chief Executive Officer and President; Vincent Capponi, Chief Operating Officer; Kathleen Bloch, Chief Financial Officer; Dr. Eric Mortensen, Chief Medical Officer; Dr.

Christian Steiner, Vice President of Sales and Marketing from Germany; and Chris Cramer, Vice President of Business Development. Before I turn the call over to Dr. Chan, 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 today. Therefore, the Company claims protection under Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ from results discussed today and therefore we refer you to a more detailed discussion of these risks and uncertainties in the Company's filings with the SEC.

Any projections as to the Company's future performance represented by management include estimates today as of May 8, 2018, and we assume no obligation to update these projections in the future as market conditions change.

During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter by Dr. Chan and Ms. Bloch. Following that presentation, we will open the line to your questions during the live Q&A session with the rest of the management team. At this time, it's now my pleasure to turn the call over to Dr.

Phillip Chan.

Phil?.

Thank you, very much Jeremy, and good afternoon everyone. Coming off a seasonally strong Q4 we had a solid start to the year. During the quarter we hit 40,000 CytoSorb treatments delivered up from 23,000 a year ago.

We also had record trailing 12-month total revenue of $17 million, including 12-month product sales of $15.2 million with the mix of strong direct and distributor and partner activity. At the end of the quarter we were well capitalized with a healthy cash balance of $21.1 million and we are currently preparing for more growth.

Our have a new manufacturing plant nearing final validation and certification and expect it to come online this quarter. We expect that blended gross margins should approach or exceed 88% over time with volume manufacturing and that is a blend of higher margin direct sales versus lower margin distributor and partner sales.

Meanwhile, users of CytoSorb continue to demonstrate the clinical benefit of CytoSorb in a wide range of critical illnesses now easily searchable in a new literature data base at cytosorb.com with new published articles in peer review journals and the successful completion of our Fifth International CytoSorb Users Meeting at the 38th International Symposium if Intensive Care and Emergency Medicine Conference in Brussels, Belgium.

We also expanded our distribution to Malaysia with our partner Biocon. On the clinical side our U.S.

REFRESH 2 pivotal trial which is 400-patient randomized controlled PMA trial targeting the reduction of postoperative acute kidney injury using CytoSorb during complex cardiac surgery which includes valve replacement and aortic reconstruction with hypothermic cardiac arrest, we recently enrolled our first patient into the trial with more expected soon.

Several REFRESH 1 sites are also expected to come online soon with a total of 26 sites in various stages of evaluation, qualification and initiation. We are targeting a total of 20 active sites for the study. Meanwhile the REMOVE endocarditis trial which is funded by the German Government continues to make excellent progress.

This is a 250-patient randomized controlled trial evaluating the safety and efficacy of CytoSorb in improving organ dysfunction when used intraoperatively during valve replacement surgery for infective endocarditis.

The first patient in this trial was enrolled in January and now the trial has 22 patients enrolled at three centers with three more starting very shortly. And last but not least, the HemoDefend pivotal trial that we discussed last quarter, this is a point of care filter that removes non-infectious contaminants from transfused pack red blood cells.

The commercial grade tooling for clinical device parts is nearing completion ahead of the human clinical trial which is expected to begin sometime in the next 9-12 months. With that, I'd like to turn the call over to Kathy for our financial overview.

Kathy?.

Thank you, Phil and good afternoon everyone. For today's call I'll be providing an update regarding Cytosorbents first quarter financial results and an update around our working capital and cash runway.

Product sales for the first quarter of 2018 were approximately $4.4 million which is an increase of $1.8 million or 71% over Q1 2017 product sales of approximately $2.6 million.

This increase was primarily driven by an increase in direct sales from both new customers and repeat orders from existing customers, and increase in distributor sales and a benefit of a stronger euro.

Grant and other income was $491,000 in Q1 2018 as compared to $517,000 in Q1 2017 and our total revenues, which includes product sales and grant income increased by 58% to $4.9 million for the first quarter of 2018 as compared to $3.1 million for 2017.

We are also very pleased to report that for the first quarter of 2018 our product gross margins grew to 74% as compared to 68% for the first quarter of 2017.

This was a result of several factors which include a reduction in the cost of devices manufactured, a favorable mix of sales between direct customers and distributors and a benefit from a stronger euro.

Looking forward into the rest of 2018 we expect product gross margins to further improve especially in the second half of the year after our new manufacturing facility comes online, which is expected to occur at the end of the second quarter of 2018. Next, we'll look at our quarter-over-quarter product sales.

Q1 2018 represents another record quarter with product sales of $4.4 million. Taking the euro into account was roughly flat when compared to Q4 2017.

As we mentioned in our last call, there appears to be some seasonality with the robust fourth quarter as hospitals used the remainder of their annual budget to order supplies followed by a comparable first quarter. This is an annual trend that can be observed in the graph.

We strongly believe that the underlying drivers of revenue growth continued to improve management continues to see growing market awareness, interest and usage of the product, which is expected to result in continuing sales growth in the coming quarters of 2018.

Our direct sales are currently the dominant driver of our results with strength in both reorders as well as in new orders and new customers. Meanwhile we've made significant investments to also expand the international sales team to accelerate this part of our business. And our growth continues to translate into strong year-over-year comparables.

In looking at our graph of trailing 12-month product sales we know that our compound annual growth rate or CAGR was 67% over the past three years and we are continuing to observe a very positive trajectory here. And lastly we'll take a look at our working capital position.

As of March 31, 2018 we had a record approximately $21.1 million in cash which provides a very solid foundation for the company.

Those shareholders who have been with us for a long time know that we have been historically very thoughtful and deliberate about financing this company is a way that minimizes shareholder dilutions with a combination of non-dilutive grants, monetization of our net operating losses, the use of debt and of course equity raises while always striving to minimize shareholder dilution.

For example, in March 2018 the company replaced its existing $10 million dollar term loan with $10 million dollars of new debt. This new debt facility is structured as a four-year term loan with monthly payments of interest only for the first 18 months and this has reduced our cash needs over that same period by approximately $6 million.

Another $5 million in term loan debt is available by March 2019 to further extend our operating runway should we choose to take it. Also in the first quarter of 2018 we raised approximately $6 million through our At The Market or ATM equity facility with Cantor Fitzgerald at an average price of $7.97.

Using this ATM we have been trying to strike a balance between having a strong balance sheet so that we can fund rapid growth while limiting shareholder dilutions. The ATM provides an efficient and cost-effective way for us to raise funds for the company's needs.

Given our strong cash position and good working capital position, we have not utilized the ATM since mid April 2018. We would like to remind our shareholders that we, the company's management, our shareholders as well and we strive to do what is in our collective best interest.

And then finally as of March 31, 2018 we had approximately 35 million common shares on a fully diluted basis. And with that, I'd like to turn the call back over to Phil..

Thank you, Kathy. In terms of guidance, we expect that the second quarter of 2018 CytoSorb sales will exceed product sales in Q1 of 2018.

We continue to expect solid growth and achievement of operating profitability in 2018 on a quarterly basis, that is less non-cash expenses in clinical trial costs and as we anticipate expansion in blended gross margins currently at 74% as we scale up manufacturing of our new plant that is expected to come online in the second quarter of 2018.

So with that, that concludes our current prepared remarks. Jeremy, please open the call up for the Q&A session..

Thank you. [Operator Instructions] We will take our first question today from Josh Jennings with Cowen..

Hi, good evening. Thanks for taking the questions and congratulations on the strong start to the year and the commencement of enrollment for REFRESH 2.

I was hoping that to start on the REFRESH 2 trial and just get a sense of the IRB approval tracking and as I think you guys were shooting for this 26 centers that are in some way involved now in the trial, whether the IRB attributable were tracking relative to your initial estimates and any sense in terms of when the trial will be enrolling it at kind of full pace if you will?.

Well, thanks very much Josh and let me turn it over to Dr. Eric Mortensen our Chief Medical Officer to give you an update on that aspect. Dr.

Eric?.

Sure Phil, thank you and thank you for the question. So basically would we feel that you know it's a little bit slow in terms of the initiation relative to what we had hopefully anticipated.

Significantly and front loaded the study site on boarding where those symptoms that had been involved in REFRESH 1 with the hope that they would be able to using the provisional approval we received in December in order to be able to get started a little bit earler.

Approaching our investigators who were extremely eager to get going, the current standard practice at all these hospitals is that they really need to see the final FDA approved protocol that came out at the end of March. And so because of the law and contractual aspects we didn’t really have a full start to getting sites on board until that time.

What I can say now is that we have one site fully initiated that was the one site that was able to progress prior to the full protocol approval and now we are awaiting final IND approval for a number of sites and will rapidly bring additional sites on board.

We're seeing very strong interest in the protocol based upon the experience both overseas of CytoSorb as well as with our preliminary results of REFRESH 1..

Great, thanks for that and then I was hoping to just followup with just what are you seeing in terms of CytoSorb utilization from an indication mix standpoint and then has that been evolving over the last few quarters or has it been fairly consistent?.

Yes, I think that when you look at the overall 40,000 treatments to date, the majority have been in critical care and of those, majority have been in sepsis and septic shock. However, the uses in cardiac surgery as well as in ECMO continue to grow and are roughly about a quarter to a third of our current usage.

So I think that there's a lot of activity broadly speaking across the many different indications and as you've seen in cardiac surgery there have been additional publications and endocarditis the publications and these are [indiscernible] after heart transplantation and many other indications that our people are using the device for.

So, but it's a relatively good mix with the strongest growth I think in critical care..

Great. If I can just ask one last one. I think Spectro recently made some public commentary around the FDA's recognition of the challenges of conducting a randomized Phase III trial into sepsis, and would potentially consider options such as a single-ARM study, and a study that relied on Bayesian statistics.

Does that change your thinking any way on the U.S. regulatory path for sepsis? And do you have bandwidth for another clinical program with REFRESH II and HemoDefend? Thanks for taking all the questions..

Yes, sure, Josh. So I think, I'm going to let Eric comment on this as well. But I think that we have a very strong desire to continue our clinical studies in sepsis. What we have done in the past has been rather than try to do an all comers trial, where we're enrolling patients with many different forms of sepsis.

We've been, instead, looking at several populations where the therapy is working reproducibility and working very well with a very large effect. Refractory shock, for example is one of those areas that we plan to continue to study in formal clinical studies. That being said, we did see that announcement by Spectro. I think that initially for our U.S.

approval, we are targeting cardiac surgery and that will remain the focus of our initial foray into U.S. approval. But as we look to expand the label of CytoSorb in the area of sepsis, we will look to try to take advantage of some of the guidance at the FDA's giving on those points, in terms of simpler studies, single-ARM studies and other things.

Those remain to be defined..

Thanks so much..

Sure..

And we'll take our next question from Andrew D'Silva with B. Riley FBR. Andrew your line is open. Go ahead..

No. I'm sorry, Andy, we don't hear anything. Maybe you're on mute. Operator, maybe just take the next analyst and then we'll come back to Andy..

And we'll take our next question from Jason McCarthy with Maxim Group..

This is Michael Okunewitch calling on behalf of Jason McCarthy. Congratulations on the quarter.

So I was just wondering regarding REFRESH II, what kind of rate of AKI is expected for cardiac surgery? And whether or not that's indication specific, so valve replacement versus aortic restructure and if it is, would you stratify the study?.

Thanks, Mike....

Do you want me to go ahead?.

Yes, Eric, why don't you go ahead and take that?.

So what I would say is that there definitely is a both a demographic distribution of risk in cardiovascular surgery.

The reason why we design the study as we have is as looking over the recent experience of several other trials that demonstrated those populations at particularly enhanced risk, thereby allowing us to hopefully enrich the patient population to have a rate of AKI that would allow us adequate study power.

When you end up looking back at what's been seeing in recent trials, I'll point to one sponsor. I hate all this calling out peoples names, but the [indiscernible] trial that was placed in two clinicaltrials.gov last year as well as studies conducted at Johns Hopkins.

You can actually see by looking at those patients who have well-established criteria increasing the risk of AKI, hypertension, diabetes, decreased renal function, you can actually see somewhere between an incidence of 50% to 70% of AKI, depending upon the standardized KDIGO criteria used by nephrologist.

So we actually do believe that by using the definitions that we've chosen, we're increasing our probability of technical success within the REFRESH II trials. As well as I should say enhancing the demonstration of clinical meaningfulness downstream for payers and reimbursement consideration..

And the trial will be stratified for valve replacement. The two populations that we're studying are valve replacement and aortic reconstruction with hypothermic cardiac arrest and they will be stratified..

All right, thank you.

And then just a quick follow up, what kind of improvement would you expect to see to meet the criteria for approval?.

Based upon what has been considered to be a credible improvement in bundle therapy for AKI, I would say that it will, obviously, be review issue with the FDA. It will depend upon what we actually see as the baseline rate of AKI.

But previous studies that have used bundle therapy as a standard have looked at improvements of more than 9% to 12% as being in the credible range.

I think we're going to have to end up ultimately seeing what we determined to be the base line rate in this play in order to be able to make an assessment of what is the clinically meaningful improvement..

All right, thank you very much for taking my questions..

Thanks Mike..

And we'll take our next question from Sean Lee with H.C. Wainwright..

Hi guys. Thank you for taking my questions and congratulations on a strong quarter. My first question is on the REFRESH II study. Could you give a bit more color on the timing you expect for the patient enrollment and for study completion? And also, I noticed that the R&D expenses have dropped quite a bit this quarter compared to last quarter.

So can we expect that to ramp up over the rest of the year?.

I'm sorry, the last sentence I just want to make sure I'm answering your question fully.

What was the last sentence of your question?.

Yes, I noticed that your R&D expenses for this quarter is quite a bit below the fourth quarter expenses.

So I'm wondering how can we expect that to move further over the year?.

Okay. Let me just first reiterate that I agree that it's been a little bit a slow at the onset than we had initially anticipated for the reasons that I have already described. I think that we are now well posed. We also had some turnover at our COO, which did not help in terms of our initial site onboarding.

However, right now, we have now done a job of bringing on a board team of very experienced people to be able to in source a lot of the activity for the RECESS source II trial within CytoSorbents. We have a lot of more control over both site onboarding and sight management.

I think what you look at in terms of fourth quarter were cost that were associated with overall program startup brining on board the essential laboratory, your CRO, the infrastructural aspects. The pause that we have the dip that we have right now reflects the fact that we are now bringing sites on through the IRB approval process.

Once we have them through that, we anticipate seeing the cost to go up, which will have Kathy after me, because of the increase rate of patient equivalve. So I think, you'll be seeing an increase in that, as we go forward..

All right, thank you for the color on that..

Thanks..

Yes, just maybe one thing to add to that is just that, from a patient enrollment standpoint, we do believe that 1 to 2 patients per site per month is possible. Again this trial is a very straightforward trial to execute, based upon our history with REFRESH I.

The intervention is just during the time of surgery, where CytoSorb is installed into the heart-lung machine in a bypass circuit and that is the only intervention.

And then after they come out of the surgery, they go into the intensive care unit and in the intensive care unit all they're doing is taking urine and blood samples and monitoring the patients for clinical outcomes. And then, there is a 30 day follow-up periods.

So notwithstanding the enriched the enrichment criteria, which makes it a little harder to find patients for the study, but we, again, believe that there's a lot of patients out there who could qualify for this study.

Patients who have risk factors for acute kidney injury such as what Eric mentioned before, diabetes, hypertension, hyperlipidemia and other things. But that once they're in the trial, we can execute on that trial very, the sites can execute on those patients very quickly. So we anticipated roughly a two year enrollment period.

We believe that, although, there has been some delay that in fact, we're going to see a bolus of sites come on board actually relatively roughly at the same time, which will help enhance the rate of enrollment overall. And so, we'll know more as we get into the trial, as we see the rate of enrollment.

But I think that we think that two year is credible. Eric mentioned the [indiscernible] study that enrolled 450 patients using very similar criteria that study enrolled in about two a little over two years. So we think that this number is very credible..

Thank you, Phil. That makes it much clear. My second question is on HemoDefend.

I know the product has been in development for over a year now, but while most of the focus is been on CytoSorb, could you dive a little more into the commercial opportunity for HemoDefend?.

Sure. What HemoDefend is designed to do. So HemoDefend, it comes out of our biocompatible pores polymer platform. And this has been a technology that has been supported by the National Heart Lung and Blood Institute as well as Special Operations Commanders, SOCOM, here in the United States.

And so the idea behind HemoDefend is to purify packed red blood cells, which are the one of the primary units that are transfused around the world. There's more than 100 million packed red blood cells that are units of packed red blood cells that are transfused around the world.

And it is designed to reduce the noninfectious contaminants in those packed red blood cells that can potentially cause life-threatening transfusion reactions.

And so HemoDefend has been demonstrated to be able to reduce a broad range of inflammatory meteors such as hemoglobins, cytokines, bioactive lipids as well as other things like antibodies that can lead to things as mild as fever and itching all the way to life-threatening transfusional-related acute lung injury called trolley that occurs roughly in 1 in every 4,000 to 5,000 blood transfusions.

And those patients who get more blood transfusions are at have accumulative risk of developing transfusion reactions.

And so it is particularly suited for patients getting a lot of blood, such as surgery patients, cardiac surgery patients, in particular, critically ill patients, particularly trauma patients, cancer patients and other patients who are getting blood over long period of time and others.

And so we initially believe that in the United States that this would be focused on really the 5% to 10% of the initial market, and then as we get approval in the United States we will leverage that approval to get approval in Europe and elsewhere, where we already have a distribution channel in place to be able to sell HemoDefend through our critical care sales force or through the cardiac surgery sales force all over the world.

So it is something that we could leverage. But I think our primary goal for the United States is not to do this alone. It is to partner this with a major player in the blood transfusions space. And we have had discussions with all of the major players in the past..

Thank you for that. That’s all I have..

Great, thanks Sean..

We'll take our next question from Brian Marckx with Zacks Investment Research..

Hi guys. Congrats on the quarter. So I'm trying to get a little bit better understanding in terms of what your expectations are now with the pace of onboarding of the REFRESH II sites.

And just wondering, if you want to give us kind of a general forecast of what you're anticipating over, say, the next three to six months in terms of the number of sites that you hope to have and actively enrolling?.

As Phil had indicated, we - I don't want to give you names of individual centers if not being inappropriate, particularly some of them are currently in the process of going through site qualifications visits.

But we currently have 26 centers that either are already indicating they would like to be in the trial, have currently already gone through site qualifications visits or have those completed in the next couple of weeks. And the - there's a block of about, I don't want to give the exact numbers.

There's a block of stem centers that are just now waiting for the May IRB approval so they can get going.

That has been the biggest hurdle that since the final protocol approval from FDA was not until end of March, we had to basically with those centers that have a standard of requiring protocol approval before they can finalize contracts and IRB approval to go forward from there.

Our expectation is to bring on the cohort of centers that Phil was talking about. We're currently targeting an initial cohort of about 20 to fully activate. My expectation is that as with all trials, some of those will - and proving to be somewhat inadequate.

So the reason why we're over enrolling the pool as it were of centers is that our expectation is we're going to be reviewing centers for their performance, and then replacing centers rapidly, as we end up assessing which ones are under performing.

That is something you have to generally do, I think, with all studies because - although all investigators think they're going to be able to do well, I think the history of my 20 years has told me that if you're not prepared to be able to swap sites out, you're going to be under prepared.

So I can't promise you which sites will be the optimal ones, but I think that we have a robust remediable plan in place in order to make sure that when we see the usual for clinical trials of summer centers, not living up to expectations, they will be able to swap them out..

And just to add maybe to Eric's comment, so I - we absolutely are aligned in our thoughts on this. But the REFRESH I sites will be up and running very shortly. And I think with some of the delays that we've had with the final FDA approval of the protocol as well as CMS approval, et cetera.

These trial sites are now - it plays to have their site initiation visit and begin screening for their first patients. So we believe that this is something that will happen in the next on the order of one to two months. And they should be up and running very soon..

Okay. And then in terms of remove, you have another three sites that you expect to come online. It looks like your pace of enrollment is roughly five or six patients a month to this point.

Is it fair to forecast that the pace of enrollment could double with the additional three sites coming on line?.

Yes. I think that those sites have been selected because of the incidents of endocarditis at their centers. And these are all major academic centers that are very used to doing clinical studies. So this pace of four to five patients a month is actually more than we had anticipated. And if they can keep that up, that would be actually fantastic.

So what we'll know very shortly when these additional three sites come on board, what their enrollment rates will be. But I think modeling somewhere in between three to five patients a month based on what we've seen so far is probably realistic..

Okay, thank you..

[Operator Instructions] And we'll take our next question from Andrew D'Silva from B. Riley FBR..

Hi good afternoon. Thanks for taking my questions. Just have a couple of quick questions. And my apologies in advance, I was hopping between calls. So I'm sorry if you already touched on this.

So I'll just start with the boring question right off the bat, when comparing the fourth quarter of 2017 to the first quarter of 2018, can you refresh my memory on what the delta was in product gross margin? And should we figure similar benefit in the fourth quarter of this year or is that changed with the new expanding manufacturing capabilities?.

Kathy, did you want to take that?.

Yes, so Andy, what we've reported was that we had - we did not report the fourth quarter product gross margins, but we've reported 71% blended gross margins over the year 2017. And then of course, now we've just reported 74% blended gross margins on product sales.

So what we've stated about the future is that we expect our gross margins to continue to improve in 2018, in particular, in the second half of the year, as we realize the benefits of the economies of scale with our bigger batch production at our new facility and as you know that facility is expected to be operational at the end of Q2 2018..

Okay. Perfect.

And then with HemoDefend, is it going to be necessary for you to make any other adjustments to your manufacturing facility, once you're able to actually commercialize the product, or is it going to be using a lot of the same resources that you already have, and equipment that you already have in place to develop CytoSorb?.

Yes, thanks, Andy.

Let me ask Vince Caponi, our Chief Operating Officer, who manages manufacturing, that question, Vince?.

Sure. Thanks, Andy. So basically, we ascribe to many of the same processes that we currently have now. We have to make some small equipment modifications in order to accommodate. Obviously, it's a very different size device. So some of the filling setups that type of thing would be different than what we're currently using now.

But what I would not say, it would not be a significant capital expenditure. Although, there will be some to be able to accommodate the HemoDefend. But basically, it's using a lot of the existing infrastructure, which is a real positive..

Okay. And in the previous question, you mentioned that you'll look to partner this in the United States.

Is this a situation, kind of, like your distribution or strategic partnership arrangements where you would take care of all the manufacturing, or is this a opportunity as a price point down the road where it would make sense for you to let outside entities manufacture it?.

Well I think that this could be potentially be either a strategic distribution agreement or a licensed agreement. And so - because I think it is a very large market - the United States is a very large consolidated market.

So I think that from manufacturing standpoint, what we've tried to do is take into account the need to be able to mass manufacture this product in a very low cost way. That is a technology that can be either transferred to a contract manufacturer or that is something that we could potentially do ourselves.

And so, I think that we'll wait to see how things go. But as it currently stands, our plan right now is to manufacture the initial quantities first. And we will, as Vince mentioned, will have the capacity to be able to do that.

We will have - as we exit the current manufacturing facility for CytoSorb and move that to the new manufacturing facility, we'll actually open up capacity to be able to run production for HemoDefend.

And so we'll see how everything goes, and then at the appropriate time make the decision to either outsource or continue capital investment in our own facility.

But again, I think that because we have designed this product for automation, I think, that it can potentially be manufactured in volume at a relatively low cost and relatively low CapEx expenditure..

Okay. That's good to hear. And then finally, I believe you also briefly touched on this, but I'm just going to ask the question in slightly different way. Your 10-K - I know, that you're going to start looking at additional indications potentially in starting new studies. So draft guidance was put out by the FDA related to breakthrough devices.

So outside of opportunities like sepsis, which we've discussed in the past, are there other low hanging fruit indications that you think would be appealing to look at, domestically, that would directly fall into that new pathway that's, hopefully going to emerge pretty soon..

Yes, absolutely. I think that their breakthrough designation is something new to medical device space. It is a it is something that the drug and biologic space has had for a while.

And what it really favors are those technologies that are either meeting a major unmet medical need where the risk of death is high or where the risk of long-term disability is high. And so I think, that's exactly the kinds of markets that we serve and I believe that there are a lot of opportunities to potentially do that.

And you can imagine that we would be looking at many possible options..

Through the guidance, I'm just trying to understand how this whole thing would work out, so you get a critical care application that you're able to go down that path, what kind of, or do you have any sense of do the robust data that you've already been able to get out of Europe, how hard would it be to go down, say, a path for sepsis and then it get expanded for burn injury or other indications that are other situations where there is elevated levels of cytokines or inflammatory mediators?.

Yes. I mean, I think for sepsis, there was another question earlier talking about, I think, it was from Josh that was talking about trying to do single-ARM studies and the FDA being a little bit more receptive to that. So I think that what I said at that time is that, there are a number of applications in sepsis.

We've seen the device work remarkably well in a number of very focused applications. And I think that we could, we don't necessarily need to do a single-ARM study because some of these studies could be less than 100 patients, for example, in randomized controlled trial.

So, but that being said, in terms of the breakthrough designation pathway, there are potentially easier ways to get to the end other than sepsis. And we are - as I mentioned before, you can imagine that we are looking at all of those possibilities..

Okay, wonderful, well thanks for the color and congrats on the progress and good luck going forward this year..

Thanks very much, Andy..

And at this time, I'd like to turn it back to management for any additional or closing remarks..

Well, thank you everyone for joining us today. And thank you to all of the analysts for your questions. We certainly appreciate your interest in the story. If you do have any other questions, this goes up broadly to the audience, please feel free to reach out to Jeremy Feffer at jeremy@lifesciadvisors.com.

And we'll try to reply to your questions where possible. In the meantime, we hope to see you at our annual meeting on June 5, 2018, in New York City, that requires preregistration. So if you do not indicate your attendance on your proxy, please contact Leo Garcia at lgarcia@cytosorbents.com to get on that invitee list. Thank you very much, everyone.

We look forward to talking to you again..

Thank you, that concludes our conference for today. I'd like to thank everyone for their participation..